1.1                          A bill for an act 
  1.2             relating to human services; adjusting medical 
  1.3             assistance hospital rate setting procedures; 
  1.4             appropriating money; amending Minnesota Statutes 1994, 
  1.5             section 256.9695, subdivision 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 256.9695, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [TRANSITION.] Except as provided in section 
  1.10  256.969, subdivision 8, the commissioner shall establish a 
  1.11  transition period for the calculation of payment rates from July 
  1.12  1, 1989, to the implementation date of the upgrade to the 
  1.13  Medicaid management information system or July 1, 1992, 
  1.14  whichever is earlier. 
  1.15     During the transition period: 
  1.16     (a) Changes resulting from section 256.969, subdivisions 7, 
  1.17  9, 10, 11, and 13, shall not be implemented, except as provided 
  1.18  in section 256.969, subdivisions 12 and 20. 
  1.19     (b) The beginning of the 1991 rate year shall be delayed 
  1.20  and the rates notification requirement shall not be applicable. 
  1.21     (c) Operating payment rates shall be indexed from the 
  1.22  hospital's most recent fiscal year ending prior to January 1, 
  1.23  1991, by prorating the hospital cost index methodology in effect 
  1.24  on January 1, 1989.  For payments made for admissions occurring 
  1.25  on or after June 1, 1990, until the implementation date of the 
  2.1   upgrade to the Medicaid management information system the 
  2.2   hospital cost index excluding the technology factor shall not 
  2.3   exceed five percent.  This hospital cost index limitation shall 
  2.4   not apply to hospitals that meet the requirements of section 
  2.5   256.969, subdivision 20, paragraphs (a) and (b). 
  2.6      (d) Property and pass-through payment rates shall be 
  2.7   maintained at the most recent payment rate effective for June 1, 
  2.8   1990.  However, all hospitals are subject to the hospital cost 
  2.9   index limitation of subdivision 2c, for two complete fiscal 
  2.10  years.  Property and pass-through costs shall be retroactively 
  2.11  settled through the transition period.  The laws in effect on 
  2.12  the day before July 1, 1989, apply to the retroactive settlement.
  2.13     (e) If the upgrade to the Medicaid management information 
  2.14  system has not been completed by July 1, 1992, the commissioner 
  2.15  shall make adjustments for admissions occurring on or after that 
  2.16  date as follows: 
  2.17     (1) provide a ten percent increase to hospitals that meet 
  2.18  the requirements of section 256.969, subdivision 20, or, upon 
  2.19  written request from the hospital to the commissioner, 50 
  2.20  percent of the rate change that the commissioner estimates will 
  2.21  occur after the upgrade to the Medicaid management information 
  2.22  system; and 
  2.23     (2) adjust the Minnesota and local trade area rebased 
  2.24  payment rates that are established after the upgrade to the 
  2.25  Medicaid management information system to compensate for a 
  2.26  rebasing effective date of July 1, 1992.  The adjustment shall 
  2.27  be determined using claim specific payment changes that result 
  2.28  from the rebased rates and revised methodology in effect after 
  2.29  the systems upgrade.  Any adjustment that is greater than zero 
  2.30  shall be ratably reduced by 20 percent.  In addition, every 
  2.31  adjustment shall be reduced for payments under clause (1), and 
  2.32  differences in the hospital cost index.  Hospitals shall revise 
  2.33  claims so that services provided by rehabilitation units of 
  2.34  hospitals are reported separately.  The adjustment shall be in 
  2.35  effect until the amount due to or owed by the hospital is fully 
  2.36  paid over a number of admissions that is equal to the number of 
  3.1   admissions under adjustment multiplied by 1.5.  The adjustment 
  3.2   for admissions occurring from July 1, 1992 to December 31, 1992, 
  3.3   shall be based on claims paid as of August 1, 1993, and the 
  3.4   adjustment shall begin with the effective date of rules 
  3.5   governing rebasing.  The adjustment for admissions occurring 
  3.6   from January 1, 1993, to the effective date of the rules shall 
  3.7   be based on claims paid as of February 1, 1994, and shall begin 
  3.8   after the first adjustment period is fully paid.  For purposes 
  3.9   of appeals under subdivision 1, the adjustment shall be 
  3.10  considered payment at the time of admission; and 
  3.11     (3) for hospitals which were part of a multi-hospital 
  3.12  system and which, but for the fact of their closing or 
  3.13  withdrawal from participation in the medical assistance or 
  3.14  general assistance medical care programs during 1994, would have 
  3.15  been entitled under this subdivision to adjustments greater than 
  3.16  zero to their payment rates, such positive adjustments shall be 
  3.17  ratably applied to any negative amounts otherwise attributable 
  3.18  under this subdivision to payments to any other hospitals which 
  3.19  are part of the same multi-hospital system. 
  3.20     Sec. 2.  [APPROPRIATION.] 
  3.21     $....... is appropriated from the general fund to the 
  3.22  commissioner of human services for the purposes in section 1, to 
  3.23  be available for the fiscal year ending June 30, 1997.