1.1 	A bill for an act
1.2 	relating to health; establishing requirements for assisted living services; changing 
1.3 	provisions for housing with services establishment; limiting use of the term 
1.4 	assisted living; establishing an advisory committee to recommend a consumer 
1.5 	information guide; modifying the home care bill of rights for assisted living 
1.6 	clients; changing provisions for long-term care; making facility rate increases; 
1.7 	changing provisions for alternative services for elderly and disabled persons; 
1.8 	requiring the commissioner of human services to confer with advocacy groups; 
1.9 	appropriating money;amending Minnesota Statutes 2004, sections 144.0724, 
1.10 	subdivisions 3, 4; 144A.071, subdivision 4a; 144A.10, by adding a subdivision; 
1.11 	144A.161, subdivisions 1, 2, 3, 4, 5, 5a, 5c, 6, 8, by adding a subdivision; 
1.12 	144A.4605; 144D.01, by adding a subdivision; 144D.015; 144D.02; 144D.03, 
1.13 	subdivision 2, by adding a subdivision; 144D.04; 144D.05; 144D.065; 256B.434, 
1.14 	by adding subdivisions; 256B.437, subdivision 3; 256B.438, subdivision 4; 
1.15 	256B.69, subdivision 9, by adding a subdivision; Minnesota Statutes 2005 
1.16 	Supplement, sections 144A.071, subdivision 1a; 256B.0918, subdivisions 1, 3, 
1.17 	4; 256B.434, subdivision 4; 256B.69, subdivision 23;  Laws 2005, First Special 
1.18 	Session chapter 4, article 9, section 5, subdivision 8; proposing coding for new 
1.19 	law in Minnesota Statutes, chapters 144A; 144D; proposing coding for new law 
1.20 	as Minnesota Statutes, chapter 144G; repealing Minnesota Rules, part 4668.0215.
1.21 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.22 	ARTICLE 1
1.23 	ASSISTED LIVING

1.24 	Section 1. [144A.441] ASSISTED LIVING BILL OF RIGHTS ADDENDUM.
1.25 	Assisted living clients, as defined in section 144G.01, subdivision 3, shall be 
1.26 	provided with the home care bill of rights required by section 144A.44, except that the 
1.27 	home care bill of rights provided to these clients must include the following provision in 
1.28 	place of the provision in section 144A.44, subdivision 1, clause (16): 
2.1 	"(16) the right to reasonable, advance notice of changes in services or charges, 
2.2 	including at least 30 days' advance notice of the termination of a service by a provider, 
2.3 	except in cases where:
2.4 	(i) the recipient of services engages in conduct that alters the conditions of 
2.5 	employment as specified in the employment contract between the home care provider 
2.6 	and the individual providing home care services, or creates an abusive or unsafe work 
2.7 	environment for the individual providing home care services;
2.8 	(ii) an emergency for the informal caregiver or a significant change in the recipient's 
2.9 	condition has resulted in service needs that exceed the current service provider agreement 
2.10 	and that cannot be safely met by the home care provider; or
2.11 	(iii) the provider has not received payment for services, for which at least ten days' 
2.12 	advance notice of the termination of a service shall be provided."

2.13 	EFFECTIVE DATE. This section is effective January 1, 2007.

2.14 	Sec. 2. [144A.442] TERMINATION OF HOME CARE SERVICES FOR 
2.15 	ASSISTED LIVING CLIENTS.
2.16 	If an arranged home care provider, as defined in section 144D.01, subdivision 2a, 
2.17 	who is not also Medicare certified terminates a service agreement or service plan with 
2.18 	an assisted living client, as defined in section 144G.01, subdivision 3, the home care 
2.19 	provider shall provide the assisted living client and the legal or designated representatives 
2.20 	of the client, if any, with a written notice of termination which includes the following 
2.21 	information:
2.22 	(1) the effective date of termination;
2.23 	(2) the reason for termination;
2.24 	(3) without extending the termination notice period, an affirmative offer to meet with 
2.25 	the assisted living client or client representatives within no more than five business days of 
2.26 	the date of the termination notice to discuss the termination;
2.27 	(4) contact information for a reasonable number of other home care providers in 
2.28 	the geographic area of the assisted living client, as required by Minnesota Rules, part 
2.29 	4668.0050;
2.30 	(5) a statement that the provider will participate in a coordinated transfer of the care 
2.31 	of the client to another provider or caregiver, as required by section 144A.44, subdivision 
2.32 	1, clause (17);
2.33 	(6) the name and contact information of a representative of the home care provider 
2.34 	with whom the client may discuss the notice of termination;
2.35 	(7) a copy of the home care bill of rights; and
3.1 	(8) a statement that the notice of termination of home care services by the home care 
3.2 	provider does not constitute notice of termination of the housing with services contract 
3.3 	with a housing with services establishment.

3.4 	EFFECTIVE DATE. This section is effective January 1, 2007.

3.5 	Sec. 3. Minnesota Statutes 2004, section 144A.4605, is amended to read:
3.6 	144A.4605 ASSISTED LIVING HOME CARE CLASS F PROVIDER.
3.7 		Subdivision 1.Definitions. For purposes of this section, the term "assisted 
3.8 	living class F home care provider" means a home care provider who provides nursing 
3.9 	services, delegated nursing services, other services performed by unlicensed personnel, or 
3.10 	central storage of medications solely for residents of one or more housing with services 
3.11 	establishments registered under chapter 144D.
3.12 		Subd. 2.Assisted living Class F home care license established. A home care 
3.13 	provider license category entitled assisted living class F home care provider is hereby 
3.14 	established. A home care provider may obtain an assisted living a class F license if the 
3.15 	program meets the following requirements:
3.16 	(a) nursing services, delegated nursing services, other services performed by 
3.17 	unlicensed personnel, or central storage of medications under the assisted living class 
3.18 	F license are provided solely for residents of one or more housing with services 
3.19 	establishments registered under chapter 144D;
3.20 	(b) unlicensed personnel perform home health aide and home care aide tasks 
3.21 	identified in Minnesota Rules, parts 4668.0100, subparts 1 and 2, and 4668.0110, subpart 1. 
3.22 	Qualifications to perform these tasks shall be established in accordance with subdivision 3;
3.23 	(c) periodic supervision of unlicensed personnel is provided as required by rule;
3.24 	(d) notwithstanding Minnesota Rules, part 4668.0160, subpart 6, item D, client 
3.25 	records shall include:
3.26 	(1) daily records or a weekly summary of home care services provided;
3.27 	(2) documentation each time medications are administered to a client; and
3.28 	(3) documentation on the day of occurrence of any significant change in the client's 
3.29 	status or any significant incident, such as a fall or refusal to take medications.
3.30 	All entries must be signed by the staff providing the services and entered into the 
3.31 	record no later than two weeks after the end of the service day, except as specified in 
3.32 	clauses (2) and (3);
4.1 	(e) medication and treatment orders, if any, are included in the client record and 
4.2 	are renewed at least every 12 months, or more frequently when indicated by a clinical 
4.3 	assessment;
4.4 	(f) the central storage of medications in a housing with services establishment 
4.5 	registered under chapter 144D is managed under a system that is established by a 
4.6 	registered nurse and addresses the control of medications, handling of medications, 
4.7 	medication containers, medication records, and disposition of medications; and
4.8 	(g) in other respects meets the requirements established by rules adopted under 
4.9 	sections  144A.45 to  144A.47. 
4.10 		Subd. 3.Training or competency evaluations required. (a) Unlicensed personnel 
4.11 	must:
4.12 	(1) satisfy the training or competency requirements established by rule under 
4.13 	sections  144A.45 to  144A.47; or 
4.14 	(2) be trained or determined competent by a registered nurse in each task identified 
4.15 	under Minnesota Rules, part 4668.0100, subparts 1 and 2, when offered to clients in a 
4.16 	housing with services establishment as described in paragraphs (b) to (e).
4.17 	(b) Training for tasks identified under Minnesota Rules, part 4668.0100, subparts 
4.18 	1 and 2, shall use a curriculum which meets the requirements in Minnesota Rules, part 
4.19 	4668.0130.
4.20 	(c) Competency evaluations for tasks identified under Minnesota Rules, part 
4.21 	4668.0100, subparts 1 and 2, must be completed and documented by a registered nurse.
4.22 	(d) Unlicensed personnel performing tasks identified under Minnesota Rules, part 
4.23 	4668.0100, subparts 1 and 2, shall be trained or demonstrate competency in the following 
4.24 	topics:
4.25 	(1) an overview of sections  144A.43 to  144A.47 and rules adopted thereunder; 
4.26 	(2) recognition and handling of emergencies and use of emergency services;
4.27 	(3) reporting the maltreatment of vulnerable minors or adults under sections  626.556
4.28 	and  626.557; 
4.29 	(4) home care bill of rights;
4.30 	(5) handling of clients' complaints and reporting of complaints to the Office of 
4.31 	Health Facility Complaints;
4.32 	(6) services of the ombudsman for older Minnesotans;
4.33 	(7) observation, reporting, and documentation of client status and of the care or 
4.34 	services provided;
4.35 	(8) basic infection control;
4.36 	(9) maintenance of a clean, safe, and healthy environment;
5.1 	(10) communication skills;
5.2 	(11) basic elements of body functioning and changes in body function that must be 
5.3 	reported to an appropriate health care professional; and
5.4 	(12) physical, emotional, and developmental needs of clients, and ways to work with 
5.5 	clients who have problems in these areas, including respect for the client, the client's 
5.6 	property, and the client's family.
5.7 	(e) Unlicensed personnel who administer medications must comply with rules 
5.8 	relating to the administration of medications in Minnesota Rules, part 4668.0100, subpart 
5.9 	2, except that unlicensed personnel need not comply with the requirements of Minnesota 
5.10 	Rules, part 4668.0100, subpart 5.
5.11 		Subd. 4.License required. (a) A housing with services establishment registered 
5.12 	under chapter 144D that is required to obtain a home care license must obtain an assisted 
5.13 	living a class F home care license according to this section or a class A or class E B license 
5.14 	according to rule. A housing with services establishment that obtains a class E B license 
5.15 	under this subdivision remains subject to the payment limitations in sections  256B.0913, 
5.16 	subdivision 5f, paragraph (b), and  256B.0915, subdivision 3d. 
5.17 	(b) A board and lodging establishment registered for special services as of December 
5.18 	31, 1996, and also registered as a housing with services establishment under chapter 
5.19 	144D, must deliver home care services according to sections  144A.43 to 144A.47, and 
5.20 	may apply for a waiver from requirements under Minnesota Rules, parts 4668.0002 to 
5.21 	4668.0240, to operate a licensed agency under the standards of section  157.17. Such 
5.22 	waivers as may be granted by the department will expire upon promulgation of home care 
5.23 	rules implementing section  144A.4605. 
5.24 	(c) An adult foster care provider licensed by the Department of Human Services and 
5.25 	registered under chapter 144D may continue to provide health-related services under its 
5.26 	foster care license until the promulgation of home care rules implementing this section.
5.27 	(d) An assisted living (c) A class F home care provider licensed under this section 
5.28 	must comply with the disclosure provisions of section  325F.72 to the extent they are 
5.29 	applicable. 
5.30 		Subd. 5.License fees. The license fees for assisted living class F home care 
5.31 	providers shall be as follows:
5.32 	(1) $125 annually for those providers serving a monthly average of 15 or fewer 
5.33 	clients, and for assisted living class F providers of all sizes during the first year of 
5.34 	operation;
5.35 	(2) $200 annually for those providers serving a monthly average of 16 to 30 clients;
6.1 	(3) $375 annually for those providers serving a monthly average of 31 to 50 clients; 
6.2 	and
6.3 	(4) $625 annually for those providers serving a monthly average of 51 or more 
6.4 	clients.
6.5 		Subd. 6.Waiver. Upon request of the home care provider, the commissioner may 
6.6 	waive the provisions of this section relating to registered nurse duties.

6.7 	EFFECTIVE DATE. This section is effective January 1, 2007.

6.8 	Sec. 4. Minnesota Statutes 2004, section 144D.01, is amended by adding a subdivision 
6.9 	to read:
6.10 		Subd. 2a.Arranged home care provider. "Arranged home care provider" means a 
6.11 	home care provider licensed under Minnesota Rules, chapter 4668, that provides services 
6.12 	to some or all of the residents of a housing with services establishment and that is either 
6.13 	the establishment itself or another entity with which the establishment has an arrangement.

6.14 	EFFECTIVE DATE. This section is effective January 1, 2007.

6.15 	Sec. 5. Minnesota Statutes 2004, section 144D.015, is amended to read:
6.16 	144D.015 ASSISTED LIVING FACILITY OR ASSISTED LIVING 
6.17 	RESIDENCE DEFINITION FOR PURPOSES OF LONG-TERM CARE 
6.18 	INSURANCE.
6.19 	For purposes of consistency with terminology commonly used in long-term 
6.20 	care insurance policies and notwithstanding chapter 144G, a housing with services 
6.21 	establishment that is registered under section  144D.03 and that holds, or contracts makes 
6.22 	arrangements with an individual or entity that holds, a any type of home care license and 
6.23 	all other licenses, permits, registrations, or other governmental approvals legally required 
6.24 	for delivery of the services the establishment offers or provides to its residents, constitutes 
6.25 	an "assisted living facility" or "assisted living residence." 

6.26 	EFFECTIVE DATE. This section is effective January 1, 2007.

6.27 	Sec. 6. Minnesota Statutes 2004, section 144D.02, is amended to read:
6.28 	144D.02 REGISTRATION REQUIRED.
6.29 	No entity may establish, operate, conduct, or maintain an elderly a housing with 
6.30 	services establishment in this state without registering and operating as required in 
6.31 	sections  144D.01 to  144D.06. 

7.1 	EFFECTIVE DATE. This section is effective January 1, 2007.

7.2 	Sec. 7. Minnesota Statutes 2004, section 144D.03, is amended by adding a subdivision 
7.3 	to read:
7.4 		Subd. 1a.Surcharge for injunctive relief actions. The commissioner shall assess 
7.5 	each housing with services establishment that offers or provides assisted living under 
7.6 	chapter 144G a surcharge on the annual registration fee paid under subdivision 1, to pay 
7.7 	for the commissioner's costs related to bringing actions for injunctive relief under section 
7.8 	144G.02, subdivision 2, paragraph (b), on or after July 1, 2007. The commissioner shall 
7.9 	assess surcharges using a sliding scale under which the surcharge amount increases with 
7.10 	the client capacity of an establishment. The commissioner shall adjust the surcharge as 
7.11 	necessary to recover the projected costs of bringing actions for injunctive relief. The 
7.12 	commissioner shall adjust the surcharge in accordance with section 16A.1285.

7.13 	EFFECTIVE DATE. This section is effective for annual registrations submitted 
7.14 	on or after July 1, 2007.

7.15 	Sec. 8. Minnesota Statutes 2004, section 144D.03, subdivision 2, is amended to read:
7.16 		Subd. 2.Registration information. The establishment shall provide the following 
7.17 	information to the commissioner in order to be registered:
7.18 	(1) the business name, street address, and mailing address of the establishment;
7.19 	(2) the name and mailing address of the owner or owners of the establishment and, if 
7.20 	the owner or owners are not natural persons, identification of the type of business entity 
7.21 	of the owner or owners, and the names and addresses of the officers and members of the 
7.22 	governing body, or comparable persons for partnerships, limited liability corporations, or 
7.23 	other types of business organizations of the owner or owners;
7.24 	(3) the name and mailing address of the managing agent, whether through 
7.25 	management agreement or lease agreement, of the establishment, if different from the 
7.26 	owner or owners, and the name of the on-site manager, if any;
7.27 	(4) verification that the establishment has entered into an elderly a housing with 
7.28 	services contract, as required in section  144D.04, with each resident or resident's 
7.29 	representative; 
7.30 	(5) verification that the establishment is complying with the requirements of section  
7.31 	325F.72, if applicable; 
7.32 	(6) the name and address of at least one natural person who shall be responsible 
7.33 	for dealing with the commissioner on all matters provided for in sections  144D.01 to  
7.34 	144D.06, and on whom personal service of all notices and orders shall be made, and who 
8.1 	shall be authorized to accept service on behalf of the owner or owners and the managing 
8.2 	agent, if any; and 
8.3 	(7) the signature of the authorized representative of the owner or owners or, if 
8.4 	the owner or owners are not natural persons, signatures of at least two authorized 
8.5 	representatives of each owner, one of which shall be an officer of the owner.
8.6 	Personal service on the person identified under clause (6) by the owner or owners in 
8.7 	the registration shall be considered service on the owner or owners, and it shall not be a 
8.8 	defense to any action that personal service was not made on each individual or entity. The 
8.9 	designation of one or more individuals under this subdivision shall not affect the legal 
8.10 	responsibility of the owner or owners under sections  144D.01 to  144D.06. 

8.11 	EFFECTIVE DATE. This section is effective January 1, 2007.

8.12 	Sec. 9. Minnesota Statutes 2004, section 144D.04, is amended to read:
8.13 	144D.04 ELDERLY HOUSING WITH SERVICES CONTRACTS.
8.14 		Subdivision 1.Contract required. No elderly housing with services establishment 
8.15 	may operate in this state unless a written elderly housing with services contract, as defined 
8.16 	in subdivision 2, is executed between the establishment and each resident or resident's 
8.17 	representative and unless the establishment operates in accordance with the terms of the 
8.18 	contract. The resident or the resident's representative shall be given a complete copy of 
8.19 	the contract and all supporting documents and attachments and any changes whenever 
8.20 	changes are made.
8.21 		Subd. 2.Contents of contract. An elderly A housing with services contract, which 
8.22 	need not be entitled as such to comply with this section, shall include at least the following 
8.23 	elements in itself or through supporting documents or attachments:
8.24 	(1) the name, street address, and mailing address of the establishment;
8.25 	(2) the name and mailing address of the owner or owners of the establishment and, if 
8.26 	the owner or owners is not a natural person, identification of the type of business entity 
8.27 	of the owner or owners;
8.28 	(3) the name and mailing address of the managing agent, through management 
8.29 	agreement or lease agreement, of the establishment, if different from the owner or owners;
8.30 	(4) the name and address of at least one natural person who is authorized to accept 
8.31 	service of process on behalf of the owner or owners and managing agent;
8.32 	(5) a statement describing the registration and licensure status of the establishment 
8.33 	and any provider providing health-related or supportive services under an arrangement 
8.34 	with the establishment;
9.1 	(6) the term of the contract;
9.2 	(7) a description of the services to be provided to the resident in the base rate to 
9.3 	be paid by resident;
9.4 	(8) a description of any additional services, including home care services, available 
9.5 	for an additional fee from the establishment directly or through arrangements with the 
9.6 	establishment, and a schedule of fees charged for these services;
9.7 	(9) fee schedules outlining the cost of any additional services;
9.8 	(10) (9) a description of the process through which the contract may be modified, 
9.9 	amended, or terminated;
9.10 	(11) (10) a description of the establishment's complaint resolution process available 
9.11 	to residents including the toll-free complaint line for the Office of Ombudsman for Older 
9.12 	Minnesotans;
9.13 	(12) (11) the resident's designated representative, if any;
9.14 	(13) (12) the establishment's referral procedures if the contract is terminated;
9.15 	(14) criteria (13) requirements of residency used by the establishment to determine 
9.16 	who may reside or continue to reside in the elderly housing with services establishment;
9.17 	(15) (14) billing and payment procedures and requirements;
9.18 	(16) (15) a statement regarding the ability of residents to receive services from 
9.19 	service providers with whom the establishment does not have an arrangement; and
9.20 	(17) (16) a statement regarding the availability of public funds for payment for 
9.21 	residence or services in the establishment; and
9.22 	(17) a statement regarding the availability of and contact information for long- 
9.23 	term care consultation services under section 256B.0911 in the county in which the 
9.24 	establishment is located.
9.25 		Subd. 3.Contracts in permanent files. Elderly Housing with services contracts 
9.26 	and related documents executed by each resident or resident's representative shall be 
9.27 	maintained by the establishment in files from the date of execution until three years after 
9.28 	the contract is terminated. The contracts and the written disclosures required under section  
9.29 	325F.72, if applicable, shall be made available for on-site inspection by the commissioner 
9.30 	upon request at any time. 

9.31 	EFFECTIVE DATE. This section is effective January 1, 2007.

9.32 	Sec. 10. [144D.045] INFORMATION CONCERNING ARRANGED HOME 
9.33 	CARE PROVIDERS.
9.34 	If a housing with services establishment has one or more arranged home care 
9.35 	providers, the establishment shall arrange to have that arranged home care provider deliver 
10.1 	the following information in writing to a prospective resident, prior to the date on which 
10.2 	the prospective resident executes a contract with the establishment or the prospective 
10.3 	resident's move-in date, whichever is earlier:
10.4 	(1) the name, mailing address, and telephone number of the arranged home care 
10.5 	provider;
10.6 	(2) the name and mailing address of at least one natural person who is authorized to 
10.7 	accept service of process on behalf of the entity described in clause (1);
10.8 	(3) a description of the process through which a home care service agreement or 
10.9 	service plan between a resident and the arranged home care provider, if any, may be 
10.10 	modified, amended, or terminated;
10.11 	(4) the arranged home care provider's billing and payment procedures and 
10.12 	requirements; and
10.13 	(5) any limits to the services available from the arranged provider.

10.14 	EFFECTIVE DATE. This section is effective January 1, 2007.

10.15 	Sec. 11. Minnesota Statutes 2004, section 144D.05, is amended to read:
10.16 	144D.05 AUTHORITY OF COMMISSIONER.
10.17 	The commissioner shall, upon receipt of information which may indicate the failure 
10.18 	of the elderly housing with services establishment, a resident, a resident's representative, 
10.19 	or a service provider to comply with a legal requirement to which one or more of them 
10.20 	may be subject, make appropriate referrals to other governmental agencies and entities 
10.21 	having jurisdiction over the subject matter. The commissioner may also make referrals 
10.22 	to any public or private agency the commissioner considers available for appropriate 
10.23 	assistance to those involved.
10.24 	The commissioner shall have standing to bring an action for injunctive relief 
10.25 	in the district court in the district in which an establishment is located to compel the 
10.26 	elderly housing with services establishment to meet the requirements of this chapter or 
10.27 	other requirements of the state or of any county or local governmental unit to which the 
10.28 	establishment is otherwise subject. Proceedings for securing an injunction may be brought 
10.29 	by the commissioner through the attorney general or through the appropriate county 
10.30 	attorney. The sanctions in this section do not restrict the availability of other sanctions.

10.31 	EFFECTIVE DATE. This section is effective January 1, 2007.

11.1 	Sec. 12. Minnesota Statutes 2004, section 144D.065, is amended to read:
11.2 	144D.065 ESTABLISHMENTS THAT SERVE PERSONS WITH 
11.3 	ALZHEIMER'S DISEASE OR RELATED DISORDERS.
11.4 	(a) If a housing with services establishment registered under this chapter markets or 
11.5 	otherwise promotes services for persons with Alzheimer's disease or related disorders, 
11.6 	whether in a segregated or general unit, the facility's establishment's direct care staff and 
11.7 	their supervisors must be trained in dementia care.
11.8 	(b) Areas of required training include:
11.9 	(1) an explanation of Alzheimer's disease and related disorders;
11.10 	(2) assistance with activities of daily living;
11.11 	(3) problem solving with challenging behaviors; and
11.12 	(4) communication skills.
11.13 	(c) The establishment shall provide to consumers in written or electronic form a 
11.14 	description of the training program, the categories of employees trained, the frequency 
11.15 	of training, and the basic topics covered. This information satisfies the disclosure 
11.16 	requirements of section  325F.72, subdivision 2, clause (4). 

11.17 	EFFECTIVE DATE. This section is effective January 1, 2007.

11.18 	Sec. 13. [144G.01] DEFINITIONS.
11.19 		Subdivision 1.Scope; other definitions. For purposes of sections 144G.01 to 
11.20 	144G.05, the following definitions apply. In addition, the definitions provided in section 
11.21 	144D.01 also apply to sections 144G.01 to 144G.05.
11.22 		Subd. 2.Assisted living. "Assisted living" means a service or package of services 
11.23 	advertised, marketed, or otherwise described, offered, or promoted using the phrase 
11.24 	"assisted living" either alone or in combination with other words, whether orally or in 
11.25 	writing, and which is subject to the requirements of this chapter.
11.26 		Subd. 3.Assisted living client. "Assisted living client" or "client" means a housing 
11.27 	with services resident who receives assisted living that is subject to the requirements 
11.28 	of this chapter.
11.29 		Subd. 4.Commissioner. "Commissioner" means the commissioner of health.

11.30 	EFFECTIVE DATE. This section is effective January 1, 2007.

11.31 	Sec. 14. [144G.02] ASSISTED LIVING; PROTECTED TITLE; RESTRICTION 
11.32 	ON USE; REGULATORY FUNCTIONS.
12.1 		Subdivision 1.Protected title; restriction on use. No person or entity may use the 
12.2 	phrase "assisted living," whether alone or in combination with other words and whether 
12.3 	orally or in writing, to advertise, market, or otherwise describe, offer, or promote itself, or 
12.4 	any housing, service, service package, or program that it provides within this state, unless 
12.5 	the person or entity is a housing with services establishment that meets the requirements of 
12.6 	this chapter, or is a person or entity that provides some or all components of assisted living 
12.7 	that meet the requirements of this chapter. A person or entity entitled to use the phrase 
12.8 	"assisted living" shall use the phrase only in the context of its participation in assisted 
12.9 	living that meets the requirements of this chapter. A housing with services establishment 
12.10 	offering or providing assisted living that is not made available to residents in all of its 
12.11 	housing units shall identify the number or location of the units in which assisted living 
12.12 	is available, and may not use the term "assisted living" in the name of the establishment 
12.13 	registered with the commissioner under chapter 144D, or in the name the establishment 
12.14 	uses to identify itself to residents or the public.
12.15 		Subd. 2.Authority of commissioner. (a) The commissioner, upon receipt of 
12.16 	information that may indicate the failure of a housing with services establishment, the 
12.17 	arranged home care provider, an assisted living client, or an assisted living client's 
12.18 	representative to comply with a legal requirement to which one or more of the entities may 
12.19 	be subject, shall make appropriate referrals to other governmental agencies and entities 
12.20 	having jurisdiction over the subject matter. The commissioner may also make referrals 
12.21 	to any public or private agency the commissioner considers available for appropriate 
12.22 	assistance to those involved.
12.23 	(b) In addition to the authority with respect to licensed home care providers under 
12.24 	sections 144A.45 and 144A.46 and with respect to housing with services establishments 
12.25 	under chapter 144D, the commissioner shall have standing to bring an action for injunctive 
12.26 	relief in the district court in the district in which a housing with services establishment 
12.27 	is located to compel the housing with services establishment or the arranged home care 
12.28 	provider to meet the requirements of this chapter or other requirements of the state or of 
12.29 	any county or local governmental unit to which the establishment or arranged home care 
12.30 	provider is otherwise subject. Proceedings for securing an injunction may be brought by 
12.31 	the commissioner through the attorney general or through the appropriate county attorney. 
12.32 	The sanctions in this section do not restrict the availability of other sanctions.

12.33 	EFFECTIVE DATE. This section is effective January 1, 2007.

12.34 	Sec. 15. [144G.03] ASSISTED LIVING REQUIREMENTS.
13.1 		Subdivision 1.Verification in annual registration. A registered housing with 
13.2 	services establishment using the phrase "assisted living," pursuant to section 144G.02, 
13.3 	subdivision 1, shall verify to the commissioner in its annual registration pursuant to chapter 
13.4 	144D that the establishment is complying with sections 144G.01 to 144G.05, as applicable.
13.5 		Subd. 2.Minimum requirements for assisted living. (a) Assisted living shall 
13.6 	be provided or made available only to individuals residing in a registered housing with 
13.7 	services establishment. Except as expressly stated in this chapter, a person or entity 
13.8 	offering assisted living may define the available services and may offer assisted living to 
13.9 	all or some of the residents of a housing with services establishment. The services that 
13.10 	comprise assisted living may be provided or made available directly by a housing with 
13.11 	services establishment or by persons or entities with which the housing with services 
13.12 	establishment has made arrangements.
13.13 	(b) A person or entity entitled to use the phrase "assisted living," according to 
13.14 	section 144G.02, subdivision 1, shall do so only with respect to a housing with services 
13.15 	establishment, or a service, service package, or program available within a housing with 
13.16 	services establishment that, at a minimum:
13.17 	(1) provides or makes available health-related services under a class A or class F 
13.18 	home care license. At a minimum, health-related services must include:
13.19 	(i) assistance with self-administration of medication as defined in Minnesota Rules, 
13.20 	part 4668.0003, subpart 2a, or medication administration as defined in Minnesota Rules, 
13.21 	part 4668.0003, subpart 21a; and
13.22 	(ii) assistance with at least three of the following seven activities of daily living: 
13.23 	bathing, dressing, grooming, eating, transferring, continence care, and toileting. 
13.24 	All health-related services shall be provided in a manner that complies with applicable 
13.25 	home care licensure requirements in chapter 144A, sections 148.171 to 148.285, and 
13.26 	Minnesota Rules, chapter 4668;
13.27 	(2) provides necessary assessments of the physical and cognitive needs of assisted 
13.28 	living clients by a registered nurse, as required by applicable home care licensure 
13.29 	requirements in chapter 144A, sections 148.171 to 148.285, and Minnesota Rules, chapter 
13.30 	4668;
13.31 	(3) has and maintains a system for delegation of health care activities to unlicensed 
13.32 	assistive health care personnel by a registered nurse, including supervision and evaluation 
13.33 	of the delegated activities as required by applicable home care licensure requirements in 
13.34 	chapter 144A, sections 148.171 to 148.285, and Minnesota Rules, chapter 4668;
13.35 	(4) provides staff access to an on-call registered nurse 24 hours per day, seven 
13.36 	days per week;
14.1 	(5) has and maintains a system to check on each assisted living client at least daily;
14.2 	(6) provides a means for assisted living clients to request assistance for health and 
14.3 	safety needs 24 hours per day, seven days per week, from the establishment or a person or 
14.4 	entity with which the establishment has made arrangements;
14.5 	(7) has a person or persons available 24 hours per day, seven days per week, who 
14.6 	is responsible for responding to the requests of assisted living clients for assistance with 
14.7 	health or safety needs, who shall be:
14.8 	(i)	awake;
14.9 	(ii) located in the same building, in an attached building, or on a contiguous campus 
14.10 	with the housing with services establishment in order to respond within a reasonable 
14.11 	amount of time;
14.12 	(iii) capable of communicating with assisted living clients;
14.13 	(iv) capable of recognizing the need for assistance;
14.14 	(v) capable of providing either the assistance required or summoning the appropriate 
14.15 	assistance; and
14.16 	(vi) capable of following directions;
14.17 	(8) offers to provide or make available at least the following supportive services 
14.18 	to assisted living clients:
14.19 	(i) two meals per day;
14.20 	(ii) weekly housekeeping;
14.21 	(iii) weekly laundry service;
14.22 	(iv) upon the request of the client, reasonable assistance with arranging for 
14.23 	transportation to medical and social services appointments, and the name of or other 
14.24 	identifying information about the person or persons responsible for providing this 
14.25 	assistance;
14.26 	(v) upon the request of the client, reasonable assistance with accessing community 
14.27 	resources and social services available in the community, and the name of or other 
14.28 	identifying information about the person or persons responsible for providing this 
14.29 	assistance; and
14.30 	(vi) periodic opportunities for socialization; and
14.31 	(9) makes available to all prospective and current assisted living clients information 
14.32 	consistent with the uniform format and the required components adopted by the 
14.33 	commissioner under section 144G.06. This information must be made available beginning 
14.34 	no later than six months after the commissioner makes the uniform format and required 
14.35 	components available to providers according to section 144G.06.
15.1 		Subd. 3.Exemption from awake-staff requirement. (a) A housing with services 
15.2 	establishment that offers or provides assisted living is exempt from the requirement in 
15.3 	subdivision 2, paragraph (b), clause (7), item (i), that the person or persons available and 
15.4 	responsible for responding to requests for assistance must be awake, if the establishment 
15.5 	meets the following requirements:
15.6 	(1) the establishment has a maximum capacity to serve 12 or fewer assisted living 
15.7 	clients;
15.8 	(2) the person or persons available and responsible for responding to requests for 
15.9 	assistance are physically present within the housing with services establishment in which 
15.10 	the assisted living clients reside;
15.11 	(3) the establishment has a system in place that is compatible with the health, safety, 
15.12 	and welfare of the establishment's assisted living clients;
15.13 	(4) the establishment's housing with services contract, as required by section 
15.14 	144D.04, includes a statement disclosing the establishment's qualification for, and 
15.15 	intention to rely upon, this exemption;
15.16 	(5) the establishment files with the commissioner, for purposes of public information 
15.17 	but not review or approval by the commissioner, a statement describing how the 
15.18 	establishment meets the conditions in clauses (1) to (4), and makes a copy of this statement 
15.19 	available to actual and prospective assisted living clients; and 
15.20 	(6) the establishment indicates on its housing with services registration, under 
15.21 	section 144D.02 or 144D.03, as applicable, that it qualifies for and intends to rely upon the 
15.22 	exemption under this subdivision.
15.23 		Subd. 4.Nursing assessment. (a) A housing with services establishment offering or 
15.24 	providing assisted living shall:
15.25 	(1) offer to have the arranged home care provider conduct a nursing assessment by 
15.26 	a registered nurse of the physical and cognitive needs of the prospective resident and 
15.27 	propose a service agreement or service plan prior to the date on which a prospective 
15.28 	resident executes a contract with a housing with services establishment or the date on 
15.29 	which a prospective resident moves in, whichever is earlier; and
15.30 	(2) inform the prospective resident of the availability of and contact information for 
15.31 	long-term care consultation services under section 256B.0911, prior to the date on which a 
15.32 	prospective resident executes a contract with a housing with services establishment or the 
15.33 	date on which a prospective resident moves in, whichever is earlier.
15.34 	(b) An arranged home care provider is not obligated to conduct a nursing assessment 
15.35 	by a registered nurse when requested by a prospective resident if either the geographic 
15.36 	distance between the prospective resident and the provider, or urgent or unexpected 
16.1 	circumstances, do not permit the assessment to be conducted prior to the date on which 
16.2 	the prospective resident executes a contract or moves in, whichever is earlier. When such 
16.3 	circumstances occur, the arranged home care provider shall offer to conduct a telephone 
16.4 	conference whenever reasonably possible. 
16.5 	(c) The arranged home care provider shall comply with applicable home care 
16.6 	licensure requirements in chapter 144A, sections 148.171 to 148.285, and Minnesota 
16.7 	Rules, chapter 4668, with respect to the provision of a nursing assessment prior to the 
16.8 	delivery of nursing services and the execution of a home care service plan or service 
16.9 	agreement.
16.10 		Subd. 5.Assistance with arranged home care provider. The housing with services 
16.11 	establishment shall provide each assisted living client with identifying information about a 
16.12 	person or persons reasonably available to assist the client with concerns the client may 
16.13 	have with respect to the services provided by the arranged home care provider. The 
16.14 	establishment shall keep each assisted living client reasonably informed of any changes in 
16.15 	the personnel referenced in this subdivision. Upon request of the assisted living client, 
16.16 	such personnel or designee shall provide reasonable assistance to the assisted living client 
16.17 	in addressing concerns regarding services provided by the arranged home care provider.
16.18 		Subd. 6.Termination of housing with services contract. If a housing with 
16.19 	services establishment terminates a housing with services contract with an assisted living 
16.20 	client, the establishment shall provide the assisted living client, and the legal or designated 
16.21 	representative of the assisted living client, if any, with a written notice of termination 
16.22 	which includes the following information:
16.23 	(1) the effective date of termination;
16.24 	(2) the section of the contract that authorizes the termination;
16.25 	(3) without extending the termination notice period, an affirmative offer to meet with 
16.26 	the assisted living client and, if applicable, client representatives, within no more than five 
16.27 	business days of the date of the termination notice to discuss the termination;
16.28 	(4) an explanation that:
16.29 	(i) the assisted living client must vacate the apartment, along with all personal 
16.30 	possessions, on or before the effective date of termination;
16.31 	(ii) failure to vacate the apartment by the date of termination may result in the filing 
16.32 	of an eviction action in court by the establishment, and that the assisted living client may 
16.33 	present a defense, if any, to the court at that time; and 
16.34 	(iii) the assisted living client may seek legal counsel in connection with the notice 
16.35 	of termination;
17.1 	(5) a statement that, with respect to the notice of termination, reasonable 
17.2 	accommodation is available for the disability of the assisted living client, if any; and
17.3 	(6) the name and contact information of the representative of the establishment 
17.4 	with whom the assisted living client or client representatives may discuss the notice of 
17.5 	termination.

17.6 	EFFECTIVE DATE. This section is effective January 1, 2007.

17.7 	Sec. 16. [144G.04] RESERVATION OF RIGHTS.
17.8 		Subdivision 1.Use of services. Nothing in this chapter requires an assisted living 
17.9 	client to utilize any service provided or made available in assisted living.
17.10 		Subd. 2.Housing with services contracts. Nothing in this chapter requires a 
17.11 	housing with services establishment to execute or refrain from terminating a housing with 
17.12 	services contract with a prospective or current resident who is unable or unwilling to meet 
17.13 	the requirements of residency, with or without assistance. 
17.14 		Subd. 3.Provision of services. Nothing in this chapter requires the arranged home 
17.15 	care provider to offer or continue to provide services under a service agreement or service 
17.16 	plan to a prospective or current resident of the establishment whose needs cannot be 
17.17 	met by the arranged home care provider.
17.18 		Subd. 4.Altering operations; service packages. Nothing in this chapter requires 
17.19 	a housing with services establishment or arranged home care provider offering assisted 
17.20 	living to fundamentally alter the nature of the operations of the establishment or the 
17.21 	provider in order to accommodate the request or need for facilities or services by any 
17.22 	assisted living client, or to refrain from requiring, as a condition of residency, that an 
17.23 	assisted living client pay for a package of assisted living services even if the client does 
17.24 	not choose to utilize all or some of the services in the package.

17.25 	EFFECTIVE DATE. This section is effective January 1, 2007.

17.26 	Sec. 17. [144G.05] REIMBURSEMENT UNDER ASSISTED LIVING SERVICE 
17.27 	PACKAGES.
17.28 	Notwithstanding the provisions of this chapter, the requirements for the Elderly 
17.29 	Waiver program's assisted living payment rates under section 256B.0915, subdivision 
17.30 	3e, shall continue to be effective and providers who do not meet the requirements of 
17.31 	this chapter may continue to receive payment under section 256B.0915, subdivision 3e, 
17.32 	as long as they continue to meet the definitions and standards for assisted living and 
17.33 	assisted living plus set forth in the federally approved Elderly Home and Community 
18.1 	Based Services Waiver Program (Control Number 0025.91). Providers of assisted living 
18.2 	for the Community Alternatives for Disabled Individuals (CADI) and Traumatic Brain 
18.3 	Injury (TBI) waivers shall continue to receive payment as long as they continue to meet 
18.4 	the definitions and standards for assisted living and assisted living plus set forth in the 
18.5 	federally approved CADI and TBI waiver plans.

18.6 	EFFECTIVE DATE. This section is effective January 1, 2007.

18.7 	Sec. 18. [144G.06] UNIFORM CONSUMER INFORMATION GUIDE.
18.8 	(a) The commissioner of health shall establish an advisory committee consisting 
18.9 	of representatives of consumers, providers, county and state officials, and other 
18.10 	groups the commissioner considers appropriate. The advisory committee shall present 
18.11 	recommendations to the commissioner on:
18.12 	(1) a format for a guide to be used by individual providers of assisted living, as 
18.13 	defined in section 144G.01, that includes information about services offered by that 
18.14 	provider, service costs, and other relevant provider-specific information, as well as a 
18.15 	statement of philosophy and values associated with assisted living, presented in uniform 
18.16 	categories that facilitate comparison with guides issued by other providers; and
18.17 	(2) requirements for informing assisted living clients, as defined in section 144G.01, 
18.18 	of their applicable legal rights.
18.19 	(b) The commissioner, after reviewing the recommendations of the advisory 
18.20 	committee, shall adopt a uniform format for the guide to be used by individual providers, 
18.21 	and the required components of materials to be used by providers to inform assisted 
18.22 	living clients of their legal rights, and shall make the uniform format and the required 
18.23 	components available to assisted living providers.

18.24 	Sec. 19. REVISOR'S INSTRUCTION.
 18.25 	(a) The revisor of statutes shall strike all references to the "Class E assisted living 
18.26 	home care programs license," "Class E license," and similar terms in Minnesota Rules, 
18.27 	chapters 4668 and 4669. In sections affected by this instruction, the revisor may make 
18.28 	changes necessary to correct the punctuation, grammar, or structure of the remaining text 
18.29 	and preserve its meaning.
18.30 	(b) The revisor of statutes shall change the term "assisted living home care provider," 
18.31 	"assisted living license," and similar terms to "Class F home care provider," "Class F 
18.32 	license," and similar terms to "Class F home care provider," "Class F license," and similar 
18.33 	terms, in Minnesota Rules, chapter 4668. In sections affected by this instruction, the 
19.1 	revisor may make changes necessary to correct the punctuation, grammar, or structure of 
19.2 	the remaining text and preserve its meaning.

19.3 	EFFECTIVE DATE. This section is effective January 1, 2007.

19.4 	Sec. 20. APPROPRIATION; ASSISTED LIVING.
 19.5 	(a) $140,000 is appropriated from the state government special revenue fund to 
19.6 	the commissioner of health for the biennium ending June 30, 2007, for costs related 
19.7 	to bringing actions for injunctive relief under Minnesota Statutes, section 144G.02, 
19.8 	subdivision 2, paragraph (b).
19.9 	(b) The state government special revenue base is increased by $140,000 in fiscal 
19.10 	year 2008 and $140,000 in fiscal year 2009.

19.11 	Sec. 21.  REPEALER.
 19.12 	Minnesota Rules, part 4668.0215, is repealed effective January 1, 2007.

19.13 	ARTICLE 2
19.14 	LONG-TERM CARE

19.15 	Section 1. Minnesota Statutes 2004, section 144.0724, subdivision 3, is amended to 
19.16 	read:
19.17 		Subd. 3.Resident reimbursement classifications. (a) Resident reimbursement 
19.18 	classifications shall be based on the minimum data set, version 2.0 assessment instrument, 
19.19 	or its successor version mandated by the Centers for Medicare and Medicaid Services 
19.20 	that nursing facilities are required to complete for all residents. The commissioner of 
19.21 	health shall establish resident classes according to the 34 group, resource utilization 
19.22 	groups, version III or RUG-III model. Resident classes must be established based on the 
19.23 	individual items on the minimum data set and must be completed according to the facility 
19.24 	manual for case mix classification issued by the Minnesota Department of Health. The 
19.25 	facility manual for case mix classification shall be drafted by the Minnesota Department 
19.26 	of Health and presented to the chairs of health and human services legislative committees 
19.27 	by December 31, 2001.
19.28 	(b) Each resident must be classified based on the information from the minimum 
19.29 	data set according to general domains in clauses (1) to (7):
19.30 	(1) extensive services where a resident requires intravenous feeding or medications, 
19.31 	suctioning, or tracheostomy care, or is on a ventilator or respirator;
19.32 	(2) rehabilitation where a resident requires physical, occupational, or speech therapy;
20.1 	(3) special care where a resident has cerebral palsy; quadriplegia; multiple sclerosis; 
20.2 	pressure ulcers; ulcers; fever with vomiting, weight loss, pneumonia, or dehydration; 
20.3 	surgical wounds with treatment; or tube feeding and aphasia; or is receiving radiation 
20.4 	therapy;
20.5 	(4) clinically complex status where a resident has tube feeding, burns, coma, 
20.6 	septicemia, pneumonia, internal bleeding, chemotherapy, dialysis, oxygen, transfusions, 
20.7 	foot infections or lesions with treatment, heiplegia/hemiparesis hemiplegia/hemiparesis, 
20.8 	physician visits or order changes, or diabetes with injections and order changes;
20.9 	(5) impaired cognition where a resident has poor cognitive performance;
20.10 	(6) behavior problems where a resident exhibits wandering or socially inappropriate 
20.11 	or disruptive behavior, has hallucinations or delusions, is physically or verbally abusive 
20.12 	toward others, or resists care, unless the resident's other condition would place the resident 
20.13 	in other categories; and
20.14 	(7) reduced physical functioning where a resident has no special clinical conditions.
20.15 	(c) The commissioner of health shall establish resident classification according to a 
20.16 	34 group model based on the information on the minimum data set and within the general 
20.17 	domains listed in paragraph (b), clauses (1) to (7). Detailed descriptions of each resource 
20.18 	utilization group shall be defined in the facility manual for case mix classification issued 
20.19 	by the Minnesota Department of Health. The 34 groups are described as follows:
20.20 	(1) SE3: requires four or five extensive services;
20.21 	(2) SE2: requires two or three extensive services;
20.22 	(3) SE1: requires one extensive service;
20.23 	(4) RAD: requires rehabilitation services and is dependent in activity of daily living 
20.24 	(ADL) at a count of 17 or 18;
20.25 	(5) RAC: requires rehabilitation services and ADL count is 14 to 16;
20.26 	(6) RAB: requires rehabilitation services and ADL count is ten to 13;
20.27 	(7) RAA: requires rehabilitation services and ADL count is four to nine;
20.28 	(8) SSC: requires special care and ADL count is 17 or 18;
20.29 	(9) SSB: requires special care and ADL count is 15 or 16;
20.30 	(10) SSA: requires special care and ADL count is seven to 14;
20.31 	(11) CC2: clinically complex with depression and ADL count is 17 or 18;
20.32 	(12) CC1: clinically complex with no depression and ADL count is 17 or 18;
20.33 	(13) CB2: clinically complex with depression and ADL count is 12 to 16;
20.34 	(14) CB1: clinically complex with no depression and ADL count is 12 to 16;
20.35 	(15) CA2: clinically complex with depression and ADL count is four to 11;
20.36 	(16) CA1: clinically complex with no depression and ADL count is four to 11;
21.1 	(17) IB2: impaired cognition with nursing rehabilitation and ADL count is six to ten;
21.2 	(18) IB1: impaired cognition with no nursing rehabilitation and ADL count is six 
21.3 	to ten;
21.4 	(19) IA2: impaired cognition with nursing rehabilitation and ADL count is four or 
21.5 	five;
21.6 	(20) IA1: impaired cognition with no nursing rehabilitation and ADL count is four 
21.7 	or five;
21.8 	(21) BB2: behavior problems with nursing rehabilitation and ADL count is six to ten;
21.9 	(22) BB1: behavior problems with no nursing rehabilitation and ADL count is 
21.10 	six to ten;
21.11 	(23) BA2: behavior problems with nursing rehabilitation and ADL count is four to 
21.12 	five;
21.13 	(24) BA1: behavior problems with no nursing rehabilitation and ADL count is 
21.14 	four to five;
21.15 	(25) PE2: reduced physical functioning with nursing rehabilitation and ADL count 
21.16 	is 16 to 18;
21.17 	(26) PE1: reduced physical functioning with no nursing rehabilitation and ADL 
21.18 	count is 16 to 18;
21.19 	(27) PD2: reduced physical functioning with nursing rehabilitation and ADL count 
21.20 	is 11 to 15;
21.21 	(28) PD1: reduced physical functioning with no nursing rehabilitation and ADL 
21.22 	count is 11 to 15;
21.23 	(29) PC2: reduced physical functioning with nursing rehabilitation and ADL count 
21.24 	is nine or ten;
21.25 	(30) PC1: reduced physical functioning with no nursing rehabilitation and ADL 
21.26 	count is nine or ten;
21.27 	(31) PB2: reduced physical functioning with nursing rehabilitation and ADL count 
21.28 	is six to eight;
21.29 	(32) PB1: reduced physical functioning with no nursing rehabilitation and ADL 
21.30 	count is six to eight;
21.31 	(33) PA2: reduced physical functioning with nursing rehabilitation and ADL count 
21.32 	is four or five; and
21.33 	(34) PA1: reduced physical functioning with no nursing rehabilitation and ADL 
21.34 	count is four or five.

21.35 	Sec. 2. Minnesota Statutes 2004, section 144.0724, subdivision 4, is amended to read:
22.1 		Subd. 4.Resident assessment schedule. (a) A facility must conduct and 
22.2 	electronically submit to the commissioner of health case mix assessments that conform 
22.3 	with the assessment schedule defined by Code of Federal Regulations, title 42, section  
22.4 	483.20, and published by the United States Department of Health and Human Services, 
22.5 	Centers for Medicare and Medicaid Services, in the Long Term Care Assessment 
22.6 	Instrument User's Manual, version 2.0, October 1995, and subsequent clarifications made 
22.7 	in the Long-Term Care Assessment Instrument Questions and Answers, version 2.0, 
22.8 	August 1996. The commissioner of health may substitute successor manuals or question 
22.9 	and answer documents published by the United States Department of Health and Human 
22.10 	Services, Centers for Medicare and Medicaid Services, to replace or supplement the 
22.11 	current version of the manual or document. 
22.12 	(b) The assessments used to determine a case mix classification for reimbursement 
22.13 	include the following:
22.14 	(1) a new admission assessment must be completed by day 14 following admission;
22.15 	(2) an annual assessment must be completed within 366 days of the last 
22.16 	comprehensive assessment;
22.17 	(3) a significant change assessment must be completed within 14 days of the 
22.18 	identification of a significant change; and
22.19 	(4) the second quarterly assessment following either a new admission assessment, 
22.20 	an annual assessment, or a significant change assessment, and all quarterly assessments 
22.21 	beginning October 1, 2006. Each quarterly assessment must be completed within 92 
22.22 	days of the previous assessment.

22.23 	Sec. 3. Minnesota Statutes 2005 Supplement, section 144A.071, subdivision 1a, 
22.24 	is amended to read:
22.25 		Subd. 1a.Definitions. For purposes of sections 144A.071 to 144A.073, the 
22.26 	following terms have the meanings given them:
22.27 	(a) "Attached fixtures" has the meaning given in Minnesota Rules, part 9549.0020, 
22.28 	subpart 6.
22.29 	(b) "Buildings" has the meaning given in Minnesota Rules, part 9549.0020, subpart 
22.30 	7.
22.31 	(c) "Capital assets" has the meaning given in section 256B.421, subdivision 16.
22.32 	(d) "Commenced construction" means that all of the following conditions were met: 
22.33 	the final working drawings and specifications were approved by the commissioner of 
22.34 	health; the construction contracts were let; a timely construction schedule was developed, 
23.1 	stipulating dates for beginning, achieving various stages, and completing construction; 
23.2 	and all zoning and building permits were applied for.
23.3 	(e) "Completion date" means the date on which a certificate of occupancy clearance 
23.4 	for the construction project is issued for a construction project, or if a certificate of 
23.5 	occupancy clearance for the construction project is not required, the date on which the 
23.6 	construction project is assets are available for facility use.
23.7 	(f) "Construction" means any erection, building, alteration, reconstruction, 
23.8 	modernization, or improvement necessary to comply with the nursing home licensure 
23.9 	rules.
23.10 	(g) "Construction project" means:
23.11 	(1) a capital asset addition to, or replacement of a nursing home or certified boarding 
23.12 	care home that results in new space or the remodeling of or renovations to existing 
23.13 	facility space; and
23.14 	(2) the remodeling or renovation of existing facility space the use of which is 
23.15 	modified as a result of the project described in clause (1). This existing space and the 
23.16 	project described in clause (1) must be used for the functions as designated on the 
23.17 	construction plans on completion of the project described in clause (1) for a period of 
23.18 	not less than 24 months.
23.19 	(h) "Depreciation guidelines" means the most recent publication of "The Estimated 
23.20 	Useful Lives of Depreciable Hospital Assets," issued by the American Hospital 
23.21 	Association, 840 North Lake Shore Drive, Chicago, Illinois, 60611.
23.22 	(i) "New licensed" or "new certified beds" means:
23.23 	(1) newly constructed beds in a facility or the construction of a new facility that 
23.24 	would increase the total number of licensed nursing home beds or certified boarding 
23.25 	care or nursing home beds in the state; or
23.26 	(2) newly licensed nursing home beds or newly certified boarding care or nursing 
23.27 	home beds that result from remodeling of the facility that involves relocation of beds but 
23.28 	does not result in an increase in the total number of beds, except when the project involves 
23.29 	the upgrade of boarding care beds to nursing home beds, as defined in section 144A.073, 
23.30 	subdivision 1. "Remodeling" includes any of the type of conversion, renovation, 
23.31 	replacement, or upgrading projects as defined in section 144A.073, subdivision 1.
23.32 	(j) "Project construction costs" means the cost of the following items that have 
23.33 	a completion date within 12 months before or after the completion date of the project 
23.34 	described in item (g), clause (1):
23.35 	(1) facility capital asset additions;
23.36 	(2) replacements;
24.1 	(3) renovations;
24.2 	(4) remodeling projects;
24.3 	(5) construction site preparation costs;
24.4 	(6) related soft costs; and
24.5 	(7) the cost of new technology implemented as part of the construction project 
24.6 	and depreciable equipment directly identified to the project, if the construction costs for 
24.7 	clauses (1) to (6) exceed the threshold for additions and replacements stated in section 
24.8 	256B.431, subdivision 16. Technology and depreciable equipment shall be included in the 
24.9 	project construction costs unless a written election is made by the facility, to not include 
24.10 	it in the facility's appraised value for purposes of Minnesota Rules, part 9549.0020, 
24.11 	subpart 5. Debt incurred for purchase of technology and depreciable equipment shall be 
24.12 	included as allowable debt for purposes of Minnesota Rules, part 9549.0060, subpart 5, 
24.13 	items A and C, unless the written election is to not include it. Any new technology and 
24.14 	depreciable equipment included in the project construction costs that the facility elects 
24.15 	not to include in its appraised value and allowable debt shall be treated as provided in 
24.16 	section 256B.431, subdivision 17, paragraph (b). Written election under this paragraph 
24.17 	must be included in the facility's request for the rate change related to the project, and 
24.18 	this election may not be changed.
24.19 	(k) "Technology" means information systems or devices that make documentation, 
24.20 	charting, and staff time more efficient or encourage and allow for care through alternative 
24.21 	settings including, but not limited to, touch screens, monitors, hand-helds, swipe cards, 
24.22 	motion detectors, pagers, telemedicine, medication dispensers, and equipment to monitor 
24.23 	vital signs and self-injections, and to observe skin and other conditions.

24.24 	Sec. 4. Minnesota Statutes 2004, section 144A.071, subdivision 4a, is amended to read:
24.25 		Subd. 4a.Exceptions for replacement beds.  It is in the best interest of the state 
24.26 	to ensure that nursing homes and boarding care homes continue to meet the physical 
24.27 	plant licensing and certification requirements by permitting certain construction projects.  
24.28 	Facilities should be maintained in condition to satisfy the physical and emotional needs 
24.29 	of residents while allowing the state to maintain control over nursing home expenditure 
24.30 	growth.
24.31 	The commissioner of health in coordination with the commissioner of human 
24.32 	services, may approve the renovation, replacement, upgrading, or relocation of a nursing 
24.33 	home or boarding care home, under the following conditions:
25.1 	(a) to license or certify beds in a new facility constructed to replace a facility or to 
25.2 	make repairs in an existing facility that was destroyed or damaged after June 30, 1987, by 
25.3 	fire, lightning, or other hazard provided:
25.4 	(i) destruction was not caused by the intentional act of or at the direction of a 
25.5 	controlling person of the facility;
25.6 	(ii) at the time the facility was destroyed or damaged the controlling persons of the 
25.7 	facility maintained insurance coverage for the type of hazard that occurred in an amount 
25.8 	that a reasonable person would conclude was adequate;
25.9 	(iii) the net proceeds from an insurance settlement for the damages caused by the 
25.10 	hazard are applied to the cost of the new facility or repairs;
25.11 	(iv) the new facility is constructed on the same site as the destroyed facility or on 
25.12 	another site subject to the restrictions in section 144A.073, subdivision 5;
25.13 	(v) the number of licensed and certified beds in the new facility does not exceed the 
25.14 	number of licensed and certified beds in the destroyed facility; and
25.15 	(vi) the commissioner determines that the replacement beds are needed to prevent an 
25.16 	inadequate supply of beds.
25.17 	Project construction costs incurred for repairs authorized under this clause shall not be 
25.18 	considered in the dollar threshold amount defined in subdivision 2;
25.19 	(b) to license or certify beds that are moved from one location to another within a 
25.20 	nursing home facility, provided the total costs of remodeling performed in conjunction 
25.21 	with the relocation of beds does not exceed $1,000,000;
25.22 	(c) to license or certify beds in a project recommended for approval under section 
25.23 	144A.073;
25.24 	(d) to license or certify beds that are moved from an existing state nursing home to 
25.25 	a different state facility, provided there is no net increase in the number of state nursing 
25.26 	home beds;
25.27 	(e) to certify and license as nursing home beds boarding care beds in a certified 
25.28 	boarding care facility if the beds meet the standards for nursing home licensure, or in a 
25.29 	facility that was granted an exception to the moratorium under section 144A.073, and if 
25.30 	the cost of any remodeling of the facility does not exceed $1,000,000.  If boarding care 
25.31 	beds are licensed as nursing home beds, the number of boarding care beds in the facility 
25.32 	must not increase beyond the number remaining at the time of the upgrade in licensure.  
25.33 	The provisions contained in section 144A.073 regarding the upgrading of the facilities 
25.34 	do not apply to facilities that satisfy these requirements;
25.35 	(f) to license and certify up to 40 beds transferred from an existing facility owned and 
25.36 	operated by the Amherst H. Wilder Foundation in the city of St. Paul to a new unit at the 
26.1 	same location as the existing facility that will serve persons with Alzheimer's disease and 
26.2 	other related disorders.  The transfer of beds may occur gradually or in stages, provided 
26.3 	the total number of beds transferred does not exceed 40.  At the time of licensure and 
26.4 	certification of a bed or beds in the new unit, the commissioner of health shall delicense 
26.5 	and decertify the same number of beds in the existing facility.  As a condition of receiving 
26.6 	a license or certification under this clause, the facility must make a written commitment 
26.7 	to the commissioner of human services that it will not seek to receive an increase in its 
26.8 	property-related payment rate as a result of the transfers allowed under this paragraph;
26.9 	(g) to license and certify nursing home beds to replace currently licensed and certified 
26.10 	boarding care beds which may be located either in a remodeled or renovated boarding care 
26.11 	or nursing home facility or in a remodeled, renovated, newly constructed, or replacement 
26.12 	nursing home facility within the identifiable complex of health care facilities in which the 
26.13 	currently licensed boarding care beds are presently located, provided that the number of 
26.14 	boarding care beds in the facility or complex are decreased by the number to be licensed 
26.15 	as nursing home beds and further provided that, if the total costs of new construction, 
26.16 	replacement, remodeling, or renovation exceed ten percent of the appraised value of 
26.17 	the facility or $200,000, whichever is less, the facility makes a written commitment to 
26.18 	the commissioner of human services that it will not seek to receive an increase in its 
26.19 	property-related payment rate by reason of the new construction, replacement, remodeling, 
26.20 	or renovation.  The provisions contained in section 144A.073 regarding the upgrading of 
26.21 	facilities do not apply to facilities that satisfy these requirements;
26.22 	(h) to license as a nursing home and certify as a nursing facility a facility that is 
26.23 	licensed as a boarding care facility but not certified under the medical assistance program, 
26.24 	but only if the commissioner of human services certifies to the commissioner of health that 
26.25 	licensing the facility as a nursing home and certifying the facility as a nursing facility will 
26.26 	result in a net annual savings to the state general fund of $200,000 or more;
26.27 	(i) to certify, after September 30, 1992, and prior to July 1, 1993, existing nursing 
26.28 	home beds in a facility that was licensed and in operation prior to January 1, 1992;
26.29 	(j) to license and certify new nursing home beds to replace beds in a facility acquired 
26.30 	by the Minneapolis Community Development Agency as part of redevelopment activities 
26.31 	in a city of the first class, provided the new facility is located within three miles of the site 
26.32 	of the old facility.  Operating and property costs for the new facility must be determined 
26.33 	and allowed under section 256B.431 or 256B.434;
26.34 	(k) to license and certify up to 20 new nursing home beds in a community-operated 
26.35 	hospital and attached convalescent and nursing care facility with 40 beds on April 21, 
26.36 	1991, that suspended operation of the hospital in April 1986.  The commissioner of human 
27.1 	services shall provide the facility with the same per diem property-related payment rate 
27.2 	for each additional licensed and certified bed as it will receive for its existing 40 beds;
27.3 	(l) to license or certify beds in renovation, replacement, or upgrading projects as 
27.4 	defined in section 144A.073, subdivision 1, so long as the cumulative total costs of the 
27.5 	facility's remodeling projects do not exceed $1,000,000;
27.6 	(m) to license and certify beds that are moved from one location to another for the 
27.7 	purposes of converting up to five four-bed wards to single or double occupancy rooms 
27.8 	in a nursing home that, as of January 1, 1993, was county-owned and had a licensed 
27.9 	capacity of 115 beds;
27.10 	(n) to allow a facility that on April 16, 1993, was a 106-bed licensed and certified 
27.11 	nursing facility located in Minneapolis to layaway all of its licensed and certified nursing 
27.12 	home beds.  These beds may be relicensed and recertified in a newly constructed teaching 
27.13 	nursing home facility affiliated with a teaching hospital upon approval by the legislature.  
27.14 	The proposal must be developed in consultation with the interagency committee on 
27.15 	long-term care planning.  The beds on layaway status shall have the same status as 
27.16 	voluntarily delicensed and decertified beds, except that beds on layaway status remain 
27.17 	subject to the surcharge in section 256.9657.  This layaway provision expires July 1, 1998;
27.18 	(o) to allow a project which will be completed in conjunction with an approved 
27.19 	moratorium exception project for a nursing home in southern Cass County and which is 
27.20 	directly related to that portion of the facility that must be repaired, renovated, or replaced, 
27.21 	to correct an emergency plumbing problem for which a state correction order has been 
27.22 	issued and which must be corrected by August 31, 1993;
27.23 	(p) to allow a facility that on April 16, 1993, was a 368-bed licensed and certified 
27.24 	nursing facility located in Minneapolis to layaway, upon 30 days prior written notice to 
27.25 	the commissioner, up to 30 of the facility's licensed and certified beds by converting 
27.26 	three-bed wards to single or double occupancy.  Beds on layaway status shall have the 
27.27 	same status as voluntarily delicensed and decertified beds except that beds on layaway 
27.28 	status remain subject to the surcharge in section 256.9657, remain subject to the license 
27.29 	application and renewal fees under section 144A.07 and shall be subject to a $100 per bed 
27.30 	reactivation fee.  In addition, at any time within three years of the effective date of the 
27.31 	layaway, the beds on layaway status may be:
27.32 	(1) relicensed and recertified upon relocation and reactivation of some or all of 
27.33 	the beds to an existing licensed and certified facility or facilities located in Pine River, 
27.34 	Brainerd, or International Falls; provided that the total project construction costs related to 
27.35 	the relocation of beds from layaway status for any facility receiving relocated beds may 
28.1 	not exceed the dollar threshold provided in subdivision 2 unless the construction project 
28.2 	has been approved through the moratorium exception process under section 144A.073;
28.3 	(2) relicensed and recertified, upon reactivation of some or all of the beds within the 
28.4 	facility which placed the beds in layaway status, if the commissioner has determined a 
28.5 	need for the reactivation of the beds on layaway status.
28.6 	The property-related payment rate of a facility placing beds on layaway status 
28.7 	must be adjusted by the incremental change in its rental per diem after recalculating the 
28.8 	rental per diem as provided in section 256B.431, subdivision 3a, paragraph (c).  The 
28.9 	property-related payment rate for a facility relicensing and recertifying beds from layaway 
28.10 	status must be adjusted by the incremental change in its rental per diem after recalculating 
28.11 	its rental per diem using the number of beds after the relicensing to establish the facility's 
28.12 	capacity day divisor, which shall be effective the first day of the month following the 
28.13 	month in which the relicensing and recertification became effective.  Any beds remaining 
28.14 	on layaway status more than three years after the date the layaway status became effective 
28.15 	must be removed from layaway status and immediately delicensed and decertified;
28.16 	(q) to license and certify beds in a renovation and remodeling project to convert 12 
28.17 	four-bed wards into 24 two-bed rooms, expand space, and add improvements in a nursing 
28.18 	home that, as of January 1, 1994, met the following conditions:  the nursing home was 
28.19 	located in Ramsey County; had a licensed capacity of 154 beds; and had been ranked 
28.20 	among the top 15 applicants by the 1993 moratorium exceptions advisory review panel.  
28.21 	The total project construction cost estimate for this project must not exceed the cost 
28.22 	estimate submitted in connection with the 1993 moratorium exception process;
28.23 	(r) to license and certify up to 117 beds that are relocated from a licensed and 
28.24 	certified 138-bed nursing facility located in St. Paul to a hospital with 130 licensed 
28.25 	hospital beds located in South St. Paul, provided that the nursing facility and hospital are 
28.26 	owned by the same or a related organization and that prior to the date the relocation is 
28.27 	completed the hospital ceases operation of its inpatient hospital services at that hospital.  
28.28 	After relocation, the nursing facility's status under section 256B.431, subdivision 2j, shall 
28.29 	be the same as it was prior to relocation.  The nursing facility's property-related payment 
28.30 	rate resulting from the project authorized in this paragraph shall become effective no 
28.31 	earlier than April 1, 1996.  For purposes of calculating the incremental change in the 
28.32 	facility's rental per diem resulting from this project, the allowable appraised value of 
28.33 	the nursing facility portion of the existing health care facility physical plant prior to the 
28.34 	renovation and relocation may not exceed $2,490,000;
28.35 	(s) to license and certify two beds in a facility to replace beds that were voluntarily 
28.36 	delicensed and decertified on June 28, 1991;
29.1 	(t) to allow 16 licensed and certified beds located on July 1, 1994, in a 142-bed 
29.2 	nursing home and 21-bed boarding care home facility in Minneapolis, notwithstanding 
29.3 	the licensure and certification after July 1, 1995, of the Minneapolis facility as a 147-bed 
29.4 	nursing home facility after completion of a construction project approved in 1993 under 
29.5 	section 144A.073, to be laid away upon 30 days' prior written notice to the commissioner.  
29.6 	Beds on layaway status shall have the same status as voluntarily delicensed or decertified 
29.7 	beds except that they shall remain subject to the surcharge in section 256.9657.  The 
29.8 	16 beds on layaway status may be relicensed as nursing home beds and recertified at 
29.9 	any time within five years of the effective date of the layaway upon relocation of some 
29.10 	or all of the beds to a licensed and certified facility located in Watertown, provided that 
29.11 	the total project construction costs related to the relocation of beds from layaway status 
29.12 	for the Watertown facility may not exceed the dollar threshold provided in subdivision 
29.13 	2 unless the construction project has been approved through the moratorium exception 
29.14 	process under section 144A.073.
29.15 	The property-related payment rate of the facility placing beds on layaway status 
29.16 	must be adjusted by the incremental change in its rental per diem after recalculating the 
29.17 	rental per diem as provided in section 256B.431, subdivision 3a, paragraph (c).  The 
29.18 	property-related payment rate for the facility relicensing and recertifying beds from 
29.19 	layaway status must be adjusted by the incremental change in its rental per diem after 
29.20 	recalculating its rental per diem using the number of beds after the relicensing to establish 
29.21 	the facility's capacity day divisor, which shall be effective the first day of the month 
29.22 	following the month in which the relicensing and recertification became effective.  Any 
29.23 	beds remaining on layaway status more than five years after the date the layaway status 
29.24 	became effective must be removed from layaway status and immediately delicensed 
29.25 	and decertified;
29.26 	(u) to license and certify beds that are moved within an existing area of a facility or 
29.27 	to a newly constructed addition which is built for the purpose of eliminating three- and 
29.28 	four-bed rooms and adding space for dining, lounge areas, bathing rooms, and ancillary 
29.29 	service areas in a nursing home that, as of January 1, 1995, was located in Fridley and had 
29.30 	a licensed capacity of 129 beds;
29.31 	(v) to relocate 36 beds in Crow Wing County and four beds from Hennepin County 
29.32 	to a 160-bed facility in Crow Wing County, provided all the affected beds are under 
29.33 	common ownership;
29.34 	(w) to license and certify a total replacement project of up to 49 beds located in 
29.35 	Norman County that are relocated from a nursing home destroyed by flood and whose 
29.36 	residents were relocated to other nursing homes.  The operating cost payment rates for 
30.1 	the new nursing facility shall be determined based on the interim and settle-up payment 
30.2 	provisions of Minnesota Rules, part 9549.0057, and the reimbursement provisions of 
30.3 	section 256B.431, except that subdivision 26, paragraphs (a) and (b), shall not apply until 
30.4 	the second rate year after the settle-up cost report is filed.  Property-related reimbursement 
30.5 	rates shall be determined under section 256B.431, taking into account any federal or state 
30.6 	flood-related loans or grants provided to the facility;
30.7 	(x) to license and certify a total replacement project of up to 129 beds located 
30.8 	in Polk County that are relocated from a nursing home destroyed by flood and whose 
30.9 	residents were relocated to other nursing homes.  The operating cost payment rates for 
30.10 	the new nursing facility shall be determined based on the interim and settle-up payment 
30.11 	provisions of Minnesota Rules, part 9549.0057, and the reimbursement provisions of 
30.12 	section 256B.431, except that subdivision 26, paragraphs (a) and (b), shall not apply until 
30.13 	the second rate year after the settle-up cost report is filed.  Property-related reimbursement 
30.14 	rates shall be determined under section 256B.431, taking into account any federal or state 
30.15 	flood-related loans or grants provided to the facility;
30.16 	(y) to license and certify beds in a renovation and remodeling project to convert 13 
30.17 	three-bed wards into 13 two-bed rooms and 13 single-bed rooms, expand space, and 
30.18 	add improvements in a nursing home that, as of January 1, 1994, met the following 
30.19 	conditions:  the nursing home was located in Ramsey County, was not owned by a hospital 
30.20 	corporation, had a licensed capacity of 64 beds, and had been ranked among the top 15 
30.21 	applicants by the 1993 moratorium exceptions advisory review panel.  The total project 
30.22 	construction cost estimate for this project must not exceed the cost estimate submitted in 
30.23 	connection with the 1993 moratorium exception process;
30.24 	(z) to license and certify up to 150 nursing home beds to replace an existing 285 
30.25 	bed nursing facility located in St. Paul.  The replacement project shall include both the 
30.26 	renovation of existing buildings and the construction of new facilities at the existing 
30.27 	site.  The reduction in the licensed capacity of the existing facility shall occur during the 
30.28 	construction project as beds are taken out of service due to the construction process.  Prior 
30.29 	to the start of the construction process, the facility shall provide written information to the 
30.30 	commissioner of health describing the process for bed reduction, plans for the relocation 
30.31 	of residents, and the estimated construction schedule.  The relocation of residents shall be 
30.32 	in accordance with the provisions of law and rule;
30.33 	(aa) to allow the commissioner of human services to license an additional 36 beds to 
30.34 	provide residential services for the physically handicapped under Minnesota Rules, parts 
30.35 	9570.2000 to 9570.3400, in a 198-bed nursing home located in Red Wing, provided that 
30.36 	the total number of licensed and certified beds at the facility does not increase;
31.1 	(bb) to license and certify a new facility in St. Louis county with 44 beds constructed 
31.2 	to replace an existing facility in St. Louis County with 31 beds, which has resident rooms 
31.3 	on two separate floors and an antiquated elevator that creates safety concerns for residents 
31.4 	and prevents nonambulatory residents from residing on the second floor.  The project shall 
31.5 	include the elimination of three- and four-bed rooms;
31.6 	(cc) to license and certify four beds in a 16-bed certified boarding care home in 
31.7 	Minneapolis to replace beds that were voluntarily delicensed and decertified on or 
31.8 	before March 31, 1992.  The licensure and certification is conditional upon the facility 
31.9 	periodically assessing and adjusting its resident mix and other factors which may 
31.10 	contribute to a potential institution for mental disease declaration.  The commissioner of 
31.11 	human services shall retain the authority to audit the facility at any time and shall require 
31.12 	the facility to comply with any requirements necessary to prevent an institution for mental 
31.13 	disease declaration, including delicensure and decertification of beds, if necessary;
31.14 	(dd) to license and certify 72 beds in an existing facility in Mille Lacs County with 
31.15 	80 beds as part of a renovation project.  The renovation must include construction of 
31.16 	an addition to accommodate ten residents with beginning and midstage dementia in a 
31.17 	self-contained living unit; creation of three resident households where dining, activities, 
31.18 	and support spaces are located near resident living quarters; designation of four beds 
31.19 	for rehabilitation in a self-contained area; designation of 30 private rooms; and other 
31.20 	improvements;
31.21 	(ee) to license and certify beds in a facility that has undergone replacement or 
31.22 	remodeling as part of a planned closure under section 256B.437;
31.23 	(ff) to license and certify a total replacement project of up to 124 beds located 
31.24 	in Wilkin County that are in need of relocation from a nursing home significantly 
31.25 	damaged by flood. The operating cost payment rates for the new nursing facility shall 
31.26 	be determined based on the interim and settle-up payment provisions of Minnesota 
31.27 	Rules, part 9549.0057, and the reimbursement provisions of section 256B.431, except 
31.28 	that section 256B.431, subdivision 26, paragraphs (a) and (b), shall not apply until the 
31.29 	second rate year after the settle-up cost report is filed.  Property-related reimbursement 
31.30 	rates shall be determined under section 256B.431, taking into account any federal or state 
31.31 	flood-related loans or grants provided to the facility;
31.32 	(gg) to allow the commissioner of human services to license an additional nine beds 
31.33 	to provide residential services for the physically handicapped under Minnesota Rules, 
31.34 	parts 9570.2000 to 9570.3400, in a 240-bed nursing home located in Duluth, provided that 
31.35 	the total number of licensed and certified beds at the facility does not increase;
32.1 	(hh) to license and certify up to 120 new nursing facility beds to replace beds in a 
32.2 	facility in Anoka County, which was licensed for 98 beds as of July 1, 2000, provided the 
32.3 	new facility is located within four miles of the existing facility and is in Anoka County.  
32.4 	Operating and property rates shall be determined and allowed under section 256B.431 and 
32.5 	Minnesota Rules, parts 9549.0010 to 9549.0080, or section 256B.434 or 256B.435.  The 
32.6 	provisions of section 256B.431, subdivision 26, paragraphs (a) and (b), do not apply until 
32.7 	the second rate year following settle-up; or 
32.8 	(ii) to transfer up to 98 beds of a 129-licensed bed facility located in Anoka County 
32.9 	that, as of March 25, 2001, is in the active process of closing, to a 122-licensed bed 
32.10 	nonprofit nursing facility located in the city of Columbia Heights or its affiliate.  The 
32.11 	transfer is effective when the receiving facility notifies the commissioner in writing of the 
32.12 	number of beds accepted.  The commissioner shall place all transferred beds on layaway 
32.13 	status held in the name of the receiving facility.  The layaway adjustment provisions of 
32.14 	section 256B.431, subdivision 30, do not apply to this layaway. The receiving facility 
32.15 	may only remove the beds from layaway for recertification and relicensure at the receiving 
32.16 	facility's current site, or at a newly constructed facility located in Anoka County.  The 
32.17 	receiving facility must receive statutory authorization before removing these beds from 
32.18 	layaway status, or may remove these beds from layaway status if removal from layaway 
32.19 	status is part of a moratorium exception project approved by the commissioner under 
32.20 	section 144A.073.

32.21 	Sec. 5. Minnesota Statutes 2004, section 144A.10, is amended by adding a subdivision 
32.22 	to read:
32.23 		Subd. 6e.Use of fines. When the commissioner of health determines the use of, 
32.24 	or provides recommendations on the use of fines collected under subdivisions 6 or 6b, 
32.25 	two representatives of the nursing home industry, appointed by nursing home trade 
32.26 	associations, and two consumer representatives as appointed by the commissioner must 
32.27 	be included in the process of developing or preparing any information, reviews, or 
32.28 	recommendations on the use of the fines. This includes, but is not limited to, including 
32.29 	two representatives of the nursing home industry in any committee designed to provide 
32.30 	information and recommendations for the use of the fines.

32.31 	Sec. 6. Minnesota Statutes 2004, section 144A.161, subdivision 1, is amended to read:
32.32 		Subdivision 1.Definitions. The definitions in this subdivision apply to subdivisions 
32.33 	2 to 10.
33.1 	(a) "Closure" means the cessation of operations of a facility and the delicensure and 
33.2 	decertification of all beds within the facility.
33.3 	(b) "Curtailment," "reduction," or "change" refers to any change in operations which 
33.4 	would result in or encourage the relocation of residents.
33.5 	(c) "Facility" means a nursing home licensed pursuant to this chapter, or a certified 
33.6 	boarding care home licensed pursuant to sections  144.50 to  144.56. 
33.7 	(d) "Licensee" means the owner of the facility or the owner's designee or the 
33.8 	commissioner of health for a facility in receivership.
33.9 	(e) "Local agency" "County social services agency" means the county or multicounty 
33.10 	social service agency authorized under sections  393.01 and  393.07, as the agency 
33.11 	responsible for providing social services for the county in which the nursing home is 
33.12 	located. 
33.13 	(f) "Plan" means a process developed under subdivision 3, paragraph (b), for the 
33.14 	closure, curtailment, reduction, or change in operations in a facility and the subsequent 
33.15 	relocation of residents.
33.16 	(g) "Relocation" means the discharge of a resident and movement of the resident to 
33.17 	another facility or living arrangement as a result of the closing, curtailment, reduction, or 
33.18 	change in operations of a nursing home or boarding care home.

33.19 	Sec. 7. Minnesota Statutes 2004, section 144A.161, is amended by adding a 
33.20 	subdivision to read:
33.21 		Subd. 1a.Scope. Where a facility is undertaking closure, curtailment, reduction, or 
33.22 	change in operations, the facility and the county social services agency must comply with 
33.23 	the requirements of this section.

33.24 	Sec. 8. Minnesota Statutes 2004, section 144A.161, subdivision 2, is amended to read:
33.25 		Subd. 2.Initial notice from licensee. (a) A licensee shall notify the following 
33.26 	parties in writing when there is an intent to close or curtail, reduce, or change operations 
33.27 	which would result in or encourage the relocation of residents:
33.28 	(1) the commissioner of health;
33.29 	(2) the commissioner of human services;
33.30 	(3) the local county social services agency;
33.31 	(4) the Office of the Ombudsman for Older Minnesotans; and
33.32 	(5) the Office of the Ombudsman for Mental Health and Mental Retardation.
33.33 	(b) The written notice shall include the names, telephone numbers, facsimile 
33.34 	numbers, and e-mail addresses of the persons in the facility responsible for coordinating 
34.1 	the licensee's efforts in the planning process, and the number of residents potentially 
34.2 	affected by the closure or curtailment, reduction, or change in operations.
34.3 	(c) After providing written notice under this section, and prior to admission, the 
34.4 	facility must fully inform prospective residents and their families of the intent to close or 
34.5 	curtail, reduce, or change operations, and the relocation plan.

34.6 	Sec. 9. Minnesota Statutes 2004, section 144A.161, subdivision 3, is amended to read:
34.7 		Subd. 3.Planning process. (a) The local county social services agency shall, 
34.8 	within five working days of receiving initial notice of the licensee's intent to close or 
34.9 	curtail, reduce, or change operations, provide the licensee and all parties identified in 
34.10 	subdivision 2, paragraph (a), with the names, telephone numbers, facsimile numbers, and 
34.11 	e-mail addresses of those persons responsible for coordinating local county social services
34.12 	agency efforts in the planning process.
34.13 	(b) Within ten working days of receipt of the notice under paragraph (a), the local
34.14 	county social services agency and licensee shall meet to develop the relocation plan. 
34.15 	The local county social services agency shall inform the Departments of Health and 
34.16 	Human Services, the Office of the Ombudsman for Older Minnesotans, and the Office 
34.17 	of the Ombudsman for Mental Health and Mental Retardation of the date, time, and 
34.18 	location of the meeting so that their representatives may attend. The relocation plan 
34.19 	must be completed within 45 days of receipt of the initial notice. However, the plan may 
34.20 	be finalized on an earlier schedule agreed to by all parties. To the extent practicable, 
34.21 	consistent with requirements to protect the safety and health of residents, the commissioner 
34.22 	may authorize the planning process under this subdivision to occur concurrent with the 
34.23 	60-day notice required under subdivision 5a. The plan shall:
34.24 	(1) identify the expected date of closure, curtailment, reduction, or change in 
34.25 	operations;
34.26 	(2) outline the process for public notification of the closure, curtailment, reduction, 
34.27 	or change in operations;
34.28 	(3) identify efforts that will be made to include other stakeholders in the relocation 
34.29 	process;
34.30 	(4) outline the process to ensure 60-day advance written notice to residents, family 
34.31 	members, and designated representatives;
34.32 	(5) present an aggregate description of the resident population remaining to be 
34.33 	relocated and the population's needs;
34.34 	(6) outline the individual resident assessment process to be utilized;
35.1 	(7) identify an inventory of available relocation options, including home and 
35.2 	community-based services;
35.3 	(8) identify a timeline for submission of the list identified in subdivision 5c, 
35.4 	paragraph (b); and
35.5 	(9) identify a schedule for the timely completion of each element of the plan; and
35.6 	(10) identify the steps the licensee and the county social services agency will take to 
35.7 	address the relocation needs of individual residents who may be difficult to place due to 
35.8 	specialized care needs such as behavioral health problems.
35.9 	(c) All parties to the plan shall refrain from any public notification of the intent to 
35.10 	close or curtail, reduce, or change operations until a relocation plan has been established. 
35.11 	If the planning process occurs concurrently with the 60-day notice period, this requirement 
35.12 	does not apply once 60-day notice is given.

35.13 	Sec. 10. Minnesota Statutes 2004, section 144A.161, subdivision 4, is amended to read:
35.14 		Subd. 4.Responsibilities of licensee for resident relocations. The licensee shall 
35.15 	provide for the safe, orderly, and appropriate relocation of residents. The licensee and 
35.16 	facility staff shall cooperate with representatives from the local county social services
35.17 	agency, the Department of Health, the Department of Human Services, the Office of 
35.18 	Ombudsman for Older Minnesotans, and ombudsman for mental health and mental 
35.19 	retardation in planning for and implementing the relocation of residents.

35.20 	Sec. 11. Minnesota Statutes 2004, section 144A.161, subdivision 5, is amended to read:
35.21 		Subd. 5.Licensee responsibilities prior to relocation. (a) The licensee shall 
35.22 	establish an interdisciplinary team responsible for coordinating and implementing the 
35.23 	plan. The interdisciplinary team shall include representatives from the local county social 
35.24 	services agency, the Office of Ombudsman for Older Minnesotans, facility staff that 
35.25 	provide direct care services to the residents, and facility administration.
35.26 	(b) The licensee shall provide a list summary document to the local county social 
35.27 	services agency that includes the following information on each resident to be relocated:
35.28 	(1) name;
35.29 	(2) date of birth;
35.30 	(3) Social Security number;
35.31 	(4) payment source and medical assistance identification number, if applicable;
35.32 	(5) county of financial responsibility;
35.33 	(6) date of admission to the facility;
35.34 	(5) (7) all diagnoses; and
36.1 	(8) the name of and contact information for the resident's physician;
36.2 	(6) (9) the name and contact information for the resident's family or other designated 
36.3 	representative;
36.4 	(10) the names of and contact information for any case managers, if known; and
36.5 	(11) the information on the resident's status related to commitment and probation.
36.6 	(c) The licensee shall consult with the local county social services agency on the 
36.7 	availability and development of available resources and on the resident relocation process.

36.8 	Sec. 12. Minnesota Statutes 2004, section 144A.161, subdivision 5a, is amended to 
36.9 	read:
36.10 		Subd. 5a.Licensee responsibilities to provide notice. At least 60 days before the 
36.11 	proposed date of closing, curtailment, reduction, or change in operations as agreed to in 
36.12 	the plan, the licensee shall send a written notice of closure or curtailment, reduction, or 
36.13 	change in operations to each resident being relocated, the resident's family member or 
36.14 	designated representative, and the resident's attending physician. The notice must include 
36.15 	the following:
36.16 	(1) the date of the proposed closure, curtailment, reduction, or change in operations;
36.17 	(2) the name, address, telephone number, facsimile number, and e-mail address 
36.18 	of the individual or individuals in the facility responsible for providing assistance and 
36.19 	information;
36.20 	(3) notification of upcoming meetings for residents, families and designated 
36.21 	representatives, and resident and family councils to discuss the relocation of residents;
36.22 	(4) the name, address, and telephone number of the local county social services
36.23 	agency contact person; and
36.24 	(5) the name, address, and telephone number of the Office of Ombudsman for Older 
36.25 	Minnesotans and the ombudsman for mental health and mental retardation.
36.26 	The notice must comply with all applicable state and federal requirements for notice 
36.27 	of transfer or discharge of nursing home residents.

36.28 	Sec. 13. Minnesota Statutes 2004, section 144A.161, subdivision 5c, is amended to 
36.29 	read:
36.30 		Subd. 5c.Licensee responsibility regarding placement information. (a) The 
36.31 	licensee shall provide sufficient preparation to residents to ensure safe, orderly, and 
36.32 	appropriate discharge and relocation. The licensee shall assist residents in finding 
36.33 	placements that respond to personal preferences, such as desired geographic location.
37.1 	(b) The licensee shall prepare a resource list with several relocation options for each 
37.2 	resident. The list must contain the following information for each relocation option, 
37.3 	when applicable:
37.4 	(1) the name, address, and telephone and facsimile numbers of each facility with 
37.5 	appropriate, available beds or services;
37.6 	(2) the certification level of the available beds;
37.7 	(3) the types of services available; and
37.8 	(4) the name, address, and telephone and facsimile numbers of appropriate available 
37.9 	home and community-based placements, services, and settings or other options for 
37.10 	individuals with special needs.
37.11 	The list shall be made available to residents and their families or designated 
37.12 	representatives, and upon request to the Office of Ombudsman for Older Minnesotans, 
37.13 	the ombudsman for mental health and Mental Retardation, and the local county social 
37.14 	services agency.
37.15 	(c) The Senior LinkAge line may make available via a Web site the name, address, 
37.16 	and telephone and facsimile numbers of each facility with available beds, the certification 
37.17 	level of the available beds, the types of services available, and the number of beds that are 
37.18 	available as updated daily by the listed facilities. The licensee must provide residents, 
37.19 	their families or designated representatives, the Office of the Ombudsman for Older 
37.20 	Minnesotans, the Office of the Ombudsman for Mental Health and Mental Retardation, 
37.21 	and the local county social services agency with the toll-free number and Web site address 
37.22 	for the Senior LinkAge line.

37.23 	Sec. 14. Minnesota Statutes 2004, section 144A.161, subdivision 6, is amended to read:
37.24 		Subd. 6.Responsibilities of the licensee during relocation. (a) The licensee 
37.25 	shall make arrangements or provide for the transportation of residents to the new facility 
37.26 	or placement within a 50-mile radius, or within a larger radius if no suitable options 
37.27 	are available within 50 miles. The licensee shall provide a staff person to accompany 
37.28 	the resident during transportation, upon request of the resident, the resident's family, or 
37.29 	designated representative. The discharge and relocation of residents must comply with all 
37.30 	applicable state and federal requirements and must be conducted in a safe, orderly, and 
37.31 	appropriate manner. The licensee must ensure that there is no disruption in providing 
37.32 	meals, medications, or treatments of a resident during the relocation process.
37.33 	(b) Beginning the week following development of the initial relocation plan, the 
37.34 	licensee shall submit biweekly weekly status reports to the commissioners of health and 
38.1 	human services or their designees and to the local county social services agency. The 
38.2 	initial status report must identify:
38.3 	(1) the relocation plan developed;
38.4 	(2) the interdisciplinary team members; and
38.5 	(3) the number of residents to be relocated.
38.6 	(c) Subsequent status reports must identify:
38.7 	(1) any modifications to the plan;
38.8 	(2) any change of interdisciplinary team members;
38.9 	(3) the number of residents relocated;
38.10 	(4) the destination to which residents have been relocated;
38.11 	(5) the number of residents remaining to be relocated; and
38.12 	(6) issues or problems encountered during the process and resolution of these issues.

38.13 	Sec. 15. Minnesota Statutes 2004, section 144A.161, subdivision 8, is amended to read:
38.14 		Subd. 8.Responsibilities of local county social services agency. (a) The local
38.15 	county social services agency shall participate in the meeting as outlined in subdivision 3, 
38.16 	paragraph (b), to develop a relocation plan.
38.17 	(b) The localcounty social services agency shall designate a representative to 
38.18 	the interdisciplinary team established by the licensee responsible for coordinating the 
38.19 	relocation efforts.
38.20 	(c) The localcounty social services agency shall serve as a resource in the relocation 
38.21 	process.
38.22 	(d) Concurrent with the notice sent to residents from the licensee as provided in 
38.23 	subdivision 5a, the localcounty social services agency shall provide written notice to 
38.24 	residents, family, or designated representatives describing:
38.25 	(1) the county's role in the relocation process and in the follow-up to relocations;
38.26 	(2) a localcounty social services agency contact name, address, and telephone 
38.27 	number; and
38.28 	(3) the name, address, and telephone number of the Office of Ombudsman for Older 
38.29 	Minnesotans and the ombudsman for mental health and mental retardation.
38.30 	(e) The localcounty social services agency designee shall meet with appropriate 
38.31 	facility staff to coordinate any assistance in the relocation process. This coordination 
38.32 	shall include participating in group meetings with residents, families, and designated 
38.33 	representatives to explain the relocation process.
38.34 	(f) The localcounty social services agency shall monitor compliance with all 
38.35 	components of the plan. If the licensee is not in compliance, the localcounty social 
39.1 	services agency shall notify the commissioners of the Departments of Health and Human 
39.2 	Services.
39.3 	(g) Except as requested by the resident, family member, or designated representative 
39.4 	and within the parameters of the Vulnerable Adults Act, the localcounty social services 
39.5 	agency may halt a relocation that it deems inappropriate or dangerous to the health or 
39.6 	safety of a resident. The localcounty social services agency shall pursue remedies to 
39.7 	protect the resident during the relocation process, including, but not limited to, assisting 
39.8 	the resident with filing an appeal of transfer or discharge, notification of all appropriate 
39.9 	licensing boards and agencies, and other remedies available to the county under section  
39.10 	626.557, subdivision 10. 
39.11 	(h) A member of the localcounty social services agency staff shall visit residents 
39.12 	relocated within 100 miles of the county within 30 days after the relocation. LocalThis 
39.13 	requirement does not apply to changes in operation where the facility moved to a new 
39.14 	location and residents chose to move to that new location. The requirement also does not 
39.15 	apply to residents admitted after the notice of closure and discharged prior to the actual 
39.16 	closure. County social services agency staff shall interview the resident and family or 
39.17 	designated representative, observe the resident on site, and review and discuss pertinent 
39.18 	medical or social records with appropriate facility staff to:
39.19 	(1) assess the adjustment of the resident to the new placement;
39.20 	(2) recommend services or methods to meet any special needs of the resident; and
39.21 	(3) identify residents at risk.
39.22 	(i) The local county social services agency may conduct subsequent follow-up visits 
39.23 	in cases where the adjustment of the resident to the new placement is in question.
39.24 	(j) Within 60 days of the completion of the follow-up visits, the local county social 
39.25 	services agency shall submit a written summary of the follow-up work to the Departments 
39.26 	of Health and Human Services in a manner approved by the commissioners.
39.27 	(k) The local county social services agency shall submit to the Departments of Health 
39.28 	and Human Services a report of any issues that may require further review or monitoring.
39.29 	(l) The local county social services agency shall be responsible for the safe and 
39.30 	orderly relocation of residents in cases where an emergent need arises or when the licensee 
39.31 	has abrogated its responsibilities under the plan.

39.32 	Sec. 16. Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 1, 
39.33 	is amended to read:
39.34 		Subdivision 1.Program criteria. Beginning on or after October 1, 2005, within 
39.35 	the limits of appropriations specifically available for this purpose, the commissioner shall 
40.1 	provide funding to qualified provider applicants for employee scholarships for education 
40.2 	in nursing and other health care fields. Employee scholarships must be for a course of 
40.3 	study that is expected to lead to career advancement with the provider or in the field 
40.4 	of long-term care, including home care or care of persons with disabilities, or nursing. 
40.5 	Providers that secure this funding must use it to award scholarships to employees who 
40.6 	work an average of at least 20 hours per week for the provider. Executive management 
40.7 	staff without direct care duties, registered nurses, and therapists are not eligible to receive 
40.8 	scholarships under this section.

40.9 	Sec. 17. Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 3, 
40.10 	is amended to read:
40.11 		Subd. 3.Provider selection criteria. To be considered for scholarship funding, 
40.12 	the provider shall submit a completed application within the time frame specified by the 
40.13 	commissioner. In awarding funding, the commissioner shall consider the following:
40.14 	(1) the size of the provider as measured in annual billing to the medical assistance 
40.15 	program. To be eligible, a provider must receive at least $500,000$300,000 annually 
40.16 	in medical assistance payments;
40.17 	(2) the percentage of employees meeting the scholarship program recipient 
40.18 	requirements;
40.19 	(3) staff retention rates for paraprofessionals; and
40.20 	(4) other criteria determined by the commissioner.

40.21 	Sec. 18. Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 4, 
40.22 	is amended to read:
40.23 		Subd. 4.Funding specifics. Within the limits of appropriations specifically 
40.24 	available for this purpose, for the rate period beginning on or after October 1, 2005, to 
40.25 	September 30, 2007, the commissioner shall provide to each provider listed in subdivision 
40.26 	2 and awarded funds under subdivision 3 a medical assistance rate increase to fund 
40.27 	scholarships up to two-tenthsthree-tenths percent of the medical assistance reimbursement 
40.28 	rate. The commissioner shall require providers to repay any portion of funds awarded 
40.29 	under subdivision 3 that is not used to fund scholarships. If applications exceed available 
40.30 	funding, funding shall be targeted to providers that employ a higher percentage of 
40.31 	paraprofessional staff or have lower rates of turnover of paraprofessional staff. During 
40.32 	the subsequent years of the program, the rate adjustment may be recalculated, at the 
40.33 	discretion of the commissioner. In making a recalculation the commissioner may consider 
41.1 	the provider's success at granting scholarships based on the amount spent during the 
41.2 	previous year and the availability of appropriations to continue the program.

41.3 	Sec. 19. Minnesota Statutes 2005 Supplement, section 256B.434, subdivision 4, 
41.4 	is amended to read:
41.5 		Subd. 4.Alternate rates for nursing facilities. (a) For nursing facilities which 
41.6 	have their payment rates determined under this section rather than section 256B.431, the 
41.7 	commissioner shall establish a rate under this subdivision. The nursing facility must enter 
41.8 	into a written contract with the commissioner.
41.9 	(b) A nursing facility's case mix payment rate for the first rate year of a facility's 
41.10 	contract under this section is the payment rate the facility would have received under 
41.11 	section 256B.431.
41.12 	(c) A nursing facility's case mix payment rates for the second and subsequent years 
41.13 	of a facility's contract under this section are the previous rate year's contract payment 
41.14 	rates plus an inflation adjustment and, for facilities reimbursed under this section or 
41.15 	section 256B.431, an adjustment to include the cost of any increase in Health Department 
41.16 	licensing fees for the facility taking effect on or after July 1, 2001. The index for the 
41.17 	inflation adjustment must be based on the change in the Consumer Price Index-All Items 
41.18 	(United States City average) (CPI-U) forecasted by the commissioner of finance's national 
41.19 	economic consultant, as forecasted in the fourth quarter of the calendar year preceding 
41.20 	the rate year. The inflation adjustment must be based on the 12-month period from the 
41.21 	midpoint of the previous rate year to the midpoint of the rate year for which the rate is 
41.22 	being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1, 2001, 
41.23 	July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July 
41.24 	1, 2008, this paragraph shall apply only to the property-related payment rate, except 
41.25 	that adjustments to include the cost of any increase in Health Department licensing fees 
41.26 	taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to 
41.27 	the property payment rate under this section and section 256B.431 shall be effective on 
41.28 	October 1. In determining the amount of the property-related payment rate adjustment 
41.29 	under this paragraph, the commissioner shall determine the proportion of the facility's 
41.30 	rates that are property-related based on the facility's most recent cost report. Beginning 
41.31 	October 1, 2006, facilities reimbursed under this section shall be allowed to receive a 
41.32 	property rate adjustment for building projects under section 144A.071, subdivision 2.
41.33 	(d) The commissioner shall develop additional incentive-based payments of up to 
41.34 	five percent above a facility's operating payment rate for achieving outcomes specified 
41.35 	in a contract. The commissioner may solicit contract amendments and implement those 
42.1 	which, on a competitive basis, best meet the state's policy objectives. The commissioner 
42.2 	shall limit the amount of any incentive payment and the number of contract amendments 
42.3 	under this paragraph to operate the incentive payments within funds appropriated for this 
42.4 	purpose. The contract amendments may specify various levels of payment for various 
42.5 	levels of performance. Incentive payments to facilities under this paragraph may be in 
42.6 	the form of time-limited rate adjustments or supplemental payments. In establishing the 
42.7 	specified outcomes and related criteria, the commissioner shall consider the following 
42.8 	state policy objectives:
42.9 	(1) successful diversion or discharge of residents to the residents' prior home or 
42.10 	other community-based alternatives;
42.11 	(2) adoption of new technology to improve quality or efficiency; 
42.12 	(3) improved quality as measured in the Nursing Home Report Card; 
42.13 	(4) reduced acute care costs; and
42.14 	(5) any additional outcomes proposed by a nursing facility that the commissioner 
42.15 	finds desirable.

42.16 	Sec. 20. Minnesota Statutes 2004, section 256B.434, is amended by adding a 
42.17 	subdivision to read:
42.18 		Subd. 4f.Construction project rate adjustments effective October 1, 2006. (a) 
42.19 	Effective October 1, 2006, facilities reimbursed under this section may receive a property 
42.20 	rate adjustment for construction projects exceeding the threshold in section 256B.431, 
42.21 	subdivision 16, and under the threshold in section 144A.071, subdivision 2, clause (a). For 
42.22 	these projects, capital assets purchased shall be counted as construction project costs for a 
42.23 	rate adjustment request made by a facility if they are: (1) purchased within 24 months 
42.24 	of the completion of the construction project; (2) purchased after the completion date of 
42.25 	any prior construction project; and (3) are not purchased prior to July 14, 2005. Except 
42.26 	as otherwise provided in this subdivision, the definitions, rate calculation methods, and 
42.27 	principles in sections 144A.071 and 256B.431 and Minnesota Rules, parts 9549.0010 
42.28 	to 9549.0080, shall be used to calculate rate adjustments for allowable construction 
42.29 	projects under this subdivision and section 144A.073. Facilities completing construction 
42.30 	projects between October 1, 2005, and October 1, 2006, are eligible to have a property 
42.31 	rate adjustment effective October 1, 2006. Facilities completing projects after October 1, 
42.32 	2006, are eligible for a property rate adjustment effective on the first day of the month 
42.33 	following the completion date.
42.34 	(b) Notwithstanding subdivision 18, as of July 14, 2005, facilities with rates set 
42.35 	under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, that 
43.1 	commenced a construction project on or after October 1, 2004, and do not have a contract 
43.2 	under subdivision 3 by September 30, 2006, are eligible to request a rate adjustment under 
43.3 	section 256B.431, subdivision 10, through September 30, 2006. If the request results 
43.4 	in the commissioner determining a rate adjustment is allowable, the rate adjustment is 
43.5 	effective on the first of the month following project completion. These facilities shall 
43.6 	be allowed to accumulate construction project costs for the period October 1, 2004, to 
43.7 	September 30, 2006.
43.8 	(c) Facilities shall be allowed construction project rate adjustments no sooner than 
43.9 	12 months after completing a previous construction project. Facilities must request the 
43.10 	rate adjustment according to section 256B.431, subdivision 10.
43.11 	(d) Capacity days shall be computed according to Minnesota Rules, part 9549.0060, 
43.12 	subpart 11. For rate calculations under this section, the number of licensed beds in the 
43.13 	nursing facility shall be the number existing after the construction project is completed 
43.14 	and the number of days in the nursing facility's reporting period shall be 365.
43.15 	(e) The value of assets to be recognized for a total replacement project as defined 
43.16 	in section 256B.431, subdivision 17d, shall be computed as described in clause (1). The 
43.17 	value of assets to be recognized for all other projects shall be computed as described 
43.18 	in clause (2):
43.19 	(1) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the 
43.20 	number of beds allowed under subdivision 3a, paragraph (c), shall be used to compute the 
43.21 	maximum amount of assets allowable in a facility's property rate calculation. If a facility's 
43.22 	current request for a rate adjustment results from the completion of a construction 
43.23 	project that was previously approved under section 144A.073, the assets to be used in 
43.24 	the rate calculation cannot exceed the lesser of the amount determined under sections 
43.25 	144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable costs of 
43.26 	the construction project. A current request that is not the result of a project under section 
43.27 	144A.073 cannot exceed the limit under section 144A.071, subdivision 2, paragraph (a). 
43.28 	Applicable credits must be deducted from the cost of the construction project.
43.29 	(2) (i) Replacement-cost-new limits under section 256B.431, subdivision 17e, and 
43.30 	the number of beds allowed under section 256B.431, subdivision 3a, paragraph (c), shall 
43.31 	be used to compute the maximum amount of assets allowable in a facility's property 
43.32 	rate calculation.
43.33 	(ii) The value of a facility's assets to be compared to the amount in item (i) begins 
43.34 	with the total appraised value from the last rate notice a facility received when its rates 
43.35 	were set under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080. 
43.36 	This value shall be indexed by the factor in section 256B.431, subdivision 3f, paragraph 
44.1 	(a), for each rate year the facility received an inflation factor on its property-related rate 
44.2 	when its rates were set under this section. The value of assets listed as previous capital 
44.3 	additions, capital additions, and special projects on the facility's base year rate notice 
44.4 	and the value of assets related to a construction project for which the facility received a 
44.5 	rate adjustment when its rates were determined under this section shall be added to the 
44.6 	indexed appraised value.
44.7 	(iii) The maximum amount of assets to be recognized in computing a facility's rate 
44.8 	adjustment after a project is completed is the lesser of the aggregate replacement-cost-new 
44.9 	limit computed in (i) minus the assets recognized in (ii) or the actual allowable costs of 
44.10 	the construction project.
44.11 	(iv) If a facility's current request for a rate adjustment results from the completion of 
44.12 	a construction project that was previously approved under section 144A.073, the assets to 
44.13 	be added to the rate calculation cannot exceed the lesser of the amount determined under 
44.14 	sections 144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable 
44.15 	costs of the construction project. A current request that is not the result of a project under 
44.16 	section 144A.073 cannot exceed the limit stated in section 144A.071, subdivision 2, 
44.17 	paragraph (a). Assets disposed of as a result of a construction project and applicable 
44.18 	credits must be deducted from the cost of the construction project.
44.19 	(f) For construction projects approved under section 144A.073, allowable debt can 
44.20 	never exceed the cost of the assets purchased, the threshold limit in section 144A.071, 
44.21 	subdivision 2, or the replacement-cost-new limit less previously existing capital debt.
44.22 	(g) For construction projects that were not approved under section 144A.073, 
44.23 	allowable debt is limited to the lesser of the threshold in section 144A.071, subdivision 2, 
44.24 	for such construction projects or the applicable limit in paragraph (e), clause (1) or (2), 
44.25 	less previously existing capital debt. Amounts of debt taken out that exceed the costs of a 
44.26 	construction project shall not be allowed regardless of the use of the funds.
44.27 	For all construction projects being recognized, interest expense and average debt 
44.28 	shall be computed based on the first 12 months following project completion. "Previously 
44.29 	existing capital debt" means capital debt recognized on the last rate determined under 
44.30 	section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, and the amount of 
44.31 	debt recognized for a construction project for which the facility received a rate adjustment 
44.32 	when its rates were determined under this section.
44.33 	For a total replacement project as defined in section 256B.431, subdivision 17d, the 
44.34 	value of previously existing capital debt shall be zero.
45.1 	(h) In addition to the interest expense allowed from the application of paragraph (f), 
45.2 	the amounts allowed under section 256B.431, subdivision 17a, paragraph (a), clauses (2) 
45.3 	and (3), will be added to interest expense.
45.4 	(i) The equity portion of the construction project shall be computed as the allowable 
45.5 	assets in paragraph (e), less the average debt in paragraph (f). The equity portion must 
45.6 	be multiplied by 5.66 percent and the allowable interest expense in paragraph (f) must 
45.7 	be added. This sum must be divided by 95 percent of capacity days to compute the 
45.8 	construction project rate adjustment.
45.9 	(j) For projects that are not a total replacement of a nursing facility, the amount 
45.10 	in paragraph (i) is adjusted for nonreimbursable areas and then added to the current 
45.11 	property-related per diem of the facility.
45.12 	(k) For projects that are a total replacement of a nursing facility, the amount 
45.13 	in paragraph (i) becomes the new property-related per diem after being adjusted for 
45.14 	nonreimbursable areas. Any amounts existing in a facility's rate before the effective date 
45.15 	of the construction project for equity incentives under section 256B.431, subdivision 16; 
45.16 	capital repairs and replacements under section 256B.431, subdivision 15; or refinancing 
45.17 	incentives under section 256B.431, subdivision 19, shall be removed from the facility's 
45.18 	rates.
45.19 	(l) No additional equipment allowance is allowed under Minnesota Rules, part 
45.20 	9549.0060, subpart 10, as the result of construction projects under this section. Allowable 
45.21 	equipment shall be included in the construction project costs.
45.22 	(m) Capital assets purchased after the completion date of a construction project shall 
45.23 	be counted as construction project costs for any future rate adjustment request made by a 
45.24 	facility under section 144A.071, subdivision 2, clause (a), if they are purchased within 24 
45.25 	months of the completion of the future construction project.
45.26 	(n) In subsequent rate years, the property-related rate for a facility that results from 
45.27 	the application of this subdivision shall be the amount inflated in subdivision 4.
45.28 	(o) Construction projects are eligible for an equity incentive under section 256B.431, 
45.29 	subdivision 16. When computing the equity incentive for a construction project under 
45.30 	this subdivision, only the allowable costs and allowable debt related to the construction 
45.31 	project shall be used. The equity incentive shall not be a part of the property-related per 
45.32 	diem and not inflated under subdivision 4.

45.33 	Sec. 21. Minnesota Statutes 2004, section 256B.434, is amended by adding a 
45.34 	subdivision to read:
46.1 		Subd. 4g.Facility rate increase effective October 1, 2007; Otter Tail County.
 46.2 	For the rate year beginning October 1, 2007, a nursing facility in Otter Tail County 
46.3 	that was licensed for 57 beds as of December 31, 2004, shall receive a rate increase to 
46.4 	increase its operating rate to the 60th percentile of the operating rates of all other Otter 
46.5 	Tail County nursing facilities. The commissioner shall determine the 60th percentile of 
46.6 	the case mix portion of the operating rates with a RUGS weight of 1.0 of all other Otter 
46.7 	Tail County  nursing facilities and then apply the case mix weights.  The 60th percentile of 
46.8 	the other  operating per diem for all other Otter Tail County nursing facilities will be added 
46.9 	to the above-determined case mix rates to compute the operating payment rates. The 
46.10 	nonoperating components of the facility's rates will not be adjusted under this subdivision.

46.11 	Sec. 22. Minnesota Statutes 2004, section 256B.434, is amended by adding a 
46.12 	subdivision to read:
46.13 		Subd. 4h.Nursing facility rate increase effective October 1, 2007; Martin 
46.14 	County. For the rate year beginning October 1, 2007, the commissioner shall provide to a 
46.15 	nursing facility in Martin County licensed for 93 beds as of January 1, 2006, an increase in 
46.16 	the total operating payment rate of $5 per resident day for all case mix classes.

46.17 	Sec. 23. Minnesota Statutes 2004, section 256B.437, subdivision 3, is amended to read:
46.18 		Subd. 3.Applications for planned closure of nursing facilities. (a) By August 
46.19 	15, 2001, the commissioner of human services shall implement and announce a program 
46.20 	for closure or partial closure of nursing facilities. Names and identifying information 
46.21 	provided in response to the announcement shall remain private unless approved, according 
46.22 	to the timelines established in the plan. The announcement must specify:
46.23 	(1) the criteria in subdivision 4 that will be used by the commissioner to approve or 
46.24 	reject applications;
46.25 	(2) the information that must accompany an application; and
46.26 	(3) that applications may combine planned closure rate adjustments with moratorium 
46.27 	exception funding, in which case a single application may serve both purposes.
46.28 	Between August 1, 2001, and June 30, 2003, the commissioner may approve planned 
46.29 	closures of up to 5,140 nursing facility beds, less the number of beds delicensed in 
46.30 	facilities during the same time period without approved closure plans or that have notified 
46.31 	the commissioner of health of their intent to close without an approved closure plan. 
46.32 	Beginning July 1, 2004, the commissioner may negotiate a planned closure rate adjustment 
46.33 	for nursing facilities providing the proposal has no cost to the state. For planned closure 
46.34 	rate adjustments negotiated after March 1, 2006, the limit of $2,080 in subdivision 6, 
47.1 	paragraph (a), clause (1), shall not apply. The removal of the limit in subdivision 6, 
47.2 	paragraph (a), clause (1), shall not constitute an increase to the amount specified in 
47.3 	subdivision 6, paragraph (a), clause (1), for the purposes of subdivision 6, paragraph (f).
47.4 	(b) A facility or facilities reimbursed under section  256B.431 or  256B.434 with a 
47.5 	closure plan approved by the commissioner under subdivision 5 may assign a planned 
47.6 	closure rate adjustment to another facility or facilities that are not closing or in the case of 
47.7 	a partial closure, to the facility undertaking the partial closure. A facility may also elect to 
47.8 	have a planned closure rate adjustment shared equally by the five nursing facilities with 
47.9 	the lowest total operating payment rates in the state development region designated under 
47.10 	section  462.385, in which the facility that is closing is located. The planned closure 
47.11 	rate adjustment must be calculated under subdivision 6. Facilities that delicense beds 
47.12 	without a closure plan, or whose closure plan is not approved by the commissioner, are not 
47.13 	eligible to assign a planned closure rate adjustment under subdivision 6, unless they are 
47.14 	delicensing five or fewer beds, or less than six percent of their total licensed bed capacity, 
47.15 	whichever is greater, are located in a county in the top three quartiles of beds per 1,000 
47.16 	persons aged 65 or older, and have not delicensed beds in the prior three months. Facilities 
47.17 	meeting these criteria are eligible to assign the amount calculated under subdivision 6 to 
47.18 	themselves. If a facility is delicensing the greater of six or more beds, or six percent or 
47.19 	more of its total licensed bed capacity, and does not have an approved closure plan or is 
47.20 	not eligible for the adjustment under subdivision 6, the commissioner shall calculate the 
47.21 	amount the facility would have been eligible to assign under subdivision 6, and shall use 
47.22 	this amount to provide equal rate adjustments to the five nursing facilities with the lowest 
47.23 	total operating payment rates in the state development region designated under section  
47.24 	462.385, in which the facility that delicensed beds is located. 
47.25 	(c) To be considered for approval, an application must include:
47.26 	(1) a description of the proposed closure plan, which must include identification of 
47.27 	the facility or facilities to receive a planned closure rate adjustment;
47.28 	(2) the proposed timetable for any proposed closure, including the proposed dates 
47.29 	for announcement to residents, commencement of closure, and completion of closure;
47.30 	(3) if available, the proposed relocation plan for current residents of any facility 
47.31 	designated for closure. If a relocation plan is not available, the application must include a 
47.32 	statement agreeing to develop a relocation plan designed to comply with section  144A.161; 
47.33 	(4) a description of the relationship between the nursing facility that is proposed for 
47.34 	closure and the nursing facility or facilities proposed to receive the planned closure rate 
47.35 	adjustment. If these facilities are not under common ownership, copies of any contracts, 
48.1 	purchase agreements, or other documents establishing a relationship or proposed 
48.2 	relationship must be provided;
48.3 	(5) documentation, in a format approved by the commissioner, that all the nursing 
48.4 	facilities receiving a planned closure rate adjustment under the plan have accepted joint 
48.5 	and several liability for recovery of overpayments under section  256B.0641, subdivision 
48.6 	2, for the facilities designated for closure under the plan; and 
48.7 	(6) an explanation of how the application coordinates with planning efforts under 
48.8 	subdivision 2. If the planning group does not support a level of nursing facility closures 
48.9 	that the commissioner considers to be reasonable, the commissioner may approve a 
48.10 	planned closure proposal without its support.
48.11 	(d) The application must address the criteria listed in subdivision 4.

48.12 	EFFECTIVE DATE. This section is effective retroactively from March 1, 2006.

48.13 	Sec. 24. Minnesota Statutes 2004, section 256B.438, subdivision 4, is amended to read:
48.14 		Subd. 4.Resident assessment schedule. (a) Nursing facilities shall conduct and 
48.15 	submit case mix assessments according to the schedule established by the commissioner 
48.16 	of health under section  144.0724, subdivisions 4 and 5. 
48.17 	(b) The resident reimbursement classifications established under section  144.0724, 
48.18 	subdivision 3, shall be effective the day of admission for new admission assessments. The 
48.19 	effective date for significant change assessments shall be the assessment reference date. 
48.20 	The effective date for annual and second quarterly assessments shall be the first day of the 
48.21 	month following assessment reference date. 
48.22 	(c) Effective October 1, 2006, the commissioner shall rebase payment rates 
48.23 	to account for the change in the resident assessment schedule in section 144.0724, 
48.24 	subdivision 4, paragraph (b), clause (4), in a facility specific budget neutral manner, 
48.25 	according to subdivision 7, paragraph (b). The rebased payment rates shall apply only for 
48.26 	the rate period October 1, 2006, through September 30, 2008.

48.27 	Sec. 25. Minnesota Statutes 2004, section 256B.69, subdivision 9, is amended to read:
48.28 		Subd. 9.Reporting. (a) Each demonstration provider shall submit information as 
48.29 	required by the commissioner, including data required for assessing client satisfaction, 
48.30 	quality of care, cost, and utilization of services for purposes of project evaluation. The 
48.31 	commissioner shall also develop methods of data reporting and collection from county 
48.32 	advocacy activities in order to provide aggregate enrollee information on encounters 
48.33 	and outcomes to determine access and quality assurance. Required information shall be 
48.34 	specified before the commissioner contracts with a demonstration provider.
49.1 	(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate 
49.2 	spending data for major categories of service as reported to the commissioners of health 
49.3 	and commerce under section 62D.08, subdivision 3, paragraph (a), and criteria for 
49.4 	service authorization and service use are public data that the commissioner shall make 
49.5 	available and use in public reports. The commissioner shall require each health plan and 
49.6 	county-based purchasing plan to provide:
49.7 	(1) encounter data for each service provided, using standard codes and unit of 
49.8 	service definitions set by the commissioner, in a form that the commissioner can report by 
49.9 	age, eligibility groups, and health plan; and
49.10 	(2) criteria, written policies, and procedures required to be disclosed under section 
49.11 	62M.10, subdivision 7, and Code of Federal Regulations, title 42, part 438.210(b)(1), used 
49.12 	for each type of service for which authorization is required.

49.13 	Sec. 26. Minnesota Statutes 2005 Supplement, section 256B.69, subdivision 23, 
49.14 	is amended to read:
49.15 		Subd. 23.Alternative services; elderly and disabled persons. (a) The 
49.16 	commissioner may implement demonstration projects to create alternative integrated 
49.17 	delivery systems for acute and long-term care services to elderly persons and persons 
49.18 	with disabilities as defined in section 256B.77, subdivision 7a, that provide increased 
49.19 	coordination, improve access to quality services, and mitigate future cost increases. 
49.20 	The commissioner may seek federal authority to combine Medicare and Medicaid 
49.21 	capitation payments for the purpose of such demonstrations and may contract with 
49.22 	Medicare-approved special needs plans to provide Medicaid services. Medicare funds 
49.23 	and services shall be administered according to the terms and conditions of the federal 
49.24 	waiver contract and demonstration provisions. For the purpose of administering medical 
49.25 	assistance funds, demonstrations under this subdivision are subject to subdivisions 1 to 
49.26 	22. The provisions of Minnesota Rules, parts 9500.1450 to 9500.1464, apply to these 
49.27 	demonstrations, with the exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, 
49.28 	subpart 1, items B and C, which do not apply to persons enrolling in demonstrations 
49.29 	under this section. An initial open enrollment period may be provided. Persons who 
49.30 	disenroll from demonstrations under this subdivision remain subject to Minnesota Rules, 
49.31 	parts 9500.1450 to 9500.1464. When a person is enrolled in a health plan under these 
49.32 	demonstrations and the health plan's participation is subsequently terminated for any 
49.33 	reason, the person shall be provided an opportunity to select a new health plan and shall 
49.34 	have the right to change health plans within the first 60 days of enrollment in the second 
49.35 	health plan. Persons required to participate in health plans under this section who fail 
50.1 	to make a choice of health plan shall not be randomly assigned to health plans under 
50.2 	these demonstrations. Notwithstanding section 256L.12, subdivision 5, and Minnesota 
50.3 	Rules, part 9505.5220, subpart 1, item A, if adopted, for the purpose of demonstrations 
50.4 	under this subdivision, the commissioner may contract with managed care organizations, 
50.5 	including counties, to serve only elderly persons eligible for medical assistance, elderly 
50.6 	and disabled persons, or disabled persons only. For persons with primary diagnoses of 
50.7 	mental retardation or a related condition, serious and persistent mental illness, or serious 
50.8 	emotional disturbance, the commissioner must ensure that the county authority has 
50.9 	approved the demonstration and contracting design. Enrollment in these projects for 
50.10 	persons with disabilities shall be voluntary. The commissioner shall not implement any 
50.11 	demonstration project under this subdivision for persons with primary diagnoses of 
50.12 	mental retardation or a related condition, serious and persistent mental illness, or serious 
50.13 	emotional disturbance, without approval of the county board of the county in which the 
50.14 	demonstration is being implemented.
50.15 	(b) Notwithstanding chapter 245B, sections 252.40 to 252.46, 256B.092, 256B.501
50.16 	to 256B.5015, and Minnesota Rules, parts 9525.0004 to 9525.0036, 9525.1200 to 
50.17 	9525.1330, 9525.1580, and 9525.1800 to 9525.1930, the commissioner may implement 
50.18 	under this section projects for persons with developmental disabilities. The commissioner 
50.19 	may capitate payments for ICF/MR services, waivered services for mental retardation or 
50.20 	related conditions, including case management services, day training and habilitation and 
50.21 	alternative active treatment services, and other services as approved by the state and by the 
50.22 	federal government. Case management and active treatment must be individualized and 
50.23 	developed in accordance with a person-centered plan. Costs under these projects may not 
50.24 	exceed costs that would have been incurred under fee-for-service. Beginning July 1, 2003, 
50.25 	and until two years after the pilot project implementation date, subcontractor participation 
50.26 	in the long-term care developmental disability pilot is limited to a nonprofit long-term 
50.27 	care system providing ICF/MR services, home and community-based waiver services, 
50.28 	and in-home services to no more than 120 consumers with developmental disabilities in 
50.29 	Carver, Hennepin, and Scott Counties. The commissioner shall report to the legislature 
50.30 	prior to expansion of the developmental disability pilot project. This paragraph expires 
50.31 	two years after the implementation date of the pilot project.
50.32 	(c) Before implementation of a demonstration project for disabled persons, the 
50.33 	commissioner must provide information to appropriate committees of the house of 
50.34 	representatives and senate and must involve representatives of affected disability groups 
50.35 	in the design of the demonstration projects.
51.1 	(d) A nursing facility reimbursed under the alternative reimbursement methodology 
51.2 	in section 256B.434 may, in collaboration with a hospital, clinic, or other health care entity 
51.3 	provide services under paragraph (a). The commissioner shall amend the state plan and 
51.4 	seek any federal waivers necessary to implement this paragraph.
51.5 	(e) The commissioner, in consultation with the commissioners of commerce and 
51.6 	health, may approve and implement programs for all-inclusive care for the elderly (PACE) 
51.7 	according to federal laws and regulations governing that program and state laws or rules 
51.8 	applicable to participating providers. The process for approval of these programs shall 
51.9 	begin only after the commissioner receives grant money in an amount sufficient to cover 
51.10 	the state share of the administrative and actuarial costs to implement the programs during 
51.11 	state fiscal years 2006 and 2007. Grant amounts for this purpose shall be deposited in an 
51.12 	account in the special revenue fund and are appropriated to the commissioner to be used 
51.13 	solely for the purpose of PACE administrative and actuarial costs. A PACE provider is 
51.14 	not required to be licensed or certified as a health plan company as defined in section 
51.15 	62Q.01, subdivision 4. Persons age 55 and older who have been screened by the county 
51.16 	and found to be eligible for services under the elderly waiver or community alternatives 
51.17 	for disabled individuals or who are already eligible for Medicaid but meet level of 
51.18 	care criteria for receipt of waiver services may choose to enroll in the PACE program. 
51.19 	Medicare and Medicaid services will be provided according to this subdivision and 
51.20 	federal Medicare and Medicaid requirements governing PACE providers and programs. 
51.21 	PACE enrollees will receive Medicaid home and community-based services through the 
51.22 	PACE provider as an alternative to services for which they would otherwise be eligible 
51.23 	through home and community-based waiver programs and Medicaid State Plan Services. 
51.24 	The commissioner shall establish Medicaid rates for PACE providers that do not exceed 
51.25 	costs that would have been incurred under fee-for-service or other relevant managed care 
51.26 	programs operated by the state.
51.27 	(f) The commissioner shall seek federal approval to expand the Minnesota disability 
51.28 	health options (MnDHO) program established under this subdivision in stages, first to 
51.29 	regional population centers outside the seven-county metro area and then to all areas 
51.30 	of the state. Until January 1, 2008, expansion for MnDHO projects that include home 
51.31 	and community-based services is limited to the two projects and service areas in effect 
51.32 	on March 1, 2006.  Enrollment in integrated MnDHO programs that include home and 
51.33 	community-based services shall remain voluntary. Costs for home and community-based 
51.34 	services included under MnDHO must not exceed costs that would have been incurred 
51.35 	under the fee-for-service program. In developing program specifications for expansion of 
51.36 	integrated programs, the commissioner shall involve and consult the state-level stakeholder 
52.1 	group established in subdivision 28, paragraph (d), including consultation on whether and 
52.2 	how to include home and community-based waiver programs. Plans for further expansion 
52.3 	of MnDHO projects shall be presented to the chairs of the house and senate committees 
52.4 	with jurisdiction over health and human services policy and finance by February 1, 2007.
52.5 	(g) Notwithstanding section 256B.0261, health plans providing services under this 
52.6 	section are responsible for home care targeted case management and relocation targeted 
52.7 	case management. Services must be provided according to the terms of the waivers and 
52.8 	contracts approved by the federal government.

52.9 	EFFECTIVE DATE. This section is effective the day following final enactment. 

52.10 	Sec. 27. Minnesota Statutes 2004, section 256B.69, is amended by adding a 
52.11 	subdivision to read:
52.12 		Subd. 28.Medicare special needs plans and medical assistance basic health 
52.13 	care for persons with disabilities. (a) The commissioner may contract with qualified 
52.14 	Medicare-approved special needs plans to provide medical assistance basic health care 
52.15 	services to persons with disabilities, including those with developmental disabilities. 
52.16 	Basic health care services include:
52.17 	(1) those services covered by the medical assistance state plan except for ICF/MR 
52.18 	services, home and community-based waiver services, case management for persons with 
52.19 	developmental disabilities under section 256B.0625, subdivision 20a, and personal care 
52.20 	and certain home care services defined by the commissioner in consultation with the 
52.21 	stakeholder group established under paragraph (d);
52.22 	(2) basic health care services may also include risk for up to 100 days of nursing 
52.23 	facility services for persons who reside in a noninstitutional setting and home health 
52.24 	services related to rehabilitation as defined by the commissioner after consultation with 
52.25 	the stakeholder group; and
52.26 	(3) the commissioner may exclude other medical assistance services from the basic 
52.27 	health care benefit set. Enrollees in these plans can access any excluded services on the 
52.28 	same basis as other medical assistance recipients who have not enrolled.
52.29 	Unless a person is otherwise required to enroll in managed care, enrollment in these 
52.30 	plans for Medicaid services must be voluntary. For purposes of this subdivision, automatic 
52.31 	enrollment with an option to opt out is not voluntary enrollment. 
52.32 	(b) Beginning January 1, 2007, the commissioner may contract with qualified 
52.33 	Medicare special needs plans to provide basic health care services under medical 
52.34 	assistance to persons who are dually eligible for both Medicare and Medicaid and those 
52.35 	Social Security beneficiaries eligible for Medicaid but in the waiting period for Medicare. 
53.1 	The commissioner shall consult with the stakeholder group under paragraph (d) in 
53.2 	developing program specifications for these services. The commissioner shall report to 
53.3 	the chairs of the house and senate committees with jurisdiction over health and human 
53.4 	services policy and finance by February 1, 2007, on implementation of these programs and 
53.5 	the need for increased funding for the ombudsman for managed care and other consumer 
53.6 	assistance and protections needed due to enrollment in managed care of persons with 
53.7 	disabilities. Payment for Medicaid services provided under this subdivision for the months 
53.8 	of May and June will be made no earlier than July 1 of the same calendar year.
53.9 	(c) Beginning January 1, 2008, the commissioner may expand contracting under this 
53.10 	subdivision to all persons with disabilities not otherwise required to enroll in managed 
53.11 	care.
53.12 	(d) The commissioner shall establish a state-level stakeholder group to provide 
53.13 	advice on managed care programs for persons with disabilities, including both MnDHO 
53.14 	and contracts with special needs plans that provide basic health care services as described 
53.15 	in paragraphs (a) and (b). The stakeholder group shall provide advice on program 
53.16 	expansions under this subdivision and subdivision 23, including:
53.17 	(1) implementation efforts; 
53.18 	(2) consumer protections; and 
53.19 	(3) program specifications such as quality assurance measures, data collection and 
53.20 	reporting, and evaluation of costs, quality, and results.
53.21 	(e) Each plan under contract to provide medical assistance basic health care services 
53.22 	shall establish a local or regional stakeholder group, including representatives of the 
53.23 	counties covered by the plan, members, consumer advocates, and providers, for advice on 
53.24 	issues that arise in the local or regional area.

53.25 	Sec. 28. Laws 2005, First Special Session chapter 4, article 9, section 5, subdivision 8, 
53.26 	is amended to read:

53.27	Subd. 8.Board of Nursing
 		3,078,000
		3,631,000
	
53.28 	
53.29 	BASE ADJUSTMENT. The base for the  
53.30 	board of nursing is increased by  $141,000 
53.31 	in fiscal year 2008 and by  $216,000 in fiscal 
53.32 	year 2009.  
53.33 	BOARD OF NURSING 
53.34 	APPROPRIATIONS  INCREASE. Of 
54.1 	this appropriation,  $120,000 the first year 
54.2 	and $126,000  the second year are for the 
54.3 	increased  cost of board operations, excluding  
54.4 	salary increases and $85,000 each year  is to 
54.5 	hire an advanced practice  registered nurse.  
54.6 	TRANSFERS FROM SPECIAL 
54.7 	REVENUE FUND.  Of this appropriation, 
54.8 	the following  transfers shall be made as 
54.9 	directed  from the state government special  
54.10 	revenue fund:  
54.11 	(a) $392,000 in fiscal year 2006,  $864,000 
54.12 	in fiscal year 2007, $930,000  in fiscal year 
54.13 	2008, and $930,000 in  fiscal year 2009 
54.14 	shall be transferred  to the general fund 
54.15 	and is appropriated  to the Department 
54.16 	of Human Services to  offset the state 
54.17 	share of the medical  assistance program 
54.18 	costs of the  long-term care and home and  
54.19 	community-based care employee  scholarship 
54.20 	program and associated  administrative costs.  
54.21 	At the end of  each biennium, any funds 
54.22 	not expended  for the scholarship program 
54.23 	and  associated administrative costs shall  
54.24 	be transferred to the state government 
54.25 	special revenue fund carried over to the 
54.26 	next biennium for the same purpose.  
54.27 	Notwithstanding  section 15, this paragraph 
54.28 	expires June  30, 2009 2011.  
54.29 	(b) $125,000 the first year and  $200,000 the 
54.30 	second year shall be  transferred to the health 
54.31 	professional  education loan forgiveness 
54.32 	program  account for loan forgiveness 
54.33 	for nurses  under Minnesota Statutes, 
54.34 	section  144.1501.  This appropriation shall  
54.35 	become part of base level funding for  the 
55.1 	commissioner for the biennium  beginning 
55.2 	July 1, 2007, but shall not  be part of base 
55.3 	level funding for the  biennium beginning 
55.4 	July 1, 2009.  Notwithstanding section 15, 
55.5 	this  paragraph expires on June 30, 2009.  

55.6 	Sec. 29. STAKEHOLDER PARTICIPATION.
 55.7 	The commissioner of human services shall confer with one or more stakeholder 
55.8 	groups of interested persons, including representatives of recipients, advocacy groups, 
55.9 	counties, providers, and health plans to provide information and advice on the development 
55.10 	of any substantial proposals for changes in the medical assistance program authorized by 
55.11 	the federal Deficit Reduction Act of 2005, Public Law 109-171. In addition, for any 
55.12 	substantial Deficit Reduction Act-related medical assistance change that affects recipients 
55.13 	and that is proposed outside of the legislative or rulemaking process, the commissioner 
55.14 	shall convene a stakeholder meeting and provide a 30-day comment period before the 
55.15 	change becomes effective. If the time frame required to comply with a federal mandate 
55.16 	precludes the 30-day advance notice, notice shall be given to the stakeholder group as 
55.17 	soon as possible.

55.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

55.19 	Sec. 30. ICF/MR PLAN.
 55.20 	The commissioner of human services shall consult with ICF/MR providers, 
55.21 	advocates, counties, and consumer families to develop a stakeholder plan and legislation 
55.22 	concerning the future services provided to people served in ICFs/MR. The plan shall be 
55.23 	reported to the house and senate committees with jurisdiction over health and human 
55.24 	services policy and finance issues by December 15, 2008. In preparing the plan, the 
55.25 	commissioner shall consider:
55.26 	(1) consumer choice of services;
55.27 	(2) consumers' service needs, including, but not limited to, active treatment;
55.28 	(3) the total cost of providing services in ICFs/MR and alternative delivery systems 
55.29 	for individuals currently residing in ICFs/MR;
55.30 	(4) the impact of the payment shift to counties for ICFs/MR with more than six beds;
55.31 	(5) whether it is the policy of the state to maintain an ICF/MR system and, if so, 
55.32 	the plan shall:
55.33 	(i) define the purpose, types of services, and intended recipients of ICF/MR services;
56.1 	(ii) define the capacity needed to maintain ICF/MR services for designated 
56.2 	populations;
56.3 	(iii) evaluate incentives for counties to maintain ICF/MR services;
56.4 	(iv) ensure that mechanisms are provided to adequately fund the transition to the 
56.5 	defined services, maintain the designated capacity, and are adjustable to meet increased 
56.6 	service demands; and
56.7 	(v) address the extent to which there is consensus among stakeholders; and
56.8 	(6) if alternative services are recommended to support the people now receiving 
56.9 	services in an ICF/MR, the plan shall provide for transition planning and ensure adequate 
56.10 	state and federal financial resources are available to meet the needs of ICF/MR recipients.

56.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

56.12 	Sec. 31. ADDITIONAL WAIVER ALLOCATIONS.
 56.13 	Notwithstanding the waiver growth limits in Laws 2005, First Special Session 
56.14 	chapter 4, article 9, section 2, paragraph (d), the commissioner may allocate an additional 
56.15 	waiver allocation under Minnesota Statutes, section 256B.49, for a recipient of personal 
56.16 	care assistant services who is eligible for and chooses waivered services and received 
56.17 	personal care assistant services from a provider who was billing for a service delivery 
56.18 	model for that recipient other than individual or shared care on March 1, 2006.

56.19 	Sec. 32. REPORT ON NEW CASE MIX INDICES.
 56.20 	The commissioner of human services shall report to the legislature by December 
56.21 	15, 2006, a mechanism to implement the case mix indices recommended in the 2004 
56.22 	Minnesota Nursing Facility Staff Time Measurement Study.

56.23 	Sec. 33. COMMISSIONER OF HUMAN SERVICES; CONTINUING CARE 
56.24 	MANAGEMENT BASE LEVEL ADJUSTMENT.
 56.25 	The general fund base for continuing care management is increased by $20,000 in 
56.26 	fiscal year 2008 and by $30,000 in fiscal year 2009.

56.27 	Sec. 34. 
56.28 	REPAYMENT DELAY.
56.29 	A county that overspent its allowed amounts in calendar year 2004 or 2005 under 
56.30 	the waivered services program for persons with developmental disabilities shall not be 
56.31 	required to pay back the amount of overspending until May 31, 2007.