1.1                          A bill for an act 
  1.2             relating to human services; making changes to 
  1.3             long-term care provisions; changing provisions for 
  1.4             nursing facilities payment rates; amending Minnesota 
  1.5             Statutes 1998, sections 144D.01, subdivision 4; 
  1.6             256B.0911, subdivision 6; 256B.0913, subdivisions 5, 
  1.7             10, 12, and 16; 256B.431, subdivision 2i; 256B.434, 
  1.8             subdivisions 3 and 13; 256B.435; 256B.48, subdivisions 
  1.9             1a, 1b, and 6; 256B.50, subdivision 1e; 256B.69, 
  1.10            subdivisions 6a and 6b; 256I.04, subdivision 3; and 
  1.11            256I.05, subdivisions 1 and 1a; repealing Minnesota 
  1.12            Statutes 1998, sections 256B.434, subdivision 17; Laws 
  1.13            1997, chapter 203, article 4, section 55. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15                             ARTICLE 1 
  1.16                           LONG-TERM CARE 
  1.17     Section 1.  Minnesota Statutes 1998, section 144D.01, 
  1.18  subdivision 4, is amended to read: 
  1.19     Subd. 4.  [HOUSING WITH SERVICES ESTABLISHMENT OR 
  1.20  ESTABLISHMENT.] "Housing with services establishment" or 
  1.21  "establishment" means an establishment providing sleeping 
  1.22  accommodations to one or more adult residents, at least 80 
  1.23  percent of which are 55 years of age or older, and offering or 
  1.24  providing, for a fee, one or more regularly scheduled 
  1.25  health-related services or two or more regularly scheduled 
  1.26  supportive services, whether offered or provided directly by the 
  1.27  establishment or by another entity arranged for by the 
  1.28  establishment. 
  1.29     Housing with services establishment does not include: 
  2.1      (1) a nursing home licensed under chapter 144A; 
  2.2      (2) a hospital, certified boarding care home, or supervised 
  2.3   living facility licensed under sections 144.50 to 144.56; 
  2.4      (3) a board and lodging establishment licensed under 
  2.5   chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 
  2.6   9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 
  2.7   9530.4450, or under chapter 245B; 
  2.8      (4) a board and lodging establishment which serves as a 
  2.9   shelter for battered women or other similar purpose; 
  2.10     (5) a family adult foster care home licensed by the 
  2.11  department of human services; 
  2.12     (6) private homes in which the residents are related by 
  2.13  kinship, law, or affinity with the providers of services; 
  2.14     (7) residential settings for persons with mental 
  2.15  retardation or related conditions in which the services are 
  2.16  licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 
  2.17  applicable successor rules or laws; 
  2.18     (8) a home-sharing arrangement such as when an elderly or 
  2.19  disabled person or single-parent family makes lodging in a 
  2.20  private residence available to another person in exchange for 
  2.21  services or rent, or both; 
  2.22     (9) a duly organized condominium, cooperative, common 
  2.23  interest community, or owners' association of the foregoing 
  2.24  where at least 80 percent of the units that comprise the 
  2.25  condominium, cooperative, or common interest community are 
  2.26  occupied by individuals who are the owners, members, or 
  2.27  shareholders of the units; or 
  2.28     (10) services for persons with developmental disabilities 
  2.29  that are provided under a license according to Minnesota Rules, 
  2.30  parts 9525.2000 to 9525.2140 in effect until January 1, 1998, or 
  2.31  under chapter 245B. 
  2.32     Sec. 2.  Minnesota Statutes 1998, section 256B.0911, 
  2.33  subdivision 6, is amended to read: 
  2.34     Subd. 6.  [PAYMENT FOR PREADMISSION SCREENING.] (a) The 
  2.35  total screening payment for each county must be paid monthly by 
  2.36  certified nursing facilities in the county.  The monthly amount 
  3.1   to be paid by each nursing facility for each fiscal year must be 
  3.2   determined by dividing the county's annual allocation for 
  3.3   screenings by 12 to determine the monthly payment and allocating 
  3.4   the monthly payment to each nursing facility based on the number 
  3.5   of licensed beds in the nursing facility. 
  3.6      (b) The commissioner shall include the total annual payment 
  3.7   for screening for each nursing facility according to section 
  3.8   256B.431, subdivision 2b, paragraph (g), or 256B.435. 
  3.9      (c) Payments for screening activities are available to the 
  3.10  county or counties to cover staff salaries and expenses to 
  3.11  provide the screening function.  The lead agency shall employ, 
  3.12  or contract with other agencies to employ, within the limits of 
  3.13  available funding, sufficient personnel to conduct the 
  3.14  preadmission screening activity while meeting the state's 
  3.15  long-term care outcomes and objectives as defined in section 
  3.16  256B.0917, subdivision 1.  The local agency shall be accountable 
  3.17  for meeting local objectives as approved by the commissioner in 
  3.18  the CSSA biennial plan. 
  3.19     (c) (d) Notwithstanding section 256B.0641, overpayments 
  3.20  attributable to payment of the screening costs under the medical 
  3.21  assistance program may not be recovered from a facility.  
  3.22     (d) (e) The commissioner of human services shall amend the 
  3.23  Minnesota medical assistance plan to include reimbursement for 
  3.24  the local screening teams. 
  3.25     Sec. 3.  Minnesota Statutes 1998, section 256B.0913, 
  3.26  subdivision 5, is amended to read: 
  3.27     Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a) 
  3.28  Alternative care funding may be used for payment of costs of: 
  3.29     (1) adult foster care; 
  3.30     (2) adult day care; 
  3.31     (3) home health aide; 
  3.32     (4) homemaker services; 
  3.33     (5) personal care; 
  3.34     (6) case management; 
  3.35     (7) respite care; 
  3.36     (8) assisted living; 
  4.1      (9) residential care services; 
  4.2      (10) care-related supplies and equipment; 
  4.3      (11) meals delivered to the home; 
  4.4      (12) transportation; 
  4.5      (13) skilled nursing; 
  4.6      (14) chore services; 
  4.7      (15) companion services; 
  4.8      (16) nutrition services; 
  4.9      (17) training for direct informal caregivers; and 
  4.10     (18) telemedicine devices to monitor recipients in their 
  4.11  own homes as an alternative to hospital care, nursing home care, 
  4.12  or home visits.; and 
  4.13     (19) other services including direct cash payments to 
  4.14  clients, approved by the county agency, subject to the 
  4.15  provisions of paragraph (m).  Total annual payments for other 
  4.16  services for all clients within a county may not exceed either 
  4.17  ten percent of that county's annual alternative care program 
  4.18  base allocation or $5,000, whichever is greater.  In no case 
  4.19  shall this amount exceed the county's total annual alternative 
  4.20  care program base allocation. 
  4.21     (b) The county agency must ensure that the funds are used 
  4.22  only to supplement and not supplant services available through 
  4.23  other public assistance or services programs. 
  4.24     (c) Unless specified in statute, the service standards for 
  4.25  alternative care services shall be the same as the service 
  4.26  standards defined in the elderly waiver.  Except for the county 
  4.27  agencies' approval of direct cash payments to clients, persons 
  4.28  or agencies must be employed by or under a contract with the 
  4.29  county agency or the public health nursing agency of the local 
  4.30  board of health in order to receive funding under the 
  4.31  alternative care program. 
  4.32     (d) The adult foster care rate shall be considered a 
  4.33  difficulty of care payment and shall not include room and 
  4.34  board.  The adult foster care daily rate shall be negotiated 
  4.35  between the county agency and the foster care provider.  The 
  4.36  rate established under this section shall not exceed 75 percent 
  5.1   of the state average monthly nursing home payment for the case 
  5.2   mix classification to which the individual receiving foster care 
  5.3   is assigned, and it must allow for other alternative care 
  5.4   services to be authorized by the case manager. 
  5.5      (e) Personal care services may be provided by a personal 
  5.6   care provider organization.  A county agency may contract with a 
  5.7   relative of the client to provide personal care services, but 
  5.8   must ensure nursing supervision.  Covered personal care services 
  5.9   defined in section 256B.0627, subdivision 4, must meet 
  5.10  applicable standards in Minnesota Rules, part 9505.0335. 
  5.11     (f) A county may use alternative care funds to purchase 
  5.12  medical supplies and equipment without prior approval from the 
  5.13  commissioner when:  (1) there is no other funding source; (2) 
  5.14  the supplies and equipment are specified in the individual's 
  5.15  care plan as medically necessary to enable the individual to 
  5.16  remain in the community according to the criteria in Minnesota 
  5.17  Rules, part 9505.0210, item A; and (3) the supplies and 
  5.18  equipment represent an effective and appropriate use of 
  5.19  alternative care funds.  A county may use alternative care funds 
  5.20  to purchase supplies and equipment from a non-Medicaid certified 
  5.21  vendor if the cost for the items is less than that of a Medicaid 
  5.22  vendor.  A county is not required to contract with a provider of 
  5.23  supplies and equipment if the monthly cost of the supplies and 
  5.24  equipment is less than $250.  
  5.25     (g) For purposes of this section, residential care services 
  5.26  are services which are provided to individuals living in 
  5.27  residential care homes.  Residential care homes are currently 
  5.28  licensed as board and lodging establishments and are registered 
  5.29  with the department of health as providing special services.  
  5.30  Residential care services are defined as "supportive services" 
  5.31  and "health-related services."  "Supportive services" means the 
  5.32  provision of up to 24-hour supervision and oversight.  
  5.33  Supportive services includes:  (1) transportation, when provided 
  5.34  by the residential care center only; (2) socialization, when 
  5.35  socialization is part of the plan of care, has specific goals 
  5.36  and outcomes established, and is not diversional or recreational 
  6.1   in nature; (3) assisting clients in setting up meetings and 
  6.2   appointments; (4) assisting clients in setting up medical and 
  6.3   social services; (5) providing assistance with personal laundry, 
  6.4   such as carrying the client's laundry to the laundry room.  
  6.5   Assistance with personal laundry does not include any laundry, 
  6.6   such as bed linen, that is included in the room and board rate.  
  6.7   Health-related services are limited to minimal assistance with 
  6.8   dressing, grooming, and bathing and providing reminders to 
  6.9   residents to take medications that are self-administered or 
  6.10  providing storage for medications, if requested.  Individuals 
  6.11  receiving residential care services cannot receive both personal 
  6.12  care services and residential care services.  
  6.13     (h) For the purposes of this section, "assisted living" 
  6.14  refers to supportive services provided by a single vendor to 
  6.15  clients who reside in the same apartment building of three or 
  6.16  more units which are not subject to registration under chapter 
  6.17  144D.  Assisted living services are defined as up to 24-hour 
  6.18  supervision, and oversight, supportive services as defined in 
  6.19  clause (1), individualized home care aide tasks as defined in 
  6.20  clause (2), and individualized home management tasks as defined 
  6.21  in clause (3) provided to residents of a residential center 
  6.22  living in their units or apartments with a full kitchen and 
  6.23  bathroom.  A full kitchen includes a stove, oven, refrigerator, 
  6.24  food preparation counter space, and a kitchen utensil storage 
  6.25  compartment.  Assisted living services must be provided by the 
  6.26  management of the residential center or by providers under 
  6.27  contract with the management or with the county. 
  6.28     (1) Supportive services include:  
  6.29     (i) socialization, when socialization is part of the plan 
  6.30  of care, has specific goals and outcomes established, and is not 
  6.31  diversional or recreational in nature; 
  6.32     (ii) assisting clients in setting up meetings and 
  6.33  appointments; and 
  6.34     (iii) providing transportation, when provided by the 
  6.35  residential center only.  
  6.36     Individuals receiving assisted living services will not 
  7.1   receive both assisted living services and homemaking or personal 
  7.2   care services.  Individualized means services are chosen and 
  7.3   designed specifically for each resident's needs, rather than 
  7.4   provided or offered to all residents regardless of their 
  7.5   illnesses, disabilities, or physical conditions.  
  7.6      (2) Home care aide tasks means:  
  7.7      (i) preparing modified diets, such as diabetic or low 
  7.8   sodium diets; 
  7.9      (ii) reminding residents to take regularly scheduled 
  7.10  medications or to perform exercises; 
  7.11     (iii) household chores in the presence of technically 
  7.12  sophisticated medical equipment or episodes of acute illness or 
  7.13  infectious disease; 
  7.14     (iv) household chores when the resident's care requires the 
  7.15  prevention of exposure to infectious disease or containment of 
  7.16  infectious disease; and 
  7.17     (v) assisting with dressing, oral hygiene, hair care, 
  7.18  grooming, and bathing, if the resident is ambulatory, and if the 
  7.19  resident has no serious acute illness or infectious disease.  
  7.20  Oral hygiene means care of teeth, gums, and oral prosthetic 
  7.21  devices.  
  7.22     (3) Home management tasks means:  
  7.23     (i) housekeeping; 
  7.24     (ii) laundry; 
  7.25     (iii) preparation of regular snacks and meals; and 
  7.26     (iv) shopping.  
  7.27     Assisted living services as defined in this section shall 
  7.28  not be authorized in boarding and lodging establishments 
  7.29  licensed according to sections 157.011 and 157.15 to 157.22. 
  7.30     (i) For establishments registered under chapter 144D, 
  7.31  assisted living services under this section means the services 
  7.32  described and licensed under section 144A.4605. 
  7.33     (j) For the purposes of this section, reimbursement for 
  7.34  assisted living services and residential care services shall be 
  7.35  a monthly rate negotiated and authorized by the county agency 
  7.36  based on an individualized service plan for each resident. The 
  8.1   rate shall not exceed the nonfederal share of the greater of 
  8.2   either the statewide or any of the geographic groups' weighted 
  8.3   average monthly medical assistance nursing facility payment rate 
  8.4   of the case mix resident class to which the 180-day eligible 
  8.5   client would be assigned under Minnesota Rules, parts 9549.0050 
  8.6   to 9549.0059, unless the services are provided by a home care 
  8.7   provider licensed by the department of health and are provided 
  8.8   in a building that is registered as a housing with services 
  8.9   establishment under chapter 144D and that provides 24-hour 
  8.10  supervision. 
  8.11     (k) For purposes of this section, companion services are 
  8.12  defined as nonmedical care, supervision and oversight, provided 
  8.13  to a functionally impaired adult.  Companions may assist the 
  8.14  individual with such tasks as meal preparation, laundry and 
  8.15  shopping, but do not perform these activities as discrete 
  8.16  services.  The provision of companion services does not entail 
  8.17  hands-on medical care.  Providers may also perform light 
  8.18  housekeeping tasks which are incidental to the care and 
  8.19  supervision of the recipient.  This service must be approved by 
  8.20  the case manager as part of the care plan.  Companion services 
  8.21  must be provided by individuals or nonprofit organizations who 
  8.22  are under contract with the local agency to provide the 
  8.23  service.  Any person related to the waiver recipient by blood, 
  8.24  marriage or adoption cannot be reimbursed under this service.  
  8.25  Persons providing companion services will be monitored by the 
  8.26  case manager. 
  8.27     (l) For purposes of this section, training for direct 
  8.28  informal caregivers is defined as a classroom or home course of 
  8.29  instruction which may include:  transfer and lifting skills, 
  8.30  nutrition, personal and physical cares, home safety in a home 
  8.31  environment, stress reduction and management, behavioral 
  8.32  management, long-term care decision making, care coordination 
  8.33  and family dynamics.  The training is provided to an informal 
  8.34  unpaid caregiver of a 180-day eligible client which enables the 
  8.35  caregiver to deliver care in a home setting with high levels of 
  8.36  quality.  The training must be approved by the case manager as 
  9.1   part of the individual care plan.  Individuals, agencies, and 
  9.2   educational facilities which provide caregiver training and 
  9.3   education will be monitored by the case manager. 
  9.4      (m) A county agency may make payment from their alternative 
  9.5   care program allocation for other services provided to an 
  9.6   alternative care program recipient if those services prevent, 
  9.7   shorten, or delay institutionalization.  These services may 
  9.8   include direct cash payments to the recipient for the purpose of 
  9.9   purchasing the recipient's services.  The following provisions 
  9.10  apply to payments under this paragraph: 
  9.11     (1) a cash payment to a client under this provision cannot 
  9.12  exceed 80 percent of the monthly payment limit for that client 
  9.13  as specified in subdivision 4, paragraph (a), clause (7); 
  9.14     (2) a county may not approve any cash payment for a client 
  9.15  who has been assessed as having a dependency in orientation, 
  9.16  unless the client has an authorized representative under section 
  9.17  256.476, subdivision 2, paragraph (g), or for a client who is 
  9.18  concurrently receiving adult foster care, residential care, or 
  9.19  assisted living services; 
  9.20     (3) any service approved under this section must be a 
  9.21  service which meets the purpose and goals of the program as 
  9.22  listed in subdivision 1; 
  9.23     (4) cash payments must also meet the criteria in section 
  9.24  256.476, subdivision 4, paragraph (b), and recipients of cash 
  9.25  grants must meet the requirements in section 256.476, 
  9.26  subdivision 10; and 
  9.27     (5) the county shall report client outcomes, services, and 
  9.28  costs under this paragraph in a manner prescribed by the 
  9.29  commissioner. 
  9.30  Upon implementation of direct cash payments to clients under 
  9.31  this section, any person determined eligible for the alternative 
  9.32  care program who chooses a cash payment approved by the county 
  9.33  agency shall receive the cash payment under this section and not 
  9.34  under section 256.476 unless the person was receiving a consumer 
  9.35  support grant under section 256.476 before implementation of 
  9.36  direct cash payments under this section. 
 10.1      Sec. 4.  Minnesota Statutes 1998, section 256B.0913, 
 10.2   subdivision 10, is amended to read: 
 10.3      Subd. 10.  [ALLOCATION FORMULA.] (a) The alternative care 
 10.4   appropriation for fiscal years 1992 and beyond shall cover only 
 10.5   180-day eligible clients. 
 10.6      (b) Prior to July 1 of each year, the commissioner shall 
 10.7   allocate to county agencies the state funds available for 
 10.8   alternative care for persons eligible under subdivision 2.  The 
 10.9   allocation for fiscal year 1992 shall be calculated using a base 
 10.10  that is adjusted to exclude the medical assistance share of 
 10.11  alternative care expenditures.  The adjusted base is calculated 
 10.12  by multiplying each county's allocation for fiscal year 1991 by 
 10.13  the percentage of county alternative care expenditures for 
 10.14  180-day eligible clients.  The percentage is determined based on 
 10.15  expenditures for services rendered in fiscal year 1989 or 
 10.16  calendar year 1989, whichever is greater. 
 10.17     (c) If the county expenditures for 180-day eligible clients 
 10.18  are 95 percent or more of its adjusted base allocation, the 
 10.19  allocation for the next fiscal year is 100 percent of the 
 10.20  adjusted base, plus inflation to the extent that inflation is 
 10.21  included in the state budget. 
 10.22     (d) If the county expenditures for 180-day eligible clients 
 10.23  are less than 95 percent of its adjusted base allocation, the 
 10.24  allocation for the next fiscal year is the adjusted base 
 10.25  allocation less the amount of unspent funds below the 95 percent 
 10.26  level. 
 10.27     (e) For fiscal year 1992 only, a county may receive an 
 10.28  increased allocation if annualized service costs for the month 
 10.29  of May 1991 for 180-day eligible clients are greater than the 
 10.30  allocation otherwise determined.  A county may apply for this 
 10.31  increase by reporting projected expenditures for May to the 
 10.32  commissioner by June 1, 1991.  The amount of the allocation may 
 10.33  exceed the amount calculated in paragraph (b).  The projected 
 10.34  expenditures for May must be based on actual 180-day eligible 
 10.35  client caseload and the individual cost of clients' care plans.  
 10.36  If a county does not report its expenditures for May, the amount 
 11.1   in paragraph (c) or (d) shall be used. 
 11.2      (f) Calculations for paragraphs (c) and (d) are to be made 
 11.3   as follows:  for each county, the determination of expenditures 
 11.4   shall be based on payments for services rendered from April 1 
 11.5   through March 31 in the base year, to the extent that claims 
 11.6   have been submitted by June 1 of that year.  Calculations for 
 11.7   paragraphs (c) and (d) must also include the funds transferred 
 11.8   to the consumer support grant program for clients who have 
 11.9   transferred to that program from April 1 through March 31 in the 
 11.10  base year.  
 11.11     (g) For the biennium ending June 30, 2001, the allocation 
 11.12  of state funds to county agencies shall be calculated as 
 11.13  described in paragraphs (c) and (d).  If the annual legislative 
 11.14  appropriation for the alternative care program is inadequate to 
 11.15  fund the combined county allocations for fiscal year 2000 or 
 11.16  2001, the commissioner shall distribute to each county the 
 11.17  entire annual appropriation as that county's percentage of the 
 11.18  computed base as calculated in paragraph (f). 
 11.19     Sec. 5.  Minnesota Statutes 1998, section 256B.0913, 
 11.20  subdivision 12, is amended to read: 
 11.21     Subd. 12.  [CLIENT PREMIUMS.] (a) A premium is required for 
 11.22  all 180-day eligible clients to help pay for the cost of 
 11.23  participating in the program.  The amount of the premium for the 
 11.24  alternative care client shall be determined as follows: 
 11.25     (1) when the alternative care client's income less 
 11.26  recurring and predictable medical expenses is greater than the 
 11.27  medical assistance income standard but less than 150 percent of 
 11.28  the federal poverty guideline, and total assets are less than 
 11.29  $6,000 $10,000, the fee is zero; 
 11.30     (2) when the alternative care client's income less 
 11.31  recurring and predictable medical expenses is greater than 150 
 11.32  percent of the federal poverty guideline, and total assets are 
 11.33  less than $6,000 $10,000, the fee is 25 percent of the cost of 
 11.34  alternative care services or the difference between 150 percent 
 11.35  of the federal poverty guideline and the client's income less 
 11.36  recurring and predictable medical expenses, whichever is less; 
 12.1   and 
 12.2      (3) when the alternative care client's total assets are 
 12.3   greater than $6,000 $10,000, the fee is 25 percent of the cost 
 12.4   of alternative care services.  
 12.5      For married persons, total assets are defined as the total 
 12.6   marital assets less the estimated community spouse asset 
 12.7   allowance, under section 256B.059, if applicable.  For married 
 12.8   persons, total income is defined as the client's income less the 
 12.9   monthly spousal allotment, under section 256B.058. 
 12.10     All alternative care services except case management shall 
 12.11  be included in the estimated costs for the purpose of 
 12.12  determining 25 percent of the costs. 
 12.13     The monthly premium shall be calculated based on the cost 
 12.14  of the first full month of alternative care services and shall 
 12.15  continue unaltered until the next reassessment is completed or 
 12.16  at the end of 12 months, whichever comes first.  Premiums are 
 12.17  due and payable each month alternative care services are 
 12.18  received unless the actual cost of the services is less than the 
 12.19  premium. 
 12.20     (b) The fee shall be waived by the commissioner when: 
 12.21     (1) a person who is residing in a nursing facility is 
 12.22  receiving case management only; 
 12.23     (2) a person is applying for medical assistance; 
 12.24     (3) a married couple is requesting an asset assessment 
 12.25  under the spousal impoverishment provisions; 
 12.26     (4) a person is a medical assistance recipient, but has 
 12.27  been approved for alternative care-funded assisted living 
 12.28  services; 
 12.29     (5) a person is found eligible for alternative care, but is 
 12.30  not yet receiving alternative care services; or 
 12.31     (6) a person's fee under paragraph (a) is less than $25. 
 12.32     (c) The county agency must collect the premium from the 
 12.33  client and forward the amounts collected to the commissioner in 
 12.34  the manner and at the times prescribed by the commissioner.  
 12.35  Money collected must be deposited in the general fund and is 
 12.36  appropriated to the commissioner for the alternative care 
 13.1   program.  The client must supply the county with the client's 
 13.2   social security number at the time of application.  If a client 
 13.3   fails or refuses to pay the premium due, the county shall supply 
 13.4   the commissioner with the client's social security number and 
 13.5   other information the commissioner requires to collect the 
 13.6   premium from the client.  The commissioner shall collect unpaid 
 13.7   premiums using the Revenue Recapture Act in chapter 270A and 
 13.8   other methods available to the commissioner.  The commissioner 
 13.9   may require counties to inform clients of the collection 
 13.10  procedures that may be used by the state if a premium is not 
 13.11  paid.  
 13.12     (d) The commissioner shall begin to adopt emergency or 
 13.13  permanent rules governing client premiums within 30 days after 
 13.14  July 1, 1991, including criteria for determining when services 
 13.15  to a client must be terminated due to failure to pay a premium.  
 13.16     Sec. 6.  Minnesota Statutes 1998, section 256B.0913, 
 13.17  subdivision 16, is amended to read: 
 13.18     Subd. 16.  [CONVERSION OF ENROLLMENT.] Upon approval of the 
 13.19  elderly waiver amendments described in section 256B.0915, 
 13.20  subdivision 1d, persons currently receiving services shall have 
 13.21  their eligibility for the elderly waiver program determined 
 13.22  under section 256B.0915.  Persons currently receiving 
 13.23  alternative care services whose income is under the special 
 13.24  income standard according to Code of Federal Regulations, title 
 13.25  42, section 435.236, who are eligible for the elderly waiver 
 13.26  program shall be transferred to that program and shall receive 
 13.27  priority access to elderly waiver slots for six months after 
 13.28  implementation of this subdivision, except that persons whose 
 13.29  income is above the maintenance needs amount described in 
 13.30  section 256B.0915, subdivision 1d, paragraph (a), shall have the 
 13.31  option of remaining in the alternative care program.  Persons 
 13.32  currently enrolled in the alternative care program who are not 
 13.33  eligible for the elderly waiver program shall continue to be 
 13.34  eligible for the alternative care program as long as continuous 
 13.35  eligibility is maintained.  Continued eligibility for the 
 13.36  alternative care program shall be reviewed every six months.  
 14.1   Persons who apply for the alternative care program after 
 14.2   approval of the elderly waiver amendments in section 256B.0915, 
 14.3   subdivision 1d, are not eligible for alternative care if they 
 14.4   would qualify for the elderly waiver, with or without a 
 14.5   spenddown.  Persons who apply for the alternative care program 
 14.6   after approval of the elderly waiver amendments in section 
 14.7   256B.0915, subdivision 1d, whose income is under the special 
 14.8   income standard according to the Code of Federal Regulations, 
 14.9   title 42, section 435.236, are not eligible for alternative care 
 14.10  if they would qualify for the elderly waiver, except that 
 14.11  persons whose income is above the maintenance needs amount 
 14.12  described in section 256B.0915, subdivision 1d, paragraph (a), 
 14.13  shall have the option of remaining in the alternative care 
 14.14  program. 
 14.15     Sec. 7.  Minnesota Statutes 1998, section 256B.434, 
 14.16  subdivision 3, is amended to read: 
 14.17     Subd. 3.  [DURATION AND TERMINATION OF CONTRACTS.] (a) 
 14.18  Subject to available resources, the commissioner may begin to 
 14.19  execute contracts with nursing facilities November 1, 1995. 
 14.20     (b) All contracts entered into under this section are for a 
 14.21  term of one year.  Either party may terminate a contract at any 
 14.22  time without cause by providing 30 90 calendar days advance 
 14.23  written notice to the other party.  The decision to terminate a 
 14.24  contract is not appealable.  If neither party provides written 
 14.25  notice of termination the contract shall be renegotiated for 
 14.26  additional one-year terms, for up to a total of four consecutive 
 14.27  one-year terms Notwithstanding section 16C.05, subdivision 2, 
 14.28  paragraph (a), clause (5), the contract shall be renegotiated 
 14.29  for additional one-year terms, unless either party provides 
 14.30  written notice of termination.  The provisions of the contract 
 14.31  shall be renegotiated annually by the parties prior to the 
 14.32  expiration date of the contract.  The parties may voluntarily 
 14.33  renegotiate the terms of the contract at any time by mutual 
 14.34  agreement. 
 14.35     (c) If a nursing facility fails to comply with the terms of 
 14.36  a contract, the commissioner shall provide reasonable notice 
 15.1   regarding the breach of contract and a reasonable opportunity 
 15.2   for the facility to come into compliance.  If the facility fails 
 15.3   to come into compliance or to remain in compliance, the 
 15.4   commissioner may terminate the contract.  If a contract is 
 15.5   terminated, the contract payment remains in effect for the 
 15.6   remainder of the rate year in which the contract was terminated, 
 15.7   but in all other respects the provisions of this section do not 
 15.8   apply to that facility effective the date the contract is 
 15.9   terminated.  The contract shall contain a provision governing 
 15.10  the transition back to the cost-based reimbursement system 
 15.11  established under section 256B.431, subdivision 25, and 
 15.12  Minnesota Rules, parts 9549.0010 to 9549.0080.  A contract 
 15.13  entered into under this section may be amended by mutual 
 15.14  agreement of the parties. 
 15.15     Sec. 8.  Minnesota Statutes 1998, section 256B.434, 
 15.16  subdivision 13, is amended to read: 
 15.17     Subd. 13.  [PAYMENT SYSTEM REFORM ADVISORY COMMITTEE.] (a) 
 15.18  The commissioner, in consultation with an advisory committee, 
 15.19  shall study options for reforming the regulatory and 
 15.20  reimbursement system for nursing facilities to reduce the level 
 15.21  of regulation, reporting, and procedural requirements, and to 
 15.22  provide greater flexibility and incentives to stimulate 
 15.23  competition and innovation.  The advisory committee shall 
 15.24  include, at a minimum, representatives from the long-term care 
 15.25  provider community, the department of health, and consumers of 
 15.26  long-term care services.  The advisory committee sunsets on June 
 15.27  30, 1997.  Among other things, the commissioner shall consider 
 15.28  the feasibility and desirability of changing from a 
 15.29  certification requirement to an accreditation requirement for 
 15.30  participation in the medical assistance program, options to 
 15.31  encourage early discharge of short-term residents through the 
 15.32  provision of intensive therapy, and further modifications needed 
 15.33  in rate equalization.  The commissioner shall also include 
 15.34  detailed recommendations for a permanent managed care payment 
 15.35  system to replace the contractual alternative payment 
 15.36  demonstration project authorized under this section.  The 
 16.1   commissioner shall submit a report with findings and 
 16.2   recommendations to the legislature by January 15, 1997. 
 16.3      (b) If a permanent managed care payment system has not been 
 16.4   enacted into law by July 1, 1997, the commissioner shall develop 
 16.5   and implement a transition plan to enable nursing facilities 
 16.6   under contract with the commissioner under this section to 
 16.7   revert to the cost-based payment system at the expiration of the 
 16.8   alternative payment demonstration project.  The commissioner 
 16.9   shall include in the alternative payment demonstration project 
 16.10  contracts entered into under this section a provision to permit 
 16.11  an amendment to the contract to be made after July 1, 1997, 
 16.12  governing the transition back to the cost-based payment system.  
 16.13  The transition plan and contract amendments are not subject to 
 16.14  rulemaking requirements.  
 16.15     Sec. 9.  Minnesota Statutes 1998, section 256B.69, 
 16.16  subdivision 6a, is amended to read: 
 16.17     Subd. 6a.  [NURSING HOME SERVICES.] (a) Notwithstanding 
 16.18  Minnesota Rules, part 9500.1457, subpart 1, item B, nursing 
 16.19  facility services as defined in section 256B.0625, subdivision 
 16.20  2, which are provided in a nursing facility certified by the 
 16.21  Minnesota department of health for services provided and 
 16.22  eligible for payment under Medicaid, shall be covered under the 
 16.23  prepaid medical assistance program for individuals who are not 
 16.24  residing in a nursing facility at the time of enrollment in the 
 16.25  prepaid medical assistance program.  Liability for coverage of 
 16.26  nursing facility services by a participating health plan is 
 16.27  limited to 365 days for any person enrolled under the prepaid 
 16.28  medical assistance program. 
 16.29     (b) For individuals enrolled in the Minnesota senior health 
 16.30  options project authorized under subdivision 23, nursing 
 16.31  facility services shall be covered according to the terms and 
 16.32  conditions of the federal waiver governing that demonstration 
 16.33  project. 
 16.34     Sec. 10.  Minnesota Statutes 1998, section 256B.69, 
 16.35  subdivision 6b, is amended to read: 
 16.36     Subd. 6b.  [ELDERLY WAIVER SERVICES.] Notwithstanding 
 17.1   Minnesota Rules, part 9500.1457, subpart 1, item C, elderly 
 17.2   waiver services shall be covered under the prepaid medical 
 17.3   assistance program for all individuals who are eligible 
 17.4   according to section 256B.0915.  For individuals enrolled in the 
 17.5   Minnesota senior health options project authorized under 
 17.6   subdivision 23, elderly waiver services shall be covered 
 17.7   according to the terms and conditions of the federal waiver 
 17.8   governing that demonstration project. 
 17.9      Sec. 11.  Minnesota Statutes 1998, section 256I.04, 
 17.10  subdivision 3, is amended to read: 
 17.11     Subd. 3.  [MORATORIUM ON THE DEVELOPMENT OF GROUP 
 17.12  RESIDENTIAL HOUSING BEDS.] (a) County agencies shall not enter 
 17.13  into agreements for new group residential housing beds with 
 17.14  total rates in excess of the MSA equivalent rate except:  (1) 
 17.15  for group residential housing establishments meeting the 
 17.16  requirements of subdivision 2a, clause (2) with department 
 17.17  approval; (2) for group residential housing establishments 
 17.18  licensed under Minnesota Rules, parts 9525.0215 to 9525.0355, 
 17.19  provided the facility is needed to meet the census reduction 
 17.20  targets for persons with mental retardation or related 
 17.21  conditions at regional treatment centers; (3) to ensure 
 17.22  compliance with the federal Omnibus Budget Reconciliation Act 
 17.23  alternative disposition plan requirements for inappropriately 
 17.24  placed persons with mental retardation or related conditions or 
 17.25  mental illness; (4) up to 80 beds in a single, specialized 
 17.26  facility located in Hennepin county that will provide housing 
 17.27  for chronic inebriates who are repetitive users of 
 17.28  detoxification centers and are refused placement in emergency 
 17.29  shelters because of their state of intoxication, and planning 
 17.30  for the specialized facility must have been initiated before 
 17.31  July 1, 1991, in anticipation of receiving a grant from the 
 17.32  housing finance agency under section 462A.05, subdivision 20a, 
 17.33  paragraph (b); or (5) notwithstanding the provisions of 
 17.34  subdivision 2a, for up to 190 supportive housing units in Anoka, 
 17.35  Dakota, Hennepin, or Ramsey county for homeless adults with a 
 17.36  mental illness, a history of substance abuse, or human 
 18.1   immunodeficiency virus or acquired immunodeficiency syndrome.  
 18.2   For purposes of this section, "homeless adult" means a person 
 18.3   who is living on the street or in a shelter or discharged from a 
 18.4   regional treatment center, community hospital, or residential 
 18.5   treatment program and has no appropriate housing available and 
 18.6   lacks the resources and support necessary to access appropriate 
 18.7   housing.  At least 70 percent of the supportive housing units 
 18.8   must serve homeless adults with mental illness, substance abuse 
 18.9   problems, or human immunodeficiency virus or acquired 
 18.10  immunodeficiency syndrome who are about to be or, within the 
 18.11  previous six months, has been discharged from a regional 
 18.12  treatment center, or a state-contracted psychiatric bed in a 
 18.13  community hospital, or a residential mental health or chemical 
 18.14  dependency treatment program.  If a person meets the 
 18.15  requirements of subdivision 1, paragraph (a), and receives a 
 18.16  federal or state housing subsidy, the group residential housing 
 18.17  rate for that person is limited to the supplementary rate under 
 18.18  section 256I.05, subdivision 1a, and is determined by 
 18.19  subtracting the amount of the person's countable income that 
 18.20  exceeds the MSA equivalent rate from the group residential 
 18.21  housing supplementary rate.  A resident in a demonstration 
 18.22  project site who no longer participates in the demonstration 
 18.23  program shall retain eligibility for a group residential housing 
 18.24  payment in an amount determined under section 256I.06, 
 18.25  subdivision 8, using the MSA equivalent rate.  Service funding 
 18.26  under section 256I.05, subdivision 1a, will end June 30, 1997, 
 18.27  if federal matching funds are available and the services can be 
 18.28  provided through a managed care entity.  If federal matching 
 18.29  funds are not available, then service funding will continue 
 18.30  under section 256I.05, subdivision 1a.; or (6) for group 
 18.31  residential housing beds in settings meeting the requirements of 
 18.32  subdivision 2, paragraph (a), clause (3), which are used 
 18.33  exclusively for recipients receiving home and community-based 
 18.34  waiver services under sections 256B.0915, 256B.092, subdivision 
 18.35  5, 256B.093, and 256B.49, and who resided in a nursing facility 
 18.36  for the six months immediately prior to the month of entry into 
 19.1   the group residential housing setting.  The group residential 
 19.2   housing rate for these beds must be set so that the monthly 
 19.3   group residential housing payment for an individual occupying 
 19.4   the bed when combined with the nonfederal share of services 
 19.5   delivered under the waiver for that person does not exceed the 
 19.6   nonfederal share of the monthly medical assistance payment made 
 19.7   for the person to the nursing facility in which the person 
 19.8   resided prior to entry into the group residential housing 
 19.9   establishment.  The rate may not exceed the MSA equivalent rate 
 19.10  plus $426.37 for any case. 
 19.11     (b) A county agency may enter into a group residential 
 19.12  housing agreement for beds with rates in excess of the MSA 
 19.13  equivalent rate in addition to those currently covered under a 
 19.14  group residential housing agreement if the additional beds are 
 19.15  only a replacement of beds with rates in excess of the MSA 
 19.16  equivalent rate which have been made available due to closure of 
 19.17  a setting, a change of licensure or certification which removes 
 19.18  the beds from group residential housing payment, or as a result 
 19.19  of the downsizing of a group residential housing setting.  The 
 19.20  transfer of available beds from one county to another can only 
 19.21  occur by the agreement of both counties. 
 19.22     Sec. 12.  Minnesota Statutes 1998, section 256I.05, 
 19.23  subdivision 1, is amended to read: 
 19.24     Subdivision 1.  [MAXIMUM RATES.] Monthly room and board 
 19.25  rates negotiated by a county agency for a recipient living in 
 19.26  group residential housing must not exceed the MSA equivalent 
 19.27  rate specified under section 256I.03, subdivision 5, with the 
 19.28  exception that a county agency may negotiate a supplementary 
 19.29  room and board rate that exceeds the MSA equivalent rate by up 
 19.30  to $426.37 for recipients of waiver services under title XIX of 
 19.31  the Social Security Act.  This exception is subject to the 
 19.32  following conditions: 
 19.33     (1) that the Secretary of Health and Human Services has not 
 19.34  approved a state request to include room and board costs which 
 19.35  exceed the MSA equivalent rate in an individual's set of waiver 
 19.36  services under title XIX of the Social Security Act; or 
 20.1      (2) that the Secretary of Health and Human Services has 
 20.2   approved the inclusion of room and board costs which exceed the 
 20.3   MSA equivalent rate, but in an amount that is insufficient to 
 20.4   cover costs which are included in a group residential housing 
 20.5   agreement in effect on June 30, 1994; and 
 20.6      (3) the amount of the rate that is above the MSA equivalent 
 20.7   rate has been approved by the commissioner the setting is 
 20.8   licensed by the commissioner of human services under Minnesota 
 20.9   Rules, parts 9555.5050 to 9555.6265; 
 20.10     (2) the setting is not the primary residence of the license 
 20.11  holder and in which the license holder is not the primary 
 20.12  caregiver; and 
 20.13     (3) the average supplementary room and board rate in a 
 20.14  county for a calendar year may not exceed the average 
 20.15  supplementary room and board rate for that county in effect on 
 20.16  January 1, 2000.  If a county has not negotiated supplementary 
 20.17  room and board rates for any facilities located in the county as 
 20.18  of January 1, 2000, or has an average supplemental room and 
 20.19  board rate under $100 per person as of January 1, 2000, it may 
 20.20  submit a supplementary room and board rate request with budget 
 20.21  information for a facility to the commissioner for approval. 
 20.22  The county agency may at any time negotiate a higher or lower 
 20.23  room and board rate than the average supplementary room and 
 20.24  board rate that would otherwise be paid under this subdivision. 
 20.25     Sec. 13.  Minnesota Statutes 1998, section 256I.05, 
 20.26  subdivision 1a, is amended to read: 
 20.27     Subd. 1a.  [SUPPLEMENTARY SERVICE RATES.] (a) Subject to 
 20.28  the provisions of section 256I.04, subdivision 3, in addition to 
 20.29  the room and board rate specified in subdivision 1, the county 
 20.30  agency may negotiate a payment not to exceed $426.37 for other 
 20.31  services necessary to provide room and board provided by the 
 20.32  group residence if the residence is licensed by or registered by 
 20.33  the department of health, or licensed by the department of human 
 20.34  services to provide services in addition to room and board, and 
 20.35  if the provider of services is not also concurrently receiving 
 20.36  funding for services for a recipient under a home and 
 21.1   community-based waiver under title XIX of the Social Security 
 21.2   Act; or funding from the medical assistance program under 
 21.3   section 256B.0627, subdivision 4, for personal care services for 
 21.4   residents in the setting; or residing in a setting which 
 21.5   receives funding under Minnesota Rules, parts 9535.2000 to 
 21.6   9535.3000.  If funding is available for other necessary services 
 21.7   through a home and community-based waiver, or personal care 
 21.8   services under section 256B.0627, subdivision 4, then the GRH 
 21.9   rate is limited to the rate set in subdivision 1.  Unless 
 21.10  otherwise provided in law, in no case may the supplementary 
 21.11  service rate plus the supplementary room and board rate exceed 
 21.12  $426.37.  The registration and licensure requirement does not 
 21.13  apply to establishments which are exempt from state licensure 
 21.14  because they are located on Indian reservations and for which 
 21.15  the tribe has prescribed health and safety requirements.  
 21.16  Service payments under this section may be prohibited under 
 21.17  rules to prevent the supplanting of federal funds with state 
 21.18  funds.  The commissioner shall pursue the feasibility of 
 21.19  obtaining the approval of the Secretary of Health and Human 
 21.20  Services to provide home and community-based waiver services 
 21.21  under title XIX of the Social Security Act for residents who are 
 21.22  not eligible for an existing home and community-based waiver due 
 21.23  to a primary diagnosis of mental illness or chemical dependency 
 21.24  and shall apply for a waiver if it is determined to be 
 21.25  cost-effective.  
 21.26     (b) The commissioner is authorized to make cost-neutral 
 21.27  transfers from the GRH fund for beds under this section to other 
 21.28  funding programs administered by the department after 
 21.29  consultation with the county or counties in which the affected 
 21.30  beds are located.  The commissioner may also make cost-neutral 
 21.31  transfers from the GRH fund to county human service agencies for 
 21.32  beds permanently removed from the GRH census under a plan 
 21.33  submitted by the county agency and approved by the 
 21.34  commissioner.  The commissioner shall report the amount of any 
 21.35  transfers under this provision annually to the legislature. 
 21.36     (c) The provisions of paragraph (b) do not apply to a 
 22.1   facility that has its reimbursement rate established under 
 22.2   section 256B.431, subdivision 4, paragraph (c). 
 22.3      Sec. 14.  [GROUP RESIDENTIAL HOUSING STUDY.] 
 22.4      The commissioner of human services shall submit to the 
 22.5   legislature by November 1, 2000, a study of the cost of 
 22.6   providing housing for individuals eligible for group residential 
 22.7   housing payments and an analysis of the relationship of the 
 22.8   costs to market rate housing costs in a representative number of 
 22.9   regions in the state. 
 22.10     Sec. 15.  [REPEALER.] 
 22.11     Minnesota Statutes 1998, section 256B.434, subdivision 17, 
 22.12  is repealed effective July 1, 1999.  Laws 1997, chapter 203, 
 22.13  article 4, section 55, is repealed. 
 22.14     Sec. 16.  [EFFECTIVE DATE.] 
 22.15     Sections 1 to 15 are effective July 1, 1999. 
 22.16                             ARTICLE  2  
 22.17                         NURSING FACILITIES 
 22.18     Section 1.  Minnesota Statutes 1998, section 256B.431, 
 22.19  subdivision 2i, is amended to read: 
 22.20     Subd. 2i.  [OPERATING COSTS AFTER JULY 1, 1988.] (a)  
 22.21  [OTHER OPERATING COST LIMITS.] For the rate year beginning July 
 22.22  1, 1988, the commissioner shall increase the other operating 
 22.23  cost limits established in Minnesota Rules, part 9549.0055, 
 22.24  subpart 2, item E, to 110 percent of the median of the array of 
 22.25  allowable historical other operating cost per diems and index 
 22.26  these limits as in Minnesota Rules, part 9549.0056, subparts 3 
 22.27  and 4.  The limits must be established in accordance with 
 22.28  subdivision 2b, paragraph (d).  For rate years beginning on or 
 22.29  after July 1, 1989, the adjusted other operating cost limits 
 22.30  must be indexed as in Minnesota Rules, part 9549.0056, subparts 
 22.31  3 and 4.  For the rate period beginning October 1, 1992, and for 
 22.32  rate years beginning after June 30, 1993, the amount of the 
 22.33  surcharge under section 256.9657, subdivision 1, shall be 
 22.34  included in the plant operations and maintenance operating cost 
 22.35  category.  The surcharge shall be an allowable cost for the 
 22.36  purpose of establishing the payment rate. 
 23.1      (b)  [CARE-RELATED OPERATING COST LIMITS.] For the rate 
 23.2   year beginning July 1, 1988, the commissioner shall increase the 
 23.3   care-related operating cost limits established in Minnesota 
 23.4   Rules, part 9549.0055, subpart 2, items A and B, to 125 percent 
 23.5   of the median of the array of the allowable historical case mix 
 23.6   operating cost standardized per diems and the allowable 
 23.7   historical other care-related operating cost per diems and index 
 23.8   those limits as in Minnesota Rules, part 9549.0056, subparts 1 
 23.9   and 2.  The limits must be established in accordance with 
 23.10  subdivision 2b, paragraph (d).  For rate years beginning on or 
 23.11  after July 1, 1989, the adjusted care-related limits must be 
 23.12  indexed as in Minnesota Rules, part 9549.0056, subparts 1 and 2. 
 23.13     (c) (b)  [SALARY ADJUSTMENT PER DIEM EFFECTIVE JULY 1, 
 23.14  1999, AND JULY 1, 2000.] Effective July 1, 1998 1999, to June 
 23.15  30, 2000, the commissioner shall make available the salary 
 23.16  adjustment per diem calculated in clause (1) or (2) to the total 
 23.17  operating cost payment rate of each nursing facility reimbursed 
 23.18  under this section or section 256B.434.  For July 1, 1999, 
 23.19  nursing facilities with rates set according to section 256B.434 
 23.20  shall receive increases according to this paragraph but shall 
 23.21  not receive inflation increases according to section 256B.434. 
 23.22  Effective July 1, 2000, the commissioner shall make available an 
 23.23  additional salary adjustment per diem as calculated in clause 
 23.24  (1) or (2) to the total operating cost payment rate of each 
 23.25  nursing facility reimbursed under this section or section 
 23.26  256B.435.  The salary adjustment per diem for each nursing 
 23.27  facility must be determined as follows:  
 23.28     (1) For each nursing facility that reports salaries for 
 23.29  registered nurses, licensed practical nurses, and aides, 
 23.30  orderlies and attendants separately, the commissioner shall 
 23.31  determine the salary adjustment per diem by multiplying the 
 23.32  total salaries, payroll taxes, and fringe benefits allowed in 
 23.33  each operating cost category, except management fees and 
 23.34  administrator and central office salaries and the related 
 23.35  payroll taxes and fringe benefits, by 3.0 5.0 percent and then 
 23.36  dividing the resulting amount by the nursing facility's actual 
 24.1   resident days. 
 24.2      (2) For each nursing facility that does not report salaries 
 24.3   for registered nurses, licensed practical nurses, aides, 
 24.4   orderlies, and attendants separately, the salary adjustment per 
 24.5   diem is the weighted average salary adjustment per diem increase 
 24.6   determined under clause (1).  
 24.7      (3) A nursing facility may apply for the salary adjustment 
 24.8   per diem calculated under clauses (1) and (2).  The application 
 24.9   must be made to the commissioner and contain a plan by which the 
 24.10  nursing facility will distribute the salary adjustment to 
 24.11  employees of the nursing facility.  In order to apply for a July 
 24.12  1, 2000, salary adjustment, a nursing facility reimbursed under 
 24.13  section 256B.434, must report the information required by clause 
 24.14  (1) or (2) in the application, in the manner specified by the 
 24.15  commissioner.  For nursing facilities in which the employees are 
 24.16  represented by an exclusive bargaining representative, an 
 24.17  agreement negotiated and agreed to by the employer and the 
 24.18  exclusive bargaining representative, after July 1, 1998, may 
 24.19  constitute the plan for the salary distribution.  The 
 24.20  commissioner shall review the plan to ensure that the salary 
 24.21  adjustment per diem is used solely to increase the compensation 
 24.22  of nursing home facility employees.  To be eligible, a facility 
 24.23  must submit its plan for the salary distribution by December 31, 
 24.24  1998 1999.  A facility may amend its plan for the second rate 
 24.25  year by submitting a revised plan by December 31, 2000.  If a 
 24.26  facility's plan for salary distribution is effective for its 
 24.27  employees after July 1, 1998 of the year that the funds are 
 24.28  available, the salary adjustment cost per diem shall be 
 24.29  effective the same date as its plan. 
 24.30     (4) Additional costs incurred by nursing facilities as a 
 24.31  result of this salary adjustment are not allowable costs for 
 24.32  purposes of the September 30, 1998 1999, cost report. 
 24.33     (d)  [NEW BASE YEAR.] The commissioner shall establish new 
 24.34  base years for both the reporting year ending September 30, 
 24.35  1989, and the reporting year ending September 30, 1990.  In 
 24.36  establishing new base years, the commissioner must take into 
 25.1   account:  
 25.2      (1) statutory changes made in geographic groups; 
 25.3      (2) redefinitions of cost categories; and 
 25.4      (3) reclassification, pass-through, or exemption of certain 
 25.5   costs such as Public Employee Retirement Act contributions. 
 25.6      (e) (c)  [NEW BASE YEAR.] The commissioner shall establish 
 25.7   a new base year for the reporting years ending September 30, 
 25.8   1991, and September 30, 1992.  In establishing a new base year, 
 25.9   the commissioner must take into account:  
 25.10     (1) statutory changes made in geographic groups; 
 25.11     (2) redefinitions of cost categories; and 
 25.12     (3) reclassification, pass-through, or exemption of certain 
 25.13  costs. 
 25.14     Sec. 2.  Minnesota Statutes 1998, section 256B.435, is 
 25.15  amended to read: 
 25.16     256B.435 [NURSING FACILITY REIMBURSEMENT SYSTEM EFFECTIVE 
 25.17  JULY 1, 2000 2001.] 
 25.18     Subdivision 1.  [IN GENERAL.] Effective July 1, 2000 2001, 
 25.19  the commissioner shall implement a performance-based contracting 
 25.20  system to replace the current method of setting operating cost 
 25.21  payment rates under sections 256B.431 and 256B.434 and Minnesota 
 25.22  Rules, parts 9549.0010 to 9549.0080.  Operating cost payment 
 25.23  rates for newly established facilities under Minnesota Rules, 
 25.24  part 9549.0057, shall be established using section 256B.431 and 
 25.25  Minnesota Rules, parts 9549.0010 to 9549.0070.  A nursing 
 25.26  facility in operation on May 1, 1998, with payment rates not 
 25.27  established under section 256B.431 or 256B.434 on that date, is 
 25.28  ineligible for this performance-based contracting system.  In 
 25.29  determining prospective payment rates of nursing facility 
 25.30  services, the commissioner shall distinguish between operating 
 25.31  costs and property-related costs.  The commissioner of finance 
 25.32  shall include an annual inflationary adjustment in operating 
 25.33  costs for nursing facilities using the inflation factor 
 25.34  specified in subdivision 3 and funding for incentive-based 
 25.35  payments as a budget change request in each biennial detailed 
 25.36  expenditure budget submitted to the legislature under section 
 26.1   16A.11.  Property related payment rates, including real estate 
 26.2   taxes and special assessments, shall be determined under section 
 26.3   256B.431 or 256B.434 or under a new property-related 
 26.4   reimbursement system, if one is implemented by the commissioner 
 26.5   under subdivision 3.  The commissioner shall present additional 
 26.6   recommendations for performance-based contracting for nursing 
 26.7   facilities to the legislature by February 15, 2000, in the 
 26.8   following specific areas: 
 26.9      (a) development of an interim default payment mechanism for 
 26.10  nursing facilities that do not respond to the state's request 
 26.11  for proposal but wish to continue participation in the medical 
 26.12  assistance program; nursing facilities the state does not select 
 26.13  in the request for proposal process; and nursing facilities 
 26.14  whose contract has been canceled; 
 26.15     (b) development of criteria for facilities to earn 
 26.16  performance-based incentive payments based on relevant outcomes 
 26.17  negotiated by nursing facilities and the commissioner and that 
 26.18  recognize both continuous quality efforts and quality 
 26.19  improvement; 
 26.20     (c) development of criteria and a process under which 
 26.21  nursing facilities can request rate adjustments for low base 
 26.22  rates, geographic disparities, or other reasons; 
 26.23     (d) development of a dispute resolution mechanism for 
 26.24  nursing facilities that are denied a contract, denied incentive 
 26.25  payments, or denied a rate adjustment; 
 26.26     (e) development of a property payment system to address the 
 26.27  capital needs of nursing facilities that will be funded with 
 26.28  additional appropriations; 
 26.29     (f) establishment of a transitional plan to move from dual 
 26.30  assessment instruments to the federally mandated resident 
 26.31  assessment system, whereby the financial impact for each 
 26.32  facility would be budget neutral; 
 26.33     (g) identification of net cost implications for facilities 
 26.34  and to the department of preparing for and implementing 
 26.35  performance-based contracting or any proposed alternative 
 26.36  system; 
 27.1      (h) identification of facility financial and statistical 
 27.2   reporting requirements; and 
 27.3      (i) identification of exemptions from current regulations 
 27.4   and statutes applicable under performance-based contracting.  
 27.5      Subd. 1a.  [REQUESTS FOR PROPOSALS.] (a) For nursing 
 27.6   facilities with rates established under section 256B.434 on 
 27.7   January 1, 2001, the commissioner shall renegotiate contracts 
 27.8   without requiring a response to a request for proposal, 
 27.9   notwithstanding the solicitation process described in chapter 
 27.10  16C. 
 27.11     (b) Prior to July 1, 2001, the commissioner shall publish 
 27.12  in the State Register a request for proposals to provide nursing 
 27.13  facility services according to this section.  The commissioner 
 27.14  will consider proposals from all nursing facilities that have 
 27.15  payment rates established under section 256B.431.  The 
 27.16  commissioner must respond to all proposals in a timely manner. 
 27.17     (c) In issuing a request for proposals, the commissioner 
 27.18  may develop reasonable requirements which, in the judgment of 
 27.19  the commissioner, are necessary to protect residents or ensure 
 27.20  that the performance-based contracting system furthers the 
 27.21  interests of the state of Minnesota.  The request for proposals 
 27.22  may include, but need not be limited to: 
 27.23     (1) a requirement that nursing facility make reasonable 
 27.24  efforts to maximize Medicare payments on behalf of eligible 
 27.25  residents; 
 27.26     (2) requirements designed to prevent inappropriate or 
 27.27  illegal discrimination against residents enrolled in the medical 
 27.28  assistance program as compared to private paying residents; 
 27.29     (3) requirements designed to ensure that admissions to a 
 27.30  nursing facility are appropriate and that reasonable efforts are 
 27.31  made to place residents in home and community-based settings 
 27.32  when appropriate; 
 27.33     (4) a requirement to agree to participate in the 
 27.34  development of data collection systems and outcome-based 
 27.35  standards.  Among other requirements specified by the 
 27.36  commissioner, each facility entering into a contract may be 
 28.1   required to pay an annual fee not to exceed $1,000.  The 
 28.2   commissioner must use revenue generated from the fees to 
 28.3   contract with a qualified consultant or contractor to develop 
 28.4   data collection systems and outcome-based contracting standards; 
 28.5      (5) a requirement that Medicare-certified contractors agree 
 28.6   to maintain Medicare cost reports and to submit them to the 
 28.7   commissioner upon request, or at times specified by the 
 28.8   commissioner; and that contractors that are not 
 28.9   Medicare-certified agree to maintain a uniform cost report in a 
 28.10  format established by the commissioner and to submit the report 
 28.11  to the commissioner upon request, or at times specified by the 
 28.12  commissioner; 
 28.13     (6) a requirement that demonstrates willingness and ability 
 28.14  to develop and maintain data collection and retrieval systems to 
 28.15  measure outcomes; and 
 28.16     (7) a requirement to provide all information and assurances 
 28.17  required by the terms and conditions of the federal waiver or 
 28.18  federal approval. 
 28.19     (d) In addition to the information and assurances contained 
 28.20  in the submitted proposals, the commissioner may consider the 
 28.21  following criteria in developing the terms of the contract: 
 28.22     (1) the facility's history of compliance with federal and 
 28.23  state laws and rules.  A facility deemed to be in substantial 
 28.24  compliance with federal and state laws and rules is eligible to 
 28.25  respond to a request for proposals.  A facility's compliance 
 28.26  history shall not be the sole determining factor in situations 
 28.27  where the facility has been sold and the new owners have 
 28.28  submitted a proposal; 
 28.29     (2) whether the facility has a record of excessive 
 28.30  licensure fines or sanctions or fraudulent cost reports; 
 28.31     (3) the facility's financial history and solvency; and 
 28.32     (4) other factors identified by the commissioner deemed 
 28.33  relevant to developing the terms of the contract, including a 
 28.34  determination that a contract with a particular facility is not 
 28.35  in the best interests of the residents of the facility or the 
 28.36  state of Minnesota. 
 29.1      (e) Notwithstanding the requirements of the solicitation 
 29.2   process described in chapter 16C, the commissioner may contract 
 29.3   with nursing facilities established according to section 
 29.4   144A.073 without issuing a request for proposals. 
 29.5      (f) Notwithstanding subdivision 1, after July 1, 2001, the 
 29.6   commissioner may contract with additional nursing facilities, 
 29.7   according to requests for proposals. 
 29.8      Subd. 2.  [CONTRACT PROVISIONS.] (a) The performance-based 
 29.9   contract with each nursing facility must include provisions that:
 29.10     (1) apply the resident case mix assessment provisions of 
 29.11  Minnesota Rules, parts 9549.0051, 9549.0058, and 9549.0059, or 
 29.12  another assessment system, with the goal of moving to a single 
 29.13  assessment system; 
 29.14     (2) monitor resident outcomes through various methods, such 
 29.15  as quality indicators based on the minimum data set and other 
 29.16  utilization and performance measures; 
 29.17     (3) require the establishment and use of a continuous 
 29.18  quality improvement process that integrates information from 
 29.19  quality indicators and regular resident and family satisfaction 
 29.20  interviews; 
 29.21     (4) require annual reporting of facility statistical 
 29.22  information, including resident days by case mix category, 
 29.23  productive nursing hours, wages and benefits, and raw food costs 
 29.24  for use by the commissioner in the development of facility 
 29.25  profiles that include trends in payment and service utilization; 
 29.26     (5) require from each nursing facility an annual certified 
 29.27  audited financial statement consisting of a balance sheet, 
 29.28  income and expense statements, and an opinion from either a 
 29.29  licensed or certified public accountant, if a certified audit 
 29.30  was prepared, or unaudited financial statements if no certified 
 29.31  audit was prepared; and 
 29.32     (6) specify the method for resolving disputes; 
 29.33     (7) establish additional requirements and penalties for 
 29.34  nursing facilities not meeting the standards set forth in the 
 29.35  performance-based contract. 
 29.36     (b) The commissioner may develop additional incentive-based 
 30.1   payments for achieving specified outcomes specified in each 
 30.2   contract.  The specified facility-specific outcomes must be 
 30.3   measurable and approved by the commissioner.  
 30.4      (c) The commissioner may also contract with nursing 
 30.5   facilities in other ways through requests for proposals, 
 30.6   including contracts on a risk or nonrisk basis, with nursing 
 30.7   facilities or consortia of nursing facilities, to provide 
 30.8   comprehensive long-term care coverage on a premium or capitated 
 30.9   basis. 
 30.10     (d) The commissioner may negotiate different contract terms 
 30.11  for different nursing facilities. 
 30.12     Subd. 2a.  [DURATION AND TERMINATION OF CONTRACTS.] (a) All 
 30.13  contracts entered into under this section are for a term of one 
 30.14  year.  Either party may terminate this contract at any time 
 30.15  without cause by providing 90 calendar days' advance written 
 30.16  notice to the other party.  Notwithstanding section 16C.05, 
 30.17  subdivisions 2, paragraph (a), and 5, if neither party provides 
 30.18  written notice of termination, the contract shall be 
 30.19  renegotiated for additional one-year terms or the terms of the 
 30.20  existing contract will be extended for one year.  The provisions 
 30.21  of the contract shall be renegotiated annually by the parties 
 30.22  prior to the expiration date of the contract.  The parties may 
 30.23  voluntarily renegotiate the terms of the contract at any time by 
 30.24  mutual agreement. 
 30.25     (b) If a nursing facility fails to comply with the terms of 
 30.26  a contract, the commissioner shall provide reasonable notice 
 30.27  regarding the breach of contract and a reasonable opportunity 
 30.28  for the facility to come into compliance.  If the facility fails 
 30.29  to come into compliance or to remain in compliance, the 
 30.30  commissioner may terminate the contract.  If a contract is 
 30.31  terminated, provisions of section 256B.48, subdivision 1a, shall 
 30.32  apply. 
 30.33     Subd. 3.  [PAYMENT RATE PROVISIONS.] (a) For rate years 
 30.34  beginning on or after July 1, 2000 2001, within the limits of 
 30.35  appropriations specifically for this purpose, the commissioner 
 30.36  shall determine operating cost payment rates for each licensed 
 31.1   and certified nursing facility by indexing its operating cost 
 31.2   payment rates in effect on June 30, 2000 2001, for inflation.  
 31.3   The inflation factor to be used must be based on the change in 
 31.4   the Consumer Price Index-All Items, United States city average 
 31.5   (CPI-U) as forecasted by Data Resources, Inc. in the fourth 
 31.6   quarter preceding the rate year.  The CPI-U forecasted index for 
 31.7   operating cost payment rates shall be based on the 12-month 
 31.8   period from the midpoint of the nursing facility's prior rate 
 31.9   year to the midpoint of the rate year for which the operating 
 31.10  payment rate is being determined.  The operating cost payment 
 31.11  rate to be inflated shall be the total payment rate in effect on 
 31.12  June 30, 2001, minus the portion determined to be the 
 31.13  property-related payment rate, minus the per diem amount of the 
 31.14  preadmission screening cost included in the nursing facility's 
 31.15  last payment rate established under section 256B.431. 
 31.16     (b) Beginning July 1, 2000, each nursing facility subject 
 31.17  to a performance-based contract under this section shall choose 
 31.18  one of two methods of payment for property-related costs: 
 31.19     (1) the method established in section 256B.434; or 
 31.20     (2) the method established in section 256B.431. 
 31.21     Once the nursing facility has made the election in this 
 31.22  paragraph, that election shall remain in effect for at least 
 31.23  four years or until an alternative property payment system is 
 31.24  developed.  A per diem amount for preadmission screening will be 
 31.25  added onto the contract payment rates according to the method of 
 31.26  distribution of county allocation described in section 
 31.27  256B.0911, subdivision 6, paragraph (a). 
 31.28     (c) For rate years beginning on or after July 1, 2000 2001, 
 31.29  the commissioner may implement a new method of payment for 
 31.30  property-related costs that addresses the capital needs of 
 31.31  nursing facilities.  Notwithstanding paragraph (b) (c), the new 
 31.32  property payment system or systems, if implemented, shall 
 31.33  replace the current method methods of setting property payment 
 31.34  rates under sections 256B.431 and 256B.434. 
 31.35     Subd. 4.  [CONTRACT PAYMENT RATES; APPEALS.] If an appeal 
 31.36  is pending concerning the cost-based payment rates that are the 
 32.1   basis for the calculation of the payment rate under this 
 32.2   section, the commissioner and the nursing facility may agree on 
 32.3   an interim contract rate to be used until the appeal is 
 32.4   resolved.  When the appeal is resolved, the contract rate must 
 32.5   be adjusted retroactively according to the appeal decision. 
 32.6      Subd. 5.  [CONSUMER PROTECTION.] In addition to complying 
 32.7   with all applicable laws regarding consumer protection, as a 
 32.8   condition of entering into a contract under this section, a 
 32.9   nursing facility must agree to: 
 32.10     (1) establish resident grievance procedures; 
 32.11     (2) establish expedited grievance procedures to resolve 
 32.12  complaints made by short-stay residents; and 
 32.13     (3) make available to residents and families a copy of the 
 32.14  performance-based contract and outcomes to be achieved. 
 32.15     Subd. 6.  [CONTRACTS ARE VOLUNTARY.] Participation of 
 32.16  nursing facilities in the medical assistance program is 
 32.17  voluntary.  The terms and procedures governing the 
 32.18  performance-based contract are determined under this section and 
 32.19  through negotiations between the commissioner and nursing 
 32.20  facilities.  
 32.21     Subd. 7.  [FEDERAL REQUIREMENTS.] The commissioner shall 
 32.22  implement the performance-based contracting system subject to 
 32.23  any required federal waivers or approval and in a manner that is 
 32.24  consistent with federal requirements.  If a provision of this 
 32.25  section is inconsistent with a federal requirement, the federal 
 32.26  requirement supersedes the inconsistent provision.  The 
 32.27  commissioner shall seek federal approval and request waivers as 
 32.28  necessary to implement this section. 
 32.29     Sec. 3.  Minnesota Statutes 1998, section 256B.48, 
 32.30  subdivision 1a, is amended to read: 
 32.31     Subd. 1a.  [TERMINATION.] If a nursing facility terminates 
 32.32  its participation in the medical assistance program, whether 
 32.33  voluntarily or involuntarily, the commissioner may authorize the 
 32.34  nursing facility to receive continued medical assistance 
 32.35  reimbursement only on a temporary basis until medical assistance 
 32.36  residents can be relocated to nursing facilities participating 
 33.1   in the medical assistance program. 
 33.2      Sec. 4.  Minnesota Statutes 1998, section 256B.48, 
 33.3   subdivision 1b, is amended to read: 
 33.4      Subd. 1b.  [EXCEPTION.] Notwithstanding any agreement 
 33.5   between a nursing facility and the department of human services 
 33.6   or the provisions of this section or section 256B.411, other 
 33.7   than subdivision 1a, the commissioner may authorize continued 
 33.8   medical assistance payments to a nursing facility which ceased 
 33.9   intake of medical assistance recipients prior to July 1, 1983, 
 33.10  and which charges private paying residents rates that exceed 
 33.11  those permitted by subdivision 1, paragraph (a), for (i) 
 33.12  residents who resided in the nursing facility before July 1, 
 33.13  1983, or (ii)  residents for whom the commissioner or any 
 33.14  predecessors of the commissioner granted a permanent individual 
 33.15  waiver prior to October 1, 1983.  Nursing facilities seeking 
 33.16  continued medical assistance payments under this subdivision 
 33.17  shall make the reports required under subdivision 2, except that 
 33.18  on or after December 31, 1985, the financial statements required 
 33.19  need not be audited by or contain the opinion of a certified 
 33.20  public accountant or licensed public accountant, but need only 
 33.21  be reviewed by a certified public accountant or licensed public 
 33.22  accountant.  In the event that the state is determined by the 
 33.23  federal government to be no longer eligible for the federal 
 33.24  share of medical assistance payments made to a nursing facility 
 33.25  under this subdivision, the commissioner may cease medical 
 33.26  assistance payments, under this subdivision, to that nursing 
 33.27  facility.  Between October 1, 1992, and July 1, 1993, a facility 
 33.28  governed by this subdivision may elect to resume full 
 33.29  participation in the medical assistance program by agreeing to 
 33.30  comply with all of the requirements of the medical assistance 
 33.31  program, including the rate equalization law in subdivision 1, 
 33.32  paragraph (a), and all other requirements established in law or 
 33.33  rule, and to resume intake of new medical assistance recipients. 
 33.34     Sec. 5.  Minnesota Statutes 1998, section 256B.48, 
 33.35  subdivision 6, is amended to read: 
 33.36     Subd. 6.  [MEDICARE CERTIFICATION.] (a) [DEFINITION.] For 
 34.1   purposes of this subdivision, "nursing facility" means a nursing 
 34.2   facility that is certified as a skilled nursing facility or, 
 34.3   after September 30, 1990, a nursing facility licensed under 
 34.4   chapter 144A that is certified as a nursing facility.  
 34.5      (b) [MEDICARE PARTICIPATION REQUIRED.] All nursing 
 34.6   facilities shall participate in Medicare part A and part B 
 34.7   unless, after submitting an application, Medicare certification 
 34.8   is denied by the federal health care financing administration.  
 34.9   Medicare review shall be conducted at the time of the annual 
 34.10  medical assistance review.  Charges for Medicare-covered 
 34.11  services provided to residents who are simultaneously eligible 
 34.12  for medical assistance and Medicare must be billed to Medicare 
 34.13  part A or part B before billing medical assistance.  Medical 
 34.14  assistance may be billed only for charges not reimbursed by 
 34.15  Medicare.  
 34.16     (c) [UNTIL SEPTEMBER 30, 1990.] Until September 30, 1990, a 
 34.17  nursing facility satisfies the requirements of paragraph (b) 
 34.18  if:  (1) at least 50 percent of the facility's beds that are 
 34.19  licensed under section 144A and certified as skilled nursing 
 34.20  beds under the medical assistance program are Medicare 
 34.21  certified; or (2) if a nursing facility's beds are licensed 
 34.22  under section 144A, and some are medical assistance certified as 
 34.23  skilled nursing beds and others are medical assistance certified 
 34.24  as intermediate care facility I beds, at least 50 percent of the 
 34.25  facility's total skilled nursing beds and intermediate care 
 34.26  facility I beds or 100 percent of its skilled nursing beds, 
 34.27  whichever is less, are Medicare certified. 
 34.28     (d) [AFTER SEPTEMBER 30, 1990.] After September 30, 1990, a 
 34.29  nursing facility satisfies the requirements of paragraph (b) if 
 34.30  at least 50 percent of the facility's beds certified as nursing 
 34.31  facility beds under the medical assistance program are Medicare 
 34.32  certified. 
 34.33     (e) (d) [CONFLICT WITH MEDICARE DISTINCT PART 
 34.34  REQUIREMENTS.] At the request of a facility, the commissioner of 
 34.35  human services may reduce the 50 percent Medicare participation 
 34.36  requirement in paragraphs (c) and (d) to no less than 20 percent 
 35.1   if the commissioner of health determines that, due to the 
 35.2   facility's physical plant configuration, the facility cannot 
 35.3   satisfy Medicare distinct part requirements at the 50 percent 
 35.4   certification level.  To receive a reduction in the 
 35.5   participation requirement, a facility must demonstrate that the 
 35.6   reduction will not adversely affect access of Medicare-eligible 
 35.7   residents to Medicare-certified beds. 
 35.8      (f) (e) [INSTITUTIONS FOR MENTAL DISEASE.] The commissioner 
 35.9   may grant exceptions to the requirements of paragraph (b) for 
 35.10  nursing facilities that are designated as institutions for 
 35.11  mental disease. 
 35.12     (g) (f) [NOTICE OF RIGHTS.] The commissioner shall inform 
 35.13  recipients of their rights under this subdivision and section 
 35.14  144.651, subdivision 29. 
 35.15     Sec. 6.  Minnesota Statutes 1998, section 256B.50, 
 35.16  subdivision 1e, is amended to read: 
 35.17     Subd. 1e.  [ATTORNEY'S FEES AND COSTS.] (a) Notwithstanding 
 35.18  section 15.472, paragraph (a), for an issue appealed under 
 35.19  subdivision 1, the prevailing party in a contested case 
 35.20  proceeding or, if appealed, in subsequent judicial review, must 
 35.21  be awarded reasonable attorney's fees and costs incurred in 
 35.22  litigating the appeal, if the prevailing party shows that the 
 35.23  position of the opposing party was not substantially justified.  
 35.24  The procedures for awarding fees and costs set forth in section 
 35.25  15.474 must be followed in determining the prevailing party's 
 35.26  fees and costs except as otherwise provided in this 
 35.27  subdivision.  For purposes of this subdivision, "costs" means 
 35.28  subpoena fees and mileage, transcript costs, court reporter 
 35.29  fees, witness fees, postage and delivery costs, photocopying and 
 35.30  printing costs, amounts charged the commissioner by the office 
 35.31  of administrative hearings, and direct administrative costs of 
 35.32  the department; and "substantially justified" means that a 
 35.33  position had a reasonable basis in law and fact, based on the 
 35.34  totality of the circumstances prior to and during the contested 
 35.35  case proceeding and subsequent review. 
 35.36     (b) When an award is made to the department under this 
 36.1   subdivision, attorney fees must be calculated at the cost to the 
 36.2   department.  When an award is made to a provider under this 
 36.3   subdivision, attorney fees must be calculated at the rate 
 36.4   charged to the provider except that attorney fees awarded must 
 36.5   be the lesser of the attorney's normal hourly fee or $100 per 
 36.6   hour. 
 36.7      (c) In contested case proceedings involving more than one 
 36.8   issue, the administrative law judge shall determine what portion 
 36.9   of each party's attorney fees and costs is related to the issue 
 36.10  or issues on which it prevailed and for which it is entitled to 
 36.11  an award.  In making that determination, the administrative law 
 36.12  judge shall consider the amount of time spent on each issue, the 
 36.13  precedential value of the issue, the complexity of the issue, 
 36.14  and other factors deemed appropriate by the administrative law 
 36.15  judge.  
 36.16     (d) When the department prevails on an issue involving more 
 36.17  than one provider, the administrative law judge shall allocate 
 36.18  the total amount of any award for attorney fees and costs among 
 36.19  the providers.  In determining the allocation, the 
 36.20  administrative law judge shall consider each provider's monetary 
 36.21  interest in the issue and other factors deemed appropriate by 
 36.22  the administrative law judge.  
 36.23     (e) Attorney fees and costs awarded to the department for 
 36.24  proceedings under this subdivision must not be reported or 
 36.25  treated as allowable costs on the provider's cost report.  
 36.26     (f) Fees and costs awarded to a provider for proceedings 
 36.27  under this subdivision must be reimbursed to them by reporting 
 36.28  the amount of fees and costs awarded as allowable costs on the 
 36.29  provider's cost report for the reporting year in which they were 
 36.30  awarded.  Fees and costs reported pursuant to this subdivision 
 36.31  must be included in the general and administrative cost category 
 36.32  but are not subject to categorical or overall cost limitations 
 36.33  established in rule or statute within 120 days of the final 
 36.34  decision on the award of attorney fees and costs. 
 36.35     (g) If the provider fails to pay the awarded attorney fees 
 36.36  and costs within 120 days of the final decision on the award of 
 37.1   attorney fees and costs, the department may collect the amount 
 37.2   due through any method available to it for the collection of 
 37.3   medical assistance overpayments to providers.  Interest charges 
 37.4   must be assessed on balances outstanding after 120 days of the 
 37.5   final decision on the award of attorney fees and costs.  The 
 37.6   annual interest rate charged must be the rate charged by the 
 37.7   commissioner of revenue for late payment of taxes that is in 
 37.8   effect on the 121st day after the final decision on the award of 
 37.9   attorney fees and costs.  
 37.10     (h) Amounts collected by the commissioner pursuant to this 
 37.11  subdivision must be deemed to be recoveries pursuant to section 
 37.12  256.01, subdivision 2, clause (15). 
 37.13     (i) This subdivision applies to all contested case 
 37.14  proceedings set on for hearing by the commissioner on or after 
 37.15  April 29, 1988, regardless of the date the appeal was filed. 
 37.16     Sec. 7.  [EFFECTIVE DATE.] 
 37.17     Sections 1 to 6 are effective July 1, 1999.