SF 2893

Introduction - 94th Legislature (2025 - 2026)

Posted on 06/06/2025 11:51 a.m.

A bill for an act
relating to health; modifying case mix reimbursement for federal conformity;
amending Minnesota Statutes 2024, section 144.0724, subdivisions 2, 3a, 4, 7, 9.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 144.0724, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of this section, the following terms have the meanings
given.

(a) "Assessment reference date" or "ARD" means the specific end point for look-back
periods in the MDS assessment process. This look-back period is also called the observation
or assessment period.

(b) "Case mix index" means the weighting factors assigned to the case mix reimbursement
classifications determined by an assessment.

(c) "Index maximization" means classifying a resident who could be assigned to more
than one category, to the category with the highest case mix index.

(d) "Minimum Data Set" or "MDS" means a core set of screening, clinical assessment,
and functional status elements, that include common definitions and coding categories
specified by the Centers for Medicare and Medicaid Services and designated by the
Department of Health.

(e) "Representative" means a person who is the resident's guardian or conservator, the
person authorized to pay the nursing home expenses of the resident, a representative of the
Office of Ombudsman for Long-Term Care whose assistance has been requested, or any
other individual designated by the resident.

(f) "Activities of daily living" new text begin or "ADL" new text end includes personal hygiene, dressing, bathing,
transferring, bed mobility, locomotion, eating, and toileting.

new text begin (g) "Patient Driven Payment Model" or "PDPM" means a case mix classification system
for residents in nursing facilities based on the resident's condition, diagnosis, and the care
the resident is receiving based on data supplied in the facility's MDS for assessments with
an ARD on or after October 1, 2025.
new text end

deleted text begin (g) deleted text end new text begin (h) new text end "Nursing facility level of care determination" means the assessment process that
results in a determination of a resident's or prospective resident's need for nursing facility
level of care as established in subdivision 11 for purposes of medical assistance payment
of long-term care services for:

(1) nursing facility services under chapter 256R;

(2) elderly waiver services under chapter 256S;

(3) CADI and BI waiver services under section 256B.49; and

(4) state payment of alternative care services under section 256B.0913.

new text begin (i) "Resource utilization groups" or "RUG" means a system for grouping a nursing
facility's residents according to the resident's clinical and functional status identified in data
supplied by the facility's minimum data set with an ARD on or prior to September 30, 2025.
new text end

Sec. 2.

Minnesota Statutes 2024, section 144.0724, subdivision 3a, is amended to read:

Subd. 3a.

Resident case mix reimbursement classifications.

(a) Resident case mix
reimbursement classifications shall be based on the Minimum Data Set, version 3.0
assessment instrument, or its successor version mandated by the Centers for Medicare and
Medicaid Services that nursing facilities are required to complete for all residents. Case
mix reimbursement classifications shall also be based on assessments required under
subdivision 4. Assessments must be completed according to the Long Term Care Facility
Resident Assessment Instrument User's Manual Version 3.0 or a successor manual issued
by the Centers for Medicare and Medicaid Services. new text begin On or before September 30, 2025, new text end the
optional state assessment must be completed according to the OSA Manual Version 1.0 v.2.

(b) Each resident must be classified based on the information from the Minimum Data
Set according to the general categories issued by the Minnesota Department of Health,
utilized for reimbursement purposes.

Sec. 3.

Minnesota Statutes 2024, section 144.0724, subdivision 4, is amended to read:

Subd. 4.

Resident assessment schedule.

(a) A facility must conduct and electronically
submit to the federal database MDS assessments that conform with the assessment schedule
defined by the Long Term Care Facility Resident Assessment Instrument User's Manual,
version 3.0, or its successor issued by the Centers for Medicare and Medicaid Services. The
commissioner of health may substitute successor manuals or question and answer documents
published by the United States Department of Health and Human Services, Centers for
Medicare and Medicaid Services, to replace or supplement the current version of the manual
or document.

(b) The assessments required under the Omnibus Budget Reconciliation Act of 1987
(OBRA) used to determine a case mix reimbursement classification include:

(1) a new admission comprehensive assessment, which must have an assessment reference
date (ARD) within 14 calendar days after admission, excluding readmissions;

(2) an annual comprehensive assessment, which must have an ARD within 92 days of
a previous quarterly review assessment or a previous comprehensive assessment, which
must occur at least once every 366 days;

(3) a significant change in status comprehensive assessment, which must have an ARD
within 14 days after the facility determines, or should have determined, that there has been
a significant change in the resident's physical or mental condition, whether an improvement
or a decline, and regardless of the amount of time since the last comprehensive assessment
or quarterly review assessment new text begin . Effective October 1, 2025, a significant change in status
assessment is also required when isolation for an infectious disease has ended. If isolation
was not coded on the most recent OBRA assessment completed, then the significant change
in status assessment is not required. The ARD of this assessment must be set on day 15 after
isolation has ended new text end ;

(4) a quarterly review assessment must have an ARD within 92 days of the ARD of the
previous quarterly review assessment or a previous comprehensive assessment;

(5) any significant correction to a prior comprehensive assessment, if the assessment
being corrected is the current one being used for reimbursement classification;

(6) any significant correction to a prior quarterly review assessment, if the assessment
being corrected is the current one being used for reimbursement classification; and

(7) any modifications to the most recent assessments under clauses (1) to (6).

(c) new text begin On or before September 30, 2025, new text end the optional state assessment must accompany all
OBRA assessments. The optional state assessment is also required to determine
reimbursement when:

(1) all speech, occupational, and physical therapies have ended. If the most recent optional
state assessment completed does not result in a rehabilitation case mix reimbursement
classification, then the optional state assessment is not required. The ARD of this assessment
must be set on day eight after all therapy services have ended; and

(2) isolation for an infectious disease has ended. If isolation was not coded on the most
recent optional state assessment completed, then the optional state assessment is not required.
The ARD of this assessment must be set on day 15 after isolation has ended.

(d) In addition to the assessments listed in paragraphs (b) and (c), the assessments used
to determine nursing facility level of care include the following:

(1) preadmission screening completed under section 256.975, subdivisions 7a to 7c, by
the Senior LinkAge Line or other organization under contract with the Minnesota Board on
Aging; and

(2) a nursing facility level of care determination as provided for under section 256B.0911,
subdivision 26, as part of a face-to-face long-term care consultation assessment completed
under section 256B.0911, by a county, tribe, or managed care organization under contract
with the Department of Human Services.

Sec. 4.

Minnesota Statutes 2024, section 144.0724, subdivision 7, is amended to read:

Subd. 7.

Notice of resident case mix reimbursement classification.

(a) The
commissioner of health shall provide to a nursing facility a notice for each resident of the
classification established under subdivision 1. The notice must inform the resident of the
case mix reimbursement classification assigned, the opportunity to review the documentation
supporting the classification, the opportunity to obtain clarification from the commissioner,
the opportunity to request a reconsideration of the classification, and the address and
telephone number of the Office of Ombudsman for Long-Term Care. The commissioner
must transmit the notice of resident classification by electronic means to the nursing facility.
The nursing facility is responsible for the distribution of the notice to each resident or the
resident's representative. This notice must be distributed within three business days after
the facility's receipt.

(b) If a facility submits a modified assessment resulting in a change in the case mix
reimbursement classification, the facility must provide a written notice to the resident or
the resident's representative regarding the item or items that were modified and the reason
for the modifications. The written notice must be provided within three business days after
distribution of the resident case mix reimbursement classification notice.

Sec. 5.

Minnesota Statutes 2024, section 144.0724, subdivision 9, is amended to read:

Subd. 9.

Audit authority.

(a) The commissioner shall audit the accuracy of resident
assessments performed under section 256R.17 through any of the following: desk audits;
on-site review of residents and their records; and interviews with staff, residents, or residents'
families. The commissioner shall reclassify a resident if the commissioner determines that
the resident was incorrectly classified.

(b) The commissioner is authorized to conduct on-site audits on an unannounced basis.

(c) A facility must grant the commissioner access to examine the medical records relating
to the resident assessments selected for audit under this subdivision. The commissioner may
also observe and speak to facility staff and residents.

(d) The commissioner shall consider documentation under the time frames for coding
items on the minimum data set as set out in the Long-Term Care Facility Resident Assessment
Instrument User's Manual or new text begin on or before September 30, 2025, the new text end OSA Manual version
1.0 v.2 published by the Centers for Medicare and Medicaid Services.

(e) The commissioner shall develop an audit selection procedure that includes the
following factors:

(1) Each facility shall be audited annually. If a facility has two successive audits in which
the percentage of change is five percent or less and the facility has not been the subject of
a special audit in the past 36 months, the facility may be audited biannually. A stratified
sample of 15 percent, with a minimum of ten assessments, of the most current assessments
shall be selected for audit. If more than 20 percent of the case mix reimbursement
classifications are changed as a result of the audit, the audit shall be expanded to a second
15 percent sample, with a minimum of ten assessments. If the total change between the first
and second samples is 35 percent or greater, the commissioner may expand the audit to all
of the remaining assessments.

(2) If a facility qualifies for an expanded audit, the commissioner may audit the facility
again within six months. If a facility has two expanded audits within a 24-month period,
that facility will be audited at least every six months for the next 18 months.

(3) The commissioner may conduct special audits if the commissioner determines that
circumstances exist that could alter or affect the validity of case mix reimbursement
classifications of residents. These circumstances include, but are not limited to, the following:

(i) frequent changes in the administration or management of the facility;

(ii) an unusually high percentage of residents in a specific case mix reimbursement
classification;

(iii) a high frequency in the number of reconsideration requests received from a facility;

(iv) frequent adjustments of case mix reimbursement classifications as the result of
reconsiderations or audits;

(v) a criminal indictment alleging provider fraud;

(vi) other similar factors that relate to a facility's ability to conduct accurate assessments;

(vii) an atypical pattern of scoring minimum data set items;

(viii) nonsubmission of assessments;

(ix) late submission of assessments; or

(x) a previous history of audit changes of 35 percent or greater.

(f) If the audit results in a case mix reimbursement classification change, the
commissioner must transmit the audit classification notice by electronic means to the nursing
facility within 15 business days of completing an audit. The nursing facility is responsible
for distribution of the notice to each resident or the resident's representative. This notice
must be distributed by the nursing facility within three business days after receipt. The
notice must inform the resident of the case mix reimbursement classification assigned, the
opportunity to review the documentation supporting the classification, the opportunity to
obtain clarification from the commissioner, the opportunity to request a reconsideration of
the classification, and the address and telephone number of the Office of Ombudsman for
Long-Term Care.