Office of the Revisor of Statutes
HF 1419
Introduction - 94th Legislature (2025 - 2026)
Posted on 02/26/2025 01:44 p.m.
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A bill for an act
relating to human services; modifying elderly waiver rates and nursing facility
reimbursement rates; amending Minnesota Statutes 2024, sections 256R.02,
subdivision 19, by adding a subdivision; 256R.23, subdivisions 2, 3; 256R.24,
subdivision 1; 256R.25; 256S.211, subdivisions 1, 2; 256S.213, subdivision 1;
proposing coding for new law in Minnesota Statutes, chapter 256R.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 256R.02, subdivision 19, is amended to read:
Subd. 19.
External fixed costs.
"External fixed costs" means costs related to the nursing
home surcharge under section 256.9657, subdivision 1; licensure fees under section 144.122;
family advisory council fee under section 144A.33; scholarships under section 256R.37;
planned closure rate adjustments under section 256R.40; consolidation rate adjustments
under section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d;
single-bed room incentives under section 256R.41; property taxes, special assessments, and
payments in lieu of taxes; employer health insurance costs; quality improvement incentive
payment rate adjustments under section 256R.39; performance-based incentive payments
under section 256R.38; special dietary needs under section 256R.51; Public Employees
Retirement Association employer costs; deleted text begin anddeleted text end border city rate adjustments under section
256R.481new text begin ; and the rate adjustment for nursing home wage standards under section 256R.495new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2026, or upon federal approval,
whichever is later, and applies retroactively to the rate year beginning January 1, 2026. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end
Sec. 2.
Minnesota Statutes 2024, section 256R.02, is amended by adding a subdivision to
read:
new text begin Subd. 25b. new text end
new text begin Known cost change factor. new text end
new text begin
"Known cost change factor" means 1.00 plus
the average amount of increase in minimum wages for nursing home employees approved
by the Nursing Home Workforce Standards Board established under section 181.212 and
taking effect within the previous 12 months.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2027, or upon federal approval,
whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end
Sec. 3.
Minnesota Statutes 2024, section 256R.23, subdivision 2, is amended to read:
Subd. 2.
Calculation of direct care cost per standardized day.
Each facility's direct
care cost per standardized day isnew text begin calculated as follows: (1) multiplynew text end the facility's direct care
costs deleted text begin divideddeleted text end new text begin and the known cost change factor; and (2) divide the result of clause (1)new text end by
the sum of the facility's standardized days. A facility's direct care cost per standardized day
is the facility's cost per day for direct care services associated with a case mix index of 1.00.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2027, or upon federal approval,
whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end
Sec. 4.
Minnesota Statutes 2024, section 256R.23, subdivision 3, is amended to read:
Subd. 3.
Calculation of other care-related cost per resident day.
Each facility's other
care-related cost per resident day is deleted text begin itsdeleted text end new text begin calculated as follows:
new text end
new text begin (1) multiply the facility'snew text end other care-related costsdeleted text begin , divideddeleted text end new text begin and the known cost change
factor; and
new text end
new text begin (2) divide the result of clause (1)new text end by the sum of the facility's resident days.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2027, or upon federal approval,
whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end
Sec. 5.
Minnesota Statutes 2024, section 256R.24, subdivision 1, is amended to read:
Subdivision 1.
Determination of other operating cost per day.
Each facility's other
operating cost per day is deleted text begin itsdeleted text end new text begin calculated as follows:
new text end
new text begin (1) multiply the facility'snew text end other operating costs deleted text begin divideddeleted text end new text begin and the known cost change factor;
and
new text end
new text begin (2) divide the result of clause (1)new text end by the sum of the facility's resident days.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2027, or upon federal approval,
whichever is later, and applies retroactively to the rate year beginning January 1, 2027. The
commissioner of human services shall notify the revisor of statutes when federal approval
is obtained.
new text end
Sec. 6.
Minnesota Statutes 2024, section 256R.25, is amended to read:
256R.25 EXTERNAL FIXED COSTS PAYMENT RATE.
(a) The payment rate for external fixed costs is the sum of the amounts in paragraphs
(b) to deleted text begin (p)deleted text end new text begin (q)new text end .
(b) For a facility licensed as a nursing home, the portion related to the provider surcharge
under section 256.9657 is equal to $8.86 per resident day. For a facility licensed as both a
nursing home and a boarding care home, the portion related to the provider surcharge under
section 256.9657 is equal to $8.86 per resident day multiplied by the result of its number
of nursing home beds divided by its total number of licensed beds.
(c) The portion related to the licensure fee under section 144.122, paragraph (d), is the
amount of the fee divided by the sum of the facility's resident days.
(d) The portion related to development and education of resident and family advisory
councils under section 144A.33 is $5 per resident day divided by 365.
(e) The portion related to scholarships is determined under section 256R.37.
(f) The portion related to planned closure rate adjustments is as determined under section
256R.40, subdivision 5, and Minnesota Statutes 2010, section 256B.436.
(g) The portion related to consolidation rate adjustments shall be as determined under
section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d.
(h) The portion related to single-bed room incentives is as determined under section
256R.41.
(i) The portions related to real estate taxes, special assessments, and payments made in
lieu of real estate taxes directly identified or allocated to the nursing facility are the allowable
amounts divided by the sum of the facility's resident days. Allowable costs under this
paragraph for payments made by a nonprofit nursing facility that are in lieu of real estate
taxes shall not exceed the amount which the nursing facility would have paid to a city or
township and county for fire, police, sanitation services, and road maintenance costs had
real estate taxes been levied on that property for those purposes.
(j) The portion related to employer health insurance costs is deleted text begin thedeleted text end new text begin calculated as follows:
new text end
new text begin (1) multiply the facility'snew text end allowablenew text begin employer health insurancenew text end costs deleted text begin divideddeleted text end new text begin and the
known cost change factor; and
new text end
new text begin (2) divide the result of clause (1)new text end by the sum of the facility's resident days.
(k) The portion related to the Public Employees Retirement Association is the allowable
costs divided by the sum of the facility's resident days.
(l) The portion related to quality improvement incentive payment rate adjustments is
the amount determined under section 256R.39.
(m) The portion related to performance-based incentive payments is the amount
determined under section 256R.38.
(n) The portion related to special dietary needs is the amount determined under section
256R.51.
(o) The portion related to the rate adjustments for border city facilities is the amount
determined under section 256R.481.
(p) The portion related to the rate adjustment for critical access nursing facilities is the
amount determined under section 256R.47.
new text begin
(q) The portion related to the rate adjustment for nursing home wage standards is the
amount determined under section 256R.495. This paragraph expires January 1, 2029.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
The amendment to paragraph (a) and the new paragraph (q) are
effective January 1, 2026, or upon federal approval, whichever is later, and apply retroactively
to the rate year beginning January 1, 2026. The amendments to paragraph (j) are effective
January 1, 2027, or upon federal approval, whichever is later, and apply retroactively to the
rate year beginning January 1, 2027. The commissioner of human services shall notify the
revisor of statutes when federal approval is obtained.
new text end
Sec. 7.
new text begin
[256R.495] RATE ADJUSTMENT FOR NURSING HOME WAGE
STANDARDS.
new text end
new text begin Subdivision 1. new text end
new text begin Nursing facility rate adjustment. new text end
new text begin
Effective for the rate years beginning
January 1, 2026, and January 1, 2027, nursing facility rates under this chapter must include
a rate adjustment to pay for the nursing home wage standards promulgated by the Nursing
Home Workforce Standards Board and adopted as proposed on October 28, 2024. Each
nursing facility reimbursed under this chapter must report to the commissioner the wage
rate for every employee and contracted employees below the minimum wage standards
established by the board under section 181.212.
new text end
new text begin Subd. 2. new text end
new text begin Application for January 1, 2026, and January 1, 2027, rate adjustments. new text end
new text begin
(a)
To receive a rate adjustment, a nursing facility must submit an application for each rate year
in which the rate adjustment under this section is in effect to the commissioner in a form
and manner determined by the commissioner. The application must include data for a period
beginning with the first pay period after July 1 of the year prior to the rate year in which
the rate adjustment takes effect, including at least three months of employee compensated
hours by wage rate, and a spending plan that describes how the funds from the rate adjustment
will be allocated for compensation to employees as defined by Minnesota Rules, part
5200.2060, that are paid less than the general wage standards defined in Minnesota Rules,
part 5200.2080, and the wage standards for certain positions defined by Minnesota Rules,
part 5200.2090. The application must be submitted by October 1 of the year prior to the
rate year in which the rate adjustment takes effect. The commissioner may request any
additional information needed to determine the rate adjustment within 20 calendar days of
receiving a completed application. The nursing facility must provide any additional
information requested by the commissioner within 20 calendar days of receiving a request
from the commissioner for additional information. The commissioner may waive the
deadlines in this subdivision under extraordinary circumstances.
new text end
new text begin
(b) For a nursing facility in which employees are represented by an exclusive bargaining
representative, the commissioner shall approve an application submitted under this
subdivision only upon receipt of a letter of acceptance of the spending plan in regard to
members of the bargaining unit, signed by the exclusive bargaining agent and dated after
July 1 of the year prior to the rate year in which the rate adjustment takes effect. Upon
receipt of the letter of acceptance, the commissioner shall deem all requirements of this
paragraph met in regard to the members of the bargaining unit.
new text end
new text begin Subd. 3. new text end
new text begin January 1, 2026, rate adjustment calculation. new text end
new text begin
Based on the application in
subdivision 2, the commissioner shall calculate the annualized compensation costs by adding
the totals of clauses (1) to (5). The result must be divided by the resident days from the most
recently available cost report to determine a per diem amount, which must be included in
the external fixed costs payment rate under section 256R.25:
new text end
new text begin
(1) for all nursing home workers, the sum of the difference between $19.00 and any
hourly wage rate of less than $19.00, multiplied by the number of compensated hours at
that wage rate;
new text end
new text begin
(2) for certified nursing assistants, the sum of the difference between $22.50 and any
hourly wage rate of less than $22.50, multiplied by the number of compensated hours at
that wage rate;
new text end
new text begin
(3) for trained medication aides, the sum of the difference between $23.50 and any hourly
wage rate of less than $23.50, multiplied by the number of compensated hours at that wage
rate;
new text end
new text begin
(4) for licensed practical nurses, the sum of the difference between $27.00 and any hourly
wage rate of less than $27.00, multiplied by the number of compensated hours at that wage
rate; and
new text end
new text begin
(5) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, pensions, and contributions to employee
retirement accounts attributable to the amounts in clauses (1) to (4).
new text end
new text begin Subd. 4. new text end
new text begin January 1, 2027, rate adjustment calculation. new text end
new text begin
Based on the application in
subdivision 2, the commissioner shall calculate the annualized compensation costs by adding
the totals of clauses (1) to (5). The result must be divided by the resident days from the most
recently available cost report to determine a per diem amount, which must be included in
the external fixed costs payment rate under section 256R.25:
new text end
new text begin
(1) for all nursing home workers, the sum of the difference between $20.50 and any
hourly wage rate of less than $20.50, multiplied by the number of compensated hours at
that wage rate;
new text end
new text begin
(2) for certified nursing assistants, the sum of the difference between $24.00 and any
hourly wage rate of less than $24.00, multiplied by the number of compensated hours at
that wage rate;
new text end
new text begin
(3) for trained medication aides, the sum of the difference between $25.00 and any hourly
wage rate of less than $25.00, multiplied by the number of compensated hours at that wage
rate;
new text end
new text begin
(4) for licensed practical nurses, the sum of the difference between $28.50 and any hourly
wage rate of less than $28.50, multiplied by the number of compensated hours at that wage
rate; and
new text end
new text begin
(5) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, pensions, and contributions to employee
retirement accounts attributable to the amounts in clauses (1) to (4).
new text end
new text begin Subd. 5. new text end
new text begin Rate adjustment timeline. new text end
new text begin
(a) For the rate year beginning January 1, 2026,
nursing facilities that receive approval of the application in subdivision 2 must receive a
rate adjustment according to subdivision 3. The rate adjustment must continue to be included
in the external fixed costs payment rate under section 256R.25 until January 1, 2028.
new text end
new text begin
(b) For the rate year beginning January 1, 2027, nursing facilities that receive approval
of the application in subdivision 2 must receive a rate adjustment according to subdivision
4. The rate adjustment must continue to be included in the external fixed costs payment rate
under section 256R.25 until January 1, 2029.
new text end
new text begin Subd. 6. new text end
new text begin Expiration. new text end
new text begin
This section expires January 1, 2029.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2025, or upon federal approval,
whichever is later. The commissioner of human services shall notify the revisor of statutes
when federal approval is obtained.
new text end
Sec. 8.
Minnesota Statutes 2024, section 256S.211, subdivision 1, is amended to read:
Subdivision 1.
Establishing base wages.
When establishing and updating the base wages
according to section 256S.212, the commissioner shall use standard occupational
classification (SOC) codes from the Bureau of Labor Statistics as defined in the edition of
the Occupational Handbook published deleted text begin immediately prior to January 1, 2019deleted text end new text begin most recentlynew text end ,
using Minnesota-specific wages taken from job descriptions.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2026, or upon federal approval,
whichever occurs later. The commissioner of human services shall notify the revisor of
statutes when federal approval is obtained.
new text end
Sec. 9.
Minnesota Statutes 2024, section 256S.211, subdivision 2, is amended to read:
Subd. 2.
Updating rates.
On January 1, deleted text begin 2024deleted text end new text begin 2026, and each January 1 thereafternew text end , the
commissioner shall update component rates and rates according to sections 256S.212 to
256S.215, using the data referenced in subdivision 1.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2026, or upon federal approval,
whichever occurs later. The commissioner of human services shall notify the revisor of
statutes when federal approval is obtained.
new text end
Sec. 10.
Minnesota Statutes 2024, section 256S.213, subdivision 1, is amended to read:
Subdivision 1.
Payroll taxes and benefits factor.
new text begin (a) new text end The payroll taxes and benefits
factor is the sum of net payroll taxes and benefits, divided by the sum of all salaries for all
nursing facilities on the most recent and available cost report.
new text begin
(b) The commissioner must update the payroll taxes and benefits factor each January 1.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective January 1, 2026, or upon federal approval,
whichever occurs later. The commissioner of human services shall notify the revisor of
statutes when federal approval is obtained.
new text end