1.1                          A bill for an act
  1.2             relating to human services; providing a six percent 
  1.3             rate increase for nursing facilities, intermediate 
  1.4             care facilities for persons with mental retardation, 
  1.5             and other programs; appropriating money; amending 
  1.6             Minnesota Statutes 2000, sections 256B.431, by adding 
  1.7             a subdivision; 256B.434, subdivision 4; and 256B.5012, 
  1.8             subdivision 3, and by adding a subdivision. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 256B.431, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 31.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
  1.13  1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
  1.14  July 1, 2001, and July 1, 2002, the commissioner shall make 
  1.15  available to each nursing facility reimbursed under this section 
  1.16  or section 256B.434 an adjustment equal to six percent of the 
  1.17  total operating payment rate.  The operating payment rates in 
  1.18  effect on June 30, 2001, and June 30, 2002, respectively, shall 
  1.19  include the adjustment in subdivision 2i, paragraph (c). 
  1.20     (b) Eighty percent of the adjustment must be used to 
  1.21  increase the wages and benefits of all employees except 
  1.22  management fees, the administrator, and central office staff and 
  1.23  to pay associated costs for FICA, the Medicare tax, workers' 
  1.24  compensation premiums, and federal and state unemployment 
  1.25  insurance. 
  1.26     Money received by a facility as a result of the additional 
  1.27  rate increase provided under this paragraph shall be used only 
  2.1   for wage increases implemented on or after July 1, 2001, or July 
  2.2   1, 2002, respectively, and shall not be used for wage increases 
  2.3   implemented prior to those dates. 
  2.4      (c) Ten percent of the adjustment must be used for employee 
  2.5   recruitment, training, transportation, and administration. 
  2.6      (d) Ten percent of the adjustment may be used for other 
  2.7   operating costs. 
  2.8      (e) A nursing facility may apply for the 
  2.9   compensation-related payment rate adjustment calculated under 
  2.10  paragraph (b).  The application must be made to the commissioner 
  2.11  and contain a plan by which the nursing facility will distribute 
  2.12  the compensation-related portion of the payment rate adjustment 
  2.13  to employees of the nursing facility.  For nursing facilities in 
  2.14  which the employees are represented by an exclusive bargaining 
  2.15  representative, an agreement negotiated and agreed to by the 
  2.16  employer and the exclusive bargaining representative constitutes 
  2.17  the plan.  A negotiated agreement may constitute the plan only 
  2.18  if the agreement is finalized after the date of enactment of all 
  2.19  increases for the rate year.  The commissioner shall review the 
  2.20  plan to ensure that the payment rate adjustment per diem is used 
  2.21  as provided in paragraph (b).  To be eligible, a facility must 
  2.22  submit its plan for the compensation distribution by December 31 
  2.23  each year.  If a facility's plan for compensation distribution 
  2.24  is effective for its employees after July 1 of the year that the 
  2.25  funds are available, the payment rate adjustment per diem shall 
  2.26  be effective the same date as its plan. 
  2.27     (f) A copy of the approved distribution plan must be made 
  2.28  available to all employees.  This must be done by giving each 
  2.29  employee a copy or by posting it in an area of the nursing 
  2.30  facility to which all employees have access.  If an employee 
  2.31  does not receive the compensation adjustment described in their 
  2.32  facility's approved plan and is unable to resolve the problem 
  2.33  with the facility's management or through the employee's union 
  2.34  representative, the employee may contact the commissioner at an 
  2.35  address or phone number provided by the commissioner and 
  2.36  included in the approved plan.  
  3.1      (g) Notwithstanding section 256B.48, subdivision 1, clause 
  3.2   (a), upon the request of a nursing facility, the commissioner 
  3.3   may authorize the facility to raise per diem rates for 
  3.4   private-pay residents on July 1 by the amount anticipated to be 
  3.5   required upon implementation of the compensation-related 
  3.6   increase available under this subdivision.  The commissioner 
  3.7   shall require any amounts collected under this paragraph to be 
  3.8   placed in an escrow account until the medical assistance rate is 
  3.9   finalized.  The commissioner shall conduct audits as necessary 
  3.10  to ensure that: 
  3.11     (1) the amounts collected are retained in escrow until 
  3.12  medical assistance rates are increased to reflect the 
  3.13  compensation-related adjustment; and 
  3.14     (2) any amounts collected from private-pay residents in 
  3.15  excess of the final medical assistance compensation-related rate 
  3.16  increase are repaid to the private-pay residents with interest 
  3.17  at the rate used by the commissioner of revenue for the late 
  3.18  payment of taxes and in effect on the date the distribution plan 
  3.19  is approved by the commissioner of human services. 
  3.20     Sec. 2.  Minnesota Statutes 2000, section 256B.434, 
  3.21  subdivision 4, is amended to read: 
  3.22     Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
  3.23  nursing facilities which have their payment rates determined 
  3.24  under this section rather than section 256B.431, the 
  3.25  commissioner shall establish a rate under this subdivision.  The 
  3.26  nursing facility must enter into a written contract with the 
  3.27  commissioner. 
  3.28     (b) A nursing facility's case mix payment rate for the 
  3.29  first rate year of a facility's contract under this section is 
  3.30  the payment rate the facility would have received under section 
  3.31  256B.431. 
  3.32     (c) A nursing facility's case mix payment rates for the 
  3.33  second and subsequent years of a facility's contract under this 
  3.34  section are the previous rate year's contract payment rates plus 
  3.35  an inflation adjustment.  The index for the inflation adjustment 
  3.36  must be based on the change in the Consumer Price Index-All 
  4.1   Items (United States City average) (CPI-U) forecasted by Data 
  4.2   Resources, Inc., as forecasted in the fourth quarter of the 
  4.3   calendar year preceding the rate year.  The inflation adjustment 
  4.4   must be based on the 12-month period from the midpoint of the 
  4.5   previous rate year to the midpoint of the rate year for which 
  4.6   the rate is being determined.  For the rate years beginning on 
  4.7   July 1, 1999, and July 1, 2000, July 1, 2001, and July 1, 2002, 
  4.8   this paragraph shall apply only to the property-related payment 
  4.9   rate.  In determining the amount of the property-related payment 
  4.10  rate adjustment under this paragraph, the commissioner shall 
  4.11  determine the proportion of the facility's rates that are 
  4.12  property-related based on the facility's most recent cost report.
  4.13     (d) The commissioner shall develop additional 
  4.14  incentive-based payments of up to five percent above the 
  4.15  standard contract rate for achieving outcomes specified in each 
  4.16  contract.  The specified facility-specific outcomes must be 
  4.17  measurable and approved by the commissioner.  The commissioner 
  4.18  may establish, for each contract, various levels of achievement 
  4.19  within an outcome.  After the outcomes have been specified the 
  4.20  commissioner shall assign various levels of payment associated 
  4.21  with achieving the outcome.  Any incentive-based payment cancels 
  4.22  if there is a termination of the contract.  In establishing the 
  4.23  specified outcomes and related criteria the commissioner shall 
  4.24  consider the following state policy objectives: 
  4.25     (1) improved cost effectiveness and quality of life as 
  4.26  measured by improved clinical outcomes; 
  4.27     (2) successful diversion or discharge to community 
  4.28  alternatives; 
  4.29     (3) decreased acute care costs; 
  4.30     (4) improved consumer satisfaction; 
  4.31     (5) the achievement of quality; or 
  4.32     (6) any additional outcomes proposed by a nursing facility 
  4.33  that the commissioner finds desirable. 
  4.34     Sec. 3.  Minnesota Statutes 2000, section 256B.5012, 
  4.35  subdivision 3, is amended to read: 
  4.36     Subd. 3.  [PROPERTY PAYMENT RATE.] (a) The property payment 
  5.1   rate effective October 1, 2000, is based on the facility's 
  5.2   modified property payment rate in effect on September 30, 2000.  
  5.3   The modified property payment rate is the actual property 
  5.4   payment rate exclusive of the effect of gains or losses on 
  5.5   disposal of capital assets or adjustments for excess 
  5.6   depreciation claims.  Effective October 1, 2000, a facility 
  5.7   minimum property rate of $8.13 shall be applied to all existing 
  5.8   ICF/MR facilities.  Facilities with a modified property payment 
  5.9   rate effective September 30, 2000, which is below the minimum 
  5.10  property rate shall receive an increase effective October 1, 
  5.11  2000, equal to the difference between the minimum property 
  5.12  payment rate and the modified property payment rate in effect as 
  5.13  of September 30, 2000.  Facilities with a modified property 
  5.14  payment rate at or above the minimum property payment rate 
  5.15  effective September 30, 2000, shall receive the modified 
  5.16  property payment rate effective October 1, 2000. 
  5.17     (b) Within the limits of appropriations specifically for 
  5.18  this purpose, Facility property payment rates shall be increased 
  5.19  annually for inflation, effective January 1, 2002.  The increase 
  5.20  shall be based on each facility's property payment rate in 
  5.21  effect on September 30, 2000.  Modified property payment rates 
  5.22  effective September 30, 2000, shall be arrayed from highest to 
  5.23  lowest before applying the minimum property payment rate in 
  5.24  paragraph (a).  For modified property payment rates at the 90th 
  5.25  percentile or above, the annual inflation increase shall be 
  5.26  zero.  For modified property payment rates below the 90th 
  5.27  percentile but equal to or above the 75th percentile, the annual 
  5.28  inflation increase shall be one percent.  For modified property 
  5.29  payment rates below the 75th percentile, the annual inflation 
  5.30  increase shall be two percent.  
  5.31     Sec. 4.  Minnesota Statutes 2000, section 256B.5012, is 
  5.32  amended by adding a subdivision to read: 
  5.33     Subd. 4.  [ICF/MR RATE INCREASES BEGINNING JULY 1, 2001, 
  5.34  AND JULY 1, 2002.] (a) On July 1, 2001, and July 1, 2002, the 
  5.35  commissioner shall make available to each facility reimbursed 
  5.36  under this section an adjustment of six percent to the total 
  6.1   payment rate, excluding the property-related payment rate, in 
  6.2   effect on the preceding June 30.  The total payment rate shall 
  6.3   include the adjustment provided in section 256B.501, subdivision 
  6.4   12. 
  6.5      (b) Eighty percent of the adjustment shall be used to 
  6.6   increase the wages and benefits of all employees except the 
  6.7   administrator and central office employees and to pay associated 
  6.8   costs for FICA, the Medicare tax, workers' compensation 
  6.9   premiums, and federal and state unemployment insurance, provided 
  6.10  that this increase shall be used only for wage increases 
  6.11  implemented on or after the first day of the fiscal year in 
  6.12  which the increase is available, and shall not be used for wage 
  6.13  increases implemented prior to that date. 
  6.14     (c) Ten percent of the adjustment must be used for employee 
  6.15  recruitment, training, transportation, and administration. 
  6.16     (d) Ten percent of the adjustment may be used for other 
  6.17  operating costs. 
  6.18     (e) Notwithstanding paragraph (a), for the rate increase 
  6.19  effective July 1, 2001, the adjustment applied to the increase 
  6.20  provided under section 256B.501, subdivision 12, shall be 10-1/2 
  6.21  percent. 
  6.22     (f) Any facility whose payment rates are governed by 
  6.23  closure agreements, receivership agreements, or Minnesota Rules, 
  6.24  part 9553.0075, is not eligible for an adjustment otherwise 
  6.25  granted under this subdivision.  
  6.26     (g) A facility may apply for the compensation-related 
  6.27  payment rate adjustment calculated under paragraph (a).  The 
  6.28  application must be made to the commissioner and contain a plan 
  6.29  by which the facility will distribute the compensation-related 
  6.30  portion of the payment rate adjustment to employees of the 
  6.31  facility.  For facilities in which the employees are represented 
  6.32  by an exclusive bargaining representative, an agreement 
  6.33  negotiated and agreed to by the employer and the exclusive 
  6.34  bargaining representative constitutes the plan.  A negotiated 
  6.35  agreement may constitute the plan only if the agreement is 
  6.36  finalized after the date of enactment of all rate increases for 
  7.1   the rate year.  The commissioner shall review the plan to ensure 
  7.2   that the payment rate adjustment per diem is used as provided in 
  7.3   this subdivision.  To be eligible, a facility must submit its 
  7.4   plan for the compensation distribution by December 31, 2001, and 
  7.5   December 31, 2002, respectively.  If a facility's plan for 
  7.6   compensation distribution is effective for its employees after 
  7.7   the first day of the applicable fiscal year that the funds are 
  7.8   available, the payment rate adjustment per diem shall be 
  7.9   effective the same date as its plan. 
  7.10     (h) A copy of the approved distribution plan must be made 
  7.11  available to all employees.  This must be done by giving each 
  7.12  employee a copy or by posting it in an area of the facility to 
  7.13  which all employees have access.  If an employee does not 
  7.14  receive the compensation adjustment described in their 
  7.15  facility's approved plan and is unable to resolve the problem 
  7.16  with the facility's management or through the employee's union 
  7.17  representative, the employee may contact the commissioner at an 
  7.18  address or telephone number provided by the commissioner and 
  7.19  included in the approved plan. 
  7.20     Sec. 5.  [PROVIDER RATE INCREASES.] 
  7.21     (a) The commissioner shall increase reimbursement rates by 
  7.22  six percent each year of the biennium for the providers listed 
  7.23  in paragraph (b).  The increases shall be effective for services 
  7.24  rendered on or after July 1 of each year. 
  7.25     (b) The rate increases described in this section shall be 
  7.26  provided to home and community-based waivered services for 
  7.27  persons with mental retardation or related conditions under 
  7.28  Minnesota Statutes, section 256B.501; home and community-based 
  7.29  waivered services for the elderly under Minnesota Statutes, 
  7.30  section 256B.0915; waivered services under community 
  7.31  alternatives for disabled individuals under Minnesota Statutes, 
  7.32  section 256B.49; community alternative care waivered services 
  7.33  under Minnesota Statutes, section 256B.49; traumatic brain 
  7.34  injury waivered services under Minnesota Statutes, section 
  7.35  256B.49; nursing services and home health services under 
  7.36  Minnesota Statutes, section 256B.0625, subdivision 6a; personal 
  8.1   care services and nursing supervision of personal care services 
  8.2   under Minnesota Statutes, section 256B.0625, subdivision 19a; 
  8.3   private-duty nursing services under Minnesota Statutes, section 
  8.4   256B.0625, subdivision 7; day training and habilitation services 
  8.5   for adults with mental retardation or related conditions under 
  8.6   Minnesota Statutes, sections 252.40 to 252.46; alternative care 
  8.7   services under Minnesota Statutes, section 256B.0913; adult 
  8.8   residential program grants under Minnesota Rules, parts 
  8.9   9535.2000 to 9535.3000; adult and family community support 
  8.10  grants under Minnesota Rules, parts 9535.1700 to 9535.1760; the 
  8.11  group residential housing supplementary service rate under 
  8.12  Minnesota Statutes, section 256I.05, subdivision 1a; adult 
  8.13  mental health integrated fund grants under Minnesota Statutes, 
  8.14  section 245.4661; semi-independent living services under 
  8.15  Minnesota Statutes, section 252.275, including SILS funding 
  8.16  under county social services grants formerly funded under 
  8.17  Minnesota Statutes, chapter 256I; community support services for 
  8.18  deaf and hard-of-hearing adults with mental illness who use or 
  8.19  wish to use sign language as their primary means of 
  8.20  communication; and living skills training programs for persons 
  8.21  with intractable epilepsy who need assistance in the transition 
  8.22  to independent living. 
  8.23     (c) Providers that receive a rate increase under this 
  8.24  section shall use 80 percent of the additional revenue to 
  8.25  increase the wages and benefits, including health insurance, of 
  8.26  all employees other than the administrator and central office 
  8.27  staff and to pay associated costs for FICA, the Medicare tax, 
  8.28  workers' compensation premiums, and federal and state 
  8.29  unemployment insurance; ten percent of the additional revenue 
  8.30  for employee recruitment, training, transportation, and 
  8.31  administration; and ten percent for other operations costs.  For 
  8.32  public employees, the portion of this increase reserved to 
  8.33  increase compensation for certain staff shall be available and 
  8.34  pay rates shall be increased only to the extent that they comply 
  8.35  with laws governing public employees collective bargaining.  
  8.36  Money for wage increases received by a provider as a result of 
  9.1   the additional rate increase described in this paragraph shall 
  9.2   be used only for wage increases implemented on or after the 
  9.3   first day of the state fiscal year in which the increase is 
  9.4   available and shall not be used for wage increases implemented 
  9.5   prior to that date. 
  9.6      (d) A copy of the provider's plan for complying with 
  9.7   paragraph (c) must be made available to all employees.  This 
  9.8   must be done by giving each employee a copy or by posting it in 
  9.9   an area of the provider's operation to which all employees have 
  9.10  access.  If an employee does not receive the compensation 
  9.11  adjustment described in the plan and is unable to resolve the 
  9.12  problem with the provider, the employee may contact the 
  9.13  employee's union representative.  If the employee is not covered 
  9.14  by a collective bargaining agreement, the employee may contact 
  9.15  the commissioner at a phone number provided by the commissioner 
  9.16  and included in the provider's plan. 
  9.17     Sec. 6.  [APPROPRIATION.] 
  9.18     $....... is appropriated from the general fund to the 
  9.19  commissioner of human services for the biennium beginning July 
  9.20  1, 2001, for the purposes of sections 1 to 5.