1.1                          A bill for an act 
  1.2             relating to human services, including provisions for 
  1.3             health and human services administration; life skills 
  1.4             self-sufficiency; children's programs; economic 
  1.5             self-sufficiency; health care; community mental health 
  1.6             and state-operated services; health plan and 
  1.7             continuing care relating to medical assistance and 
  1.8             general medical assistance care; prohibiting certain 
  1.9             asset transfers within 60 months of application for 
  1.10            assistance; establishing a penalty period that begins 
  1.11            with the month of application; changing the method for 
  1.12            determining the length of penalty period; reducing the 
  1.13            limit on monthly uncompensated transfers that shall be 
  1.14            disregarded; allowing estate claims against the estate 
  1.15            of a predeceased spouse in certain situations; 
  1.16            creating a cause of action against transferees in 
  1.17            certain circumstances; requiring the personal 
  1.18            representative to serve notice on the commissioner of 
  1.19            human services under certain circumstances; long-term 
  1.20            care; technical changes; health plan regulations; 
  1.21            permitting the establishment of a medical education 
  1.22            and research fund; appropriating money; amending 
  1.23            Minnesota Statutes 1994, sections 62D.04, subdivision 
  1.24            5; 62N.10, subdivision 4; 62Q.075, subdivision 2; 
  1.25            144.0722, by adding subdivisions; 144.572; 144.71, 
  1.26            subdivisions 1 and 2; 144.72, subdivisions 1 and 2; 
  1.27            144.73, subdivision 1; 144.74; 144A.04, by adding a 
  1.28            subdivision; 144A.09, subdivision 1; 144A.20, 
  1.29            subdivision 2; 148C.09, by adding a subdivision; 
  1.30            245.462, subdivision 4; 245.4871, subdivision 4; 
  1.31            253B.11, subdivision 2; 256.9355, subdivision 3; 
  1.32            256B.03, by adding a subdivision; 256B.056, 
  1.33            subdivision 1; 256B.057, subdivisions 1 and 2; 
  1.34            256B.0595, by adding subdivisions; 256B.0627, 
  1.35            subdivision 1, as amended, and 5, as amended, and by 
  1.36            adding a subdivision; 256B.0913, subdivision 7; 
  1.37            256B.0915, subdivision 1b; 256B.35, subdivision 1; 
  1.38            256B.37, subdivision 5, and by adding a subdivision; 
  1.39            256B.431, by adding a subdivision; 256B.48, 
  1.40            subdivision 1; 256B.49, by adding a subdivision; 
  1.41            256B.501, by adding a subdivision; 256G.01, 
  1.42            subdivision 3, and by adding subdivisions; 256G.02, 
  1.43            subdivisions 4 and 6; 256G.03; 256G.06; 256G.07, 
  1.44            subdivisions 1 and 2; 256G.09, subdivisions 2 and 5; 
  1.45            256G.10; 256I.04, subdivision 1; 256I.05, subdivision 
  1.46            1c, and by adding a subdivision; 325F.71, subdivision 
  2.1             2; 327.14, subdivision 8; 524.2-403; and 524.3-801; 
  2.2             Minnesota Statutes 1995 Supplement, sections 62Q.03, 
  2.3             subdivision 8; 62Q.19, subdivisions 1 and 5; 62R.17; 
  2.4             144A.071, subdivisions 3 and 4a; 148C.01, subdivisions 
  2.5             12 and 13; 148C.02, subdivisions 1 and 2; 148C.03, 
  2.6             subdivision 1; 148C.04, subdivisions 3, 4, and by 
  2.7             adding a subdivision; 148C.05, subdivision 1; 148C.06; 
  2.8             148C.11, subdivisions 1 and 3; 157.011, subdivision 1; 
  2.9             157.15, subdivisions 4, 5, 6, 9, 12, 13, 14, and by 
  2.10            adding subdivisions; 157.16; 157.17, subdivision 2; 
  2.11            157.20, subdivision 1, and by adding a subdivision; 
  2.12            157.21; 256.045, subdivision 3; 256.969, subdivisions 
  2.13            1, 2b, and 10; 256B.055, subdivision 12; 256B.057, 
  2.14            subdivision 1b; 256B.0575; 256B.0595, subdivisions 1, 
  2.15            2, 3, and 4; 256B.0625, subdivisions 17 and 30; 
  2.16            256B.0628, subdivision 2; 256B.0913, subdivision 5; 
  2.17            256B.0915, subdivision 3; 256B.093, subdivision 3; 
  2.18            256B.15, subdivision 5, and by adding a subdivision; 
  2.19            256B.431, subdivisions 2j and 25; 256B.432, 
  2.20            subdivision 2; 256B.434, subdivisions 2 and 10; 
  2.21            256B.49, subdivisions 6 and 7; 256B.501, subdivisions 
  2.22            5b and 5c; 256B.69, subdivisions 3a, 4, 5b, 6, and 21; 
  2.23            256D.02, subdivision 12a; 256D.03, subdivisions 3 and 
  2.24            4; 256D.045; and 256I.04, subdivisions 2b and 3; Laws 
  2.25            1995, chapter 207, article 6, section 125, 
  2.26            subdivisions 8, 9, 11, and 12; and article 8, section 
  2.27            35; proposing coding for new law in Minnesota 
  2.28            Statutes, chapters 16B; 62J; 144; and 256B; proposing 
  2.29            coding for new law as Minnesota Statutes, chapters 
  2.30            62S; and 252B; repealing Minnesota Statutes 1994, 
  2.31            sections 144.691, subdivision 4; 146.14; and 146.20; 
  2.32            Minnesota Statutes 1995 Supplement, sections 157.03; 
  2.33            157.15, subdivision 2; 157.18; 157.19; 256B.057, 
  2.34            subdivisions 2a and 2b; 256B.15, subdivision 5; 
  2.35            256B.69, subdivision 4a; 256G.05, subdivision 1; and 
  2.36            256G.07, subdivision 3a; Laws 1995, chapter 207, 
  2.37            article 6, section 125, subdivision 6; Minnesota 
  2.38            Rules, part 9505.5230. 
  2.39  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.40                             ARTICLE 1 
  2.41                           APPROPRIATIONS 
  2.42  Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
  2.43     The sums shown in the columns marked "APPROPRIATIONS" are 
  2.44  appropriated from the general fund, or any other fund named, to 
  2.45  the agencies and for the purposes specified in the following 
  2.46  sections of this article, to be available for the fiscal years 
  2.47  indicated for each purpose.  The figures "1996" and "1997" where 
  2.48  used in this article, mean that the appropriation or 
  2.49  appropriations listed under them are available for the fiscal 
  2.50  year ending June 30, 1996, or June 30, 1997, respectively.  
  2.51  Where a dollar amount appears in parentheses, it means a 
  2.52  reduction of an appropriation.  
  2.53                          SUMMARY BY FUND
  2.54                                                      BIENNIAL
  2.55                            1996          1997           TOTAL
  3.1   General           $ (118,332,000) $ (53,012,000) $(171,344,000)
  3.2   State Government
  3.3   Special Revenue           50,000        100,000        150,000
  3.4   TOTAL             $ (118,282,000) $ (52,912,000) $(171,194,000)
  3.5                                              APPROPRIATIONS 
  3.6                                          Available for the Year 
  3.7                                              Ending June 30 
  3.8                                             1996         1997 
  3.9   Sec. 2.  COMMISSIONER OF 
  3.10  HUMAN SERVICES 
  3.11  Subdivision 1.  Total 
  3.12  Appropriation                       (118,332,000)   (55,042,000)
  3.13  This reduction is taken from the 
  3.14  appropriation in Laws 1995, chapter 
  3.15  207, article 1, section 2. 
  3.16  The amounts that are added to or 
  3.17  reduced from the appropriation for each 
  3.18  program are specified in the following 
  3.19  subdivisions. 
  3.20  [DHS SPENDING CAP.] General fund 
  3.21  spending by the department of human 
  3.22  services, net of federal 
  3.23  reimbursements, is limited to 
  3.24  $5,000,000,000 in the biennium ending 
  3.25  June 30, 1999.  
  3.26  The commissioner of human services 
  3.27  shall prepare and submit to the 
  3.28  legislature by December 1, 1996, a 
  3.29  proposal on how to limit the increase 
  3.30  in general fund appropriations to the 
  3.31  department of human services from the 
  3.32  1996-1997 biennium to the 1998-1999 
  3.33  biennium so as not to exceed the 
  3.34  spending cap.  The commissioner may 
  3.35  also submit alternative proposals to 
  3.36  accomplish the same goal.  The proposal 
  3.37  or proposals must include the 
  3.38  commissioner's recommendations for 
  3.39  changes in services to be provided and 
  3.40  any necessary changes in program 
  3.41  content, coverage, and reimbursement 
  3.42  rates, including any recommendations 
  3.43  the commissioner may have for changes 
  3.44  in copayment requirements or annual or 
  3.45  lifetime payment limitations.  The 
  3.46  commissioner shall give particular 
  3.47  attention to services that are not 
  3.48  required as a condition of federal 
  3.49  participation and to services that are 
  3.50  not provided by neighboring states, 
  3.51  including Illinois, Indiana, and 
  3.52  Michigan, as well as those that border 
  3.53  Minnesota. 
  3.54  Subd. 2.  Life Skills 
  3.55  Self-Sufficiency 
  3.56      (3,462,000)       900,000
  3.57  The amounts that may be spent from this 
  3.58  appropriation for each purpose are as 
  4.1   follows: 
  4.2   (a) Chemical Dependency
  4.3   Consolidated Treatment
  4.4       (3,462,000)    (1,346,000)
  4.5   (b) Deaf and Hard-of-Hearing 
  4.6   Services Grants
  4.7          -0-            100,000
  4.8   (c) Community Social Services Grants
  4.9          -0-             36,000
  4.10  (d) Aging Grants
  4.11         -0-          1,050,000
  4.12  (e) Administration and Other Grants
  4.13         -0-          1,060,000 
  4.14  [DEAF AND HARD-OF-HEARING PROGRAMS.] Of 
  4.15  this appropriation, $100,000 in fiscal 
  4.16  year 1997 is for a grant to a nonprofit 
  4.17  agency that is currently serving deaf 
  4.18  and hard-of-hearing adults with mental 
  4.19  illness through residential programs 
  4.20  and supported housing outreach 
  4.21  activities.  The grant must be used to 
  4.22  expand the services provided by the 
  4.23  nonprofit agency to include community 
  4.24  support services for deaf and 
  4.25  hard-of-hearing adults with mental 
  4.26  illness.  This appropriation shall not 
  4.27  become part of the base for the 
  4.28  1997-1999 biennial budget. 
  4.29  [ADULT DAY CARE.] Of this 
  4.30  appropriation, $350,000 in fiscal year 
  4.31  1997 is for grants to counties to 
  4.32  expand or upgrade adult day care 
  4.33  services and adult day care 
  4.34  facilities.  This appropriation is 
  4.35  available until expended but shall not 
  4.36  become part of the base appropriation 
  4.37  for the biennium beginning July 1, 
  4.38  1997.  The commissioner shall 
  4.39  distribute grants to counties outside 
  4.40  the metropolitan area where there is a 
  4.41  need for expanded or improved services 
  4.42  or facilities, and the commissioner 
  4.43  shall require a ten percent local match 
  4.44  from the adult day care nonprofit 
  4.45  agency.  The county shall award grants 
  4.46  to adult day care agencies in order for 
  4.47  the agency to physically upgrade the 
  4.48  facility, which will result in the 
  4.49  expansion of the number of clients 
  4.50  served in adult day care, expand the 
  4.51  type of services offered, or enable 
  4.52  programs to service persons with 
  4.53  greater needs.  A grant to an adult day 
  4.54  care nonprofit agency may not exceed 
  4.55  $5,000.  
  4.56  [SENIOR PROGRAMS.] For fiscal year 
  4.57  1997, of this appropriation, $150,000 
  4.58  is for volunteer programs for retired 
  5.1   senior citizens established under 
  5.2   Minnesota Statutes, section 256.9753, 
  5.3   $150,000 is for the foster grandparent 
  5.4   program established under Minnesota 
  5.5   Statutes, section 256.976, and $150,000 
  5.6   is for the senior companion program 
  5.7   established under Minnesota Statutes, 
  5.8   section 256.977.  This appropriation 
  5.9   shall not become part of the base for 
  5.10  the 1997-1999 biennial budget. 
  5.11  [SENIOR NUTRITION PROGRAM.] Of this 
  5.12  appropriation, $600,000 in fiscal year 
  5.13  1997 is for senior nutrition programs.  
  5.14  The funds shall be used to support 
  5.15  congregate dining sites and 
  5.16  home-delivered meals and may be used 
  5.17  for nutrition support services, which 
  5.18  include transportation to deliver 
  5.19  home-delivered meals, purchased food 
  5.20  and medications to the seniors' 
  5.21  residence, vouchers for food purchases 
  5.22  at selected restaurants, food stamp 
  5.23  outreach, transportation of seniors to 
  5.24  congregate dining sites, and other 
  5.25  appropriate services to support senior 
  5.26  nutrition programs.  This appropriation 
  5.27  shall not become part of the base for 
  5.28  the 1997-1999 biennial budget. 
  5.29  [SOCIAL SERVICES INFORMATION SYSTEM.] 
  5.30  Of this appropriation, $710,000 in 
  5.31  fiscal year 1997 is for the social 
  5.32  services information system.  This 
  5.33  appropriation shall not become part of 
  5.34  the base for the 1997-1999 biennial 
  5.35  budget. 
  5.36  Subd. 3.  Children's Program             -0-          1,500,000
  5.37  The amounts that may be spent from this 
  5.38  appropriation for each purpose are as 
  5.39  follows: 
  5.40  (a) Subsidized Adoption Grants
  5.41         -0-          1,500,000
  5.42  Subd. 4.  Economic Self-Sufficiency
  5.43  General
  5.44     (13,982,000)   (16,109,000)
  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     (13,092,000)   (16,794,000)
  5.50  (b) General Assistance Grants
  5.51         958,000      2,539,000
  5.52  (c) Minnesota Supplemental Aid
  5.53        (740,000)      (697,000)
  5.54  (d) Minnesota Family Investment
  6.1   Plan (MFIP) Grants
  6.2          -0-             64,000
  6.3   (e) Child Care Fund Entitlement Grants
  6.4       (1,258,000)    (1,321,000)
  6.5   (f) Administration and Other Grants
  6.6          150,000        100,000
  6.7   Subd. 5.  Health Care 
  6.8   General
  6.9     (100,248,000)   (38,673,000)
  6.10  The amounts that may be spent from this 
  6.11  appropriation for each purpose are as 
  6.12  follows: 
  6.13  (a) Group Residential Housing Grants
  6.14      (3,318,000)    (4,501,000)
  6.15  (b) MA Long-Term Care Facilities
  6.16     (19,995,000)    (3,313,000)
  6.17  (c) MA Long-Term Care Waivers
  6.18  and Home Care
  6.19      (2,313,000)     9,948,000 
  6.20  (d) MA Managed Care and 
  6.21  Fee-for-Service
  6.22     (21,453,000)   (11,529,000)
  6.23  (e) General Assistance Medical Care
  6.24     (53,639,000)   (30,375,000)
  6.25  (f) Administration and Other Grants
  6.26         470,000      1,097,000
  6.27  [NEW ICF/MR.] A newly constructed or 
  6.28  newly established intermediate care 
  6.29  facility for persons with mental 
  6.30  retardation that is developed and 
  6.31  financed during fiscal year 1997 shall 
  6.32  not be subject to the equity 
  6.33  requirements in Minnesota Statutes, 
  6.34  section 256B.501, subdivision 11, 
  6.35  paragraph (d), or Minnesota Rules, part 
  6.36  9553.0060, subpart 3, item F, provided 
  6.37  that the provider's interest rate does 
  6.38  not exceed the interest rate available 
  6.39  through state agency tax exempt 
  6.40  financing. 
  6.41  [ICF/MR RECEIVERSHIP.] If a facility 
  6.42  which is in receivership under 
  6.43  Minnesota Statutes, section 245A.12 or 
  6.44  245A.13, is sold during fiscal year 
  6.45  1997 to an unrelated organization:  (1) 
  6.46  the facility shall be considered a 
  6.47  newly established facility for rate 
  6.48  setting purposes notwithstanding any 
  7.1   provisions to the contrary in Minnesota 
  7.2   Statutes, section 256B.501, subdivision 
  7.3   11; and (2) the facility's historical 
  7.4   basis for the physical plant, land, and 
  7.5   land improvements for each facility 
  7.6   must not exceed the prior owner's 
  7.7   aggregate historical basis for these 
  7.8   same assets for each facility.  The 
  7.9   allocation of the purchase price 
  7.10  between land, land improvements, and 
  7.11  physical plant shall be based on the 
  7.12  real estate appraisal using the 
  7.13  depreciated replacement cost method. 
  7.14  [COUNTY WAIVERED SERVICES RESERVE.] 
  7.15  Notwithstanding the provisions of 
  7.16  Minnesota Statutes, section 2656B.092, 
  7.17  subdivision 4, and Minnesota Rules, 
  7.18  part 9525.1830, subpart 2, the 
  7.19  commissioner may approve written 
  7.20  procedures and criteria for the 
  7.21  allocation of home- and community-based 
  7.22  waivered services funding for persons 
  7.23  with mental retardation or related 
  7.24  conditions which enables the counties 
  7.25  to maintain a reserve.  The reserve may 
  7.26  not exceed five percent of the agency's 
  7.27  total annual allocation of home- and 
  7.28  community-based waivered services 
  7.29  funds.  The reserve may be utilized to 
  7.30  assure ability to meet changing needs 
  7.31  of current recipients, to assure the 
  7.32  health and safety needs of current 
  7.33  recipients, or to provide short-term 
  7.34  care emergency intervention to eligible 
  7.35  waiver recipients. 
  7.36  [PREADMISSION SCREENING TRANSFER.] 
  7.37  Effective the day following final 
  7.38  enactment, up to $40,000 of the 
  7.39  appropriation for preadmission 
  7.40  screening and alternative care for 
  7.41  fiscal year 1996 may be transferred to 
  7.42  the health care administration account 
  7.43  to pay the state's share of county 
  7.44  claims for conducting nursing home 
  7.45  assessments for persons with mental 
  7.46  illness or mental retardation as 
  7.47  required by Public Law Number 100-203. 
  7.48  [SERVICE ALLOWANCE TRANSFER.] For 
  7.49  fiscal year 1997, the commissioner may 
  7.50  transfer $848,000 from medical 
  7.51  assistance grants to the alternative 
  7.52  care grants account for allocation as 
  7.53  service allowances to counties in 
  7.54  accordance with Minnesota Statutes, 
  7.55  section 256B.0913, subdivision 15. 
  7.56  [JOINT PURCHASER DEMONSTRATION 
  7.57  PROJECT.] Of this appropriation, 
  7.58  $542,000 for fiscal year 1997 is for 
  7.59  the following purposes:  (1) $342,000 
  7.60  is for actuarial studies for services 
  7.61  covered by the capitated payment to 
  7.62  health plans and evaluations of county 
  7.63  demonstration projects; and (2) 
  7.64  $200,000 is for a grant to the 
  7.65  Minnesota counties' research foundation 
  7.66  for the purpose of providing technical 
  7.67  assistance to counties interested in 
  8.1   developing a joint purchaser 
  8.2   demonstration project. 
  8.3   [HIV/AIDS DRUG REIMBURSEMENT PROGRAM.] 
  8.4   Of this appropriation, $65,000 in 
  8.5   fiscal year 1997 is for the HIV/AIDS 
  8.6   drug reimbursement program and shall be 
  8.7   added to federal funds available for 
  8.8   that program. 
  8.9   [ICF/MR ALTERNATIVE RATE STRUCTURE.] 
  8.10  The commissioner, in conjunction with 
  8.11  ICF/MR service providers, shall present 
  8.12  to the legislature by January 31, 1997, 
  8.13  recommendations for an alternative rate 
  8.14  structure that recognizes the small 
  8.15  size and individual needs of ICFs/MR.  
  8.16  The system proposed must recognize 
  8.17  costs incurred, must not penalize 
  8.18  facilities converted since 1990 as part 
  8.19  of the A to B conversion project, and 
  8.20  must reimburse the costs associated 
  8.21  with federal active treatment 
  8.22  standards.  As part of developing these 
  8.23  recommendations the commissioner shall 
  8.24  also examine issues related to the 
  8.25  relative size and cost of these 
  8.26  facilities and shall develop 
  8.27  recommendations regarding whether 
  8.28  allowing the development of larger 
  8.29  facilities can be a high-quality, 
  8.30  cost-efficient service option. 
  8.31  [NURSING FACILITY RECEIVERSHIP COSTS.] 
  8.32  Notwithstanding the provisions of 
  8.33  Minnesota Statutes, section 256B.495, 
  8.34  for a nursing facility where the 
  8.35  closure of the facility after resident 
  8.36  relocation and the loss of the nursing 
  8.37  home beds will significantly decrease 
  8.38  the regional average number of 
  8.39  long-term care beds per thousand 
  8.40  elderly over 65 in the year 2000 to 
  8.41  within 11 beds of the hardship standard 
  8.42  as referenced in the study, The 1993 
  8.43  Distribution of Nursing Home Beds in 
  8.44  Minnesota, prepared by the Interagency 
  8.45  Long-Term Care Planning committee in 
  8.46  March 1994, the commissioner of human 
  8.47  services shall extend the period to 
  8.48  recover receivership costs incurred 
  8.49  during a department of health 
  8.50  receivership of a nursing home 
  8.51  beginning on September 15, 1995, over a 
  8.52  period of not more than 60 months.  The 
  8.53  extension of time for recovery is 
  8.54  contingent on the following 
  8.55  considerations:  
  8.56  (1) the purchaser of the facility has 
  8.57  demonstrated to the satisfaction of the 
  8.58  commissioners of health and human 
  8.59  services that the facility will be 
  8.60  operated in accordance with the 
  8.61  reimbursement system.  The purchaser 
  8.62  must provide documentation to verify 
  8.63  access to funds to purchase the 
  8.64  facility, access to appropriate lines 
  8.65  of credit to cover anticipated and 
  8.66  unanticipated operating costs, cash 
  8.67  flow projections which provide a 
  9.1   realistic estimate of expenses and 
  9.2   income, and other financial information 
  9.3   that might be required by the 
  9.4   commissioners to determine whether a 
  9.5   license should be granted; 
  9.6   (2) the cost of continued operation 
  9.7   under the receivership while residents 
  9.8   are relocated has been estimated to 
  9.9   equal or exceed $500,000; 
  9.10  (3) the purchaser has demonstrated that 
  9.11  the purchase of the facility and the 
  9.12  ongoing operation of the facility will 
  9.13  not occur without the decision to 
  9.14  forego the recovery of the receivership 
  9.15  funds, that the former owner of the 
  9.16  facility does not financially benefit 
  9.17  by the sale of the facility, and that 
  9.18  the entities with financial interests 
  9.19  in the nursing home land and building 
  9.20  have taken substantial losses; and 
  9.21  (4) the closure of the facility will 
  9.22  require the relocation of a majority of 
  9.23  residents to facilities in different 
  9.24  counties. 
  9.25  Subd. 6.  Community Mental Health
  9.26  and State-Operated Services
  9.27  General 
  9.28        (640,000)    (2,660,000)
  9.29  The amounts that are reduced from this 
  9.30  appropriation for each purpose are as 
  9.31  follows: 
  9.32  (a) Mental Health Grants - Children
  9.33        (600,000)    (2,300,000)
  9.34  (b) Mental Health Grants - Adults
  9.35         (40,000)      (360,000)
  9.36  [CRISIS SERVICES.] Crisis services for 
  9.37  developmentally disabled persons in 
  9.38  each regional center catchment area, 
  9.39  including crisis beds and mobile 
  9.40  intervention teams, shall be at 
  9.41  Brainerd, Cambridge, Fergus Falls, St. 
  9.42  Peter, and Willmar regional centers in 
  9.43  accordance with the agreement reached 
  9.44  in 1990, and codified in Minnesota 
  9.45  Statutes, section 252.025.  The program 
  9.46  design must be negotiated and agreed to 
  9.47  by the affected exclusive 
  9.48  representatives.  The parties also must 
  9.49  meet and discuss ways to provide the 
  9.50  highest quality services, while 
  9.51  maintaining or increasing cost 
  9.52  effectiveness. 
  9.53  [COMPULSIVE GAMBLING.] For the fiscal 
  9.54  year beginning July 1, 1996, the state 
  9.55  lottery board shall deposit $800,000 in 
  9.56  the general fund for use by the 
  9.57  commissioner of human services to pay 
  9.58  for compulsive gambling services as 
 10.1   follows: $500,000 is allocated for 
 10.2   treatment of compulsive gamblers; 
 10.3   $150,000 is allocated for the 
 10.4   compulsive gambling treatment pilot 
 10.5   project for treating individual 
 10.6   compulsive gamblers; and $150,000 is 
 10.7   allocated for education and prevention 
 10.8   efforts.  The amount deposited by the 
 10.9   board shall be deducted from the 
 10.10  lottery prize fund established under 
 10.11  Minnesota Statutes, section 349A.10, 
 10.12  subdivision 2.  The amount deposited is 
 10.13  appropriated to the commissioner of 
 10.14  human services for this purpose.  None 
 10.15  of the amount appropriated for 
 10.16  compulsive gambling services under this 
 10.17  section may be used to pay 
 10.18  administrative costs of the department 
 10.19  of human services. 
 10.20  [COMPULSIVE GAMBLING GRANT FOR 
 10.21  ADOLESCENT PROGRAMS.] Of this 
 10.22  appropriation, $40,000 in fiscal year 
 10.23  1997 is for a grant to a compulsive 
 10.24  gambling council located in St. Louis 
 10.25  county for a compulsive gambling 
 10.26  prevention and education project for 
 10.27  adolescents.  This appropriation shall 
 10.28  not become part of the base level 
 10.29  funding for the 1997-1999 biennial 
 10.30  budget.  The appropriation in Laws 
 10.31  1995, chapter 207, article 1, section 
 10.32  2, subdivision 7, for compulsive 
 10.33  gambling programs for fiscal year 1996 
 10.34  is reduced by $40,000.  
 10.35  Sec. 3.  COMMISSIONER OF HEALTH 
 10.36  Subdivision 1.  Total 
 10.37  Appropriation                            -0-          2,030,000
 10.38  This appropriation is added to the 
 10.39  appropriation in Laws 1995, chapter 
 10.40  207, article 1, section 3. 
 10.41  The amounts that may be spent from this 
 10.42  appropriation for each program are 
 10.43  specified in the following subdivisions.
 10.44  Subd. 2.  Health Policy and 
 10.45  Special Populations                      -0-          2,030,000
 10.46  [CORE PUBLIC HEALTH FUNCTIONS.] Of this 
 10.47  appropriation, $1,814,000 in fiscal 
 10.48  year 1997 is for core public health 
 10.49  functions.  Of this amount, up to five 
 10.50  percent is available to the 
 10.51  commissioner for administrative and 
 10.52  technical support of community health 
 10.53  boards.  Funds distributed shall not be 
 10.54  used to displace current appropriations 
 10.55  or to provide individual personal 
 10.56  health care services which compete with 
 10.57  or duplicate services otherwise 
 10.58  available through the prepaid medical 
 10.59  assistance program.  These funds shall 
 10.60  be distributed on a pro rata basis 
 10.61  according to the existing community 
 10.62  health services subsidy formula to 
 10.63  those community health service areas 
 10.64  which are participating in the state's 
 11.1   prepaid medical assistance program.  
 11.2   This appropriation shall not become 
 11.3   part of the base for the 1997-1999 
 11.4   biennial budget.  
 11.5   [BIRTH DEFECTS REGISTRY.] Of this 
 11.6   appropriation, $186,000 in fiscal year 
 11.7   1997 is for the birth defects registry 
 11.8   system under Minnesota Statutes, 
 11.9   section 144.2215.  This appropriation 
 11.10  shall not become part of the base for 
 11.11  the 1997-1999 biennial budget. 
 11.12  [DIRECT CONTRACTING REPORT.] The 
 11.13  commissioner of health, in consultation 
 11.14  with the commissioner of commerce, 
 11.15  shall study and report to the 
 11.16  legislative oversight commission on 
 11.17  health care access by December 15, 
 11.18  1996, on the feasibility of allowing 
 11.19  direct provider contracting of health 
 11.20  care services.  Included in this report 
 11.21  shall be recommendations on the 
 11.22  consumer protections, reserve 
 11.23  requirements, and protections for 
 11.24  consumers who will not have direct 
 11.25  contracting available to them that the 
 11.26  legislature should consider to ensure 
 11.27  protection of persons receiving health 
 11.28  coverage through networks allowed to 
 11.29  conduct direct provider contracting. 
 11.30  [HEALTH BENEFIT ANALYSIS.] $30,000 in 
 11.31  fiscal year 1997 is for the 
 11.32  commissioner of health to conduct a 
 11.33  cost-benefit analysis of the social and 
 11.34  financial impact of mandating that 
 11.35  health plans, as defined in Minnesota 
 11.36  Statutes, section 62A.011, subdivision 
 11.37  3, but including coverage listed in 
 11.38  subdivision 3, clauses (7) and (10), 
 11.39  include coverage for hearing loss 
 11.40  screening for newborns, prostate cancer 
 11.41  screening, and alternative medicine.  
 11.42  The commissioner shall report the 
 11.43  results of the analysis to the 
 11.44  legislature by December 15, 1996. 
 11.45  Sec. 4.  HEALTH-RELATED BOARDS 
 11.46  Board of Medical Practice                 50,000        100,000 
 11.47  This appropriation is added to the 
 11.48  appropriation in Laws 1995, chapter 
 11.49  207, article 1, section 5. 
 11.50  [STATE GOVERNMENT SPECIAL REVENUE 
 11.51  FUND.] The appropriations in this 
 11.52  section are from the state government 
 11.53  special revenue fund. 
 11.54  [NO SPENDING IN EXCESS OF REVENUES.] 
 11.55  The commissioner of finance shall not 
 11.56  permit the allotment, encumbrance, or 
 11.57  expenditure of money appropriated in 
 11.58  this section in excess of the 
 11.59  anticipated biennial revenues or 
 11.60  accumulated surplus revenues from fees 
 11.61  collected by the boards.  Neither this 
 11.62  provision nor Minnesota Statutes, 
 11.63  section 214.06, applies to transfers 
 12.1   from the general contingent account, if 
 12.2   the amount transferred does not exceed 
 12.3   the amount of surplus revenue 
 12.4   accumulated by the transferee during 
 12.5   the previous five years. 
 12.6   Sec. 5.  [CARRYOVER LIMITATION.] 
 12.7   None of the appropriations in this 
 12.8   article which are allowed to be carried 
 12.9   forward from fiscal year 1996 to fiscal 
 12.10  year 1997 shall become part of the base 
 12.11  level funding for the 1997-1999 
 12.12  biennial budget, unless specifically 
 12.13  directed by the legislature. 
 12.14  Sec. 6.  [SUNSET OF UNCODIFIED 
 12.15  LANGUAGE.] 
 12.16  All uncodified language contained in 
 12.17  this article expires on June 30, 1997, 
 12.18  unless a different expiration is 
 12.19  explicit. 
 12.20                             ARTICLE 2
 12.21               HEALTH AND CONTINUING CARE RELATED TO 
 12.22       MEDICAL ASSISTANCE AND GENERAL ASSISTANCE MEDICAL CARE 
 12.23     Section 1.  Minnesota Statutes 1995 Supplement, section 
 12.24  62Q.19, subdivision 1, is amended to read: 
 12.25     Subdivision 1.  [DESIGNATION.] The commissioner shall 
 12.26  designate essential community providers.  The criteria for 
 12.27  essential community provider designation shall be the following: 
 12.28     (1) a demonstrated ability to integrate applicable 
 12.29  supportive and stabilizing services with medical care for 
 12.30  uninsured persons and high-risk and special needs populations as 
 12.31  defined in section 62Q.07, subdivision 2, paragraph (e), 
 12.32  underserved, and other special needs populations; and 
 12.33     (2) a commitment to serve low-income and underserved 
 12.34  populations by meeting the following requirements: 
 12.35     (i) has nonprofit status in accordance with chapter 317A; 
 12.36     (ii) has tax exempt status in accordance with the Internal 
 12.37  Revenue Service Code, section 501(c)(3); 
 12.38     (iii) charges for services on a sliding fee schedule based 
 12.39  on current poverty income guidelines; and 
 12.40     (iv) does not restrict access or services because of a 
 12.41  client's financial limitation; or 
 12.42     (3) status as a local government unit as defined in section 
 12.43  62D.02, subdivision 11, an Indian tribal government, an Indian 
 13.1   health service unit, or community health board as defined in 
 13.2   chapter 145A; or 
 13.3      (4) a former state hospital that specializes in the 
 13.4   treatment of cerebral palsy, spina bifida, epilepsy, closed head 
 13.5   injuries, specialized orthopedic problems, and other disabling 
 13.6   conditions.  
 13.7      Prior to designation, the commissioner shall publish the 
 13.8   names of all applicants in the State Register.  The public shall 
 13.9   have 30 days from the date of publication to submit written 
 13.10  comments to the commissioner on the application.  No designation 
 13.11  shall be made by the commissioner until the 30-day period has 
 13.12  expired. 
 13.13     The commissioner may designate an eligible provider as an 
 13.14  essential community provider for all the services offered by 
 13.15  that provider or for specific services designated by the 
 13.16  commissioner. 
 13.17     For the purpose of this subdivision, supportive and 
 13.18  stabilizing services include at a minimum, transportation, child 
 13.19  care, cultural, and linguistic services where appropriate. 
 13.20     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 13.21  62Q.19, subdivision 5, is amended to read: 
 13.22     Subd. 5.  [CONTRACT PAYMENT RATES.] An essential community 
 13.23  provider and a health plan company may negotiate the payment 
 13.24  rate for covered services provided by the essential community 
 13.25  provider.  This rate must be at least the same rate per unit of 
 13.26  service as is paid to other health plan providers for the same 
 13.27  or similar services. 
 13.28     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 13.29  256B.055, subdivision 12, is amended to read: 
 13.30     Subd. 12.  [DISABLED CHILDREN.] (a) A person is eligible 
 13.31  for medical assistance if the person is under age 19 and 
 13.32  qualifies as a disabled individual under United States Code, 
 13.33  title 42, section 1382c(a), and would be eligible for medical 
 13.34  assistance under the state plan if residing in a medical 
 13.35  institution, and the child requires a level of care provided in 
 13.36  a hospital, nursing facility, or intermediate care facility for 
 14.1   persons with mental retardation or related conditions, for whom 
 14.2   home care is appropriate, provided that the cost to medical 
 14.3   assistance under this section is not more than the amount that 
 14.4   medical assistance would pay for if the child resides in an 
 14.5   institution.  Eligibility under this section must be determined 
 14.6   annually After the child is determined to be eligible under this 
 14.7   section, the commissioner shall review the child's disability 
 14.8   under United States Code, title 42, section 1382c(a) and level 
 14.9   of care defined under this section no more often than annually 
 14.10  and may elect, based on the recommendation of health care 
 14.11  professionals under contract with the state medical review team, 
 14.12  to extend the review of disability and level of care up to a 
 14.13  maximum of four years.  The commissioner's decision on the 
 14.14  frequency of continuing review of disability and level of care 
 14.15  is not subject to administrative appeal under section 256.045.  
 14.16  Nothing in this subdivision shall be construed as affecting 
 14.17  other redeterminations of medical assistance eligibility under 
 14.18  chapter 256B and annual cost effective reviews under this 
 14.19  section.  
 14.20     (b) For purposes of this subdivision, "hospital" means an 
 14.21  institution as defined in section 144.696, subdivision 3, 
 14.22  144.55, subdivision 3, or Minnesota Rules, part 4640.3600, and 
 14.23  licensed pursuant to sections 144.50 to 144.58 .  For purposes 
 14.24  of this subdivision, a child requires a level of care provided 
 14.25  in a hospital if the child is determined by the commissioner to 
 14.26  need an extensive array of health services, including mental 
 14.27  health services, for an undetermined period of time, whose 
 14.28  health condition requires frequent monitoring and treatment by a 
 14.29  health care professional or by a person supervised by a health 
 14.30  care professional, who would reside in a hospital or require 
 14.31  frequent hospitalization if these services were not provided, 
 14.32  and the daily care needs are more complex than a nursing 
 14.33  facility level of care.  
 14.34     A child with serious emotional disturbance requires a level 
 14.35  of care provided in a hospital if the commissioner determines 
 14.36  that the individual requires 24-hour supervision because the 
 15.1   person exhibits recurrent or frequent suicidal or homicidal 
 15.2   ideation or behavior, recurrent or frequent psychosomatic 
 15.3   disorders or somatopsychic disorders that may become life 
 15.4   threatening, recurrent or frequent severe socially unacceptable 
 15.5   behavior associated with psychiatric disorder, ongoing and 
 15.6   chronic psychosis or severe, ongoing and chronic developmental 
 15.7   problems requiring continuous skilled observation, or severe 
 15.8   disabling symptoms for which office-centered outpatient 
 15.9   treatment is not adequate, and which overall severely impact the 
 15.10  individual's ability to function. 
 15.11     (c) For purposes of this subdivision, "nursing facility" 
 15.12  means a facility which provides nursing care as defined in 
 15.13  section 144A.01, subdivision 5, licensed pursuant to sections 
 15.14  144A.02 to 144A.10, which is appropriate if a person is in 
 15.15  active restorative treatment; is in need of special treatments 
 15.16  provided or supervised by a licensed nurse; or has unpredictable 
 15.17  episodes of active disease processes requiring immediate 
 15.18  judgment by a licensed nurse.  For purposes of this subdivision, 
 15.19  a child requires the level of care provided in a nursing 
 15.20  facility if the child is determined by the commissioner to meet 
 15.21  the requirements of the preadmission screening assessment 
 15.22  document under section 256B.0911 and the home care independent 
 15.23  rating document under section 256B.0627, subdivision 5, 
 15.24  paragraph (f), item (iii), adjusted to address age-appropriate 
 15.25  standards for children age 18 and under, pursuant to section 
 15.26  256B.0627, subdivision 5, paragraph (d), clause (2). 
 15.27     (d) For purposes of this subdivision, "intermediate care 
 15.28  facility for persons with mental retardation or related 
 15.29  conditions" or "ICF/MR" means a program licensed to provide 
 15.30  services to persons with mental retardation under section 
 15.31  252.28, and chapter 245A, and a physical plant licensed as a 
 15.32  supervised living facility under chapter 144, which together are 
 15.33  certified by the Minnesota department of health as meeting the 
 15.34  standards in Code of Federal Regulations, title 42, part 483, 
 15.35  for an intermediate care facility which provides services for 
 15.36  persons with mental retardation or persons with related 
 16.1   conditions who require 24-hour supervision and active treatment 
 16.2   for medical, behavioral, or habilitation needs.  For purposes of 
 16.3   this subdivision, a child requires a level of care provided in 
 16.4   an ICF/MR if the commissioner finds that the child has mental 
 16.5   retardation or a related condition in accordance with section 
 16.6   256B.092, is in need of a 24-hour plan of care and active 
 16.7   treatment similar to persons with mental retardation, and there 
 16.8   is a reasonable indication that the child will need ICF/MR 
 16.9   services. 
 16.10     (e) The determination of the level of care needed by the 
 16.11  child shall be made by the commissioner based on information 
 16.12  supplied to the commissioner by the parent or guardian, the 
 16.13  child's physician or physicians , and other professionals as 
 16.14  requested by the commissioner.  The commissioner shall establish 
 16.15  a screening team to conduct the level of care determinations 
 16.16  according to this subdivision. 
 16.17     (f) If a child meets the conditions in paragraph (b), (c), 
 16.18  or (d), the commissioner must assess the case to determine 
 16.19  whether: 
 16.20     (1) the child qualifies as a disabled individual under 
 16.21  United States Code, title 42, section 1382c(a) and would be 
 16.22  eligible for medical assistance if residing in a medical 
 16.23  institution; and 
 16.24     (2) the cost of medical assistance services for the child, 
 16.25  if eligible under this subdivision, would not be more than the 
 16.26  cost to medical assistance if the child resides in a medical 
 16.27  institution to be determined as follows: 
 16.28     (i) for a child who requires a level of care provided in an 
 16.29  ICF/MR, the cost of care for the child in an institution shall 
 16.30  be determined using the average payment rate established for the 
 16.31  regional treatment centers that are certified as ICFs/MR; 
 16.32     (ii) for a child who requires a level of care provided in 
 16.33  an inpatient hospital setting according to paragraph (b), 
 16.34  cost-effectiveness shall be determined according to Minnesota 
 16.35  Rules, part 9505.3520, items F and G; and 
 16.36     (iii) for a child who requires a level of care provided in 
 17.1   a nursing facility according to paragraph (c), 
 17.2   cost-effectiveness shall be determined according to Minnesota 
 17.3   Rules, part 9505.3040, except that the nursing facility average 
 17.4   rate shall be adjusted to reflect rates which would be paid for 
 17.5   children under age 16.  The commissioner may authorize an amount 
 17.6   up to the amount medical assistance would pay for a child 
 17.7   referred to the commissioner by the preadmission screening team 
 17.8   under section 256B.0911. 
 17.9      (g) Children eligible for medical assistance services under 
 17.10  section 256B.055, subdivision 12, as of June 30, 1995, must be 
 17.11  screened according to the criteria in this subdivision prior to 
 17.12  January 1, 1996.  Children found to be ineligible may not be 
 17.13  removed from the program until January 1, 1996 July 1, 1997. 
 17.14     Sec. 4.  Minnesota Statutes 1994, section 256B.056, 
 17.15  subdivision 1, is amended to read: 
 17.16     Subdivision 1.  [RESIDENCY.] To be eligible for medical 
 17.17  assistance, a person must reside have resided in Minnesota for 
 17.18  at least 30 days, or, if absent from the state, be deemed to be 
 17.19  a resident of Minnesota in accordance with the rules of the 
 17.20  state agency. 
 17.21     A person who has resided in the state for less than 30 days 
 17.22  is considered to be a Minnesota resident if the person: 
 17.23     (1) was born in the state; 
 17.24     (2) has in the past resided in the state for at least 365 
 17.25  consecutive days; 
 17.26     (3) has come to the state to join a close relative, which, 
 17.27  for purposes of this subdivision means a parent, grandparent, 
 17.28  brother, sister, spouse, or child; or 
 17.29     (4) has come to this state to accept a bona fide offer of 
 17.30  employment for which the person is eligible.  A county agency 
 17.31  shall waive the 30-day residency requirement in cases of medical 
 17.32  emergency or where unusual hardship would result from denial of 
 17.33  assistance.  The county agency must report to the commissioner 
 17.34  within 30 days on any waiver granted under this section. 
 17.35     Any administrative cost incurred by the county implementing 
 17.36  this subdivision shall be reimbursed by the state. 
 18.1      Sec. 5.  Minnesota Statutes 1994, section 256B.057, 
 18.2   subdivision 1, is amended to read: 
 18.3      Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] An infant 
 18.4   less than one year of age or a pregnant woman who has written 
 18.5   verification of a positive pregnancy test from a physician or 
 18.6   licensed registered nurse, is eligible for medical assistance if 
 18.7   countable family income is equal to or less than 275 percent of 
 18.8   the federal poverty guideline for the same family size.  For 
 18.9   purposes of this subdivision, "countable family income" means 
 18.10  the amount of income considered available using the methodology 
 18.11  of the AFDC program, except for the earned income disregard and 
 18.12  employment deductions.  An amount equal to the amount of earned 
 18.13  income exceeding 275 percent of the federal poverty guideline, 
 18.14  up to a maximum of the amount by which the combined total of 185 
 18.15  percent of the federal poverty guideline plus the earned income 
 18.16  disregards and deductions of the AFDC program exceeds 275 
 18.17  percent of the federal poverty guideline will be deducted for 
 18.18  pregnant women and infants less than one year of age.  
 18.19  Eligibility for a pregnant woman or infant less than one year of 
 18.20  age under this subdivision and who is eligible through a 
 18.21  spenddown must be determined without regard to asset standards 
 18.22  established in section 256B.056, subdivision 3.  
 18.23     An infant born on or after January 1, 1991, to a woman who 
 18.24  was eligible for and receiving medical assistance on the date of 
 18.25  the child's birth shall continue to be eligible for medical 
 18.26  assistance without redetermination until the child's first 
 18.27  birthday, as long as the child remains in the woman's household. 
 18.28     Sec. 6.  Minnesota Statutes 1995 Supplement, section 
 18.29  256B.057, subdivision 1b, is amended to read: 
 18.30     Subd. 1b.  [PREGNANT WOMEN AND INFANTS; EXPANSION.] This 
 18.31  subdivision supersedes subdivision 1 as long as the Minnesota 
 18.32  health care reform waiver remains in effect.  When the waiver 
 18.33  expires, the commissioner of human services shall publish a 
 18.34  notice in the State Register and notify the revisor of 
 18.35  statutes.  An infant less than two years of age or a pregnant 
 18.36  woman who has written verification of a positive pregnancy test 
 19.1   from a physician or licensed registered nurse, is eligible for 
 19.2   medical assistance if countable family income is equal to or 
 19.3   less than 275 percent of the federal poverty guideline for the 
 19.4   same family size.  For purposes of this subdivision, "countable 
 19.5   family income" means the amount of income considered available 
 19.6   using the methodology of the AFDC program, except for the earned 
 19.7   income disregard and employment deductions.  An amount equal to 
 19.8   the amount of earned income exceeding 275 percent of the federal 
 19.9   poverty guideline, up to a maximum of the amount by which the 
 19.10  combined total of 185 percent of the federal poverty guideline 
 19.11  plus the earned income disregards and deductions of the AFDC 
 19.12  program exceeds 275 percent of the federal poverty guideline 
 19.13  will be deducted for pregnant women and infants less than two 
 19.14  years of age.  Eligibility for a pregnant woman or infant less 
 19.15  than two years of age under this subdivision and who is eligible 
 19.16  through a spenddown must be determined without regard to asset 
 19.17  standards established in section 256B.056, subdivision 3.  
 19.18     An infant born on or after January 1, 1991, to a woman who 
 19.19  was eligible for and receiving medical assistance on the date of 
 19.20  the child's birth shall continue to be eligible for medical 
 19.21  assistance without redetermination until the child's second 
 19.22  birthday, as long as the child remains in the woman's household. 
 19.23     Sec. 7.  Minnesota Statutes 1994, section 256B.057, 
 19.24  subdivision 2, is amended to read: 
 19.25     Subd. 2.  [CHILDREN.] A child one through five years of age 
 19.26  in a family whose countable income is less than 133 percent of 
 19.27  the federal poverty guidelines for the same family size, is 
 19.28  eligible for medical assistance.  A child six through 18 years 
 19.29  of age, who was born after September 30, 1983, in a family whose 
 19.30  countable income is less than 100 percent of the federal poverty 
 19.31  guidelines for the same family size is eligible for medical 
 19.32  assistance.  Eligibility for children under this subdivision and 
 19.33  who is eligible through a spenddown must be determined without 
 19.34  regard to asset standards established in section 256B.056, 
 19.35  subdivision 3. 
 19.36     Sec. 8.  Minnesota Statutes 1995 Supplement, section 
 20.1   256B.0575, is amended to read: 
 20.2      256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
 20.3   PERSONS.] 
 20.4      When an institutionalized person is determined eligible for 
 20.5   medical assistance, the income that exceeds the deductions in 
 20.6   paragraphs (a) and (b) must be applied to the cost of 
 20.7   institutional care.  
 20.8      (a) The following amounts must be deducted from the 
 20.9   institutionalized person's income in the following order: 
 20.10     (1) the personal needs allowance under section 256B.35 or, 
 20.11  for a veteran who does not have a spouse or child, or a 
 20.12  surviving spouse of a veteran having no child, the amount of an 
 20.13  improved pension received from the veteran's administration not 
 20.14  exceeding $90 per month; 
 20.15     (2) the personal allowance for disabled individuals under 
 20.16  section 256B.36; 
 20.17     (3) if the institutionalized person has a legally appointed 
 20.18  guardian or conservator, five percent of the recipient's gross 
 20.19  monthly income up to $100 as reimbursement for guardianship or 
 20.20  conservatorship services; 
 20.21     (4) a monthly income allowance determined under section 
 20.22  256B.058, subdivision 2, but only to the extent income of the 
 20.23  institutionalized spouse is made available to the community 
 20.24  spouse; 
 20.25     (5) a monthly allowance for children under age 18 which, 
 20.26  together with the net income of the children, would provide 
 20.27  income equal to the medical assistance standard for families and 
 20.28  children according to section 256B.056, subdivision 4, for a 
 20.29  family size that includes only the minor children.  This 
 20.30  deduction applies only if the children do not live with the 
 20.31  community spouse and only to the extent that the deduction is 
 20.32  not included in the personal needs allowance under section 
 20.33  256B.35, subdivision 1, as child support garnished under a court 
 20.34  order; 
 20.35     (6) a monthly family allowance for other family members, 
 20.36  equal to one-third of the difference between 122 percent of the 
 21.1   federal poverty guidelines and the monthly income for that 
 21.2   family member; 
 21.3      (7) reparations payments made by the Federal Republic of 
 21.4   Germany and reparations payments made by the Netherlands for 
 21.5   victims of Nazi persecution between 1940 and 1945; and 
 21.6      (8) amounts for reasonable expenses incurred for necessary 
 21.7   medical or remedial care for the institutionalized spouse that 
 21.8   are not medical assistance covered expenses and that are not 
 21.9   subject to payment by a third party.  
 21.10     For purposes of clause (6), "other family member" means a 
 21.11  person who resides with the community spouse and who is a minor 
 21.12  or dependent child, dependent parent, or dependent sibling of 
 21.13  either spouse.  "Dependent" means a person who could be claimed 
 21.14  as a dependent for federal income tax purposes under the 
 21.15  Internal Revenue Code. 
 21.16     (b) Income shall be allocated to an institutionalized 
 21.17  person for a period of up to three calendar months, in an amount 
 21.18  equal to the medical assistance standard for a family size of 
 21.19  one if:  
 21.20     (1) a physician certifies that the person is expected to 
 21.21  reside in the long-term care facility for three calendar months 
 21.22  or less; 
 21.23     (2) if the person has expenses of maintaining a residence 
 21.24  in the community; and 
 21.25     (3) if one of the following circumstances apply:  
 21.26     (i) the person was not living together with a spouse or a 
 21.27  family member as defined in paragraph (a) when the person 
 21.28  entered a long-term care facility; or 
 21.29     (ii) the person and the person's spouse become 
 21.30  institutionalized on the same date, in which case the allocation 
 21.31  shall be applied to the income of one of the spouses.  
 21.32  For purposes of this paragraph, a person is determined to be 
 21.33  residing in a licensed nursing home, regional treatment center, 
 21.34  or medical institution if the person is expected to remain for a 
 21.35  period of one full calendar month or more. 
 21.36     Sec. 9.  Minnesota Statutes 1995 Supplement, section 
 22.1   256B.0595, subdivision 1, is amended to read: 
 22.2      Subdivision 1.  [PROHIBITED TRANSFERS.] (a) For transfers 
 22.3   of assets made on or before August 10, 1993, if a person or the 
 22.4   person's spouse has given away, sold, or disposed of, for less 
 22.5   than fair market value, any asset or interest therein, except 
 22.6   assets other than the homestead that are excluded under the 
 22.7   supplemental security program, within 30 months before or any 
 22.8   time after the date of institutionalization if the person has 
 22.9   been determined eligible for medical assistance, or within 30 
 22.10  months before or any time after the date of the first approved 
 22.11  application for medical assistance if the person has not yet 
 22.12  been determined eligible for medical assistance, the person is 
 22.13  ineligible for long-term care services for the period of time 
 22.14  determined under subdivision 2.  
 22.15     (b) Effective for transfers made after August 10, 1993, a 
 22.16  person, a person's spouse, or any person, court, or 
 22.17  administrative body with legal authority to act in place of, on 
 22.18  behalf of, at the direction of, or upon the request of the 
 22.19  person or person's spouse, may not give away, sell, or dispose 
 22.20  of, for less than fair market value, any asset or interest 
 22.21  therein, except assets other than the homestead that are 
 22.22  excluded under the supplemental security income program, for the 
 22.23  purpose of establishing or maintaining medical assistance 
 22.24  eligibility.  For purposes of determining eligibility for 
 22.25  long-term care services, any transfer of such assets within 36 
 22.26  months before or any time after an institutionalized person 
 22.27  applies for medical assistance, or 36 months before or any time 
 22.28  after a medical assistance recipient becomes institutionalized, 
 22.29  for less than fair market value may be considered.  Any such 
 22.30  transfer is presumed to have been made for the purpose of 
 22.31  establishing or maintaining medical assistance eligibility and 
 22.32  the person is ineligible for long-term care services for the 
 22.33  period of time determined under subdivision 2, unless the person 
 22.34  furnishes convincing evidence to establish that the transaction 
 22.35  was exclusively for another purpose, or unless the transfer is 
 22.36  permitted under subdivision 3 or 4.  Notwithstanding the 
 23.1   provisions of this paragraph, in the case of payments from a 
 23.2   trust or portions of a trust that are considered transfers of 
 23.3   assets under federal law, any transfers made within 60 months 
 23.4   before or any time after an institutionalized person applies for 
 23.5   medical assistance and within 60 months before or any time after 
 23.6   a medical assistance recipient becomes institutionalized, may be 
 23.7   considered. 
 23.8      (c) This section applies to transfers, for less than fair 
 23.9   market value, of income or assets, including assets that are 
 23.10  considered income in the month received, such as inheritances, 
 23.11  court settlements, and retroactive benefit payments or income to 
 23.12  which the person or the person's spouse is entitled but does not 
 23.13  receive due to action by the person, the person's spouse, or any 
 23.14  person, court, or administrative body with legal authority to 
 23.15  act in place of, on behalf of, at the direction of, or upon the 
 23.16  request of the person or the person's spouse.  
 23.17     (d) This section applies to payments for care or personal 
 23.18  services provided by a relative, unless the compensation was 
 23.19  stipulated in a notarized, written agreement which was in 
 23.20  existence when the service was performed, the care or services 
 23.21  directly benefited the person, and the payments made represented 
 23.22  reasonable compensation for the care or services provided.  A 
 23.23  notarized written agreement is not required if payment for the 
 23.24  services was made within 60 days after the service was provided. 
 23.25     (e) This section applies to the portion of any asset or 
 23.26  interest that a person, a person's spouse, or any person, court, 
 23.27  or administrative body with legal authority to act in place of, 
 23.28  on behalf of, at the direction of, or upon the request of the 
 23.29  person or the person's spouse, transfers to any trust, annuity, 
 23.30  or other instrument, that exceeds the value of the benefit 
 23.31  likely to be returned to the person or spouse while alive, based 
 23.32  on estimated life expectancy using the life expectancy tables 
 23.33  employed by the supplemental security income program to 
 23.34  determine the value of an agreement for services for life.  The 
 23.35  commissioner may adopt rules reducing life expectancies based on 
 23.36  the need for long-term care. 
 24.1      (f) For purposes of this section, long-term care services 
 24.2   include services in a nursing facility, services that are 
 24.3   eligible for payment according to section 256B.0625, subdivision 
 24.4   2, because they are provided in a swing bed, intermediate care 
 24.5   facility for persons with mental retardation, and home and 
 24.6   community-based services provided pursuant to sections 
 24.7   256B.0915, 256B.092, and 256B.49.  For purposes of this 
 24.8   subdivision and subdivisions 2, 3, and 4, "institutionalized 
 24.9   person" includes a person who is an inpatient in a nursing 
 24.10  facility or in a swing bed, or intermediate care facility for 
 24.11  persons with mental retardation or who is receiving home and 
 24.12  community-based services under sections 256B.0915, 256B.092, and 
 24.13  256B.49. 
 24.14     (g) Effective for transfers made on or after July 1, 1995, 
 24.15  or upon federal approval, whichever is later, a person, a 
 24.16  person's spouse, or any person, court, or administrative body 
 24.17  with legal authority to act in place of, on behalf of, at the 
 24.18  direction of, or upon the request of the person or person's 
 24.19  spouse, may not give away, sell, or dispose of, for less than 
 24.20  fair market value, any asset or interest therein, for the 
 24.21  purpose of establishing or maintaining medical assistance 
 24.22  eligibility.  For purposes of determining eligibility for 
 24.23  long-term care services, any transfer of such assets within 60 
 24.24  months before, or any time after, an institutionalized person 
 24.25  applies for medical assistance, or 60 months before, or any time 
 24.26  after, a medical assistance recipient becomes institutionalized, 
 24.27  for less than fair market value may be considered.  Any such 
 24.28  transfer is presumed to have been made for the purpose of 
 24.29  establishing or maintaining medical assistance eligibility and 
 24.30  the person is ineligible for long-term care services for the 
 24.31  period of time determined under subdivision 2, unless the person 
 24.32  furnishes convincing evidence to establish that the transaction 
 24.33  was exclusively for another purpose, or unless the transfer is 
 24.34  permitted under subdivision 3 or 4. 
 24.35     Sec. 10.  Minnesota Statutes 1994, section 256B.0595, is 
 24.36  amended by adding a subdivision to read: 
 25.1      Subd. 1a.  [PROHIBITED TRANSFERS.] (a) Notwithstanding any 
 25.2   contrary provisions of this section, this subdivision applies to 
 25.3   transfers involving recipients of medical assistance that are 
 25.4   made on or after its effective date and to all transfers 
 25.5   involving persons who apply for medical assistance on or after 
 25.6   its effective date if the transfer occurred within 60 months 
 25.7   before the person applies for medical assistance, except that 
 25.8   this subdivision does not apply to transfers made prior to March 
 25.9   1, 1996.  A person, a person's spouse, or any person, court, or 
 25.10  administrative body with legal authority to act in place of, on 
 25.11  behalf of, at the direction of, or upon the request of the 
 25.12  person or the person's spouse, may not give away, sell, dispose 
 25.13  of, or reduce ownership or control of any income, asset, or 
 25.14  interest therein for less than fair market value for the purpose 
 25.15  of establishing or maintaining medical assistance eligibility 
 25.16  for the person.  For purposes of determining eligibility for 
 25.17  medical assistance services, any transfer of such income or 
 25.18  assets for less than fair market value within 60 months before 
 25.19  or any time after a person applies for medical assistance may be 
 25.20  considered.  Any such transfer is presumed to have been made for 
 25.21  the purpose of establishing or maintaining medical assistance 
 25.22  eligibility, and the person is ineligible for medical assistance 
 25.23  services for the period of time determined under subdivision 2a, 
 25.24  unless the person furnishes convincing evidence to establish 
 25.25  that the transaction was exclusively for another purpose, or 
 25.26  unless the transfer is permitted under subdivision 3a or 4a. 
 25.27     (b) This section applies to transfers of income or assets 
 25.28  for less than fair market value, including assets that are 
 25.29  considered income in the month received, such as inheritances, 
 25.30  court settlements, and retroactive benefit payments or income to 
 25.31  which the person or the person's spouse is entitled but does not 
 25.32  receive due to action by the person, the person's spouse, or any 
 25.33  person, court, or administrative body with legal authority to 
 25.34  act in place of, on behalf of, at the direction of, or upon the 
 25.35  request of the person or the person's spouse.  
 25.36     (c) This section applies to payments for care or personal 
 26.1   services provided by a relative, unless the compensation was 
 26.2   stipulated in a notarized, written agreement which was in 
 26.3   existence when the service was performed, the care or services 
 26.4   directly benefited the person, and the payments made represented 
 26.5   reasonable compensation for the care or services provided.  A 
 26.6   notarized written agreement is not required if payment for the 
 26.7   services was made within 60 days after the service was provided. 
 26.8      (d) This section applies to the portion of any income, 
 26.9   asset, or interest therein that a person, a person's spouse, or 
 26.10  any person, court, or administrative body with legal authority 
 26.11  to act in place of, on behalf of, at the direction of, or upon 
 26.12  the request of the person or the person's spouse, transfers to 
 26.13  any annuity that exceeds the value of the benefit likely to be 
 26.14  returned to the person or spouse while alive, based on estimated 
 26.15  life expectancy of adults entering long-term care.  The 
 26.16  commissioner shall adopt rules establishing life expectancies of 
 26.17  adults entering long-term care. 
 26.18     Sec. 11.  Minnesota Statutes 1995 Supplement, section 
 26.19  256B.0595, subdivision 2, is amended to read: 
 26.20     Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
 26.21  uncompensated transfer occurring on or before August 10, 1993, 
 26.22  the number of months of ineligibility for long-term care 
 26.23  services shall be the lesser of 30 months, or the uncompensated 
 26.24  transfer amount divided by the average medical assistance rate 
 26.25  for nursing facility services in the state in effect on the date 
 26.26  of application.  The amount used to calculate the average 
 26.27  medical assistance payment rate shall be adjusted each July 1 to 
 26.28  reflect payment rates for the previous calendar year.  The 
 26.29  period of ineligibility begins with the month in which the 
 26.30  assets were transferred.  If the transfer was not reported to 
 26.31  the local agency at the time of application, and the applicant 
 26.32  received long-term care services during what would have been the 
 26.33  period of ineligibility if the transfer had been reported, a 
 26.34  cause of action exists against the transferee for the cost of 
 26.35  long-term care services provided during the period of 
 26.36  ineligibility, or for the uncompensated amount of the transfer, 
 27.1   whichever is less.  The action may be brought by the state or 
 27.2   the local agency responsible for providing medical assistance 
 27.3   under chapter 256G.  The uncompensated transfer amount is the 
 27.4   fair market value of the asset at the time it was given away, 
 27.5   sold, or disposed of, less the amount of compensation received.  
 27.6      (b) For uncompensated transfers made after August 10, 1993, 
 27.7   the number of months of ineligibility for long-term care 
 27.8   services shall be the total uncompensated value of the resources 
 27.9   transferred divided by the average medical assistance rate for 
 27.10  nursing facility services in the state in effect on the date of 
 27.11  application.  The amount used to calculate the average medical 
 27.12  assistance payment rate shall be adjusted each July 1 to reflect 
 27.13  payment rates for the previous calendar year.  The period of 
 27.14  ineligibility begins with the month in which the assets were 
 27.15  transferred except that if one or more uncompensated transfers 
 27.16  are made during a period of ineligibility, the total assets 
 27.17  transferred during the ineligibility period shall be combined 
 27.18  and a penalty period calculated to begin in the month the first 
 27.19  uncompensated transfer was made.  If the transfer was not 
 27.20  reported to the local agency at the time of application, and the 
 27.21  applicant received medical assistance services during what would 
 27.22  have been the period of ineligibility if the transfer had been 
 27.23  reported, a cause of action exists against the transferee for 
 27.24  the cost of medical assistance services provided during the 
 27.25  period of ineligibility, or for the uncompensated amount of the 
 27.26  transfer, whichever is less.  The action may be brought by the 
 27.27  state or the local agency responsible for providing medical 
 27.28  assistance under chapter 256G.  The uncompensated transfer 
 27.29  amount is the fair market value of the asset at the time it was 
 27.30  given away, sold, or disposed of, less the amount of 
 27.31  compensation received.  
 27.32     (c) If a calculation of a penalty period results in a 
 27.33  partial month, payments for long-term care services shall be 
 27.34  reduced in an amount equal to the fraction, except that in 
 27.35  calculating the value of uncompensated transfers, if the total 
 27.36  value of all uncompensated transfers made in a month not 
 28.1   included in an existing penalty period does not exceed 
 28.2   $1,000 $500, then such transfers shall be disregarded for each 
 28.3   month prior to the month of application for or during receipt of 
 28.4   medical assistance. 
 28.5      Sec. 12.  Minnesota Statutes 1994, section 256B.0595, is 
 28.6   amended by adding a subdivision to read: 
 28.7      Subd. 2a.  [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 
 28.8   any contrary provisions of this section, this subdivision 
 28.9   applies to transfers involving recipients of medical assistance 
 28.10  that are made on or after its effective date and to all 
 28.11  transfers involving persons who apply for medical assistance on 
 28.12  or after its effective date, regardless of when the transfer 
 28.13  occurred, except that this subdivision does not apply to 
 28.14  transfers made prior to March 1, 1996.  For any uncompensated 
 28.15  transfer occurring within 60 months prior to the date of 
 28.16  application, at any time after application, or while eligible, 
 28.17  the number of months of cumulative ineligibility for medical 
 28.18  assistance services shall be the total uncompensated value of 
 28.19  the assets and income transferred divided by the statewide 
 28.20  average per person nursing facility payment made by the state in 
 28.21  effect on the date of application.  The amount used to calculate 
 28.22  the average per person payment shall be adjusted each July 1 to 
 28.23  reflect average payments for the previous calendar year.  For 
 28.24  applicants, the period of ineligibility begins with the month in 
 28.25  which the person applied for medical assistance and satisfied 
 28.26  all other requirements for eligibility, or the month the local 
 28.27  agency becomes aware of the transfer, if later.  For recipients, 
 28.28  the period of ineligibility begins in the month the agency 
 28.29  becomes aware of the transfer, except that penalty periods for 
 28.30  transfers made during a period of ineligibility as determined 
 28.31  under this section shall begin in the month following the 
 28.32  existing period of ineligibility.  If the transfer was not 
 28.33  reported to the local agency at the time of application, and the 
 28.34  applicant received medical assistance services during what would 
 28.35  have been the period of ineligibility if the transfer had been 
 28.36  reported, a cause of action exists against the transferee for 
 29.1   the cost of medical assistance services provided during the 
 29.2   period of ineligibility, or for the uncompensated amount of the 
 29.3   transfer that was not recovered from the transferor through the 
 29.4   implementation of a penalty period under this subdivision, 
 29.5   whichever is less.  The action may be brought by the state or 
 29.6   the local agency responsible for providing medical assistance 
 29.7   under chapter 256G.  The total uncompensated value is the fair 
 29.8   market value of the income or asset at the time it was given 
 29.9   away, sold, or disposed of, less the amount of compensation 
 29.10  received.  No cause of action exists for a transfer, unless:  
 29.11  (1) the transferee knew or should have known that the transfer 
 29.12  was being made by a person who was a resident of a long-term 
 29.13  care facility or was receiving that level of care in the 
 29.14  community at the time of the transfer; (2) the transferee knew 
 29.15  or should have known that the transfer was being made to assist 
 29.16  the person to qualify for or retain medical assistance 
 29.17  eligibility; or (3) the transferee actively solicited the 
 29.18  transfer with intent to assist the person to qualify for or 
 29.19  retain eligibility for medical assistance. 
 29.20     (b) If a calculation of a penalty period results in a 
 29.21  partial month, payments for medical assistance services shall be 
 29.22  reduced in an amount equal to the fraction, except that in 
 29.23  calculating the value of uncompensated transfers, if the total 
 29.24  value of all uncompensated transfers made in a month not 
 29.25  included in an existing penalty period does not exceed $500, 
 29.26  then such transfers shall be disregarded for each month prior to 
 29.27  the month of application for or during receipt of medical 
 29.28  assistance. 
 29.29     Sec. 13.  Minnesota Statutes 1995 Supplement, section 
 29.30  256B.0595, subdivision 3, is amended to read: 
 29.31     Subd. 3.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 29.32  (a) An institutionalized person is not ineligible for long-term 
 29.33  care services due to a transfer of assets for less than fair 
 29.34  market value if the asset transferred was a homestead and: 
 29.35     (1) title to the homestead was transferred to the 
 29.36  individual's 
 30.1      (i) spouse; 
 30.2      (ii) child who is under age 21; 
 30.3      (iii) blind or permanently and totally disabled child as 
 30.4   defined in the supplemental security income program; 
 30.5      (iv) sibling who has equity interest in the home and who 
 30.6   was residing in the home for a period of at least one year 
 30.7   immediately before the date of the individual's admission to the 
 30.8   facility; or 
 30.9      (v) son or daughter who was residing in the individual's 
 30.10  home for a period of at least two years immediately before the 
 30.11  date of the individual's admission to the facility, and who 
 30.12  provided care to the individual that, as certified by the 
 30.13  individual's attending physician, permitted the individual to 
 30.14  reside at home rather than in an institution or facility; 
 30.15     (2) a satisfactory showing is made that the individual 
 30.16  intended to dispose of the homestead at fair market value or for 
 30.17  other valuable consideration; or 
 30.18     (3) the local agency grants a waiver of the excess 
 30.19  resources created by the uncompensated transfer a penalty 
 30.20  resulting from a transfer for less than fair market value 
 30.21  because denial of eligibility would cause undue hardship for the 
 30.22  individual, based on imminent threat to the individual's health 
 30.23  and well-being.  
 30.24     (b) When a waiver is granted under paragraph (a), clause 
 30.25  (3), a cause of action exists against the person to whom the 
 30.26  homestead was transferred for that portion of long-term care 
 30.27  services granted within: 
 30.28     (1) 30 months of a transfer made on or before August 10, 
 30.29  1993; 
 30.30     (2) 60 months if the homestead was transferred after August 
 30.31  10, 1993, to a trust or portion of a trust that is considered a 
 30.32  transfer of assets under federal law; or 
 30.33     (3) 36 months if transferred in any other manner after 
 30.34  August 10, 1993, 
 30.35  or the amount of the uncompensated transfer, whichever is less, 
 30.36  together with the costs incurred due to the action.  The action 
 31.1   may shall be brought by the state or unless the state delegates 
 31.2   this responsibility to the local agency responsible for 
 31.3   providing medical assistance under chapter 256G. 
 31.4      Sec. 14.  Minnesota Statutes 1994, section 256B.0595, is 
 31.5   amended by adding a subdivision to read: 
 31.6      Subd. 3a.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 31.7   (a) This subdivision applies to transfers involving recipients 
 31.8   of medical assistance that are made on or after its effective 
 31.9   date and to all transfers involving persons who apply for 
 31.10  medical assistance on or after its effective date, regardless of 
 31.11  when the transfer occurred.  A person is not ineligible for 
 31.12  medical assistance services due to a transfer of assets for less 
 31.13  than fair market value as described in subdivision 1a if the 
 31.14  asset transferred was a homestead and: 
 31.15     (1) title to the homestead was transferred to the 
 31.16  individual's relatives who are residing in the homestead and are 
 31.17  the individual's 
 31.18     (i) spouse; 
 31.19     (ii) child who is under age 21; 
 31.20     (iii) blind or permanently and totally disabled child as 
 31.21  defined in the supplemental security income program; 
 31.22     (iv) sibling who has equity interest in the home and who 
 31.23  was residing in the home for a period of at least one year 
 31.24  immediately before the date of the individual's admission to the 
 31.25  facility; or 
 31.26     (v) son or daughter who was residing in the individual's 
 31.27  home for a period of at least two years immediately before the 
 31.28  date of the individual's admission to the facility, and who 
 31.29  provided care to the individual that, as certified by the 
 31.30  individual's attending physician, permitted the individual to 
 31.31  reside at home rather than in an institution or facility; 
 31.32     (2) a satisfactory showing is made that the individual 
 31.33  intended to dispose of the homestead at fair market value or for 
 31.34  other valuable consideration; or 
 31.35     (3) the local agency grants a waiver of a penalty resulting 
 31.36  from a transfer for less than fair market value because denial 
 32.1   of eligibility would cause undue hardship for the individual and 
 32.2   there exists an imminent threat to the individual's health and 
 32.3   well-being. 
 32.4      (b) When a waiver is granted under paragraph (a), clause 
 32.5   (3), a cause of action exists against the person to whom the 
 32.6   homestead was transferred for that portion of medical assistance 
 32.7   services granted within 60 months of the date the transferor 
 32.8   applied for medical assistance and satisfied all other 
 32.9   requirements for eligibility, 
 32.10  or the amount of the uncompensated transfer, whichever is less, 
 32.11  together with the costs incurred due to the action.  The action 
 32.12  shall be brought by the state unless the state delegates this 
 32.13  responsibility to the local agency responsible for providing 
 32.14  medical assistance under chapter 256G. 
 32.15     Sec. 15.  Minnesota Statutes 1995 Supplement, section 
 32.16  256B.0595, subdivision 4, is amended to read: 
 32.17     Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 
 32.18  institutionalized person who has made, or whose spouse has made 
 32.19  a transfer prohibited by subdivision 1, is not ineligible for 
 32.20  long-term care services if one of the following conditions 
 32.21  applies: 
 32.22     (1) the assets were transferred to the individual's spouse 
 32.23  or to another for the sole benefit of the spouse; or 
 32.24     (2) the institutionalized spouse, prior to being 
 32.25  institutionalized, transferred assets to a spouse, provided that 
 32.26  the spouse to whom the assets were transferred does not then 
 32.27  transfer those assets to another person for less than fair 
 32.28  market value.  (At the time when one spouse is 
 32.29  institutionalized, assets must be allocated between the spouses 
 32.30  as provided under section 256B.059); or 
 32.31     (3) the assets were transferred to the individual's child 
 32.32  who is blind or permanently and totally disabled as determined 
 32.33  in the supplemental security income program; or 
 32.34     (4) a satisfactory showing is made that the individual 
 32.35  intended to dispose of the assets either at fair market value or 
 32.36  for other valuable consideration; or 
 33.1      (5)  the local agency determines that denial of eligibility 
 33.2   for long-term care services would work an undue hardship and 
 33.3   grants a waiver of excess assets a penalty resulting from a 
 33.4   transfer for less than fair market value based on an imminent 
 33.5   threat to the individual's health and well-being.  When a waiver 
 33.6   is granted, a cause of action exists against the person to whom 
 33.7   the assets were transferred for that portion of long-term care 
 33.8   services granted within: 
 33.9      (i) 30 months of a transfer made on or before August 10, 
 33.10  1993; 
 33.11     (ii) 60 months of a transfer if the assets were transferred 
 33.12  after August 30, 1993, to a trust or portion of a trust that is 
 33.13  considered a transfer of assets under federal law; or 
 33.14     (iii) 36 months of a transfer if transferred in any other 
 33.15  manner after August 10, 1993, 
 33.16  or the amount of the uncompensated transfer, whichever is less, 
 33.17  together with the costs incurred due to the action.  The action 
 33.18  may shall be brought by the state or unless the state delegates 
 33.19  this responsibility to the local agency responsible for 
 33.20  providing medical assistance under this chapter; or 
 33.21     (6) for transfers occurring after August 10, 1993, the 
 33.22  assets were transferred by the person or person's spouse:  (i) 
 33.23  into a trust established solely for the benefit of a son or 
 33.24  daughter of any age who is blind or disabled as defined by the 
 33.25  Supplemental Security Income program; or (ii) into a trust 
 33.26  established solely for the benefit of an individual who is under 
 33.27  65 years of age who is disabled as defined by the Supplemental 
 33.28  Security Income program. 
 33.29     Sec. 16.  Minnesota Statutes 1994, section 256B.0595, is 
 33.30  amended by adding a subdivision to read: 
 33.31     Subd. 4a.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] This 
 33.32  subdivision applies to transfers involving recipients of medical 
 33.33  assistance that are made on or after its effective date and to 
 33.34  all transfers involving persons who apply for medical assistance 
 33.35  on or after its effective date, regardless of when the transfer 
 33.36  occurred.  A person or a person's spouse who has made a transfer 
 34.1   prohibited by subdivision 1a is not ineligible for medical 
 34.2   assistance services if one of the following conditions applies: 
 34.3      (1) the assets or income were transferred to the 
 34.4   individual's spouse or to another for the sole benefit of the 
 34.5   spouse, except that after eligibility is established, transfers 
 34.6   to a spouse are permitted only to comply with the provisions of 
 34.7   section 256B.059; or 
 34.8      (2) the institutionalized spouse, prior to being 
 34.9   institutionalized, transferred assets or income to a spouse, 
 34.10  provided that the spouse to whom the assets or income were 
 34.11  transferred does not then transfer those assets or income to 
 34.12  another person for less than fair market value.  (At the time 
 34.13  when one spouse is institutionalized, assets must be allocated 
 34.14  between the spouses as provided under section 256B.059); or 
 34.15     (3) the assets or income were transferred to a trust for 
 34.16  the sole benefit of the individual's child who is blind or 
 34.17  permanently and totally disabled as determined in the 
 34.18  supplemental security income program and the trust reverts to 
 34.19  the state upon the disabled child's death to the extent medical 
 34.20  assistance has paid for services for the child; or 
 34.21     (4) a satisfactory showing is made that the individual 
 34.22  intended to dispose of the assets or income either at fair 
 34.23  market value or for other valuable consideration; or 
 34.24     (5) the local agency determines that denial of eligibility 
 34.25  for medical assistance services would work an undue hardship and 
 34.26  grants a waiver of a penalty resulting from a transfer for less 
 34.27  than fair market value because there exists an imminent threat 
 34.28  to the individual's health and well-being.  When a waiver is 
 34.29  granted, a cause of action exists against the person to whom the 
 34.30  assets were transferred for that portion of medical assistance 
 34.31  services granted within 60 months of the date the transferor 
 34.32  applied for medical assistance and satisfied all other 
 34.33  requirements for eligibility, 
 34.34  or the amount of the uncompensated transfer, whichever is less, 
 34.35  together with the costs incurred due to the action.  The action 
 34.36  shall be brought by the state unless the state delegates this 
 35.1   responsibility to the local agency responsible for providing 
 35.2   medical assistance under this chapter. 
 35.3      Sec. 17.  Minnesota Statutes 1994, section 256B.0595, is 
 35.4   amended by adding a subdivision to read: 
 35.5      Subd. 8.  [NOTICE OF RIGHTS.] If a period of ineligibility 
 35.6   is imposed under subdivision 2 or 2a, the local agency shall 
 35.7   inform the applicant or recipient subject to the penalty of the 
 35.8   person's rights under section 325F.71, subdivision 2. 
 35.9      Sec. 18.  Minnesota Statutes 1995 Supplement, section 
 35.10  256B.0628, subdivision 2, is amended to read: 
 35.11     Subd. 2.  [DUTIES.] (a) The commissioner may contract with 
 35.12  or employ qualified registered nurses and necessary support 
 35.13  staff, or contract with qualified agencies, to provide home care 
 35.14  prior authorization and review services for medical assistance 
 35.15  recipients who are receiving home care services. 
 35.16     (b) Reimbursement for the prior authorization function 
 35.17  shall be made through the medical assistance administrative 
 35.18  authority.  The state shall pay the nonfederal share.  The 
 35.19  functions will be to: 
 35.20     (1) assess the recipient's individual need for services 
 35.21  required to be cared for safely in the community; 
 35.22     (2) ensure that a service plan that meets the recipient's 
 35.23  needs is developed by the appropriate agency or individual; 
 35.24     (3) ensure cost-effectiveness of medical assistance home 
 35.25  care services; 
 35.26     (4) recommend the approval or denial of the use of medical 
 35.27  assistance funds to pay for home care services; 
 35.28     (5) reassess the recipient's need for and level of home 
 35.29  care services at a frequency determined by the commissioner; and 
 35.30     (6) conduct on-site assessments when determined necessary 
 35.31  by the commissioner and recommend changes to care plans that 
 35.32  will provide more efficient and appropriate home care. 
 35.33     (c) In addition, the commissioner or the commissioner's 
 35.34  designee may: 
 35.35     (1) review service plans and reimbursement data for 
 35.36  utilization of services that exceed community-based standards 
 36.1   for home care, inappropriate home care services, medical 
 36.2   necessity, home care services that do not meet quality of care 
 36.3   standards, or unauthorized services and make appropriate 
 36.4   referrals within the department or to other appropriate entities 
 36.5   based on the findings; 
 36.6      (2) assist the recipient in obtaining services necessary to 
 36.7   allow the recipient to remain safely in or return to the 
 36.8   community; 
 36.9      (3) coordinate home care services with other medical 
 36.10  assistance services under section 256B.0625; 
 36.11     (4) assist the recipient with problems related to the 
 36.12  provision of home care services; and 
 36.13     (5) assure the quality of home care services.; and 
 36.14     (6) Assure that all liable third-party payers including 
 36.15  Medicare have been used prior to medical assistance for home 
 36.16  care services, including but not limited to, home health agency, 
 36.17  elected hospice benefit, waivered services, alternative care 
 36.18  program services, and personal care services. 
 36.19     (d) For the purposes of this section, "home care services"  
 36.20  means medical assistance services defined under section 
 36.21  256B.0625, subdivisions 6a, 7, and 19a. 
 36.22     Sec. 19.  [256B.07] [MEDICARE MAXIMIZATION PROGRAM.] 
 36.23     Subdivision 1.  [DEFINITION.] (a) "Dual entitlees" means 
 36.24  recipients eligible for either the medical assistance program or 
 36.25  the alternative care program who are also eligible for the 
 36.26  federal Medicare program.  
 36.27     (b) For purposes of this section "home care services" means 
 36.28  home health agency services, private duty nursing services, 
 36.29  personal care assistant services, waivered services, alternative 
 36.30  care program services, hospice services, rehabilitation therapy 
 36.31  services, and medical supplies and equipment. 
 36.32     Subd. 2.  [TECHNICAL ASSISTANCE TO PROVIDERS.] (a) The 
 36.33  commissioner shall establish a technical assistance program to 
 36.34  require providers of services and equipment under this section 
 36.35  to maximize collections from the federal Medicare program.  The 
 36.36  technical assistance may include the provision of materials to 
 37.1   help providers determine those services and equipment likely to 
 37.2   be reimbursed by Medicare.  The technical assistance may also 
 37.3   include the provision of computer software to providers to 
 37.4   assist in this process.  The commissioner may expand the 
 37.5   technical assistance program to include providers of other 
 37.6   services under this chapter. 
 37.7      (b) Any provider of home care services enrolled in the 
 37.8   medical assistance program, or county public health nursing 
 37.9   agency responsible for personal care assessments, or county case 
 37.10  managers for alternative care or medical assistance waiver 
 37.11  programs, is required to use the method developed and supplied 
 37.12  by the department of human services for determining Medicare 
 37.13  coverage for home care equipment and services provided to dual 
 37.14  entitlees to ensure appropriate billing of Medicare.  The method 
 37.15  will be developed in two phases; the first phase is a manual 
 37.16  system effective July 1, 1996, and the second phase will 
 37.17  automate the manual procedure by expanding the current Medicaid 
 37.18  Management Information System (MMIS) effective January 1, 1997.  
 37.19  Both methods will determine Medicare coverage for the dates of 
 37.20  service, Medicare coverage for home care services, and create an 
 37.21  audit trail including reports.  Both methods will be linked to 
 37.22  prior authorization, therefore, either method must be used 
 37.23  before home care services are authorized and when there is a 
 37.24  change of condition affecting medical assistance authorization.  
 37.25  The department will conduct periodic reviews of participant 
 37.26  performance with the method and upon demonstrating appropriate 
 37.27  referral and billing of Medicare, participants may be determined 
 37.28  exempt from regular performance audits.  
 37.29     Subd. 3.  [REFERRALS TO MEDICARE CERTIFIED PROVIDERS 
 37.30  REQUIRED.] Non-Medicare certified and nonparticipating Medicare 
 37.31  certified home care service providers must refer dual eligible 
 37.32  recipients to Medicare certified providers when Medicare is 
 37.33  determined to be the appropriate payer for supplies and 
 37.34  equipment or services.  Non-Medicare certified and 
 37.35  nonparticipating Medicare certified home care service providers 
 37.36  will be terminated from participation in the medical assistance 
 38.1   program for failure to make such referrals. 
 38.2      Subd. 4.  [MEDICARE CERTIFICATION REQUIREMENT.] Medicare 
 38.3   certification is required of all medical assistance enrolled 
 38.4   home care service providers as defined in subdivision 1 within 
 38.5   one year of the date the Minnesota department of health gives 
 38.6   notice to the department that initial Medicare surveys will 
 38.7   resume. 
 38.8      Subd. 5.  [ADVISORY COMMITTEE.] The commissioner shall 
 38.9   establish an advisory committee comprised of home care services 
 38.10  recipients, providers, county public health nurses, home care 
 38.11  and county nursing associations, and department of human 
 38.12  services staff to make recommendations to the Medicare 
 38.13  maximization program.  The recommendations shall include:  
 38.14  nursing practice issues as they relate to home care services 
 38.15  funded by Medicare and medical assistance; and streamlining 
 38.16  assessment, prior authorization, and up-front payer 
 38.17  determination processes to achieve administrative efficiencies. 
 38.18     Sec. 20.  Minnesota Statutes 1995 Supplement, section 
 38.19  256B.15, is amended by adding a subdivision to read: 
 38.20     Subd. 2a.  [CLAIMS ON THE ESTATE OF A PREDECEASED 
 38.21  SPOUSE.] The claim shall include only the total amount of 
 38.22  medical assistance rendered after age 55 or during a period of 
 38.23  institutionalization described in subdivision 1a, clause (b), 
 38.24  and the total amount of general assistance medical care 
 38.25  rendered, and shall not include interest.  Claims that have been 
 38.26  allowed but not paid shall bear interest according to section 
 38.27  524.3-806, paragraph (d).  A claim against the estate of a 
 38.28  spouse who did not receive medical assistance who predeceases 
 38.29  the spouse who did receive medical assistance, for medical 
 38.30  assistance rendered for the spouse, is limited to the value of 
 38.31  the assets of the estate that were marital property or jointly 
 38.32  owned property at any time during the marriage. 
 38.33     Sec. 21.  Minnesota Statutes 1994, section 256B.35, 
 38.34  subdivision 1, is amended to read: 
 38.35     Subdivision 1.  [PERSONAL NEEDS ALLOWANCE.] (a) 
 38.36  Notwithstanding any law to the contrary, welfare allowances for 
 39.1   clothing and personal needs for individuals receiving medical 
 39.2   assistance while residing in any skilled nursing home, 
 39.3   intermediate care facility, or medical institution including 
 39.4   recipients of supplemental security income, in this state shall 
 39.5   not be less than $45 per month from all sources.  When benefit 
 39.6   amounts for social security or supplemental security income 
 39.7   recipients are increased pursuant to United States Code, title 
 39.8   42, sections 415(i) and 1382f, the commissioner shall, effective 
 39.9   in the month in which the increase takes effect, increase by the 
 39.10  same percentage to the nearest whole dollar the clothing and 
 39.11  personal needs allowance for individuals receiving medical 
 39.12  assistance while residing in any skilled nursing home, medical 
 39.13  institution, or intermediate care facility.  The commissioner 
 39.14  shall provide timely notice to local agencies, providers, and 
 39.15  recipients of increases under this provision. 
 39.16     (b) The personal needs allowance may be paid as part of the 
 39.17  Minnesota supplemental aid program, notwithstanding the 
 39.18  provisions of section 256D.37, subdivision 2, and payments to 
 39.19  recipients of Minnesota supplemental aid may be made once each 
 39.20  three months covering liabilities that accrued during the 
 39.21  preceding three months. 
 39.22     (c) The personal needs allowance shall be increased to 
 39.23  include income garnished for child support under a court order, 
 39.24  up to a maximum of $250 per month but only to the extent that 
 39.25  the amount garnished is not deducted as a monthly allowance for 
 39.26  children under section 256B.0575, paragraph (a), clause (5). 
 39.27     Sec. 22.  Minnesota Statutes 1994, section 256B.37, 
 39.28  subdivision 5, is amended to read: 
 39.29     Subd. 5.  [PRIVATE BENEFITS TO BE USED FIRST.] Private 
 39.30  accident and health care coverage including Medicare for medical 
 39.31  services is primary coverage and must be exhausted before 
 39.32  medical assistance is paid for medical services including home 
 39.33  health care, personal care assistant services, hospice, or 
 39.34  services covered under a Health Care Financing Administration 
 39.35  (HCFA) waiver.  When a person who is otherwise eligible for 
 39.36  medical assistance has private accident or health care coverage, 
 40.1   including Medicare or a prepaid health plan, the private health 
 40.2   care benefits available to the person must be used first and to 
 40.3   the fullest extent. 
 40.4      Sec. 23.  Minnesota Statutes 1995 Supplement, section 
 40.5   256B.69, subdivision 3a, is amended to read: 
 40.6      Subd. 3a.  [COUNTY AUTHORITY.] The commissioner, when 
 40.7   implementing the general assistance medical care, or medical 
 40.8   assistance or MinnesotaCare prepayment program within a county, 
 40.9   must include the county board in the process of development, 
 40.10  approval, and issuance of the request for proposals to provide 
 40.11  services to eligible individuals within the proposed county.  
 40.12  County boards must be given reasonable opportunity to make 
 40.13  recommendations regarding the development, issuance, review of 
 40.14  responses, and changes needed in the request for proposals.  The 
 40.15  commissioner must provide county boards the opportunity to 
 40.16  review each proposal based on the identification of community 
 40.17  needs under chapters 145A and 256E and county advocacy 
 40.18  activities.  If a county board finds that a proposal does not 
 40.19  address certain community needs, the county board and 
 40.20  commissioner shall continue efforts for improving the proposal 
 40.21  and network prior to the approval of the contract.  The county 
 40.22  board shall make recommendations regarding the approval of local 
 40.23  networks and their operations to ensure adequate availability 
 40.24  and access to covered services.  The provider or health plan 
 40.25  must respond directly to county advocates and the state prepaid 
 40.26  medical assistance ombudsperson regarding service delivery and 
 40.27  must be accountable to the state regarding contracts with 
 40.28  medical assistance and general assistance medical care funds.  
 40.29  The county board may recommend a maximum number of participating 
 40.30  health plans after considering the size of the enrolling 
 40.31  population; ensuring adequate access and capacity; considering 
 40.32  the client and county administrative complexity; and considering 
 40.33  the need to promote the viability of locally developed health 
 40.34  plans.  Prior to the development of the request for proposal, 
 40.35  there shall be established a mutually agreed upon timetable.  
 40.36  This process shall in no way delay the department's ability to 
 41.1   secure and finalize contracts for the medical assistance 
 41.2   prepayment program.  The prepaid medical assistance and general 
 41.3   assistance medical care program shall not be expanded to any 
 41.4   county that has not begun enrollment as of March 1, 1996, until 
 41.5   July 1, 1997, unless the expansion is approved by the county 
 41.6   board.  Additional services and additional target populations 
 41.7   shall not be expanded in the counties currently implementing a 
 41.8   prepaid medical assistance program until July 1, 1997, unless 
 41.9   the expansion is approved by the county board.  The prepaid 
 41.10  MinnesotaCare program may not begin enrollment until July 1, 
 41.11  1997, unless eligibility to the MinnesotaCare program is 
 41.12  expanded to include single adults and households without 
 41.13  children who have gross family incomes up to 150 percent of the 
 41.14  federal poverty guidelines.  If eligibility is expanded, then 
 41.15  enrollment for the prepaid MinnesotaCare program may begin on 
 41.16  the date that the expansion is effective. 
 41.17     Sec. 24.  Minnesota Statutes 1995 Supplement, section 
 41.18  256B.69, subdivision 4, is amended to read: 
 41.19     Subd. 4.  [LIMITATION OF CHOICE.] The commissioner shall 
 41.20  develop criteria to determine when limitation of choice may be 
 41.21  implemented in the experimental counties.  The criteria shall 
 41.22  ensure that all eligible individuals in the county have 
 41.23  continuing access to the full range of medical assistance 
 41.24  services as specified in subdivision 6.  The commissioner shall 
 41.25  exempt the following persons from participation in the project, 
 41.26  in addition to those who do not meet the criteria for limitation 
 41.27  of choice:  (1) persons eligible for medical assistance 
 41.28  according to section 256B.055, subdivision 1; (2) persons 
 41.29  eligible for medical assistance due to blindness or disability 
 41.30  as determined by the social security administration or the state 
 41.31  medical review team, unless:  (i) they are 65 years of age or 
 41.32  older, or (ii) they are eligible for medical assistance 
 41.33  according to section 256B.055, subdivision 12, or (iii) unless 
 41.34  they reside in Itasca county or they reside in a county in which 
 41.35  the commissioner conducts a pilot project under a waiver granted 
 41.36  pursuant to section 1115 of the Social Security Act; (3) 
 42.1   recipients who currently have private coverage through a health 
 42.2   maintenance organization; (4) recipients who are eligible for 
 42.3   medical assistance by spending down excess income for medical 
 42.4   expenses other than the nursing facility per diem 
 42.5   expense; and (5) recipients who receive benefits under the 
 42.6   Refugee Assistance Program, established under United States 
 42.7   Code, title 8, section 1522(e); (6) effective the day following 
 42.8   final enactment, children who, prior to enrollment in the 
 42.9   prepaid medical assistance program, are both determined to be 
 42.10  severely emotionally disturbed and receiving case management 
 42.11  services according to section 256B.0625, subdivision 20; and (7) 
 42.12  effective the day following final enactment, adults who, prior 
 42.13  to enrollment in the prepaid medical assistance program, are 
 42.14  both determined to be seriously and persistently mentally ill 
 42.15  and received case management services according to section 
 42.16  256B.0625, subdivision 20.  Children under age 21 who are in 
 42.17  foster placement may enroll in the project on an elective basis. 
 42.18  Individuals excluded under clauses (5) and (6) may choose to 
 42.19  enroll on an elective basis.  The commissioner may allow persons 
 42.20  with a one-month spenddown who are otherwise eligible to enroll 
 42.21  to voluntarily enroll or remain enrolled, if they elect to 
 42.22  prepay their monthly spenddown to the state.  Beginning on or 
 42.23  after July 1, 1997, the commissioner may require those 
 42.24  individuals to enroll in the prepaid medical assistance program 
 42.25  who otherwise would have been excluded under clauses (1) and (3) 
 42.26  under Minnesota Rules, part 9500.1452, items H, K, and L.  
 42.27  Before limitation of choice is implemented, eligible individuals 
 42.28  shall be notified and after notification, shall be allowed to 
 42.29  choose only among demonstration providers.  The commissioner may 
 42.30  assign an individual with private coverage through a health 
 42.31  maintenance organization, to the same health maintenance 
 42.32  organization for medical assistance coverage, if the health 
 42.33  maintenance organization is under contract for medical 
 42.34  assistance in the individual's county of residence.  After 
 42.35  initially choosing a provider, the recipient is allowed to 
 42.36  change that choice only at specified times as allowed by the 
 43.1   commissioner.  If a demonstration provider ends participation in 
 43.2   the project for any reason, a recipient enrolled with that 
 43.3   provider must select a new provider but may change providers 
 43.4   without cause once more within the first 60 days after 
 43.5   enrollment with the second provider. 
 43.6      Sec. 25.  Minnesota Statutes 1995 Supplement, section 
 43.7   256B.69, subdivision 5b, is amended to read: 
 43.8      Subd. 5b.  [PROSPECTIVE REIMBURSEMENT RATES.] For prepaid 
 43.9   medical assistance and general assistance medical care program 
 43.10  contract rates set by the commissioner under subdivision 5 and 
 43.11  effective on or after January 1, 1996 1997, through December 31, 
 43.12  1996 1997, capitation rates for nonmetropolitan counties shall 
 43.13  on a weighted average be no less than 85 percent of the 
 43.14  capitation rates for metropolitan counties, excluding Hennepin 
 43.15  county. 
 43.16     Sec. 26.  Minnesota Statutes 1995 Supplement, section 
 43.17  256B.69, subdivision 21, is amended to read: 
 43.18     Subd. 21.  [PREPAYMENT COORDINATOR.] The local agency 
 43.19  county board shall designate a prepayment coordinator to assist 
 43.20  the state agency in implementing this section and section 
 43.21  256D.03, subdivision 4.  Assistance must include educating 
 43.22  recipients about available health care options, enrolling 
 43.23  recipients under subdivision 5, providing necessary eligibility 
 43.24  and enrollment information to health plans and the state agency, 
 43.25  and coordinating complaints and appeals with the ombudsman 
 43.26  established in subdivision 18. 
 43.27     Sec. 27.  Minnesota Statutes 1995 Supplement, section 
 43.28  256D.02, subdivision 12a, is amended to read: 
 43.29     Subd. 12a.  [RESIDENT.] For purposes of eligibility for 
 43.30  general assistance under section 256D.05, and payments under 
 43.31  section 256D.051 and general assistance medical care, a 
 43.32  "resident" is a person living in the state for at least 30 days 
 43.33  with the intention of making the person's home here and not for 
 43.34  any temporary purpose.  All applicants for these programs are 
 43.35  required to demonstrate the requisite intent and can do so in 
 43.36  any of the following ways: 
 44.1      (1) by showing that the applicant maintains a residence at 
 44.2   a verified address, other than a place of public accommodation.  
 44.3   An applicant may verify a residence address by presenting a 
 44.4   valid state driver's license, a state identification card, a 
 44.5   voter registration card, a rent receipt, a statement by the 
 44.6   landlord, apartment manager, or homeowner verifying that the 
 44.7   individual is residing at the address, or other form of 
 44.8   verification approved by the commissioner;.  An applicant who 
 44.9   has been in the state for less than 30 days shall be considered 
 44.10  a resident if the applicant can provide documentation 
 44.11     (2) by providing written documentation that the applicant 
 44.12  came to the state in response to an offer of employment; 
 44.13     (3) by providing verification (1) that the applicant has 
 44.14  been a long-time resident of the state or was formerly a 
 44.15  resident of the state for at least 365 days and is returning to 
 44.16  the state from a temporary absence, as those terms are defined 
 44.17  in rules to be adopted by the commissioner; or 
 44.18     (4) by providing other persuasive evidence to show that the 
 44.19  applicant is a resident of the state, according to rules adopted 
 44.20  by the commissioner (2) that the applicant has come to this 
 44.21  state to accept a bona fide offer of employment for which the 
 44.22  applicant is eligible.  A county agency shall waive the 30-day 
 44.23  residency requirement in cases of emergencies, including medical 
 44.24  emergencies, or where unusual hardship would result from denial 
 44.25  of assistance.  The county agency must report to the 
 44.26  commissioner within 30 days on any waiver granted under this 
 44.27  section. 
 44.28     Any administrative cost incurred by the county implementing 
 44.29  this subdivision shall be reimbursed by the state. 
 44.30     Sec. 28.  Minnesota Statutes 1995 Supplement, section 
 44.31  256D.03, subdivision 3, is amended to read: 
 44.32     Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 44.33  (a) General assistance medical care may be paid for any person 
 44.34  who is not eligible for medical assistance under chapter 256B, 
 44.35  including eligibility for medical assistance based on a 
 44.36  spenddown of excess income according to section 256B.056, 
 45.1   subdivision 5, and: 
 45.2      (1) who is receiving assistance under section 256D.05 or 
 45.3   256D.051, or who is having a payment made on the person's behalf 
 45.4   under sections 256I.01 to 256I.06; or 
 45.5      (2)(i) who is a resident of Minnesota; and whose equity in 
 45.6   assets is not in excess of $1,000 per assistance unit.  No asset 
 45.7   test shall be applied to children and their parents living in 
 45.8   the same household.  Exempt assets, the reduction of excess 
 45.9   assets, and the waiver of excess assets must conform to the 
 45.10  medical assistance program in chapter 256B, with the following 
 45.11  exception:  the maximum amount of undistributed funds in a trust 
 45.12  that could be distributed to or on behalf of the beneficiary by 
 45.13  the trustee, assuming the full exercise of the trustee's 
 45.14  discretion under the terms of the trust, must be applied toward 
 45.15  the asset maximum; and 
 45.16     (ii) who has countable income not in excess of the 
 45.17  assistance standards established in section 256B.056, 
 45.18  subdivision 4, or whose excess income is spent down pursuant to 
 45.19  section 256B.056, subdivision 5, using a six-month budget 
 45.20  period, except that a one-month budget period must be used for 
 45.21  recipients residing in a long-term care facility.  The method 
 45.22  for calculating earned income disregards and deductions for a 
 45.23  person who resides with a dependent child under age 21 shall be 
 45.24  as specified in section 256.74, subdivision 1.  However, if a 
 45.25  disregard of $30 and one-third of the remainder described in 
 45.26  section 256.74, subdivision 1, clause (4), has been applied to 
 45.27  the wage earner's income, the disregard shall not be applied 
 45.28  again until the wage earner's income has not been considered in 
 45.29  an eligibility determination for general assistance, general 
 45.30  assistance medical care, medical assistance, or aid to families 
 45.31  with dependent children for 12 consecutive months.  The earned 
 45.32  income and work expense deductions for a person who does not 
 45.33  reside with a dependent child under age 21 shall be the same as 
 45.34  the method used to determine eligibility for a person under 
 45.35  section 256D.06, subdivision 1, except the disregard of the 
 45.36  first $50 of earned income is not allowed; or 
 46.1      (3) who would be eligible for medical assistance except 
 46.2   that the person resides in a facility that is determined by the 
 46.3   commissioner or the federal health care financing administration 
 46.4   to be an institution for mental diseases. 
 46.5      (b) Eligibility is available for the month of application, 
 46.6   and for three months prior to application if the person was 
 46.7   eligible in those prior months.  A redetermination of 
 46.8   eligibility must occur every 12 months. 
 46.9      (c) General assistance medical care is not available for a 
 46.10  person in a correctional facility unless the person is detained 
 46.11  by law for less than one year in a county correctional or 
 46.12  detention facility as a person accused or convicted of a crime, 
 46.13  or admitted as an inpatient to a hospital on a criminal hold 
 46.14  order, and the person is a recipient of general assistance 
 46.15  medical care at the time the person is detained by law or 
 46.16  admitted on a criminal hold order and as long as the person 
 46.17  continues to meet other eligibility requirements of this 
 46.18  subdivision.  
 46.19     (d) General assistance medical care is not available for 
 46.20  applicants or recipients who do not cooperate with the county 
 46.21  agency to meet the requirements of medical assistance. 
 46.22     (e) In determining the amount of assets of an individual, 
 46.23  there shall be included any asset or interest in an asset, 
 46.24  including an asset excluded under paragraph (a), that was given 
 46.25  away, sold, or disposed of for less than fair market value 
 46.26  within the 60 months preceding application for general 
 46.27  assistance medical care or during the period of eligibility.  
 46.28  Any transfer described in this paragraph shall be presumed to 
 46.29  have been for the purpose of establishing eligibility for 
 46.30  general assistance medical care, unless the individual furnishes 
 46.31  convincing evidence to establish that the transaction was 
 46.32  exclusively for another purpose.  For purposes of this 
 46.33  paragraph, the value of the asset or interest shall be the fair 
 46.34  market value at the time it was given away, sold, or disposed 
 46.35  of, less the amount of compensation received.  For any 
 46.36  uncompensated transfer, the number of months of ineligibility, 
 47.1   including partial months, shall be calculated by dividing the 
 47.2   uncompensated transfer amount by the average monthly per person 
 47.3   payment made by the medical assistance program to skilled 
 47.4   nursing facilities for the previous calendar year.  The 
 47.5   individual shall remain ineligible until this fixed period has 
 47.6   expired.  The period of ineligibility may exceed 30 months, and 
 47.7   a reapplication for benefits after 30 months from the date of 
 47.8   the transfer shall not result in eligibility unless and until 
 47.9   the period of ineligibility has expired.  The period of 
 47.10  ineligibility begins in the month the transfer was reported to 
 47.11  the county agency, or if the transfer was not reported, the 
 47.12  month in which the county agency discovered the transfer, 
 47.13  whichever comes first.  For applicants, the period of 
 47.14  ineligibility begins on the date of the first approved 
 47.15  application. 
 47.16     (f)(1) Beginning October 1, 1993, an undocumented alien or 
 47.17  a nonimmigrant is ineligible for general assistance medical care 
 47.18  other than emergency services.  For purposes of this 
 47.19  subdivision, a nonimmigrant is an individual in one or more of 
 47.20  the classes listed in United States Code, title 8, section 
 47.21  1101(a)(15), and an undocumented alien is an individual who 
 47.22  resides in the United States without the approval or 
 47.23  acquiescence of the Immigration and Naturalization Service. 
 47.24     (2) This subdivision does not apply to a child under age 
 47.25  18, to a Cuban or Haitian entrant as defined in Public Law 
 47.26  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 47.27  is aged, blind, or disabled as defined in United States Code, 
 47.28  title 42, section 1382c(a)(1). 
 47.29     (3) For purposes of paragraph (f), "emergency services" has 
 47.30  the meaning given in Code of Federal Regulations, title 42, 
 47.31  section 440.255(b)(1), except that it also means services 
 47.32  rendered because of suspected or actual pesticide poisoning. 
 47.33     Sec. 29.  Minnesota Statutes 1995 Supplement, section 
 47.34  256D.045, is amended to read: 
 47.35     256D.045 [SOCIAL SECURITY NUMBER REQUIRED.] 
 47.36     To be eligible for general assistance under sections 
 48.1   256D.01 to 256D.21, an individual must provide the individual's 
 48.2   social security number to the county agency or submit proof that 
 48.3   an application has been made.  The provisions of this section do 
 48.4   not apply to the determination of eligibility for emergency 
 48.5   general assistance under section 256D.06, subdivision 2.  This 
 48.6   provision applies to eligible children under the age of 18 
 48.7   effective July 1, 1997.  
 48.8      Sec. 30.  Minnesota Statutes 1994, section 256G.01, 
 48.9   subdivision 3, is amended to read: 
 48.10     Subd. 3.  [PROGRAM COVERAGE.] This chapter applies to 
 48.11  all social service programs administered by the commissioner in 
 48.12  which residence is the determining factor in establishing 
 48.13  financial responsibility.  These include, but are not limited 
 48.14  to:  aid to families with dependent children; medical 
 48.15  assistance; general assistance; work readiness; general 
 48.16  assistance medical care; Minnesota supplemental aid; commitment 
 48.17  proceedings, including voluntary admissions; emergency holds 
 48.18  under sections 253B.05, subdivisions 1 and 2, and 253B.07, 
 48.19  subdivision 6; poor relief funded wholly through local agencies; 
 48.20  and social services, including title XX, IV-E and other 
 48.21  components of the community social services act, sections 
 48.22  256E.01 to 256E.12; social services programs funded wholly 
 48.23  through the resources of county agencies; social services 
 48.24  provided under the Minnesota Indian family preservation act, 
 48.25  sections 257.35 to 257.356; costs for delinquency confinement 
 48.26  under section 393.07, subdivision 2; and service responsibility 
 48.27  for these programs.  
 48.28     Sec. 31.  Minnesota Statutes 1994, section 256G.01, is 
 48.29  amended by adding a subdivision to read: 
 48.30     Subd. 4.  [ADDITIONAL COVERAGE.] The provisions in sections 
 48.31  256G.02, subdivision 4, paragraphs (a) to (d); 256G.02, 
 48.32  subdivisions 5 to 8; 256G.03; 256G.04; 256G.05; and 256G.07, 
 48.33  subdivisions 1 to 3 apply to the following programs:  aid to 
 48.34  families with dependent children; medical assistance; general 
 48.35  assistance; family general assistance; work readiness; general 
 48.36  assistance medical care; and Minnesota supplemental aid. 
 49.1      Sec. 32.  Minnesota Statutes 1994, section 256G.01, is 
 49.2   amended by adding a subdivision to read: 
 49.3      Subd. 5.  [SCOPE AND EFFECT.] Unless stated otherwise, the 
 49.4   provisions of this chapter also apply to disputes involving 
 49.5   financial responsibility for social services when another 
 49.6   definition of the county of financial responsibility has been 
 49.7   created in Minnesota Statutes.  
 49.8      Sec. 33.  Minnesota Statutes 1994, section 256G.02, 
 49.9   subdivision 4, is amended to read: 
 49.10     Subd. 4.  [COUNTY OF FINANCIAL RESPONSIBILITY.] (a) "County 
 49.11  of financial responsibility" has the meanings in paragraphs (b) 
 49.12  to (h).  
 49.13     (b) For an applicant who resides in the state and is not in 
 49.14  a facility described in subdivision 6, it means the county in 
 49.15  which the applicant resides at the time of application.  
 49.16     (c) For an applicant who resides in a facility described in 
 49.17  subdivision 6, it means the county in which the applicant last 
 49.18  resided in nonexcluded status immediately before entering the 
 49.19  facility.  
 49.20     (d) For an applicant who has not resided in this state for 
 49.21  any time other than the excluded time, and subject to the 
 49.22  limitations in section 256G.03, subdivision 2, it means the 
 49.23  county in which the applicant resides at the time of making 
 49.24  application.  
 49.25     (e) For medical assistance purposes only, and for an infant 
 49.26  who has resided only in an excluded time facility, it means the 
 49.27  county that would have been responsible for the infant if 
 49.28  eligibility had been established, based on that of the birth 
 49.29  mother, at the time of application. 
 49.30     (f) Notwithstanding paragraphs (b) to (d), the county of 
 49.31  financial responsibility for medical assistance recipients is 
 49.32  the county from which a recipient is receiving a maintenance 
 49.33  grant or money payment under the program of aid to families with 
 49.34  dependent children or Minnesota supplemental aid. 
 49.35     (g) Notwithstanding paragraphs (b) to (f), the county of 
 49.36  financial responsibility for social services for a person 
 50.1   receiving aid to families with dependent children, general 
 50.2   assistance, general assistance medical care, medical assistance, 
 50.3   or Minnesota supplemental aid is the county from which that 
 50.4   person is receiving the aid or assistance.  If more than one 
 50.5   named program is open concurrently For an individual already 
 50.6   having a social service case open in one county, financial 
 50.7   responsibility for any additional social services attaches to 
 50.8   the program case that has the earliest date of application and 
 50.9   has been open without interruption.  
 50.10     (h) (f) Notwithstanding paragraphs (b) to (g) (e), the 
 50.11  county of financial responsibility for semi-independent living 
 50.12  services provided under section 252.275, and Minnesota Rules, 
 50.13  parts 9525.0500 to 9525.0660, is the county of residence in 
 50.14  nonexcluded status immediately before the placement into or 
 50.15  request for those services. 
 50.16     Sec. 34.  Minnesota Statutes 1994, section 256G.02, 
 50.17  subdivision 6, is amended to read: 
 50.18     Subd. 6.  [EXCLUDED TIME.] "Excluded time" means: 
 50.19     (a) any period an applicant spends in a hospital, 
 50.20  sanitarium, nursing home, shelter other than an emergency 
 50.21  shelter, halfway house, foster home, semi-independent living 
 50.22  domicile or services program, residential facility offering 
 50.23  care, board and lodging facility or other institution for the 
 50.24  hospitalization or care of human beings, as defined in section 
 50.25  144.50, 144A.01, or 245A.02, subdivision 14; or in a maternity 
 50.26  home, battered women's shelter, or correctional facility.  
 50.27  "Excluded time" also means that time during which an applicant 
 50.28  participates in a rehabilitation facility as defined in section 
 50.29  268A.01, or is receiving personal care assistant services 
 50.30  pursuant to section 256B.0625, subdivision 19.; or any facility 
 50.31  based on an emergency hold under sections 253B.05, subdivisions 
 50.32  1 and 2, and 253B.07, subdivision 6; 
 50.33     (b) any period an applicant spends on a placement basis in 
 50.34  a training and habilitation program, including a rehabilitation 
 50.35  facility or work or employment program as defined in section 
 50.36  268A.01; or receiving personal care assistant services pursuant 
 51.1   to section 256B.0627, subdivision 4; semi-independent living 
 51.2   services provided under section 252.275, and Minnesota Rules, 
 51.3   parts 9525.0500 to 9525.0660; day training and habilitation 
 51.4   programs, and community-based services for mentally retarded and 
 51.5   mentally ill individuals and individuals receiving assisted 
 51.6   living service facilities; and 
 51.7      (c) any placement for a person with an indeterminate 
 51.8   commitment, including independent living. 
 51.9      Sec. 35.  Minnesota Statutes 1994, section 256G.03, is 
 51.10  amended to read: 
 51.11     256G.03 [ESTABLISHING RESIDENCE.] 
 51.12     Subdivision 1.  [STATE RESIDENCE.] For purposes of this 
 51.13  chapter, a resident of any Minnesota county is considered a 
 51.14  state resident.  For purposes of eligibility for general 
 51.15  assistance or work readiness, residency must be substantiated 
 51.16  according to section 256D.02, subdivision 12a. 
 51.17     Subd. 2.  [NO DURATIONAL TEST.] For purposes of this 
 51.18  chapter, no waiting period is required before securing county or 
 51.19  state residence.  Notwithstanding any other provision of this 
 51.20  chapter, a person cannot, however, gain county or state 
 51.21  residence by entering an excluded time facility or excluded time 
 51.22  program while physically present in an excluded time facility 
 51.23  unless otherwise specified in this chapter or in a specifically 
 51.24  mandated by federal regulation controlling a federally funded 
 51.25  human service program. 
 51.26     Sec. 36.  Minnesota Statutes 1994, section 256G.06, is 
 51.27  amended to read: 
 51.28     256G.06 [DETOXIFICATION SERVICES.] 
 51.29     The county of financial responsibility for detoxification 
 51.30  services is the county where the client is physically present 
 51.31  when the need for services is identified.  If that need is 
 51.32  identified while the client is a resident of a chemical 
 51.33  dependency facility, the provisions of section 256G.02, 
 51.34  subdivision 4, paragraphs (b), (c), and (e) (d) apply. 
 51.35     Sec. 37.  Minnesota Statutes 1994, section 256G.07, 
 51.36  subdivision 1, is amended to read: 
 52.1      Subdivision 1.  [EFFECT OF MOVING.] Except as provided in 
 52.2   subdivision 4, a person who has applied for and is receiving 
 52.3   services or assistance under a program governed by this chapter, 
 52.4   in any county in this state, and who moves to another county in 
 52.5   this state, is entitled to continue to receive that assistance 
 52.6   service from the county from which that person has moved until 
 52.7   that person has resided in nonexcluded status for two full 
 52.8   calendar months in the county to which that person has 
 52.9   moved.  For purposes of general assistance and general 
 52.10  assistance medical care, this time period is, however, one full 
 52.11  calendar month. 
 52.12     Sec. 38.  Minnesota Statutes 1994, section 256G.07, 
 52.13  subdivision 2, is amended to read: 
 52.14     Subd. 2.  [TRANSFER OF RECORDS.] Before the person has 
 52.15  resided in nonexcluded status for two calendar months or one 
 52.16  calendar month in the case of general assistance and general 
 52.17  assistance medical care, in the county to which that person has 
 52.18  moved, the local agency of the county from which the person has 
 52.19  moved shall complete an eligibility review and transfer all 
 52.20  necessary records relating to that person to the local agency of 
 52.21  the county to which the person has moved. 
 52.22     Sec. 39.  Minnesota Statutes 1994, section 256G.09, 
 52.23  subdivision 2, is amended to read: 
 52.24     Subd. 2.  [FINANCIAL DISPUTES.] (a) If the county receiving 
 52.25  the transmittal does not believe it is financially responsible, 
 52.26  it should provide to the department and the initially 
 52.27  responsible county a statement of all facts and documents 
 52.28  necessary for the department to make the requested determination 
 52.29  of financial responsibility.  The submission must clearly state 
 52.30  the program area in dispute and must state the specific basis 
 52.31  upon which the submitting county is denying financial 
 52.32  responsibility. 
 52.33     (b) The initially responsible county then has 15 calendar 
 52.34  days to submit its position and any supporting evidence to the 
 52.35  department.  The absence of a submission by the initially 
 52.36  responsible county does not limit the right of the department to 
 53.1   issue a binding opinion based on the evidence actually submitted.
 53.2      (c) A case must not be submitted until the local agency 
 53.3   taking the application or making the commitment has made an 
 53.4   initial determination about eligibility and financial 
 53.5   responsibility, and services or assistance has have been 
 53.6   initiated.  This paragraph does not prohibit the submission of 
 53.7   closed cases that otherwise meet the applicable statute of 
 53.8   limitations. 
 53.9      Sec. 40.  Minnesota Statutes 1994, section 256G.09, 
 53.10  subdivision 5, is amended to read: 
 53.11     Subd. 5.  [PAYMENT PENDING APPEAL.] After the department 
 53.12  issues an opinion in any submission under this section, the 
 53.13  service or assistance covered by the submission must be provided 
 53.14  or paid pending or during an appeal to the district court. 
 53.15     Sec. 41.  Minnesota Statutes 1994, section 256G.10, is 
 53.16  amended to read: 
 53.17     256G.10 [DERIVATIVE SETTLEMENT ELIMINATED.] 
 53.18     Except as described in section 256G.02, subdivision 4, 
 53.19  paragraph (e), residence under this chapter must be determined 
 53.20  independently for each applicant.  The residence of the parent 
 53.21  of a minor child, with whom that child last lived in a 
 53.22  nonexcluded time setting, or guardian does not of a ward shall 
 53.23  determine the residence of the child or ward for all social 
 53.24  services governed by this chapter. 
 53.25     For purposes of this chapter, a minor child is defined as 
 53.26  being under 18 years of age unless otherwise specified in a 
 53.27  program administered by the commissioner. 
 53.28     Physical or legal custody has no bearing on residence 
 53.29  determinations.  This section does not, however, apply to 
 53.30  situations involving another state or, limit the application of 
 53.31  an interstate compact, or apply to situations involving state 
 53.32  wards where the commissioner is defined by law as the guardian. 
 53.33     Sec. 42.  Minnesota Statutes 1994, section 256I.05, is 
 53.34  amended by adding a subdivision to read: 
 53.35     Subd. 7c.  [DEMONSTRATION PROJECT.] The commissioner is 
 53.36  authorized to pursue a demonstration project under federal food 
 54.1   stamp regulation for the purpose of gaining federal 
 54.2   reimbursement of food and nutritional costs currently paid by 
 54.3   the state group residential housing program.  Any administrative 
 54.4   earnings received from this demonstration project may be 
 54.5   retained to offset the costs of development, implementation, 
 54.6   administration, and group residential housing expenditures. 
 54.7      Sec. 43.  Minnesota Statutes 1994, section 325F.71, 
 54.8   subdivision 2, is amended to read: 
 54.9      Subd. 2.  [SUPPLEMENTAL CIVIL PENALTY.] (a) In addition to 
 54.10  any liability for a civil penalty pursuant to Minnesota 
 54.11  Statutes, sections 325D.43 to 325D.48, regarding deceptive trade 
 54.12  practices; 325F.67, regarding false advertising; and 325F.68 to 
 54.13  325F.70, regarding consumer fraud; a person who engages in any 
 54.14  conduct prohibited by those statutes, and whose conduct is 
 54.15  perpetrated against one or more senior citizens or handicapped 
 54.16  persons, is liable for an additional civil penalty not to exceed 
 54.17  $10,000 for each violation, if one or more of the factors in 
 54.18  paragraph (b) are present. 
 54.19     (b) In determining whether to impose a civil penalty 
 54.20  pursuant to paragraph (a), and the amount of the penalty, the 
 54.21  court shall consider, in addition to other appropriate factors, 
 54.22  the extent to which one or more of the following factors are 
 54.23  present: 
 54.24     (1) whether the defendant knew or should have known that 
 54.25  the defendant's conduct was directed to one or more senior 
 54.26  citizens or handicapped persons; 
 54.27     (2) whether the defendant's conduct caused senior citizens 
 54.28  or handicapped persons to suffer:  loss or encumbrance of a 
 54.29  primary residence, principal employment, or source of income; 
 54.30  substantial loss of property set aside for retirement or for 
 54.31  personal or family care and maintenance; substantial loss of 
 54.32  payments received under a pension or retirement plan or a 
 54.33  government benefits program; or assets essential to the health 
 54.34  or welfare of the senior citizen or handicapped person; 
 54.35     (3) whether one or more senior citizens or handicapped 
 54.36  persons are more vulnerable to the defendant's conduct than 
 55.1   other members of the public because of age, poor health or 
 55.2   infirmity, impaired understanding, restricted mobility, or 
 55.3   disability, and actually suffered physical, emotional, or 
 55.4   economic damage resulting from the defendant's conduct; or 
 55.5      (4) whether the defendant's conduct caused senior citizens 
 55.6   or handicapped persons to make an uncompensated asset transfer 
 55.7   that resulted in the person being found ineligible for medical 
 55.8   assistance. 
 55.9      Sec. 44.  Minnesota Statutes 1994, section 524.2-403, is 
 55.10  amended to read: 
 55.11     524.2-403 [EXEMPT PROPERTY.] 
 55.12     (a) If there is a surviving spouse, then, in addition to 
 55.13  the homestead and family allowance, the surviving spouse is 
 55.14  entitled from the estate to: 
 55.15     (1) property not exceeding $10,000 in value in excess of 
 55.16  any security interests therein, in household furniture, 
 55.17  furnishings, appliances, and personal effects, subject to an 
 55.18  award of sentimental value property under section 525.152; and 
 55.19     (2) one automobile, if any, without regard to value. 
 55.20     (b) If there is no surviving spouse, the decedent's 
 55.21  children are entitled jointly to the same property as provided 
 55.22  in paragraph (a). 
 55.23     (c) If encumbered chattels are selected and the value in 
 55.24  excess of security interests, plus that of other exempt 
 55.25  property, is less than $10,000, or if there is not $10,000 worth 
 55.26  of exempt property in the estate, the surviving spouse or 
 55.27  children are entitled to other personal property of the estate, 
 55.28  if any, to the extent necessary to make up the $10,000 value. 
 55.29     (d) Rights to exempt property and assets needed to make up 
 55.30  a deficiency of exempt property have priority over all claims 
 55.31  against the estate, but the right to any assets to make up a 
 55.32  deficiency of exempt property abates as necessary to permit 
 55.33  earlier payment of the family allowance. 
 55.34     (e) The rights granted by this section are in addition to 
 55.35  any benefit or share passing to the surviving spouse or children 
 55.36  by the decedent's will, unless otherwise provided by intestate 
 56.1   succession or by way of elective share.  
 56.2      (f) A claim under section 246.53, 261.04, 256B.15, or 
 56.3   256D.16 takes precedence over any rights granted to a decedent's 
 56.4   adult children under this section. 
 56.5      Sec. 45.  Minnesota Statutes 1994, section 524.3-801, is 
 56.6   amended to read: 
 56.7      524.3-801 [NOTICE TO CREDITORS.] 
 56.8      (a) Unless notice has already been given under this 
 56.9   section, upon appointment of a general personal representative 
 56.10  in informal proceedings or upon the filing of a petition for 
 56.11  formal appointment of a general personal representative, notice 
 56.12  thereof, in the form prescribed by court rule, shall be given 
 56.13  under the direction of the court administrator by publication 
 56.14  once a week for two successive weeks in a legal newspaper in the 
 56.15  county wherein the proceedings are pending giving the name and 
 56.16  address of the general personal representative and notifying 
 56.17  creditors of the estate to present their claims within four 
 56.18  months after the date of the court administrator's notice which 
 56.19  is subsequently published or be forever barred, unless they are 
 56.20  entitled to further service of notice under paragraph (b) or (c).
 56.21     (b)(1) Within three months after:  (i) the date of the 
 56.22  first publication of the notice; or (ii) June 16, 1989, 
 56.23  whichever is later, the personal representative may determine, 
 56.24  in the personal representative's discretion, that it is or is 
 56.25  not advisable to conduct a reasonably diligent search for 
 56.26  creditors of the decedent who are either not known or not 
 56.27  identified.  If the personal representative determines that a 
 56.28  reasonably diligent search is advisable, the personal 
 56.29  representative shall conduct the search. 
 56.30     (2) If the notice is first published after June 16, 1989, 
 56.31  the personal representative shall, within three months after the 
 56.32  date of the first publication of the notice, serve a copy of the 
 56.33  notice upon each then known and identified creditor in the 
 56.34  manner provided in paragraph (c).  If the decedent or a 
 56.35  predeceased spouse of the decedent received assistance for which 
 56.36  a claim could be filed under section 246.53, 256B.15, 256D.16, 
 57.1   or 261.04, the personal representative shall serve a copy of the 
 57.2   notice on the commissioner of human services in the manner 
 57.3   provided in paragraph (c) on or before the date of the first 
 57.4   publication of the notice.  The copy of the notice served on the 
 57.5   commissioner of human services shall include the full name, date 
 57.6   of birth, and social security number of the decedent or the 
 57.7   predeceased spouse who received assistance for which a claim 
 57.8   could be filed under any of the sections listed in this 
 57.9   paragraph.  Notwithstanding any will or other instrument or law 
 57.10  to the contrary, except as allowed in this paragraph no property 
 57.11  subject to administration by the estate may be distributed by 
 57.12  the estate or the personal representative until 70 days after 
 57.13  the date the notice is served upon the commissioner, as provided 
 57.14  in paragraph (c) unless the local agency consents.  An affidavit 
 57.15  of service shall be prima facie evidence of service and, if it 
 57.16  contains a legal description of the affected real property, may 
 57.17  be filed or recorded in the office of the county recorder or 
 57.18  registrar of titles to establish compliance with the notice 
 57.19  requirement established in this paragraph.  This restriction on 
 57.20  distribution does not apply to the personal representative's 
 57.21  sale of real or personal property while the estate is open but 
 57.22  does apply to the net proceeds the estate receives from the 
 57.23  sale.  If notice was first published under the applicable 
 57.24  provisions of law under the direction of the court administrator 
 57.25  before June 16, 1989, and if a personal representative is 
 57.26  empowered to act at any time after June 16, 1989, the personal 
 57.27  representative shall, within three months after June 16, 1989, 
 57.28  serve upon the then known and identified creditors in the manner 
 57.29  provided in paragraph (c) a copy of the notice as published, 
 57.30  together with a supplementary notice requiring each of the 
 57.31  creditors to present any claim within one month after the date 
 57.32  of the service of the notice or be forever barred. 
 57.33     (3) Under this section, a creditor is "known" if:  (i) the 
 57.34  personal representative knows that the creditor has asserted a 
 57.35  claim that arose during the decedent's life against either the 
 57.36  decedent or the decedent's estate; or (ii) the creditor has 
 58.1   asserted a claim that arose during the decedent's life and the 
 58.2   fact is clearly disclosed in accessible financial records known 
 58.3   and available to the personal representative.  Under this 
 58.4   section, a creditor is "identified" if the personal 
 58.5   representative's knowledge of the name and address of the 
 58.6   creditor will permit service of notice to be made under 
 58.7   paragraph (c).  
 58.8      (c) The personal representative shall serve a copy of any 
 58.9   notice and any supplementary notice required by paragraph (b), 
 58.10  clause (1) or (2), upon each creditor of the decedent who is 
 58.11  then known to the personal representative and identified, except 
 58.12  a creditor whose claim has either been presented to the personal 
 58.13  representative or paid, either by delivery of a copy of the 
 58.14  required notice to the creditor, or by mailing a copy of the 
 58.15  notice to the creditor by certified, registered, or ordinary 
 58.16  first class mail addressed to the creditor at the creditor's 
 58.17  office or place of residence. 
 58.18     Sec. 46.  Laws 1995, chapter 207, article 6, section 125, 
 58.19  subdivision 8, is amended to read: 
 58.20     Subd. 8.  Section 48, section 256B.0625, subdivision 19a, 
 58.21  is effective July 1, 1996 1997. 
 58.22     Sec. 47.  Laws 1995, chapter 207, article 6, section 125, 
 58.23  subdivision 9, is amended to read: 
 58.24     Subd. 9.  Section 52, section 256B.0627, subdivision 1, 
 58.25  paragraph (c), is effective January 1, 1996; paragraph (d) is 
 58.26  effective January 1, 1996, except the deletions relating to 
 58.27  responsible party are effective July 1, 1996 1997; and the 
 58.28  stricken paragraph (d), the deletion of the definition of 
 58.29  responsible party, is effective July 1, 1996 1997. 
 58.30     Sec. 48.  Laws 1995, chapter 207, article 6, section 125, 
 58.31  subdivision 11, is amended to read: 
 58.32     Subd. 11.  Section 54, section 256B.0627, subdivision 4, 
 58.33  paragraph (a), is effective July 1, 1996 1997; and paragraph 
 58.34  (b), clauses (2) and (3), are effective January 1, 1996; and the 
 58.35  stricken language in clause (1) and the stricken language in the 
 58.36  stricken clause (4), are effective July 1, 1996 1997. 
 59.1      Sec. 49.  Laws 1995, chapter 207, article 6, section 125, 
 59.2   subdivision 12, is amended to read: 
 59.3      Subd. 12.  Section 55, section 256B.0627, subdivision 5, 
 59.4   paragraph (a), clause (2), is effective January 1, 1996 July 1, 
 59.5   1997; paragraph (d) is effective January 1, 1996 July 1, 1997; 
 59.6   paragraph (e), clause (2)(i), the new language relating to the 
 59.7   registered nurse supervision is effective January 1, 1996 July 
 59.8   1, 1997; paragraph (e), clause (2)(i)A, B, C, D, and E, are 
 59.9   effective July 1, 1996 1997; paragraph (e), clause (2)(ii), is 
 59.10  effective July 1, 1996 1997; paragraph (e), clause (2)(iii), the 
 59.11  new language relating to county public health nurse, is 
 59.12  effective January 1, 1996 July 1, 1997, and the stricken 
 59.13  language relating to the seizure activity provision, is 
 59.14  effective July 1, 1996 1997; paragraph (e), clause (2), the 
 59.15  language striking items (v) to (viii), is effective July 1, 1996 
 59.16  1997; paragraph (h), is effective January 1, 1996 July 1, 1997; 
 59.17  and paragraph (i), clause (2), the stricken language relating to 
 59.18  the foster care license holder, and the language in the stricken 
 59.19  clause (3) relating to the responsible party, is effective July 
 59.20  1, 1996 1997. 
 59.21     Sec. 50.  Laws 1995, chapter 207, article 8, section 35, is 
 59.22  amended to read: 
 59.23     Sec. 35.  Laws 1993, First Special Session chapter 1, 
 59.24  article 7, section 51, subdivision 5, is amended to read: 
 59.25     Subd. 5.  Sections 42 and 43 are effective July 1, 1996 and 
 59.26  expires June 30, 1997. 
 59.27     Sec. 51.  [JOINT PURCHASER DEMONSTRATION PROJECTS.] 
 59.28     Subdivision 1.  [OBJECTIVES.] The objectives of the 
 59.29  demonstration project are to promote the development of local 
 59.30  provider networks and retain the availability and accountability 
 59.31  of local service providers; further define the county and state 
 59.32  roles, authorities, and functions related to publicly reimbursed 
 59.33  and publicly provided health and social services, including 
 59.34  services funded by county property tax revenues; promote better 
 59.35  coordination of services for all enrollees and target 
 59.36  populations; facilitate appropriate competition, consumer 
 60.1   choice, and entry of providers into the marketplace while 
 60.2   defining appropriate publicly operated safety net services; 
 60.3   identify mechanisms to ensure short-term and long-term control 
 60.4   of costs and avoidance of cost shifting; define adequate 
 60.5   financing within a capitated allocation; develop state-county 
 60.6   risk-sharing strategies, which may include stop-loss protection, 
 60.7   reinsurance, and retrospective risk adjustment; and define 
 60.8   state-county shares of the cost savings achieved for a return on 
 60.9   the public investment.  
 60.10     Subd. 2.  [AUTHORIZATION.] A county or group of counties 
 60.11  may establish a county-based joint purchaser demonstration 
 60.12  project, for services provided to eligible individuals under 
 60.13  medical assistance, except medical assistance recipients who are 
 60.14  age 65 or older who reside in the Twin Cities seven-county 
 60.15  metropolitan area, general assistance medical care, 
 60.16  MinnesotaCare, state health and social service grants, and 
 60.17  county-funded programs for these or other participants.  As part 
 60.18  of a project, the county may explore the option of direct 
 60.19  contracting with local providers, provider networks, or public 
 60.20  providers.  If a county or group of counties implement direct 
 60.21  contracting, the county or counties shall be considered a health 
 60.22  plan company for purposes of Minnesota Statutes, section 62Q.19, 
 60.23  and must meet the requirements of Minnesota Statutes, section 
 60.24  62Q.19.  At the option of the county board, the project may 
 60.25  include county employees, other units of local government, and 
 60.26  private employers.  Groups of counties participating in a joint 
 60.27  purchaser demonstration project must execute a joint powers 
 60.28  agreement in accordance with Minnesota Statutes, section 471.59, 
 60.29  for purposes of the demonstration project. 
 60.30     Subd. 3.  [LONG-TERM CARE OPTIONS PROJECT 
 60.31  EXCEPTION.] Medical assistance recipients who are age 65 or 
 60.32  older who reside in the seven-county metropolitan area shall not 
 60.33  be included in a joint purchaser demonstration project.  Medical 
 60.34  assistance recipients who are age 65 or older who reside outside 
 60.35  the seven-county metropolitan area may be included in a joint 
 60.36  purchaser demonstration project.  A county board or group of 
 61.1   county boards, other than the seven metropolitan counties, that 
 61.2   notify the commissioner of intent to participate in a 
 61.3   demonstration project, in accordance with subdivision 8, must 
 61.4   include notice of their intent and preference for participation 
 61.5   in the long-term care options project.  Counties participating 
 61.6   in the long-term care options project must meet all requirements 
 61.7   of the federal waivers governing the long-term care options 
 61.8   project demonstration. 
 61.9      Subd. 4.  [PROJECT SCOPE.] A county or group of counties 
 61.10  may establish a demonstration project or projects to provide all 
 61.11  covered services to the categorically and medically needy 
 61.12  families with children or may establish a demonstration project 
 61.13  to provide mental health services, chemical dependency services, 
 61.14  services to the elderly, if the county is located outside the 
 61.15  Twin Cities seven-county metropolitan area, or services to the 
 61.16  developmentally disabled, or any combination thereof.  If the 
 61.17  county establishes a demonstration project to provide mental 
 61.18  health services and the county is participating in a mental 
 61.19  health collaborative under Minnesota Statutes, sections 245.491 
 61.20  to 245.496, families must have the opportunity to be enrolled in 
 61.21  one network.  
 61.22     Subd. 5.  [SERVICE REQUIREMENTS.] A demonstration project 
 61.23  shall continue to be subject to the current eligibility, 
 61.24  benefits, enrollee protection, and appeal process requirements 
 61.25  under the prepaid medical assistance, general assistance medical 
 61.26  care, and MinnesotaCare programs.  The project shall institute 
 61.27  recipient grievance procedures utilizing applicable requirements 
 61.28  of Minnesota Statutes, section 256B.69.  
 61.29     Subd. 6.  [CONSUMER CHOICE.] In order to maintain an 
 61.30  opportunity for choice, a county or counties must contract with 
 61.31  two or more service delivery networks, unless there are less 
 61.32  than two licensed health maintenance organizations, integrated 
 61.33  service networks, or community integrated service networks 
 61.34  willing to provide services in the county or counties.  If only 
 61.35  one network is providing services within the county or counties, 
 61.36  the project must demonstrate that enrollees have a choice of 
 62.1   providers within the existing network.  
 62.2      Subd. 7.  [PROJECT DESIGN AND IMPLEMENTATION.] (a) The 
 62.3   demonstration project must ensure that consumer representatives 
 62.4   are involved in the planning process for the design of the 
 62.5   demonstration projects.  A participating county or group of 
 62.6   counties shall issue a request for proposals to provide services 
 62.7   to eligible individuals residing within the participating county 
 62.8   or counties.  The participating county board shall review the 
 62.9   proposals and shall approve all contracts.  Individual county 
 62.10  staff who are employed by a publicly owned health plan that 
 62.11  intends to respond to a request for proposal are prohibited from 
 62.12  reviewing, critiquing, or approving any proposals submitted in 
 62.13  this subdivision.  Before a participating county can enter into 
 62.14  a contract with a service delivery network, the commissioner of 
 62.15  human services must review the contract and determine whether 
 62.16  the contracting network offers adequate services to recipients.  
 62.17  If the commissioner determines that the contract does not 
 62.18  provide adequate services, the commissioner and county board 
 62.19  shall continue negotiations with the network to ensure the 
 62.20  provision of all necessary services.  
 62.21     Subd. 8.  [NOTICE OF INTENT; PROJECT PROPOSALS.] (a) In 
 62.22  counties where the state has entered into a managed care 
 62.23  contract, a county board or a group of county boards must notify 
 62.24  the commissioner of human services of their intent to 
 62.25  participate in a joint purchaser demonstration project no later 
 62.26  than June 20, 1996.  The notice of intent must include a 
 62.27  transition plan describing the county or counties' plan for 
 62.28  moving the enrollees into the demonstration project.  The 
 62.29  transition plan may not propose returning current prepaid 
 62.30  medical assistance, prepaid general assistance medical care, or 
 62.31  prepaid MinnesotaCare enrollees to fee-for-service coverage for 
 62.32  any period of time during the transition period.  In counties 
 62.33  where the prepayment program is not currently being implemented, 
 62.34  a county board or group of county boards must notify the 
 62.35  commissioner of human services of their intent to participate in 
 62.36  a joint purchaser demonstration project by February 1, 1997.  By 
 63.1   February 1, 1997, each county board must inform the commissioner 
 63.2   whether the county intends on participating in a demonstration 
 63.3   project.  
 63.4      (b) By July 1, 1997, each county board wishing to 
 63.5   participate in a demonstration project must submit a final 
 63.6   proposal that demonstrates the ability to provide services 
 63.7   beginning on January 1, 1998, in accordance with this section.  
 63.8   For any geographic area and for any population for which the 
 63.9   state has not received a final proposal by July 1, 1997, nothing 
 63.10  shall prohibit the implementation of the prepaid medical 
 63.11  assistance, prepaid general assistance medical care, and prepaid 
 63.12  MinnesotaCare programs.  The commissioner must accept or reject 
 63.13  final proposals on or before September 1, 1997.  The 
 63.14  commissioner must authorize any proposal that satisfies the 
 63.15  criteria listed in subdivision 14 subject to federal approval.  
 63.16  The commissioner must negotiate the contract for the joint 
 63.17  purchaser demonstration project with the appropriate county or 
 63.18  counties by September 1, 1997, for implementation effective 
 63.19  January 1, 1998. 
 63.20     (c) In counties in which the prepaid medical assistance, 
 63.21  prepaid general assistance medical care, or prepaid 
 63.22  MinnesotaCare program is operating, the commissioner may 
 63.23  continue or extend those contracts until the county negotiated 
 63.24  contracts become effective and enrollment begins.  In counties 
 63.25  in which the prepaid medical assistance or prepaid general 
 63.26  assistance medical care programs are not currently operating, 
 63.27  and enrollment under the county negotiated contracts does not 
 63.28  begin by January 1, 1998, nothing shall prohibit the 
 63.29  implementation of the prepaid medical assistance, prepaid 
 63.30  general assistance medical care, and prepaid MinnesotaCare 
 63.31  programs. 
 63.32     Subd. 9.  [PROJECT REPORTING.] (a) Counties that intend to 
 63.33  participate in a demonstration project must report to the 
 63.34  legislative oversight commission on health care access by 
 63.35  January 15, 1997, with recommendations for reserve requirements 
 63.36  for local provider networks; project reporting data, including 
 64.1   data necessary to assess enrollee needs, satisfaction, outcomes, 
 64.2   and utilization of services for the purpose of project 
 64.3   evaluation; and state and county risk sharing methodology 
 64.4   options. 
 64.5      (b) The commissioner of human services shall contract for 
 64.6   an independent evaluation of the demonstration projects and 
 64.7   submit the results of the evaluation in a report to the 
 64.8   legislature no later than January 15, 1999.  The evaluation must 
 64.9   determine the impact of each joint purchasing demonstration 
 64.10  project on quality of care, costs, and access to services.  Each 
 64.11  evaluation must also compare demonstration project outcomes to 
 64.12  outcomes under the prepaid medical assistance program. 
 64.13     Subd. 10.  [PAYMENT RATES.] The commissioner of human 
 64.14  services shall determine payment by the state to the joint 
 64.15  purchaser demonstration projects.  The total payment must be 
 64.16  reduced by five percent of the estimated fee-for-service costs 
 64.17  for Medicare recipients and by ten percent of the estimated 
 64.18  fee-for-service costs for all other recipients.  The 
 64.19  commissioner shall develop per member, per month payment rates 
 64.20  for each project year, in consultation with an independent 
 64.21  actuary, to ensure that the cost of services under these 
 64.22  demonstration projects does not exceed the prepaid medical 
 64.23  assistance, prepaid general assistance medical care, and the 
 64.24  prepaid MinnesotaCare program rates under existing methodology.  
 64.25  Payments to counties shall be made in accordance with Minnesota 
 64.26  Statutes, section 256B.69.  
 64.27     Subd. 11.  [FEDERAL WAIVER.] The commissioner of human 
 64.28  services shall apply by August 1, 1996, for any new federal 
 64.29  waivers or any modifications to existing waivers necessary to 
 64.30  implement this section.  The chairs of the senate health care 
 64.31  committee and health care and family services finance division, 
 64.32  house of representatives health and human services committee and 
 64.33  health and human services finance division, and one minority 
 64.34  member from the house of representatives and senate appointed by 
 64.35  the rules of the house and senate, and three county 
 64.36  commissioners appointed by the association of Minnesota counties 
 65.1   shall participate in developing the waiver application and in 
 65.2   waiver negotiations, including negotiations to interpret the 
 65.3   current waivers.  No payments shall be made to any county under 
 65.4   this section, and no recipient shall be disenrolled from the 
 65.5   prepaid medical assistance or general assistance medical care 
 65.6   program under this section without prior federal approval. 
 65.7      Subd. 12.  [ALTERNATIVE METHODS.] Upon federal waiver 
 65.8   approval to proceed with these projects, the commissioner of 
 65.9   human services may approve alternative methods to meet the 
 65.10  intent of existing rules and statutes relating to services for 
 65.11  eligible persons.  The commissioner shall ensure that in no case 
 65.12  are the rights and protections afforded under these rules and 
 65.13  statutes abridged.  The commissioner shall not waive the rights 
 65.14  or procedural protections under Minnesota Statutes, sections 
 65.15  245.825; 245.91 to 245.97; 252.41, subdivision 9; 256.045; 
 65.16  256B.092; 626.556; and 626.557, including the county agency's 
 65.17  responsibility to arrange for appropriate services and 
 65.18  procedures for the monitoring of psychotropic medications. 
 65.19     Subd. 13.  [ACTUARIAL STUDY.] The commissioner of human 
 65.20  services shall contract with an independent actuary to prepare 
 65.21  an analysis of the amount of funding for mental health services, 
 65.22  which is included in the capitated payment to health plans, 
 65.23  compared to the utilization of mental health services. 
 65.24     Subd. 14.  [STANDARDS AND CRITERIA.] Any demonstration 
 65.25  project must demonstrate the ability to: 
 65.26     (1) purchase all covered services for a fixed amount that 
 65.27  does not exceed the estimated cost that would have occurred 
 65.28  under the prepaid medical assistance, prepaid general assistance 
 65.29  medical care, and the prepaid MinnesotaCare programs; 
 65.30     (2) ensure that covered services are accessible to all 
 65.31  enrollees and that enrollees have a choice of providers whenever 
 65.32  possible; 
 65.33     (3) issue payments to participating vendors or networks in 
 65.34  a timely manner; 
 65.35     (4) establish a process to ensure and improve the quality 
 65.36  of the care received; 
 66.1      (5) provide appropriate quality and other required data in 
 66.2   a format required by the state that will allow comparisons 
 66.3   between plans and providers; and 
 66.4      (6) provide an advocacy and enrollee protection and 
 66.5   complaints and appeals system that is independent from care 
 66.6   providers or other risk bearers and complies with Minnesota 
 66.7   Statutes, section 256B.69. 
 66.8      Sec. 52.  [HOME TELEMEDICINE DEVICES.] 
 66.9      (a) The commissioner of human services shall facilitate a 
 66.10  request for information process to demonstrate the effectiveness 
 66.11  of telemedicine devices as a high quality, lower cost 
 66.12  alternative to in-person home visits from nurses and other home 
 66.13  care personnel.  The commissioner shall prepare and publish a 
 66.14  request for information by August 31, 1996.  The commissioner 
 66.15  shall provide a forum for all responders to demonstrate their 
 66.16  products for a wide variety of home- and community-based waiver 
 66.17  program providers, prepaid medical assistance program providers, 
 66.18  and other home care providers.  The telemedicine devices must:  
 66.19     (1) be capable of providing video and audio communication 
 66.20  between the client's home and a central monitoring station using 
 66.21  regular telephone lines; and 
 66.22     (2) be equipped to monitor blood pressure, heart rate, and 
 66.23  vital signs.  
 66.24  Responders may demonstrate service to a range of client needs, 
 66.25  including clients who need home care following hospital stays, 
 66.26  chronic care clients, high users of health care services, 
 66.27  persons at risk of nursing home placement, and other persons 
 66.28  identified by the commissioner as likely to be served in a 
 66.29  cost-effective manner. 
 66.30     (b) The commissioner shall collect any reports, preliminary 
 66.31  results, or final recommendations from efforts to evaluate 
 66.32  effectiveness of the telemedicine devices, including evidence of 
 66.33  improved patient access to care by eliminating or reducing 
 66.34  nursing personnel travel time, reduced emergency room visits, 
 66.35  reduced hospitalization costs, improved use of home therapies, 
 66.36  reduced nursing home admissions, and early discharge from 
 67.1   nursing facilities.  This information and a recommendation 
 67.2   regarding whether telemedicine devices should be a covered 
 67.3   service under medical assistance shall be forwarded to the 
 67.4   legislature by December 15, 1996. 
 67.5      Sec. 53.  [INDIVIDUAL COMPULSIVE GAMBLING TREATMENT PILOT 
 67.6   PROJECT.] 
 67.7      Subdivision 1.  [ESTABLISHMENT.] The commissioner of human 
 67.8   services shall establish a pilot project in the southeast area 
 67.9   of the state to provide compulsive gambling treatment services 
 67.10  to individuals seeking treatment.  The pilot project shall 
 67.11  directly reimburse qualified providers for treatment to 
 67.12  individuals on a case-by-case basis.  The pilot project shall 
 67.13  seek to utilize existing qualified providers and shall provide 
 67.14  treatment reimbursement to the maximum number of persons who 
 67.15  qualify for treatment. 
 67.16     Subd. 2.  [PLAN.] The commissioner shall submit to the 
 67.17  legislature by December 15, 1996, a plan for expansion of the 
 67.18  treatment pilot project to all areas of the state.  The plan 
 67.19  shall include the necessary legislative changes needed to move 
 67.20  from a treatment center model to a provider reimbursement model. 
 67.21     Sec. 54.  [EXTENSION OF TIME REQUIREMENT FOR CLAIM 
 67.22  SUBMITTAL.] 
 67.23     The commissioner of human services shall provide vendors of 
 67.24  medical care, as defined in Minnesota Statutes, section 256B.02, 
 67.25  subdivision 7, with a 120-day extension to the 12-month time 
 67.26  requirement for submission of claims in accordance with the 
 67.27  general billing procedures of health care programs, for all 
 67.28  claims for which the vendor delayed submittal at the request of 
 67.29  the commissioner due to the phase in of the upgrade to the 
 67.30  Medicaid management information system.  This 120-day extension 
 67.31  for claim submittal shall apply regardless of the date of 
 67.32  service of the claim. 
 67.33     Sec. 55.  [REPEALER.] 
 67.34     Minnesota Statutes 1995 Supplement, sections 256B.057, 
 67.35  subdivisions 2a and 2b; 256B.15, subdivision 5; 256G.05, 
 67.36  subdivision 1; and 256G.07, subdivision 3a, are repealed.  Laws 
 68.1   1995, chapter 207, article 6, section 125, subdivision 6, is 
 68.2   repealed.  
 68.3      Sec. 56.  [EFFECTIVE DATE; APPLICATION.] 
 68.4      (a) Sections 3 [256B.055, subdivision 12], 10 [256B.0595, 
 68.5   subdivision 1a], 12 [256B.0595, subdivision 2a], 14 [256B.0595, 
 68.6   subdivision 3a], 16 [256B.0595, subdivision 4a], 20 [256B.15, 
 68.7   subdivision 2a], 23 [256B.69, subdivision 3a], 24 [256B.69, 
 68.8   subdivision 4], 25 [256B.69, subdivision 5b], 46 to 49, 51, and 
 68.9   55 are effective the day following final enactment to the extent 
 68.10  permitted by federal law.  If any provisions of these sections 
 68.11  are prohibited by federal law, those provisions shall become 
 68.12  effective when federal law is changed to permit their 
 68.13  application or a waiver is received.  The commissioner of human 
 68.14  services shall notify the revisor of statutes when federal law 
 68.15  is enacted or a waiver is received and publish a notice in the 
 68.16  State Register.  The commissioner must include the notice in the 
 68.17  first State Register published after the effective date of the 
 68.18  federal changes.  
 68.19     (b) If, by July 1, 1996, any provisions of these sections 
 68.20  are not effective because of prohibitions in federal law, the 
 68.21  commissioner shall apply to the federal government for a waiver 
 68.22  of those prohibitions, and those provisions shall become 
 68.23  effective upon receipt of a federal waiver, notification to the 
 68.24  revisor of statutes, and publication of a notice in the State 
 68.25  Register to that effect.  If the commissioner applies for a 
 68.26  waiver of the lookback period, the commissioner shall seek the 
 68.27  longest lookback period the health care financing administration 
 68.28  will approve, not to exceed 84 months. 
 68.29     (c) Section 44 [524.2-403] applies to estates of decedents 
 68.30  dying on or after its effective date.  Section 45 [524.3-801] 
 68.31  applies to estates where the notice under Minnesota Statutes, 
 68.32  section 524.3-801, paragraph (a), was first published on or 
 68.33  after its effective date.  Section 45 [524.3-801] does not 
 68.34  affect any right or duty to provide notice to known creditors, 
 68.35  including a local agency, before its effective date. 
 68.36     (d) Sections 11 [256B.0595, subdivision 2], 13 [256B.0595, 
 69.1   subdivision 3], and 15 [256B.0595, subdivision 4] are effective 
 69.2   the day following final enactment.  Section 54 (claim submittal) 
 69.3   is effective the day following final enactment. 
 69.4      (e) Section 9 [256B.0595, subdivision 1] is effective 
 69.5   retroactive to October 1, 1993. 
 69.6      (f) Section 19, subdivision 3 [256B.07, subdivision 3], is 
 69.7   effective upon federal approval of this requirement. 
 69.8      (g) Section 24 [256B.69, subdivision 4] is effective upon 
 69.9   approval by the health care financing administration. 
 69.10     (h) Sections 8 [256B.0575] and 21 [256B.35, subdivision 1] 
 69.11  are effective upon receipt of federal approval, retroactive to 
 69.12  January 1, 1996. 
 69.13                             ARTICLE 3 
 69.14                           LONG-TERM CARE 
 69.15     Section 1.  Minnesota Statutes 1995 Supplement, section 
 69.16  144A.071, subdivision 3, is amended to read: 
 69.17     Subd. 3.  [EXCEPTIONS AUTHORIZING AN INCREASE IN BEDS.] The 
 69.18  commissioner of health, in coordination with the commissioner of 
 69.19  human services, may approve the addition of a new certified bed 
 69.20  or the addition of a new licensed nursing home bed, under the 
 69.21  following conditions:  
 69.22     (a) to license or certify a new bed in place of one 
 69.23  decertified after July 1, 1993, as long as the number of 
 69.24  certified plus newly certified or recertified beds does not 
 69.25  exceed the number of beds licensed or certified on July 1, 1993, 
 69.26  or to address an extreme hardship situation, in a particular 
 69.27  county that, together with all contiguous Minnesota counties, 
 69.28  has fewer nursing home beds per 1,000 elderly than the number 
 69.29  that is ten percent higher than the national average of nursing 
 69.30  home beds per 1,000 elderly individuals.  For the purposes of 
 69.31  this section, the national average of nursing home beds shall be 
 69.32  the most recent figure that can be supplied by the federal 
 69.33  health care financing administration and the number of elderly 
 69.34  in the county or the nation shall be determined by the most 
 69.35  recent federal census or the most recent estimate of the state 
 69.36  demographer as of July 1, of each year of persons age 65 and 
 70.1   older, whichever is the most recent at the time of the request 
 70.3   for replacement.  An extreme hardship situation can only be 
 70.4   found after the county documents the existence of unmet medical 
 70.5   needs that cannot be addressed by any other alternatives; 
 70.6      (b) to certify or license new beds in a new facility that 
 70.7   is to be operated by the commissioner of veterans affairs or 
 70.8   when the costs of constructing and operating the new beds are to 
 70.9   be reimbursed by the commissioner of veterans affairs or the 
 70.10  United States Veterans Administration; 
 70.11     (c) to license or certify beds in a facility that has been 
 70.12  involuntarily delicensed or decertified for participation in the 
 70.13  medical assistance program, provided that an application for 
 70.14  relicensure or recertification is submitted to the commissioner 
 70.15  within 120 days after delicensure or decertification; or 
 70.16     (d) to certify two existing beds in a facility with 66 
 70.17  licensed beds on January 1, 1994, that had an average occupancy 
 70.18  rate of 98 percent or higher in both calendar years 1992 and 
 70.19  1993, and which began construction of four attached assisted 
 70.20  living units in April 1993; or 
 70.21     (e) to certify four existing beds in a facility in Winona 
 70.22  with 139 beds, of which 129 beds are certified. 
 70.23     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 70.24  144A.071, subdivision 4a, is amended to read: 
 70.25     Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
 70.26  best interest of the state to ensure that nursing homes and 
 70.27  boarding care homes continue to meet the physical plant 
 70.28  licensing and certification requirements by permitting certain 
 70.29  construction projects.  Facilities should be maintained in 
 70.30  condition to satisfy the physical and emotional needs of 
 70.31  residents while allowing the state to maintain control over 
 70.32  nursing home expenditure growth. 
 70.33     The commissioner of health in coordination with the 
 70.34  commissioner of human services, may approve the renovation, 
 70.35  replacement, upgrading, or relocation of a nursing home or 
 70.36  boarding care home, under the following conditions: 
 70.37     (a) to license or certify beds in a new facility 
 71.1   constructed to replace a facility or to make repairs in an 
 71.2   existing facility that was destroyed or damaged after June 30, 
 71.3   1987, by fire, lightning, or other hazard provided:  
 71.4      (i) destruction was not caused by the intentional act of or 
 71.5   at the direction of a controlling person of the facility; 
 71.6      (ii) at the time the facility was destroyed or damaged the 
 71.7   controlling persons of the facility maintained insurance 
 71.8   coverage for the type of hazard that occurred in an amount that 
 71.9   a reasonable person would conclude was adequate; 
 71.10     (iii) the net proceeds from an insurance settlement for the 
 71.11  damages caused by the hazard are applied to the cost of the new 
 71.12  facility or repairs; 
 71.13     (iv) the new facility is constructed on the same site as 
 71.14  the destroyed facility or on another site subject to the 
 71.15  restrictions in section 144A.073, subdivision 5; 
 71.16     (v) the number of licensed and certified beds in the new 
 71.17  facility does not exceed the number of licensed and certified 
 71.18  beds in the destroyed facility; and 
 71.19     (vi) the commissioner determines that the replacement beds 
 71.20  are needed to prevent an inadequate supply of beds. 
 71.21  Project construction costs incurred for repairs authorized under 
 71.22  this clause shall not be considered in the dollar threshold 
 71.23  amount defined in subdivision 2; 
 71.24     (b) to license or certify beds that are moved from one 
 71.25  location to another within a nursing home facility, provided the 
 71.26  total costs of remodeling performed in conjunction with the 
 71.27  relocation of beds does not exceed 25 percent of the appraised 
 71.28  value of the facility or $500,000, whichever is less; 
 71.29     (c) to license or certify beds in a project recommended for 
 71.30  approval under section 144A.073; 
 71.31     (d) to license or certify beds that are moved from an 
 71.32  existing state nursing home to a different state facility, 
 71.33  provided there is no net increase in the number of state nursing 
 71.34  home beds; 
 71.35     (e) to certify and license as nursing home beds boarding 
 71.36  care beds in a certified boarding care facility if the beds meet 
 72.1   the standards for nursing home licensure, or in a facility that 
 72.2   was granted an exception to the moratorium under section 
 72.3   144A.073, and if the cost of any remodeling of the facility does 
 72.4   not exceed 25 percent of the appraised value of the facility or 
 72.5   $500,000, whichever is less.  If boarding care beds are licensed 
 72.6   as nursing home beds, the number of boarding care beds in the 
 72.7   facility must not increase beyond the number remaining at the 
 72.8   time of the upgrade in licensure.  The provisions contained in 
 72.9   section 144A.073 regarding the upgrading of the facilities do 
 72.10  not apply to facilities that satisfy these requirements; 
 72.11     (f) to license and certify up to 40 beds transferred from 
 72.12  an existing facility owned and operated by the Amherst H. Wilder 
 72.13  Foundation in the city of St. Paul to a new unit at the same 
 72.14  location as the existing facility that will serve persons with 
 72.15  Alzheimer's disease and other related disorders.  The transfer 
 72.16  of beds may occur gradually or in stages, provided the total 
 72.17  number of beds transferred does not exceed 40.  At the time of 
 72.18  licensure and certification of a bed or beds in the new unit, 
 72.19  the commissioner of health shall delicense and decertify the 
 72.20  same number of beds in the existing facility.  As a condition of 
 72.21  receiving a license or certification under this clause, the 
 72.22  facility must make a written commitment to the commissioner of 
 72.23  human services that it will not seek to receive an increase in 
 72.24  its property-related payment rate as a result of the transfers 
 72.25  allowed under this paragraph; 
 72.26     (g) to license and certify nursing home beds to replace 
 72.27  currently licensed and certified boarding care beds which may be 
 72.28  located either in a remodeled or renovated boarding care or 
 72.29  nursing home facility or in a remodeled, renovated, newly 
 72.30  constructed, or replacement nursing home facility within the 
 72.31  identifiable complex of health care facilities in which the 
 72.32  currently licensed boarding care beds are presently located, 
 72.33  provided that the number of boarding care beds in the facility 
 72.34  or complex are decreased by the number to be licensed as nursing 
 72.35  home beds and further provided that, if the total costs of new 
 72.36  construction, replacement, remodeling, or renovation exceed ten 
 73.1   percent of the appraised value of the facility or $200,000, 
 73.2   whichever is less, the facility makes a written commitment to 
 73.3   the commissioner of human services that it will not seek to 
 73.4   receive an increase in its property-related payment rate by 
 73.5   reason of the new construction, replacement, remodeling, or 
 73.6   renovation.  The provisions contained in section 144A.073 
 73.7   regarding the upgrading of facilities do not apply to facilities 
 73.8   that satisfy these requirements; 
 73.9      (h) to license as a nursing home and certify as a nursing 
 73.10  facility a facility that is licensed as a boarding care facility 
 73.11  but not certified under the medical assistance program, but only 
 73.12  if the commissioner of human services certifies to the 
 73.13  commissioner of health that licensing the facility as a nursing 
 73.14  home and certifying the facility as a nursing facility will 
 73.15  result in a net annual savings to the state general fund of 
 73.16  $200,000 or more; 
 73.17     (i) to certify, after September 30, 1992, and prior to July 
 73.18  1, 1993, existing nursing home beds in a facility that was 
 73.19  licensed and in operation prior to January 1, 1992; 
 73.20     (j) to license and certify new nursing home beds to replace 
 73.21  beds in a facility condemned as part of an economic 
 73.22  redevelopment plan in a city of the first class, provided the 
 73.23  new facility is located within one mile of the site of the old 
 73.24  facility.  Operating and property costs for the new facility 
 73.25  must be determined and allowed under existing reimbursement 
 73.26  rules; 
 73.27     (k) to license and certify up to 20 new nursing home beds 
 73.28  in a community-operated hospital and attached convalescent and 
 73.29  nursing care facility with 40 beds on April 21, 1991, that 
 73.30  suspended operation of the hospital in April 1986.  The 
 73.31  commissioner of human services shall provide the facility with 
 73.32  the same per diem property-related payment rate for each 
 73.33  additional licensed and certified bed as it will receive for its 
 73.34  existing 40 beds; 
 73.35     (l) to license or certify beds in renovation, replacement, 
 73.36  or upgrading projects as defined in section 144A.073, 
 74.1   subdivision 1, so long as the cumulative total costs of the 
 74.2   facility's remodeling projects do not exceed 25 percent of the 
 74.3   appraised value of the facility or $500,000, whichever is less; 
 74.4      (m) to license and certify beds that are moved from one 
 74.5   location to another for the purposes of converting up to five 
 74.6   four-bed wards to single or double occupancy rooms in a nursing 
 74.7   home that, as of January 1, 1993, was county-owned and had a 
 74.8   licensed capacity of 115 beds; 
 74.9      (n) to allow a facility that on April 16, 1993, was a 
 74.10  106-bed licensed and certified nursing facility located in 
 74.11  Minneapolis to layaway all of its licensed and certified nursing 
 74.12  home beds.  These beds may be relicensed and recertified in a 
 74.13  newly-constructed teaching nursing home facility affiliated with 
 74.14  a teaching hospital upon approval by the legislature.  The 
 74.15  proposal must be developed in consultation with the interagency 
 74.16  committee on long-term care planning.  The beds on layaway 
 74.17  status shall have the same status as voluntarily delicensed and 
 74.18  decertified beds, except that beds on layaway status remain 
 74.19  subject to the surcharge in section 256.9657.  This layaway 
 74.20  provision expires July 1, 1997; 
 74.21     (o) to allow a project which will be completed in 
 74.22  conjunction with an approved moratorium exception project for a 
 74.23  nursing home in southern Cass county and which is directly 
 74.24  related to that portion of the facility that must be repaired, 
 74.25  renovated, or replaced, to correct an emergency plumbing problem 
 74.26  for which a state correction order has been issued and which 
 74.27  must be corrected by August 31, 1993; 
 74.28     (p) to allow a facility that on April 16, 1993, was a 
 74.29  368-bed licensed and certified nursing facility located in 
 74.30  Minneapolis to layaway, upon 30 days prior written notice to the 
 74.31  commissioner, up to 30 of the facility's licensed and certified 
 74.32  beds by converting three-bed wards to single or double 
 74.33  occupancy.  Beds on layaway status shall have the same status as 
 74.34  voluntarily delicensed and decertified beds except that beds on 
 74.35  layaway status remain subject to the surcharge in section 
 74.36  256.9657, remain subject to the license application and renewal 
 75.1   fees under section 144A.07 and shall be subject to a $100 per 
 75.2   bed reactivation fee.  In addition, at any time within three 
 75.3   years of the effective date of the layaway, the beds on layaway 
 75.4   status may be: 
 75.5      (1) relicensed and recertified upon relocation and 
 75.6   reactivation of some or all of the beds to an existing licensed 
 75.7   and certified facility or facilities located in Pine River, 
 75.8   Brainerd, or International Falls; provided that the total 
 75.9   project construction costs related to the relocation of beds 
 75.10  from layaway status for any facility receiving relocated beds 
 75.11  may not exceed the dollar threshold provided in subdivision 2 
 75.12  unless the construction project has been approved through the 
 75.13  moratorium exception process under section 144A.073; 
 75.14     (2) relicensed and recertified, upon reactivation of some 
 75.15  or all of the beds within the facility which placed the beds in 
 75.16  layaway status, if the commissioner has determined a need for 
 75.17  the reactivation of the beds on layaway status. 
 75.18     The property-related payment rate of a facility placing 
 75.19  beds on layaway status must be adjusted by the incremental 
 75.20  change in its rental per diem after recalculating the rental per 
 75.21  diem as provided in section 256B.431, subdivision 3a, paragraph 
 75.22  (d).  The property-related payment rate for a facility 
 75.23  relicensing and recertifying beds from layaway status must be 
 75.24  adjusted by the incremental change in its rental per diem after 
 75.25  recalculating its rental per diem using the number of beds after 
 75.26  the relicensing to establish the facility's capacity day 
 75.27  divisor, which shall be effective the first day of the month 
 75.28  following the month in which the relicensing and recertification 
 75.29  became effective.  Any beds remaining on layaway status more 
 75.30  than three years after the date the layaway status became 
 75.31  effective must be removed from layaway status and immediately 
 75.32  delicensed and decertified; 
 75.33     (q) to license and certify beds in a renovation and 
 75.34  remodeling project to convert 13 three-bed wards into 13 two-bed 
 75.35  rooms and 13 single-bed rooms, expand space, and add 
 75.36  improvements in a nursing home that, as of January 1, 1994, met 
 76.1   the following conditions:  the nursing home was located in 
 76.2   Ramsey county; was not owned by a hospital corporation; had a 
 76.3   licensed capacity of 64 beds; and had been ranked among the top 
 76.4   15 applicants by the 1993 moratorium exceptions advisory review 
 76.5   panel.  The total project construction cost estimate for this 
 76.6   project must not exceed the cost estimate submitted in 
 76.7   connection with the 1993 moratorium exception process; 
 76.8      (r) to license and certify beds in a renovation and 
 76.9   remodeling project to convert 12 four-bed wards into 24 two-bed 
 76.10  rooms, expand space, and add improvements in a nursing home 
 76.11  that, as of January 1, 1994, met the following conditions:  the 
 76.12  nursing home was located in Ramsey county; had a licensed 
 76.13  capacity of 154 beds; and had been ranked among the top 15 
 76.14  applicants by the 1993 moratorium exceptions advisory review 
 76.15  panel.  The total project construction cost estimate for this 
 76.16  project must not exceed the cost estimate submitted in 
 76.17  connection with the 1993 moratorium exception process; 
 76.18     (s) to license and certify up to 117 beds that are 
 76.19  relocated from a licensed and certified 138-bed nursing facility 
 76.20  located in St. Paul to a hospital with 130 licensed hospital 
 76.21  beds located in South St. Paul, provided that the nursing 
 76.22  facility and hospital are owned by the same or a related 
 76.23  organization and that prior to the date the relocation is 
 76.24  completed the hospital ceases operation of its inpatient 
 76.25  hospital services at that hospital.  After relocation, the 
 76.26  nursing facility's status under section 256B.431, subdivision 
 76.27  2j, shall be the same as it was prior to relocation.  The 
 76.28  nursing facility's property-related payment rate resulting from 
 76.29  the project authorized in this paragraph shall become effective 
 76.30  no earlier than April 1, 1996.  For purposes of calculating the 
 76.31  incremental change in the facility's rental per diem resulting 
 76.32  from this project, the allowable appraised value of the nursing 
 76.33  facility portion of the existing health care facility physical 
 76.34  plant prior to the renovation and relocation may not exceed 
 76.35  $2,490,000; 
 76.36     (t) to license and certify two beds in a facility to 
 77.1   replace beds that were voluntarily delicensed and decertified on 
 77.2   June 28, 1991; 
 77.3      (u) to allow 16 licensed and certified beds located on July 
 77.4   1, 1994, in a 142-bed nursing home and 21-bed boarding care home 
 77.5   facility in Minneapolis, notwithstanding the licensure and 
 77.6   certification after July 1, 1995, of the Minneapolis facility as 
 77.7   a 147-bed nursing home facility after completion of a 
 77.8   construction project approved in 1993 under section 144A.073, to 
 77.9   be laid away upon 30 days' prior written notice to the 
 77.10  commissioner.  Beds on layaway status shall have the same status 
 77.11  as voluntarily delicensed or decertified beds except that they 
 77.12  shall remain subject to the surcharge in section 256.9657.  The 
 77.13  16 beds on layaway status may be relicensed as nursing home beds 
 77.14  and recertified at any time within five years of the effective 
 77.15  date of the layaway upon relocation of some or all of the beds 
 77.16  to a licensed and certified facility located in Watertown, 
 77.17  provided that the total project construction costs related to 
 77.18  the relocation of beds from layaway status for the Watertown 
 77.19  facility may not exceed the dollar threshold provided in 
 77.20  subdivision 2 unless the construction project has been approved 
 77.21  through the moratorium exception process under section 144A.073. 
 77.22     The property-related payment rate of the facility placing 
 77.23  beds on layaway status must be adjusted by the incremental 
 77.24  change in its rental per diem after recalculating the rental per 
 77.25  diem as provided in section 256B.431, subdivision 3a, paragraph 
 77.26  (d).  The property-related payment rate for the facility 
 77.27  relicensing and recertifying beds from layaway status must be 
 77.28  adjusted by the incremental change in its rental per diem after 
 77.29  recalculating its rental per diem using the number of beds after 
 77.30  the relicensing to establish the facility's capacity day 
 77.31  divisor, which shall be effective the first day of the month 
 77.32  following the month in which the relicensing and recertification 
 77.33  became effective.  Any beds remaining on layaway status more 
 77.34  than five years after the date the layaway status became 
 77.35  effective must be removed from layaway status and immediately 
 77.36  delicensed and decertified; or 
 78.1      (v) to license and certify beds that are moved within an 
 78.2   existing area of a facility or to a newly-constructed addition 
 78.3   which is built for the purpose of eliminating three- and 
 78.4   four-bed rooms and adding space for dining, lounge areas, 
 78.5   bathing rooms, and ancillary service areas in a nursing home 
 78.6   that, as of January 1, 1995, was located in Fridley and had a 
 78.7   licensed capacity of 129 beds; or 
 78.8      (w) to relocate 36 beds in Crow Wing county and 4 beds from 
 78.9   Hennepin county to a 160 bed facility in Crow Wing county, 
 78.10  provided all the affected beds are under common ownership.  
 78.11     Sec. 3.  Minnesota Statutes 1994, section 256B.37, is 
 78.12  amended by adding a subdivision to read: 
 78.13     Subd. 5b.  [EXCEPTION FOR MANAGED CARE PAYMENTS.] For a 
 78.14  nursing facility that receives a third-party payment in excess 
 78.15  of the medical assistance payment rate and (1) the facility has 
 78.16  entered into a contractual managed care arrangement with a third 
 78.17  party, and (2) the payment is for services provided as part of 
 78.18  the contractual managed care arrangement, the excess payment 
 78.19  shall be exempt from the requirements of subdivisions 5 and 5a. 
 78.20     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
 78.21  256B.431, subdivision 2j, is amended to read: 
 78.22     Subd. 2j.  [HOSPITAL-ATTACHED NURSING FACILITY STATUS.] (a) 
 78.23  For the purpose of setting rates under Minnesota Rules, parts 
 78.24  9549.0010 to 9549.0080, for rate years beginning after June 30, 
 78.25  1989, a hospital-attached nursing facility means a nursing 
 78.26  facility which meets the requirements of clauses (1) to (3): 
 78.27     (1) the nursing facility is recognized by the federal 
 78.28  Medicare program to be a hospital-based nursing facility for 
 78.29  purposes of being subject to higher cost limits accorded 
 78.30  hospital-based nursing facilities under the Medicare program, 
 78.31  or, prior to June 30, 1983, was classified as a 
 78.32  hospital-attached nursing facility under Minnesota Rules, parts 
 78.33  9510.0010 to 9510.0480; 
 78.34     (2) the nursing facility's cost report filed under 
 78.35  Minnesota Rules, parts 9549.0010 to 9549.0080, shall use the 
 78.36  same cost allocation principles and methods used in the reports 
 79.1   filed for the Medicare program except as provided in clause (3); 
 79.2   and 
 79.3      (3) direct identification of costs to the nursing facility 
 79.4   cost center will be permitted only when the comparable hospital 
 79.5   costs have also been directly identified to a cost center which 
 79.6   is not allocated to the nursing facility.  
 79.7      (b) For rate years beginning after June 30, 1989, a nursing 
 79.8   facility and hospital, which have applied for hospital-based 
 79.9   nursing facility status under the federal Medicare program 
 79.10  during the reporting year or the nine-month period following the 
 79.11  nursing facility's reporting year, shall be considered a 
 79.12  hospital-attached nursing facility for purposes of setting 
 79.13  payment rates under Minnesota Rules, parts 9549.0010 to 
 79.14  9549.0080, for the rate year following the reporting year or the 
 79.15  nine-month period in which the facility made its Medicare 
 79.16  application.  The nursing facility must file its cost report or 
 79.17  an amended cost report for that reporting year before the 
 79.18  following rate year using Medicare principles and Medicare's 
 79.19  recommended cost allocation methods had the Medicare program's 
 79.20  hospital-based nursing facility status been granted to the 
 79.21  nursing facility.  For each subsequent rate year, the nursing 
 79.22  facility must meet the definition requirements in paragraph 
 79.23  (a).  If the nursing facility is denied hospital-based nursing 
 79.24  facility status under the Medicare program, the nursing 
 79.25  facility's payment rates for the rate years the nursing facility 
 79.26  was considered to be a hospital-attached nursing facility 
 79.27  pursuant to this paragraph shall be recalculated treating the 
 79.28  nursing facility as a non-hospital-attached nursing facility. 
 79.29     (c) For rate years beginning on or after July 1, 1995, a 
 79.30  nursing facility shall be considered a hospital attached nursing 
 79.31  facility for purposes of setting payment rates under Minnesota 
 79.32  Rules, parts 9549.0010 to 9549.0080 and this section if it meets 
 79.33  the requirements of paragraphs (a) and (b), and 
 79.34     (1) the hospital and nursing facility are physically 
 79.35  attached or connected by a tunnel or skyway; or 
 79.36     (2) the nursing facility was recognized by the Medicare 
 80.1   program as hospital attached as of January 1, 1995, and this 
 80.2   status has been maintained continuously; or 
 80.3      (3) the nursing facility was recognized by the Medicare 
 80.4   program as hospital attached in December 1994, and the nursing 
 80.5   facility and the hospital merged on June 1, 1995.  
 80.6      Sec. 5.  Minnesota Statutes 1994, section 256B.431, is 
 80.7   amended by adding a subdivision to read: 
 80.8      Subd. 2s.  [PAYMENTS IN EXCESS OF MEDICAL ASSISTANCE RATE.] 
 80.9   For rate years beginning on or after July 1, 1996, a nursing 
 80.10  facility that receives a per diem payment that is in excess of 
 80.11  the medical assistance payment rate and (1) is related to 
 80.12  routine nursing facility care, and (2) is from a third party 
 80.13  through a contractual managed care arrangement, must offset to 
 80.14  the nursing category on the provider's cost report either:  (i) 
 80.15  90 percent of the per diem payment in excess of the medical 
 80.16  assistance payment rate; or (ii) the directly identified costs 
 80.17  associated with the per diem payment in excess of the medical 
 80.18  assistance rate.  The cost of nonroutine nursing facility care 
 80.19  shall be determined using the medical assistance allowed charge 
 80.20  for each unit of nonroutine service provided to the nursing 
 80.21  facility resident while the resident is covered under the 
 80.22  managed care contract. 
 80.23     Sec. 6.  Minnesota Statutes 1995 Supplement, section 
 80.24  256B.431, subdivision 25, is amended to read: 
 80.25     Subd. 25.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
 80.26  BEGINNING JULY 1, 1995.] The nursing facility reimbursement 
 80.27  changes in paragraphs (a) to (g) (h) shall apply in the sequence 
 80.28  specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 
 80.29  this section, beginning July 1, 1995. 
 80.30     (a) The eight-cent adjustment to care-related rates in 
 80.31  subdivision 22, paragraph (e), shall no longer apply. 
 80.32     (b) For rate years beginning on or after July 1, 1995, the 
 80.33  commissioner shall limit a nursing facility's allowable 
 80.34  operating per diem for each case mix category for each rate year 
 80.35  as in clauses (1) to (3). 
 80.36     (1) For the rate year beginning July 1, 1995, the 
 81.1   commissioner shall group nursing facilities into two groups, 
 81.2   freestanding and nonfreestanding, within each geographic group, 
 81.3   using their operating cost per diem for the case mix A 
 81.4   classification.  A nonfreestanding nursing facility is a nursing 
 81.5   facility whose other operating cost per diem is subject to the 
 81.6   hospital attached, short length of stay, or the rule 80 limits.  
 81.7   All other nursing facilities shall be considered freestanding 
 81.8   nursing facilities.  The commissioner shall then array all 
 81.9   nursing facilities in each grouping by their allowable case mix 
 81.10  A operating cost per diem.  In calculating a nursing facility's 
 81.11  operating cost per diem for this purpose, the commissioner shall 
 81.12  exclude the raw food cost per diem related to providing special 
 81.13  diets that are based on religious beliefs, as determined in 
 81.14  subdivision 2b, paragraph (h).  For those nursing facilities in 
 81.15  each grouping whose case mix A operating cost per diem: 
 81.16     (i) is at or below the median minus 1.0 standard deviation 
 81.17  of the array, the commissioner shall limit the nursing 
 81.18  facility's allowable operating cost per diem for each case mix 
 81.19  category to the lesser of the prior reporting year's allowable 
 81.20  operating cost per diems plus the inflation factor as 
 81.21  established in paragraph (f), clause (2), increased by six 
 81.22  percentage points, or the current reporting year's corresponding 
 81.23  allowable operating cost per diem; 
 81.24     (ii) is between minus .5 standard deviation and minus 1.0 
 81.25  standard deviation below the median of the array, the 
 81.26  commissioner shall limit the nursing facility's allowable 
 81.27  operating cost per diem for each case mix category to the lesser 
 81.28  of the prior reporting year's allowable operating cost per diems 
 81.29  plus the inflation factor as established in paragraph (f), 
 81.30  clause (2), increased by four percentage points, or the current 
 81.31  reporting year's corresponding allowable operating cost per 
 81.32  diem; or 
 81.33     (iii) is equal to or above minus .5 standard deviation 
 81.34  below the median of the array, the commissioner shall limit the 
 81.35  nursing facility's allowable operating cost per diem for each 
 81.36  case mix category to the lesser of the prior reporting year's 
 82.1   allowable operating cost per diems plus the inflation factor as 
 82.2   established in paragraph (f), clause (2), increased by three 
 82.3   percentage points, or the current reporting year's corresponding 
 82.4   allowable operating cost per diem. 
 82.5      (2) For the rate year beginning on July 1, 1996, the 
 82.6   commissioner shall limit the nursing facility's allowable 
 82.7   operating cost per diem for each case mix category to the lesser 
 82.8   of the prior reporting year's allowable operating cost per diems 
 82.9   plus the inflation factor as established in paragraph (f), 
 82.10  clause (2), increased by one percentage point or the current 
 82.11  reporting year's corresponding allowable operating cost per 
 82.12  diems; and 
 82.13     (3) For rate years beginning on or after July 1, 1997, the 
 82.14  commissioner shall limit the nursing facility's allowable 
 82.15  operating cost per diem for each case mix category to the lesser 
 82.16  of the reporting year prior to the current reporting year's 
 82.17  allowable operating cost per diems plus the inflation factor as 
 82.18  established in paragraph (f), clause (2), or the current 
 82.19  reporting year's corresponding allowable operating cost per 
 82.20  diems. 
 82.21     (c) For rate years beginning on July 1, 1995, the 
 82.22  commissioner shall limit the allowable operating cost per diems 
 82.23  for high cost nursing facilities.  After application of the 
 82.24  limits in paragraph (b) to each nursing facility's operating 
 82.25  cost per diems, the commissioner shall group nursing facilities 
 82.26  into two groups, freestanding or nonfreestanding, within each 
 82.27  geographic group.  A nonfreestanding nursing facility is a 
 82.28  nursing facility whose other operating cost per diems are 
 82.29  subject to hospital attached, short length of stay, or rule 80 
 82.30  limits.  All other nursing facilities shall be considered 
 82.31  freestanding nursing facilities.  The commissioner shall then 
 82.32  array all nursing facilities within each grouping by their 
 82.33  allowable case mix A operating cost per diems.  In calculating a 
 82.34  nursing facility's operating cost per diem for this purpose, the 
 82.35  commissioner shall exclude the raw food cost per diem related to 
 82.36  providing special diets that are based on religious beliefs, as 
 83.1   determined in subdivision 2b, paragraph (h).  For those nursing 
 83.2   facilities in each grouping whose case mix A operating cost per 
 83.3   diem exceeds 1.0 standard deviation above the median, the 
 83.4   commissioner shall reduce their allowable operating cost per 
 83.5   diems by two percent.  For those nursing facilities in each 
 83.6   grouping whose case mix A operating cost per diem exceeds 0.5 
 83.7   standard deviation above the median but is less than or equal to 
 83.8   1.0 standard deviation above the median, the commissioner shall 
 83.9   reduce their allowable operating cost per diems by one percent. 
 83.10     (d) For rate years beginning on or after July 1, 1996, the 
 83.11  commissioner shall limit the allowable operating cost per diems 
 83.12  for high cost nursing facilities.  After application of the 
 83.13  limits in paragraph (b) to each nursing facility's operating 
 83.14  cost per diems, the commissioner shall group nursing facilities 
 83.15  into two groups, freestanding or nonfreestanding, within each 
 83.16  geographic group.  A nonfreestanding nursing facility is a 
 83.17  nursing facility whose other operating cost per diems are 
 83.18  subject to hospital attached, short length of stay, or rule 80 
 83.19  limits.  All other nursing facilities shall be considered 
 83.20  freestanding nursing facilities.  The commissioner shall then 
 83.21  array all nursing facilities within each grouping by their 
 83.22  allowable case mix A operating cost per diems.  In calculating a 
 83.23  nursing facility's operating cost per diem for this purpose, the 
 83.24  commissioner shall exclude the raw food cost per diem related to 
 83.25  providing special diets that are based on religious beliefs, as 
 83.26  determined in subdivision 2b, paragraph (h).  In those nursing 
 83.27  facilities in each grouping whose case mix A operating cost per 
 83.28  diem exceeds 1.0 standard deviation above the median, the 
 83.29  commissioner shall reduce their allowable operating cost per 
 83.30  diems by three percent.  For those nursing facilities in each 
 83.31  grouping whose case mix A operating cost per diem exceeds 0.5 
 83.32  standard deviation above the median but is less than or equal to 
 83.33  1.0 standard deviation above the median, the commissioner shall 
 83.34  reduce their allowable operating cost per diems by two percent. 
 83.35     (e) For rate years beginning on or after July 1, 1995, the 
 83.36  commissioner shall determine a nursing facility's efficiency 
 84.1   incentive by first computing the allowable difference, which is 
 84.2   the lesser of $4.50 or the amount by which the facility's other 
 84.3   operating cost limit exceeds its nonadjusted other operating 
 84.4   cost per diem for that rate year.  The commissioner shall 
 84.5   compute the efficiency incentive by: 
 84.6      (1) subtracting the allowable difference from $4.50 and 
 84.7   dividing the result by $4.50; 
 84.8      (2) multiplying 0.20 by the ratio resulting from clause 
 84.9   (1), and then; 
 84.10     (3) adding 0.50 to the result from clause (2); and 
 84.11     (4) multiplying the result from clause (3) times the 
 84.12  allowable difference. 
 84.13     The nursing facility's efficiency incentive payment shall 
 84.14  be the lesser of $2.25 or the product obtained in clause (4). 
 84.15     (f) For rate years beginning on or after July 1, 1995, the 
 84.16  forecasted price index for a nursing facility's allowable 
 84.17  operating cost per diems shall be determined under clauses (1) 
 84.18  to (3) using the change in the Consumer Price Index-All Items 
 84.19  (United States city average) (CPI-U) or the change in the 
 84.20  Nursing Home Market Basket, both as forecasted by Data Resources 
 84.21  Inc., whichever is applicable.  The commissioner shall use the 
 84.22  indices as forecasted in the fourth quarter of the calendar year 
 84.23  preceding the rate year, subject to subdivision 2l, paragraph 
 84.24  (c).  If, as a result of federal legislative or administrative 
 84.25  action, the methodology used to calculate the Consumer Price 
 84.26  Index-All Items (United States city average) (CPI-U) changes, 
 84.27  the commissioner shall develop a conversion factor or other 
 84.28  methodology to convert the CPI-U index factor that results from 
 84.29  the new methodology to an index factor that approximates, as 
 84.30  closely as possible, the index factor that would have resulted 
 84.31  from application of the original CPI-U methodology prior to any 
 84.32  changes in methodology.  The commissioner shall use the 
 84.33  conversion factor or other methodology to calculate an adjusted 
 84.34  inflation index.  The adjusted inflation index must be used to 
 84.35  calculate payment rates under this section instead of the CPI-U 
 84.36  index specified in paragraph (d).  If the commissioner is 
 85.1   required to develop an adjusted inflation index, the 
 85.2   commissioner shall report to the legislature as part of the next 
 85.3   budget submission the fiscal impact of applying this index. 
 85.4      (1) The CPI-U forecasted index for allowable operating cost 
 85.5   per diems shall be based on the 21-month period from the 
 85.6   midpoint of the nursing facility's reporting year to the 
 85.7   midpoint of the rate year following the reporting year. 
 85.8      (2) The Nursing Home Market Basket forecasted index for 
 85.9   allowable operating costs and per diem limits shall be based on 
 85.10  the 12-month period between the midpoints of the two reporting 
 85.11  years preceding the rate year. 
 85.12     (3) For rate years beginning on or after July 1, 1996, the 
 85.13  forecasted index for operating cost limits referred to in 
 85.14  subdivision 21, paragraph (b), shall be based on the CPI-U for 
 85.15  the 12-month period between the midpoints of the two reporting 
 85.16  years preceding the rate year. 
 85.17     (g) After applying these provisions for the respective rate 
 85.18  years, the commissioner shall index these allowable operating 
 85.19  costs per diems by the inflation factor provided for in 
 85.20  paragraph (f), clause (1), and add the nursing facility's 
 85.21  efficiency incentive as computed in paragraph (e). 
 85.22     (h) A nursing facility licensed for 302 beds on September 
 85.23  30, 1993, that was approved under the moratorium exception 
 85.24  process in section 144A.073 for a partial replacement, and 
 85.25  completed the replacement project in December 1994, is exempt 
 85.26  from paragraphs (b) to (d) for rate years beginning on or after 
 85.27  July 1, 1995. 
 85.28     Sec. 7.  Minnesota Statutes 1994, section 256B.48, 
 85.29  subdivision 1, is amended to read: 
 85.30     Subdivision 1.  [PROHIBITED PRACTICES.] A nursing facility 
 85.31  is not eligible to receive medical assistance payments unless it 
 85.32  refrains from all of the following: 
 85.33     (a) Charging private paying residents rates for similar 
 85.34  services which exceed those which are approved by the state 
 85.35  agency for medical assistance recipients as determined by the 
 85.36  prospective desk audit rate, except under the following 
 86.1   circumstances:  the nursing facility may (1) charge private 
 86.2   paying residents a higher rate for a private room, and (2) 
 86.3   charge for special services which are not included in the daily 
 86.4   rate if medical assistance residents are charged separately at 
 86.5   the same rate for the same services in addition to the daily 
 86.6   rate paid by the commissioner, and (3) notwithstanding chapter 
 86.7   144A, sections 256B.37, 256B.433, and 256B.47, receive an 
 86.8   additional third-party payment in excess of the medical 
 86.9   assistance rate when (i) the third party has entered into a 
 86.10  contractual managed care arrangement with the nursing facility, 
 86.11  and (ii) the payment is for services provided as part of the 
 86.12  contractual managed care arrangement.  Services covered by the 
 86.13  payment rate must be the same regardless of payment source.  
 86.14  Special services, if offered, must be available to all residents 
 86.15  in all areas of the nursing facility and charged separately at 
 86.16  the same rate.  Residents are free to select or decline special 
 86.17  services.  Special services must not include services which must 
 86.18  be provided by the nursing facility in order to comply with 
 86.19  licensure or certification standards and that if not provided 
 86.20  would result in a deficiency or violation by the nursing 
 86.21  facility.  Services beyond those required to comply with 
 86.22  licensure or certification standards must not be charged 
 86.23  separately as a special service if they were included in the 
 86.24  payment rate for the previous reporting year.  A nursing 
 86.25  facility that charges a private paying resident a rate in 
 86.26  violation of this clause is subject to an action by the state of 
 86.27  Minnesota or any of its subdivisions or agencies for civil 
 86.28  damages.  A private paying resident or the resident's legal 
 86.29  representative has a cause of action for civil damages against a 
 86.30  nursing facility that charges the resident rates in violation of 
 86.31  this clause.  The damages awarded shall include three times the 
 86.32  payments that result from the violation, together with costs and 
 86.33  disbursements, including reasonable attorneys' fees or their 
 86.34  equivalent.  A private paying resident or the resident's legal 
 86.35  representative, the state, subdivision or agency, or a nursing 
 86.36  facility may request a hearing to determine the allowed rate or 
 87.1   rates at issue in the cause of action.  Within 15 calendar days 
 87.2   after receiving a request for such a hearing, the commissioner 
 87.3   shall request assignment of an administrative law judge under 
 87.4   sections 14.48 to 14.56 to conduct the hearing as soon as 
 87.5   possible or according to agreement by the parties.  The 
 87.6   administrative law judge shall issue a report within 15 calendar 
 87.7   days following the close of the hearing.  The prohibition set 
 87.8   forth in this clause shall not apply to facilities licensed as 
 87.9   boarding care facilities which are not certified as skilled or 
 87.10  intermediate care facilities level I or II for reimbursement 
 87.11  through medical assistance. 
 87.12     (b) Requiring an applicant for admission to the facility, 
 87.13  or the guardian or conservator of the applicant, as a condition 
 87.14  of admission, to pay any fee or deposit in excess of $100, loan 
 87.15  any money to the nursing facility, or promise to leave all or 
 87.16  part of the applicant's estate to the facility.  
 87.17     (c) Requiring any resident of the nursing facility to 
 87.18  utilize a vendor of health care services chosen by the nursing 
 87.19  facility. 
 87.20     (d) Providing differential treatment on the basis of status 
 87.21  with regard to public assistance.  
 87.22     (e) Discriminating in admissions, services offered, or room 
 87.23  assignment on the basis of status with regard to public 
 87.24  assistance or refusal to purchase special services.  Admissions 
 87.25  discrimination shall include, but is not limited to:  
 87.26     (1) basing admissions decisions upon assurance by the 
 87.27  applicant to the nursing facility, or the applicant's guardian 
 87.28  or conservator, that the applicant is neither eligible for nor 
 87.29  will seek public assistance for payment of nursing facility care 
 87.30  costs; and 
 87.31     (2) engaging in preferential selection from waiting lists 
 87.32  based on an applicant's ability to pay privately or an 
 87.33  applicant's refusal to pay for a special service. 
 87.34     The collection and use by a nursing facility of financial 
 87.35  information of any applicant pursuant to a preadmission 
 87.36  screening program established by law shall not raise an 
 88.1   inference that the nursing facility is utilizing that 
 88.2   information for any purpose prohibited by this paragraph.  
 88.3      (f) Requiring any vendor of medical care as defined by 
 88.4   section 256B.02, subdivision 7, who is reimbursed by medical 
 88.5   assistance under a separate fee schedule, to pay any amount 
 88.6   based on utilization or service levels or any portion of the 
 88.7   vendor's fee to the nursing facility except as payment for 
 88.8   renting or leasing space or equipment or purchasing support 
 88.9   services from the nursing facility as limited by section 
 88.10  256B.433.  All agreements must be disclosed to the commissioner 
 88.11  upon request of the commissioner.  Nursing facilities and 
 88.12  vendors of ancillary services that are found to be in violation 
 88.13  of this provision shall each be subject to an action by the 
 88.14  state of Minnesota or any of its subdivisions or agencies for 
 88.15  treble civil damages on the portion of the fee in excess of that 
 88.16  allowed by this provision and section 256B.433.  Damages awarded 
 88.17  must include three times the excess payments together with costs 
 88.18  and disbursements including reasonable attorney's fees or their 
 88.19  equivalent.  
 88.20     (g) Refusing, for more than 24 hours, to accept a resident 
 88.21  returning to the same bed or a bed certified for the same level 
 88.22  of care, in accordance with a physician's order authorizing 
 88.23  transfer, after receiving inpatient hospital services. 
 88.24     The prohibitions set forth in clause (b) shall not apply to 
 88.25  a retirement facility with more than 325 beds including at least 
 88.26  150 licensed nursing facility beds and which:  
 88.27     (1) is owned and operated by an organization tax-exempt 
 88.28  under section 290.05, subdivision 1, clause (i); and 
 88.29     (2) accounts for all of the applicant's assets which are 
 88.30  required to be assigned to the facility so that only expenses 
 88.31  for the cost of care of the applicant may be charged against the 
 88.32  account; and 
 88.33     (3) agrees in writing at the time of admission to the 
 88.34  facility to permit the applicant, or the applicant's guardian, 
 88.35  or conservator, to examine the records relating to the 
 88.36  applicant's account upon request, and to receive an audited 
 89.1   statement of the expenditures charged against the applicant's 
 89.2   individual account upon request; and 
 89.3      (4) agrees in writing at the time of admission to the 
 89.4   facility to permit the applicant to withdraw from the facility 
 89.5   at any time and to receive, upon withdrawal, the balance of the 
 89.6   applicant's individual account. 
 89.7      The prohibitions set forth in paragraphs (c) and (f) shall 
 89.8   not apply to nursing facilities that receive a third-party 
 89.9   payment in excess of the medical assistance rate when (1) the 
 89.10  third party has entered into a contractual managed care 
 89.11  arrangement with the nursing facility, and (2) the payment is 
 89.12  for services provided as part of the contractual managed care 
 89.13  arrangement. 
 89.14     For a period not to exceed 180 days, the commissioner may 
 89.15  continue to make medical assistance payments to a nursing 
 89.16  facility or boarding care home which is in violation of this 
 89.17  section if extreme hardship to the residents would result.  In 
 89.18  these cases the commissioner shall issue an order requiring the 
 89.19  nursing facility to correct the violation.  The nursing facility 
 89.20  shall have 20 days from its receipt of the order to correct the 
 89.21  violation.  If the violation is not corrected within the 20-day 
 89.22  period the commissioner may reduce the payment rate to the 
 89.23  nursing facility by up to 20 percent.  The amount of the payment 
 89.24  rate reduction shall be related to the severity of the violation 
 89.25  and shall remain in effect until the violation is corrected.  
 89.26  The nursing facility or boarding care home may appeal the 
 89.27  commissioner's action pursuant to the provisions of chapter 14 
 89.28  pertaining to contested cases.  An appeal shall be considered 
 89.29  timely if written notice of appeal is received by the 
 89.30  commissioner within 20 days of notice of the commissioner's 
 89.31  proposed action.  
 89.32     In the event that the commissioner determines that a 
 89.33  nursing facility is not eligible for reimbursement for a 
 89.34  resident who is eligible for medical assistance, the 
 89.35  commissioner may authorize the nursing facility to receive 
 89.36  reimbursement on a temporary basis until the resident can be 
 90.1   relocated to a participating nursing facility.  
 90.2      Certified beds in facilities which do not allow medical 
 90.3   assistance intake on July 1, 1984, or after shall be deemed to 
 90.4   be decertified for purposes of section 144A.071 only. 
 90.5      Sec. 8.  Minnesota Statutes 1995 Supplement, section 
 90.6   256B.501, subdivision 5b, is amended to read: 
 90.7      Subd. 5b.  [ICF/MR OPERATING COST LIMITATION AFTER 
 90.8   SEPTEMBER 30, 1995.] (a) For the rate years year beginning on 
 90.9   October 1, 1995, and October 1, 1996 and for rate years 
 90.10  beginning on or after October 1, 1997, the commissioner shall 
 90.11  limit the allowable operating cost per diems, as determined 
 90.12  under this subdivision and the reimbursement rules, for high 
 90.13  cost ICF's/MR.  Prior to indexing each facility's operating cost 
 90.14  per diems for inflation, the commissioner shall group the 
 90.15  facilities into eight groups.  The commissioner shall then array 
 90.16  all facilities within each grouping by their general operating 
 90.17  cost per service unit per diems. 
 90.18     (b) The commissioner shall annually review and adjust the 
 90.19  general operating costs incurred by the facility during the 
 90.20  reporting year preceding the rate year to determine the 
 90.21  facility's allowable historical general operating costs.  For 
 90.22  this purpose, the term general operating costs means the 
 90.23  facility's allowable operating costs included in the program, 
 90.24  maintenance, and administrative operating costs categories, as 
 90.25  well as the facility's related payroll taxes and fringe 
 90.26  benefits, real estate insurance, and professional liability 
 90.27  insurance.  A facility's total operating cost payment rate shall 
 90.28  be limited according to paragraphs (c) and (d) as follows: 
 90.29     (c) A facility's total operating cost payment rate shall be 
 90.30  equal to its allowable historical operating cost per diems for 
 90.31  program, maintenance, and administrative cost categories 
 90.32  multiplied by the forecasted inflation index in subdivision 3c, 
 90.33  clause (1), subject to the limitations in paragraph (d). 
 90.34     (d) For the rate years beginning on or after October 1, 
 90.35  1995, the commissioner shall establish maximum overall general 
 90.36  operating cost per service unit limits for facilities according 
 91.1   to clauses (1) to (8).  Each facility's allowable historical 
 91.2   general operating costs and client assessment information 
 91.3   obtained from client assessments completed under subdivision 3g 
 91.4   for the reporting year ending December 31, 1994 (the base year), 
 91.5   shall be used for establishing the overall limits.  If a 
 91.6   facility's proportion of temporary care resident days to total 
 91.7   resident days exceeds 80 percent, the commissioner must exempt 
 91.8   that facility from the overall general operating cost per 
 91.9   service unit limits in clauses (1) to (8).  For this purpose, 
 91.10  "temporary care" means care provided by a facility to a client 
 91.11  for less than 30 consecutive resident days. 
 91.12     (1) The commissioner shall determine each facility's 
 91.13  weighted service units for the reporting year by multiplying its 
 91.14  resident days in each client classification level as established 
 91.15  in subdivision 3g, paragraph (d), by the corresponding weights 
 91.16  for that classification level, as established in subdivision 3g, 
 91.17  paragraph (i), and summing the results.  For the reporting year 
 91.18  ending December 31, 1994, the commissioner shall use the service 
 91.19  unit score computed from the client classifications determined 
 91.20  by the Minnesota department of health's annual review, including 
 91.21  those of clients admitted during that year. 
 91.22     (2) The facility's service unit score is equal to its 
 91.23  weighted service units as computed in clause (1), divided by the 
 91.24  facility's total resident days excluding temporary care resident 
 91.25  days, for the reporting year. 
 91.26     (3) For each facility, the commissioner shall determine the 
 91.27  facility's cost per service unit by dividing its allowable 
 91.28  historical general operating costs for the reporting year by the 
 91.29  facility's service unit score in clause (2) multiplied by its 
 91.30  total resident days, or 85 percent of the facility's capacity 
 91.31  days times its service unit score in clause (2), if the 
 91.32  facility's occupancy is less than 85 percent of licensed 
 91.33  capacity.  If a facility reports temporary care resident days, 
 91.34  the temporary care resident days shall be multiplied by the 
 91.35  service unit score in clause (2), and the resulting weighted 
 91.36  resident days shall be added to the facility's weighted service 
 92.1   units in clause (1) prior to computing the facility's cost per 
 92.2   service unit under this clause. 
 92.3      (4) The commissioner shall group facilities based on class 
 92.4   A or class B licensure designation, number of licensed beds, and 
 92.5   geographic location.  For purposes of this grouping, facilities 
 92.6   with six beds or less shall be designated as small facilities 
 92.7   and facilities with more than six beds shall be designated as 
 92.8   large facilities.  If a facility has both class A and class B 
 92.9   licensed beds, the facility shall be considered a class A 
 92.10  facility for this purpose if the number of class A beds is more 
 92.11  than half its total number of ICF/MR beds; otherwise the 
 92.12  facility shall be considered a class B facility.  The 
 92.13  metropolitan geographic designation shall include Anoka, Carver, 
 92.14  Dakota, Hennepin, Ramsey, Scott, and Washington counties.  All 
 92.15  other Minnesota counties shall be designated as the 
 92.16  nonmetropolitan geographic group.  These characteristics result 
 92.17  in the following eight groupings: 
 92.18     (i) small class A metropolitan; 
 92.19     (ii) large class A metropolitan; 
 92.20     (iii) small class B metropolitan; 
 92.21     (iv) large class B metropolitan; 
 92.22     (v) small class A nonmetropolitan; 
 92.23     (vi) large class A nonmetropolitan; 
 92.24     (vii) small class B nonmetropolitan; and 
 92.25     (viii) large class B nonmetropolitan. 
 92.26     (5) The commissioner shall array facilities within each 
 92.27  grouping in clause (4) by each facility's cost per service unit 
 92.28  as determined in clause (3). 
 92.29     (6) In each array established under clause (5), facilities 
 92.30  with a cost per service unit at or above the median shall be 
 92.31  limited to the lesser of:  (i) the current reporting year's cost 
 92.32  per service unit; or (ii) the prior reporting year's allowable 
 92.33  historical general operating cost per service unit plus the 
 92.34  inflation factor as established in subdivision 3c, clause (2), 
 92.35  increased by three percentage points. 
 92.36     (7) The overall operating cost per service unit limit for 
 93.1   each group shall be established as follows: 
 93.2      (i) each array established under clause (5) shall be 
 93.3   arrayed again after the application of clause (6); 
 93.4      (ii) in each array established in clause (5), two general 
 93.5   operating cost limits shall be determined.  The first cost per 
 93.6   service unit limit shall be established at 0.5 and less than or 
 93.7   equal to 1.0 standard deviation above the median of that array.  
 93.8   The second cost per service unit limit shall be established at 
 93.9   1.0 standard deviation above the median of the array; and 
 93.10     (iii) the overall operating cost per service unit limits 
 93.11  shall be indexed for inflation annually beginning with the 
 93.12  reporting year ending December 31, 1995, using the forecasted 
 93.13  inflation index in subdivision 3c, clause (2). 
 93.14     (8) Annually, facilities shall be arrayed using the method 
 93.15  described in clauses (5) and (7).  Each facility with a cost per 
 93.16  service unit at or above its group's first cost per service unit 
 93.17  limit, but less than the second cost per service unit limit for 
 93.18  that group, shall be limited to 98 percent of its total 
 93.19  operating cost per diems then add the forecasted inflation index 
 93.20  in subdivision 3c, clause (1).  Each facility with a cost per 
 93.21  service unit at or above the second cost per service unit limit 
 93.22  will be limited to 97 percent of its total operating cost per 
 93.23  diems, then add the forecasted inflation index in subdivision 
 93.24  3c, clause (1). 
 93.25     (9) The commissioner may rebase these overall limits, using 
 93.26  the method described in this subdivision but no more frequently 
 93.27  than once every three years. 
 93.28     (e) For rate years beginning on or after October 1, 1995, 
 93.29  the facility's efficiency incentive shall be determined as 
 93.30  provided in the reimbursement rule. 
 93.31     (f) The total operating cost payment rate shall be the sum 
 93.32  of paragraphs (c) and (e). 
 93.33     (g) For the rate year beginning on October 1, 1996, the 
 93.34  commissioner shall exempt a facility from the reductions in this 
 93.35  subdivision if the facility is involved in a bed relocation 
 93.36  project where more than 25 percent of the facility's beds are 
 94.1   transferred to another facility, the relocated beds are six or 
 94.2   fewer, there is no change in the total number of ICF/MR beds for 
 94.3   the parent organization of the facility, and the relocation is 
 94.4   not part of an interim or settle-up rate. 
 94.5      Sec. 9.  Minnesota Statutes 1995 Supplement, section 
 94.6   256B.501, subdivision 5c, is amended to read: 
 94.7      Subd. 5c.  [OPERATING COSTS AFTER SEPTEMBER 30, 1979 1999.] 
 94.8   (a) In general, the commissioner shall establish maximum 
 94.9   standard rates for the prospective reimbursement of facility 
 94.10  costs.  The maximum standard rates must take into account the 
 94.11  level of reimbursement which is adequate to cover the base-level 
 94.12  costs of economically operated facilities.  In determining the 
 94.13  base-level costs, the commissioner shall consider geographic 
 94.14  location, types of facilities (class A or class B), minimum 
 94.15  staffing standards, resident assessment under subdivision 3g, 
 94.16  and other factors as determined by the commissioner. 
 94.17     (b) The commissioner shall may also develop additional 
 94.18  incentive-based payments which, if achieved for specified 
 94.19  outcomes, will be added to the maximum standard rates.  The 
 94.20  specified outcomes must be measurable and shall be based on 
 94.21  criteria to be developed by the commissioner during fiscal year 
 94.22  1996.  The commissioner may establish various levels of 
 94.23  achievement within an outcome.  Once the outcomes are 
 94.24  established, the commissioner shall assign various levels of 
 94.25  payment associated with achieving the outcome.  In establishing 
 94.26  the specified outcomes and the related criteria, the 
 94.27  commissioner shall consider the following state policy 
 94.28  objectives:  
 94.29     (1) resident transitioned into cost-effective community 
 94.30  alternatives; 
 94.31     (2) the results of a uniform consumer satisfaction survey; 
 94.32     (3) the achievement of no major licensure or certification 
 94.33  deficiencies; or 
 94.34     (4) any other outcomes the commissioner finds 
 94.35  desirable.  The commissioner may also consider the findings of 
 94.36  projects examining services to persons with developmental 
 95.1   disabilities, including outcome-based quality assurance methods, 
 95.2   and the inclusion of persons with developmental disabilities in 
 95.3   managed care alternative service delivery models. 
 95.4      (c) In developing the maximum standard rates and the 
 95.5   incentive-based payments, desirable outcomes, and related 
 95.6   criteria, the commissioner, in collaboration with the 
 95.7   commissioner of health, shall form an advisory committee.  The 
 95.8   membership of the advisory committee shall include 
 95.9   representation from the consumers advocacy groups (3), the two 
 95.10  facility trade associations (3 each), counties (3), commissioner 
 95.11  of finance (1), the legislature (2 each from both the house and 
 95.12  senate), and others the commissioners find appropriate. 
 95.13     (d) Beginning July 1, 1996 1998, the commissioner shall 
 95.14  collect the data from the facilities, the department of health, 
 95.15  or others as necessary to determine the extent to which a 
 95.16  facility has met any of the outcomes and related criteria.  
 95.17  Payment rates under this subdivision shall be effective October 
 95.18  1, 1997 1999. 
 95.19     (e) The commissioner shall report to the legislature on the 
 95.20  progress of the advisory committee by January 31, 1996, any 
 95.21  necessary changes to the reimbursement methodology proposed 
 95.22  under this subdivision 1998.  By January 15, 1997 1999, the 
 95.23  commissioner shall recommend to the legislature legislation 
 95.24  which will implement this reimbursement methodology for rate 
 95.25  years beginning on or after the proposed effective date of 
 95.26  October 1, 1997 1999. 
 95.27     Sec. 10.  Minnesota Statutes 1994, section 256B.501, is 
 95.28  amended by adding a subdivision to read: 
 95.29     Subd. 5d.  [ADJUSTMENT FOR OUTREACH CRISIS SERVICES.] An 
 95.30  ICF/MR with crisis services developed under the authority of 
 95.31  Laws 1992, chapter 513, article 9, section 40, shall have its 
 95.32  operating cost per diem calculated according to paragraphs (a) 
 95.33  and (b). 
 95.34     (a) Effective for rate years beginning on or after October 
 95.35  1, 1996, the maintenance limitation in Minnesota Rules, part 
 95.36  9553.0050, subpart 1, item A, subitem (2), shall be calculated 
 96.1   to reflect capacity as of October 1, 1992.  The maintenance 
 96.2   limit shall be the per diem limitation otherwise in effect 
 96.3   adjusted by the ratio of licensed capacity days as of October 1, 
 96.4   1992, divided by resident days in the reporting year ending 
 96.5   December 31, 1993. 
 96.6      (b) Effective for rate years beginning on or after October 
 96.7   1, 1996, the operating cost per service unit, for purposes of 
 96.8   the cost per service unit limit in section 256B.501, subdivision 
 96.9   5b, paragraph (d), clauses (7) and (8), shall be calculated 
 96.10  after excluding the costs directly identified to the provision 
 96.11  of outreach crisis services and a four-bed crisis unit. 
 96.12     (c) The efficiency incentive paid to an ICF/MR shall not be 
 96.13  increased as a result of this subdivision. 
 96.14     Sec. 11.  Minnesota Statutes 1994, section 256I.05, 
 96.15  subdivision 1c, is amended to read: 
 96.16     Subd. 1c.  [RATE INCREASES.] A county agency may not 
 96.17  increase the rates negotiated for group residential housing 
 96.18  above those in effect on June 30, 1993, except: as provided in 
 96.19  paragraphs (a) to (g).  
 96.20     (a) A county may increase the rates for group residential 
 96.21  housing settings to the MSA equivalent rate for those settings 
 96.22  whose current rate is below the MSA equivalent rate.  
 96.23     (b) A county agency may increase the rates for residents in 
 96.24  adult foster care whose difficulty of care has increased.  The 
 96.25  total group residential housing rate for these residents must 
 96.26  not exceed the maximum rate specified in subdivisions 1 and 1a.  
 96.27  County agencies must not include nor increase group residential 
 96.28  housing difficulty of care rates for adults in foster care whose 
 96.29  difficulty of care is eligible for funding by home and 
 96.30  community-based waiver programs under title XIX of the Social 
 96.31  Security Act.  
 96.32     (c) The room and board rates will be increased each year 
 96.33  when the MSA equivalent rate is adjusted for SSI cost-of-living 
 96.34  increases by the amount of the annual SSI increase, less the 
 96.35  amount of the increase in the medical assistance personal needs 
 96.36  allowance under section 256B.35.  
 97.1      (d) When a group residential housing rate is used to pay 
 97.2   for an individual's room and board, or other costs necessary to 
 97.3   provide room and board, the rate payable to the residence must 
 97.4   continue for up to 18 calendar days per incident that the person 
 97.5   is temporarily absent from the residence, not to exceed 60 days 
 97.6   in a calendar year, if the absence or absences have received the 
 97.7   prior approval of the county agency's social service staff.  
 97.8   Prior approval is not required for emergency absences due to 
 97.9   crisis, illness, or injury.  
 97.10     (e) For facilities meeting substantial change criteria 
 97.11  within the prior year.  Substantial change criteria exists if 
 97.12  the group residential housing establishment experiences a 25 
 97.13  percent increase or decrease in the total number of its beds, if 
 97.14  the net cost of capital additions or improvements is in excess 
 97.15  of 15 percent of the current market value of the residence, or 
 97.16  if the residence physically moves, or changes its licensure, and 
 97.17  incurs a resulting increase in operation and property costs. 
 97.18     (f) Until June 30, 1994, a county agency may increase by up 
 97.19  to five percent the total rate paid for recipients of assistance 
 97.20  under sections 256D.01 to 256D.21 or 256D.33 to 256D.54 who 
 97.21  reside in residences that are licensed by the commissioner of 
 97.22  health as a boarding care home, but are not certified for the 
 97.23  purposes of the medical assistance program.  However, an 
 97.24  increase under this clause must not exceed an amount equivalent 
 97.25  to 65 percent of the 1991 medical assistance reimbursement rate 
 97.26  for nursing home resident class A, in the geographic grouping in 
 97.27  which the facility is located, as established under Minnesota 
 97.28  Rules, parts 9549.0050 to 9549.0058. 
 97.29     (g) For the rate year beginning July 1, 1996, a county 
 97.30  agency may increase the total rate paid for recipients of 
 97.31  assistance under sections 256D.01 to 256D.21 or 256D.33 to 
 97.32  256D.54 who reside in residences that meet the following 
 97.33  criteria: 
 97.34     (1) they are licensed by the commissioner of health as a 
 97.35  boarding care home; 
 97.36     (2) they are not certified for the purposes of the medical 
 98.1   assistance program; 
 98.2      (3) at least 50 percent of their residents are diagnosed 
 98.3   with mental illness; 
 98.4      (4) they have at least 16 beds; and 
 98.5      (5) they provide medication administration to residents.  
 98.6   An increase under this paragraph must not exceed an amount 
 98.7   equivalent to the 1995 medical assistance reimbursement rate for 
 98.8   nursing home resident class A, in the geographic grouping in 
 98.9   which the facility is located, as established under Minnesota 
 98.10  Rules, parts 9520.0500 to 9549.0058.  
 98.11     Sec. 12.  [RATE ADJUSTMENT.] 
 98.12     Notwithstanding the requirements of Minnesota Statutes, 
 98.13  section 252.46, subdivisions 3 and 6, the commissioner of human 
 98.14  services shall, at the request of the responsible board of 
 98.15  county commissioners and subject to conditions the commissioner 
 98.16  finds appropriate consistent with the service principles in 
 98.17  Minnesota Statutes, section 252.42, grant a variance to the 
 98.18  payment rate for vendors defined in Minnesota Statutes, section 
 98.19  252.41, subdivision 9, and located in Hennepin county that serve 
 98.20  persons with very severe self-injurious or assaultive behavior, 
 98.21  as those terms are used in Minnesota Statutes, section 252.46, 
 98.22  subdivision 4, paragraph (b).  The adjusted rate shall: 
 98.23     (1) be limited to provisions of services to no more than 42 
 98.24  such persons; 
 98.25     (2) not exceed 200 percent of the statewide average rate as 
 98.26  calculated in accordance with Minnesota Statutes, section 
 98.27  252.46, subdivision 4, paragraph (b); 
 98.28     (3) become effective July 1, 1996; and 
 98.29     (4) be used as the basis for calculating the rate maximum 
 98.30  for that vendor for calendar year 1997 in accordance with the 
 98.31  requirements of Minnesota Statutes, section 252.46, subdivision 
 98.32  3. 
 98.33     Sec. 13.  [DOWNSIZING PILOT PROJECT.] 
 98.34     (a) The commissioner of human services shall establish a 
 98.35  pilot project in Pennington county to downsize to 11 beds an 
 98.36  existing 15-bed intermediate care facility for persons with 
 99.1   mental retardation or related conditions, and develop a four-bed 
 99.2   supportive living service facility utilizing the conversion of 
 99.3   ICF/MR slots to medical assistance waiver conversion slots for 
 99.4   the displaced residents.  The project must be approved by the 
 99.5   commissioner under Minnesota Statutes, section 252.28, and must 
 99.6   include criteria for determining how individuals are selected 
 99.7   for alternative services and the use of a request for proposal 
 99.8   process in selecting the vendors for alternative services.  The 
 99.9   project must include:  
 99.10     (1) alternative services for the residents being relocated; 
 99.11     (2) timelines for resident relocation and decertification 
 99.12  of beds; and 
 99.13     (3) adjustment of the facility's operating cost rate under 
 99.14  Minnesota Rules, part 9553.0075, as necessary to implement the 
 99.15  project. 
 99.16     (b) The facility's aggregate investment-per-bed limit in 
 99.17  effect before downsizing must be the facility's 
 99.18  investment-per-bed limit after downsizing.  The facility's total 
 99.19  revenues after downsizing must not increase as a result of the 
 99.20  downsizing project.  The facility's total revenues before 
 99.21  downsizing are determined by multiplying the payment rate in 
 99.22  effect the day before the downsizing is effective by the number 
 99.23  of resident days for the reporting year preceding the downsizing 
 99.24  project.  For the purpose of this project, the average medical 
 99.25  assistance rate for home- and community-based services must not 
 99.26  exceed the rate made available under Laws 1995, chapter 207, 
 99.27  article 8, section 34. 
 99.28     Sec. 14.  [NURSING FACILITY REIMBURSEMENT FOR FISCAL YEAR 
 99.29  1997.] 
 99.30     (a) Notwithstanding any contrary provisions of Minnesota 
 99.31  Statutes, section 256B.431, subdivision 25, the provisions of 
 99.32  this section shall apply for the rate year beginning July 1, 
 99.33  1996. 
 99.34     (b) The commissioner of human services shall group nursing 
 99.35  facilities into two groups, freestanding and nonfreestanding, 
 99.36  within each geographic group, using their operating cost per