1.1                          A bill for an act 
  1.2             relating to human services; establishing a process to 
  1.3             close nursing facilities and reallocate the savings to 
  1.4             other facilities; requiring budget neutrality; 
  1.5             proposing coding for new law in Minnesota Statutes, 
  1.6             chapter 256B. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [256B.436] [CLOSURE PLANS.] 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) "Closure" means the 
  1.10  voluntary cessation of operations of a nursing facility and 
  1.11  voluntary delicensure and decertification of all nursing 
  1.12  facility beds of the nursing facility. 
  1.13     (b) "Commencement of closure" means the date on which the 
  1.14  commissioner of health is notified of a planned closure in 
  1.15  accordance with section 144A.16, as part of an approved closure 
  1.16  plan. 
  1.17     (c) "Completion of closure" means the date on which the 
  1.18  final resident of the nursing facility or nursing facilities 
  1.19  designated for closure in an approved closure plan is discharged 
  1.20  from the facility or facilities. 
  1.21     (d) "Closure plan" means a plan to close one or more 
  1.22  nursing facilities and reallocate the resulting savings to 
  1.23  provide special rate adjustments at other facilities. 
  1.24     (e) "Interim closure payments" means the medical assistance 
  1.25  payments that may be made to a nursing facility designated for 
  1.26  closure in an approved plan under this section. 
  2.1      (f) "Phased plan" means a closure plan affecting more than 
  2.2   one nursing facility undergoing closure that is commenced and 
  2.3   completed in phases. 
  2.4      (g) "Special rate adjustment" means an increase in a 
  2.5   nursing facility's operating rates under this section. 
  2.6      (h) "Standardized resident days" means the standardized 
  2.7   resident days as calculated under Minnesota Rules, part 
  2.8   9549.0054, subpart 2, based on the resident days in each 
  2.9   resident class for the most recent reporting period required to 
  2.10  be reported to the commissioner. 
  2.11     Subd. 2.  [PROPOSAL FOR A CLOSURE PLAN.] (a) One or more 
  2.12  nursing facilities that are owned or operated by a nonprofit 
  2.13  corporation owning or operating more than 22 nursing facilities 
  2.14  licensed in the state of Minnesota may submit to the 
  2.15  commissioner a proposal for a closure plan under this section. 
  2.16  Between February 25, 2000, and June 30, 2001, the commissioner 
  2.17  may negotiate phased plans for closure of up to seven nursing 
  2.18  facilities. 
  2.19     (b) A facility or facilities reimbursed under section 
  2.20  256B.431 or 256B.434 with a closure plan approved by the 
  2.21  commissioner under subdivision 4 are eligible for the following 
  2.22  payments: 
  2.23     (1) facilities designated for closure are eligible for 
  2.24  interim closure payments under subdivision 5; and 
  2.25     (2) facilities that remain open are eligible for a special 
  2.26  rate adjustment. 
  2.27     (c) To be considered for approval, a proposal must include 
  2.28  the following: 
  2.29     (1) a description of the proposed closure plan, which shall 
  2.30  include identification of the facility or facilities to receive 
  2.31  a special rate adjustment, the amount and timing of special rate 
  2.32  adjustment proposed for each facility for the case mix level "A" 
  2.33  operating rate, the standardized resident days for each facility 
  2.34  for which a special rate adjustment is proposed, and the 
  2.35  effective date for each special rate adjustment.  The actual 
  2.36  special rate adjustment for a facility shall be allocated 
  3.1   proportionately to the various rate per diems included in that 
  3.2   facility's operating rate; 
  3.3      (2) an analysis of the projected state medical assistance 
  3.4   costs of the closure plan as proposed, including the estimated 
  3.5   costs of the special rate adjustments and estimated resident 
  3.6   relocation costs, including county government costs; 
  3.7      (3) an analysis of the projected state medical assistance 
  3.8   savings of the closure plan as proposed, including any savings 
  3.9   projected to result from closure of one or more nursing 
  3.10  facilities; 
  3.11     (4) the proposed timetable for any proposed closure, 
  3.12  including the proposed dates for commencement and completion of 
  3.13  closure; 
  3.14     (5) the proposed relocation plan for current residents of 
  3.15  any facility designated for closure.  The proposed relocation 
  3.16  plan must be designed to comply with all applicable state and 
  3.17  federal statutes and regulations, including, but not limited to, 
  3.18  section 144A.16; and Minnesota Rules, parts 4655.6810 to 
  3.19  4655.6830; parts 4658.1600 to 4658.1690; and parts 9546.0010 to 
  3.20  9546.0060; and 
  3.21     (6) documentation, in a format approved by the 
  3.22  commissioner, that all the nursing facilities receiving a 
  3.23  special rate adjustment under the plan have accepted joint and 
  3.24  several liability for recovery of overpayments under section 
  3.25  256B.0641, subdivision 2, for the facilities designated for 
  3.26  closure under the plan. 
  3.27     Subd. 3.  [PHASED CLOSURE PLANS.] A proposal for a phased 
  3.28  plan may include more than one closure, each of which must meet 
  3.29  the requirements of this section and each of which may be 
  3.30  implemented in phases at different times.  As part of a phased 
  3.31  plan, a nursing facility may receive a special rate adjustment 
  3.32  under more than one phase of the plan, and the cost savings from 
  3.33  the closure of a nursing facility designated for closure under 
  3.34  the plan may be applied as an offset to the subsequent costs of 
  3.35  more than one phase of the plan.  If a facility is proposed to 
  3.36  receive a special rate adjustment or provide cost savings under 
  4.1   more than one phase of a plan, the proposal must describe the 
  4.2   special rate adjustments or cost savings in each of the affected 
  4.3   phases of the plan.  Review and approval of a phased plan under 
  4.4   subdivision 4 shall apply to all phases of the plan as proposed. 
  4.5      Subd. 4.  [REVIEW AND APPROVAL OF PROPOSALS.] (a) The 
  4.6   commissioner may grant interim closure payments or special rate 
  4.7   adjustments for a nursing facility or facilities according to an 
  4.8   approved plan that satisfies the requirements of this section.  
  4.9   The commissioner shall not approve a proposal unless the 
  4.10  commissioner determines that projected state savings of the plan 
  4.11  equal or exceed projected state and county government costs, 
  4.12  including facility costs during the closure period, the 
  4.13  estimated costs of special rate adjustments, estimated resident 
  4.14  relocation costs, the cost of services to relocated residents, 
  4.15  and state agency administrative costs directly related to the 
  4.16  accomplishment of duties specified in this subdivision relative 
  4.17  to that proposal.  To achieve cost neutrality costs may only be 
  4.18  offset against savings that occur within the same fiscal year.  
  4.19  For purposes of a phased plan, the requirement that costs must 
  4.20  not exceed savings applies to both the aggregate costs and 
  4.21  savings of the plan and to each phase of the plan.  A special 
  4.22  rate adjustment under this section shall be effective no earlier 
  4.23  than the first day of the month following completion of closure 
  4.24  of all facilities designated for closure under the plan.  For 
  4.25  purposes of a phased plan, the special rate adjustment for each 
  4.26  phase shall be effective no earlier than the first day of the 
  4.27  month following completion of closure of all facilities 
  4.28  designated for closure in that phase of the plan.  No special 
  4.29  rate adjustment under this section shall take effect prior to 
  4.30  July 1, 2000. 
  4.31     (b) Upon receipt of a proposal for a closure plan, the 
  4.32  commissioner shall provide a copy of the proposal to the 
  4.33  commissioner of health.  The commissioner of health shall 
  4.34  certify to the commissioner within 30 days whether the proposal, 
  4.35  if implemented, will satisfy the requirements of section 
  4.36  144A.16; and Minnesota Rules, parts 4655.6810 to 4655.6830, and 
  5.1   parts 4658.1600 to 4658.1690.  The commissioner shall not 
  5.2   approve a plan under this section unless the commissioner of 
  5.3   health has made the certification required under this paragraph. 
  5.4      (c) The commissioner shall review a proposal for a closure 
  5.5   plan to determine whether it satisfies the requirements of this 
  5.6   section.  A determination shall be made within 60 days of the 
  5.7   date the proposal is submitted.  If the commissioner determines 
  5.8   that the proposal does not satisfy the requirements of this 
  5.9   section, or if the commissioner of health does not certify the 
  5.10  proposal under paragraph (b), the applicant shall be provided 
  5.11  written notice as soon as practicable, specifying the 
  5.12  deficiencies of the proposal.  The proposal may be modified and 
  5.13  resubmitted for further review by each commissioner.  The 
  5.14  commissioner of health shall review a modified proposal within 
  5.15  30 days from the date it is submitted, and the commissioner 
  5.16  shall make a final determination on whether the proposal 
  5.17  satisfies the requirements of this section within 60 days of the 
  5.18  date the modified proposal is submitted. 
  5.19     (d) Approval of a closure plan expires 18 months after 
  5.20  approval by the commissioner, unless commencement of closure has 
  5.21  occurred at all facilities designated for closure under the plan.
  5.22     Subd. 5.  [INTERIM CLOSURE PAYMENTS.] Instead of payments 
  5.23  under section 256B.431 or 256B.434, the commissioner may approve 
  5.24  a closure plan under which the commissioner shall: 
  5.25     (1) apply the interim and settle-up rate provisions under 
  5.26  Minnesota Rules, part 9549.0057, to include facilities covered 
  5.27  by this section, effective from commencement of closure to 
  5.28  completion of closure; 
  5.29     (2) extend the length of the interim period but not to 
  5.30  exceed 12 months; 
  5.31     (3) limit the amount of reimbursable expenses related to 
  5.32  the acquisition of new capital assets; 
  5.33     (4) prohibit the acquisition of additional capital debt or 
  5.34  refinancing of existing capital debt unless prior approval is 
  5.35  obtained from the commissioner; 
  5.36     (5) establish as the aggregate administrative operating 
  6.1   cost limitation for the interim period the actual aggregate 
  6.2   administrative operating costs for the period immediately prior 
  6.3   to commencement of closure that is of the same duration as the 
  6.4   interim period; 
  6.5      (6) require the retention of financial and statistical 
  6.6   records until the commissioner has audited the interim period 
  6.7   and the settle-up rate; 
  6.8      (7) make aggregate payments under this subdivision for the 
  6.9   interim period up to the level of the aggregate payments for the 
  6.10  period immediately prior to commencement of closure that is of 
  6.11  the same duration as the interim period; or 
  6.12     (8) change any other provision to which all parties to the 
  6.13  plan agree. 
  6.14     Subd. 6.  [COST SAVINGS OF CLOSURE.] For purposes of this 
  6.15  section, the calculation of medical assistance cost savings from 
  6.16  the closure of a nursing facility designated for closure under a 
  6.17  closure plan shall be according to the following criteria: 
  6.18     (a) The projected medical assistance savings of the closure 
  6.19  of a facility shall be the aggregate medical assistance payments 
  6.20  to the facility for the most recently completed state fiscal 
  6.21  year prior to submission of the proposal, as reflected in the 
  6.22  number of resident days of care for each resident class provided 
  6.23  by the facility in that fiscal year, multiplied by the payment 
  6.24  rate for each resident class. 
  6.25     (b) If one or more facilities designated for closure in an 
  6.26  approved closure plan are not able to be closed for any reason, 
  6.27  or projection of savings for that closure are otherwise 
  6.28  prohibited under this section, the projected medical assistance 
  6.29  savings from that closure may not be offset against the medical 
  6.30  assistance costs of special rate adjustments under the plan.  In 
  6.31  that event, the applicant must notify the commissioner in 
  6.32  writing and the applicant must either amend its proposal by 
  6.33  reducing the special rate adjustment to reduce the medical 
  6.34  assistance cost of the plan by at least the amount of the 
  6.35  medical assistance savings that were projected from the closure 
  6.36  of that facility, or withdraw the plan. 
  7.1      (c) No medical assistance savings shall be projected from 
  7.2   closure of a nursing facility that is designated for closure 
  7.3   under a closure plan, if the facility is subject to adverse 
  7.4   licensure action under section 144A.ll at the time the proposal 
  7.5   is submitted or at the commencement of closure. 
  7.6      (d) Medical assistance savings under paragraph (a) shall be 
  7.7   recognized for purposes of this section beginning the first day 
  7.8   of the month following the month of completion of closure for 
  7.9   all facilities designated for closure under the plan, or all 
  7.10  facilities designated for closure under that phase for a phased 
  7.11  plan. 
  7.12     Subd. 7.  [OTHER RATE ADJUSTMENTS.] Except as otherwise 
  7.13  provided in subdivision 5, facilities subject to this section 
  7.14  remain eligible for any applicable rate adjustments provided 
  7.15  under section 256B.431, 256B.434, or any other section. 
  7.16     Subd. 8.  [COUNTY COSTS.] A portion of the savings 
  7.17  estimated under subdivision 4, not to exceed $75,000 per closing 
  7.18  facility, may be transferred from the medical assistance account 
  7.19  to the commissioner to be used for relocation costs incurred by 
  7.20  counties. 
  7.21     Sec. 2.  [MORATORIUM EXCEPTION PROCESS.] 
  7.22     For fiscal year beginning July 1, 2000, when approving 
  7.23  nursing home moratorium exception projects under Minnesota 
  7.24  Statutes, section 144A.073, the commissioner of health shall 
  7.25  give priority to proposals to build replacement facilities in 
  7.26  the city of Anoka or within ten miles of the city of Anoka. 
  7.27     Sec. 3.  [REPORT.] 
  7.28     (a) By January 15, 2001, the commissioner of health and the 
  7.29  commissioner of human services shall each report to the senate 
  7.30  health and family security committee, and the house health and 
  7.31  human services committee, any recommendations for revision and 
  7.32  general application of the closure process established in 
  7.33  section 1, including a recommendation on the advisability of 
  7.34  providing an appropriation to assist counties with relocation 
  7.35  costs and to facilitate closure projects or downsizing projects 
  7.36  that are not budget neutral. 
  8.1      (b) The report required in paragraph (a) must also contain 
  8.2   recommendations to make state financial and technical assistance 
  8.3   available to all nursing facilities statewide that are 
  8.4   considering closure or downsizing due to financial or staffing 
  8.5   problems, or the age and structural inadequacy of the facility 
  8.6   and physical plant.  The recommendations must address issues 
  8.7   related to alternative facility use, including, but not limited 
  8.8   to, conversion of all or part of the facility to provide 
  8.9   assisted living, housing with services, and board and lodging. 
  8.10     Sec. 4.  [RELOCATION STUDY.] 
  8.11     (a) The commissioner of health, in consultation with 
  8.12  representatives of county government, nursing facility 
  8.13  operators, employees, residents, and advocates, shall study and 
  8.14  report to the legislature by January 15, 2001, on: 
  8.15     (1) Minnesota Statutes, section 144A.16, and on Minnesota 
  8.16  Rules, parts 4655.6810 to 4655.6830, and 4658.1600 to 4658.1690, 
  8.17  governing relocation of nursing facility and boarding care home 
  8.18  residents; and 
  8.19     (2) the impact on county government and on residents and 
  8.20  their families of relocations occurring under Minnesota 
  8.21  Statutes, section 256B.436. 
  8.22     (b) The report shall recommend any necessary modifications 
  8.23  in law or rule. 
  8.24     Sec. 5.  [EFFECTIVE DATE.] 
  8.25     Section 1 is effective the day following final enactment 
  8.26  and applies to nursing homes that give notice of closure to the 
  8.27  commissioner of health on or after February 25, 2000.