1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to human services; changing provisions to 1.3 health and continuing care related to MA and GAMC; 1.4 changing provisions to long term care; changing 1.5 provisions to health plan regulations; making 1.6 technical and policy changes for the department of 1.7 human services; requiring the commissioner of human 1.8 services to study and make recommendations on the 1.9 administration of the community alternative care 1.10 program, and to study and report on the effect on 1.11 medical assistance waiver programs of medically 1.12 fragile children in foster care; appropriating money; 1.13 amending Minnesota Statutes 1994, sections 62D.04, 1.14 subdivision 5; 62N.10, subdivision 4; 62Q.075, 1.15 subdivision 2; 144.0722, by adding a subdivision; 1.16 144.572; 144.71, subdivisions 1 and 2; 144.72, 1.17 subdivisions 1 and 2; 144.73, subdivision 1; 144.74; 1.18 144A.04, by adding a subdivision; 144A.09, subdivision 1.19 1; 144A.20, subdivision 2; 145.61, subdivision 5; 1.20 148.235, by adding a subdivision; 148C.01, by adding a 1.21 subdivision; 148C.09, by adding a subdivision; 1.22 245.462, subdivision 4; 245.4871, subdivision 4; 1.23 245.94, subdivisions 2a and 3; 245.95, subdivision 2; 1.24 245.97, subdivision 6; 246.57, by adding a 1.25 subdivision; 253B.11, subdivision 2; 256.482, by 1.26 adding a subdivision; 256.73, subdivision 1, and by 1.27 adding a subdivision; 256.9355, subdivision 3; 1.28 256B.03, by adding a subdivision; 256B.056, 1.29 subdivisions 1 and 1a; 256B.0595, by adding 1.30 subdivisions; 256B.0627, subdivisions 1, as amended, 1.31 4, as amended, 5, as amended, and by adding a 1.32 subdivision; 256B.0913, subdivision 7, and by adding 1.33 subdivisions; 256B.0915, subdivision 1b, and by adding 1.34 subdivisions; 256B.15, by adding subdivisions; 1.35 256B.35, subdivision 1; 256B.37, subdivision 5; 1.36 256B.49, by adding a subdivision; 256B.501, by adding 1.37 subdivisions; 256B.69, by adding a subdivision; 1.38 256G.01, subdivision 3, and by adding subdivisions; 1.39 256G.02, subdivisions 4 and 6; 256G.03; 256G.06; 1.40 256G.07, subdivisions 1 and 2; 256G.08, subdivision 1; 1.41 256G.09, subdivision 2; 256G.10; 256I.04, subdivision 1.42 1; 256I.05, subdivision 1c, and by adding a 1.43 subdivision; 325F.71, subdivision 2; 327.14, 1.44 subdivision 8; 524.2-403; and 524.3-801; Minnesota 1.45 Statutes 1995 Supplement, sections 62Q.03, subdivision 1.46 8; 62Q.19, subdivisions 1 and 5; 62R.17; 144.122; 2.1 144.9503, subdivisions 6, 8, and 9; 144.9504, 2.2 subdivisions 2, 7, and 8; 144.9505, subdivision 4; 2.3 144A.071, subdivisions 3 and 4a; 148C.01, subdivisions 2.4 12 and 13; 148C.02, subdivisions 1 and 2; 148C.03, 2.5 subdivision 1; 148C.04, subdivisions 3, 4, and by 2.6 adding a subdivision; 148C.05, subdivision 1; 148C.06; 2.7 148C.11, subdivisions 1 and 3; 157.011, subdivision 1; 2.8 157.15, subdivisions 4, 5, 6, 9, 12, 13, 14, and by 2.9 adding subdivisions; 157.16; 157.17, subdivision 2; 2.10 157.20, subdivision 1, and by adding a subdivision; 2.11 157.21; 252.27, subdivision 2a; 256.045, subdivision 2.12 3; 256.969, subdivisions 1, 2b, 9, and 10; 256B.055, 2.13 subdivision 12; 256B.0575; 256B.0595, subdivisions 1, 2.14 2, 3, and 4; 256B.0625, subdivisions 17, 19a, and 30; 2.15 256B.0628, subdivision 2; 256B.0913, subdivisions 5 2.16 and 15a; 256B.0915, subdivisions 3 and 3a; 256B.093, 2.17 subdivision 3; 256B.15, subdivision 5; 256B.431, 2.18 subdivision 25; 256B.432, subdivision 2; 256B.434, 2.19 subdivision 10; 256B.49, subdivisions 6 and 7; 2.20 256B.501, subdivisions 5b and 5c; 256B.69, 2.21 subdivisions 3a, 4, 5b, 6, and 21; 256D.02, 2.22 subdivision 12a; 256D.03, subdivision 4; 256D.045; and 2.23 256I.04, subdivisions 2b and 3; Laws 1995, chapter 2.24 207, article 1, section 2, subdivision 4; proposing 2.25 coding for new law in Minnesota Statutes, chapters 2.26 62J; 144; 145; 252; 256; 256B; and 299A; proposing 2.27 coding for new law as Minnesota Statutes, chapter 2.28 252B; repealing Minnesota Statutes 1994, sections 2.29 144.691, subdivision 4; 146.14; and 146.20; Minnesota 2.30 Statutes 1995 Supplement, sections 157.03; 157.15, 2.31 subdivision 2; 157.18; 157.19; 256B.15, subdivision 5; 2.32 256B.69, subdivision 4a; 256G.05, subdivision 1; and 2.33 256G.07, subdivision 3a; Minnesota Rules, part 2.34 9505.5230. 2.35 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.36 ARTICLE 1 2.37 APPROPRIATIONS 2.38 Section 1. [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 2.39 The sums shown in the columns marked "APPROPRIATIONS" are 2.40 appropriated from the general fund, or any other fund named, to 2.41 the agencies and for the purposes specified in the following 2.42 sections of this article, to be available for the fiscal years 2.43 indicated for each purpose. The figures "1996" and "1997" where 2.44 used in this article, mean that the appropriation or 2.45 appropriations listed under them are available for the fiscal 2.46 year ending June 30, 1996, or June 30, 1997, respectively. 2.47 Where a dollar amount appears in parentheses, it means a 2.48 reduction of an appropriation. 2.49 SUMMARY BY FUND 2.50 BIENNIAL 2.51 1996 1997 TOTAL 2.52 General $ (118,284,000) $ (57,253,000) $(175,537,000) 2.53 State Government 3.1 Special Revenue 50,000 300,000 350,000 3.2 TOTAL $ (118,234,000) $ (56,953,000) $(175,187,000) 3.3 APPROPRIATIONS 3.4 Available for the Year 3.5 Ending June 30 3.6 1996 1997 3.7 Sec. 2. COMMISSIONER OF 3.8 HUMAN SERVICES 3.9 Subdivision 1. Total 3.10 Appropriation (118,284,000) (59,533,000) 3.11 This reduction is taken from the 3.12 appropriation in Laws 1995, chapter 3.13 207, article 1, section 2. 3.14 The amounts that are added to or 3.15 reduced from the appropriation for each 3.16 program are specified in the following 3.17 subdivisions. 3.18 [DHS SPENDING CAP.] The 1998-1999 3.19 general fund spending in the department 3.20 of human services is limited to 3.21 $2,602,561,000 in fiscal year 1998 and 3.22 $2,823,204,000 in fiscal year 1999. 3.23 Policy changes made to meet this 3.24 spending cap will include the effects 3.25 on both revenues and expenditures. 3.26 Changes from end of session revenue 3.27 estimates shall be counted against this 3.28 expenditures limit. Expenditures in 3.29 the department may exceed these 3.30 estimates only if forecast caseloads 3.31 increase. After consultation with the 3.32 legislature, the commissioner of 3.33 finance may also adjust these limits to 3.34 recognize any errors or omissions in 3.35 the workpapers used to generate the 3.36 figure. 3.37 Subd. 2. Life Skills 3.38 Self-Sufficiency 3.39 (3,462,000) 90,000 3.40 The amounts that may be spent from this 3.41 appropriation for each purpose are as 3.42 follows: 3.43 (a) Chemical Dependency 3.44 Consolidated Treatment 3.45 (3,462,000) (1,346,000) 3.46 (b) Deaf and Hard-of-Hearing 3.47 Services Grants 3.48 -0- 100,000 3.49 (c) Community Social Services Grants 3.50 -0- 36,000 3.51 (d) Aging Grants 3.52 -0- 1,050,000 4.1 (e) Administration and Other Grants 4.2 -0- 250,000 4.3 [DEAF AND HARD-OF-HEARING PROGRAMS.] Of 4.4 this appropriation, $100,000 in fiscal 4.5 year 1997 is for a grant to a nonprofit 4.6 agency that is currently serving deaf 4.7 and hard-of-hearing adults with mental 4.8 illness through residential programs 4.9 and supported housing outreach 4.10 activities. The grant must be used to 4.11 expand the services provided by the 4.12 nonprofit agency to include community 4.13 support services for deaf and 4.14 hard-of-hearing adults with mental 4.15 illness. This appropriation shall not 4.16 become part of the base for the 4.17 1998-1999 biennial budget. 4.18 [ADULT DAY CARE.] Of this 4.19 appropriation, $250,000 in fiscal year 4.20 1997 is for grants to counties to 4.21 expand or upgrade adult day care 4.22 services and adult day care 4.23 facilities. This appropriation is 4.24 available until expended but shall not 4.25 become part of the base appropriation 4.26 for the biennium beginning July 1, 4.27 1997. The commissioner shall 4.28 distribute grants to counties outside 4.29 the metropolitan area where there is a 4.30 need for expanded or improved services, 4.31 facilities, or other capital assets, 4.32 including vans for transporting 4.33 clients, and the commissioner shall 4.34 require a ten percent local match from 4.35 the adult day care agency. The county 4.36 shall award grants to nonprofit or 4.37 loans to for-profit adult day care 4.38 agencies in order for the agency to 4.39 physically upgrade the facility, which 4.40 will result in the expansion of the 4.41 number of clients served in adult day 4.42 care, expand the type of services 4.43 offered, or enable programs to service 4.44 persons with greater needs. For-profit 4.45 adult day care agencies eligible for 4.46 funds under this section receive funds 4.47 as a loan. If a county elects to 4.48 provide a loan to a for-profit agency, 4.49 the county shall make provisions for 4.50 the repayment of the loan within five 4.51 years, and redistribute the funds for 4.52 additional expansion or upgrading. A 4.53 grant or loan to an adult day care 4.54 nonprofit or for-profit agency, 4.55 respectively, may not exceed $10,000. 4.56 These funds shall not be used to pay 4.57 for service costs. 4.58 [SENIOR PROGRAMS.] For fiscal year 4.59 1997, of this appropriation, $150,000 4.60 is for volunteer programs for retired 4.61 senior citizens established under 4.62 Minnesota Statutes, section 256.9753, 4.63 $150,000 is for the foster grandparent 4.64 program established under Minnesota 4.65 Statutes, section 256.976, and $150,000 4.66 is for the senior companion program 4.67 established under Minnesota Statutes, 5.1 section 256.977. 5.2 [SENIOR NUTRITION PROGRAM.] Of this 5.3 appropriation, $600,000 in fiscal year 5.4 1997 is for senior nutrition programs 5.5 under Minnesota Statutes, section 5.6 256.9750. Not less than $400,000 of 5.7 this appropriation shall be used for 5.8 congregate dining sites and 5.9 home-delivered meals, and not more than 5.10 $200,000 shall be used for nutritional 5.11 support services. 5.12 Subd. 3. Children's Program -0- 2,400,000 5.13 The amounts that may be spent from this 5.14 appropriation for each purpose are as 5.15 follows: 5.16 (a) Subsidized Adoption Grants 5.17 -0- 1,500,000 5.18 (b) Other Families With Children 5.19 Services Administration 5.20 -0- 900,000 5.21 [SOCIAL SERVICES INFORMATION SYSTEM.] 5.22 Of this appropriation, $850,000 in 5.23 fiscal year 1997 is for the social 5.24 services information system. This 5.25 appropriation shall not become part of 5.26 the base for the 1998-1999 biennial 5.27 budget. 5.28 [CHILD WELFARE TECHNOLOGY GRANT.] Of 5.29 this appropriation, $50,000 is for 5.30 purposes of developing an integrated 5.31 child welfare computer system to 5.32 connect tribal social services, 5.33 counties, nonprofit organizations, and 5.34 state agencies that are involved with 5.35 child welfare issues, including 5.36 adoption, foster care, and out-of-home 5.37 placement issues. The appropriation 5.38 will be provided to the commissioner 5.39 when the commissioner applies for and 5.40 receives a technology grant through the 5.41 United States Department of Commerce, 5.42 Division of National Technology 5.43 Information Administration, to develop 5.44 and implement the child welfare 5.45 network. This $50,000 in state funding 5.46 is part of the 50 percent match that is 5.47 necessary in order to be eligible for 5.48 the federal technology grant. 5.49 Subd. 4. Economic Self-Sufficiency 5.50 General 5.51 (13,668,000) (14,350,000) 5.52 The amounts that may be spent from this 5.53 appropriation for each purpose are as 5.54 follows: 5.55 (a) AFDC Grants 5.56 (13,196,000) (16,000,000) 6.1 (b) General Assistance Grants 6.2 878,000 2,593,000 6.3 (c) Minnesota Supplemental Aid 6.4 (262,000) (328,000) 6.5 (d) Minnesota Family Investment 6.6 Plan (MFIP) Grants 6.7 -0- 64,000 6.8 (e) Child Care Fund Entitlement Grants 6.9 (1,258,000) (1,321,000) 6.10 (f) Administration and Other Grants 6.11 170,000 642,000 6.12 [RESIDENCY REQUIREMENT ADMINISTRATIVE 6.13 COSTS.] (a) Of this appropriation, 6.14 $225,000 in fiscal year 1997 is to 6.15 reimburse the counties for the verified 6.16 administrative costs of implementing 6.17 the 30-day residency requirement in the 6.18 general assistance and general 6.19 assistance medical care programs. 6.20 (b) The commissioner of finance shall 6.21 include in the department of human 6.22 services biennial budget recommendation 6.23 for the 1998-1999 biennium an 6.24 appropriation sufficient to reimburse 6.25 the counties for the verified 6.26 administrative costs of implementing 6.27 the 30-day residency requirement in the 6.28 medical assistance, aid to families 6.29 with dependent children, general 6.30 assistance, and general assistance 6.31 medical care programs. 6.32 [COMBINED MANUAL PRODUCTION COSTS.] For 6.33 the biennium ending June 30, 1997, the 6.34 commissioner may increase the fee 6.35 charged to, and may retain money 6.36 received from, individuals and private 6.37 entities in order to recover the 6.38 difference between the costs of 6.39 producing the department of human 6.40 services combined manual and the 6.41 subsidized price charged to individuals 6.42 and private entities on January 1, 6.43 1996. This provision does not apply to 6.44 government agencies and nonprofit 6.45 agencies serving the legal or social 6.46 service needs of clients. 6.47 Subd. 5. Health Care 6.48 General 6.49 (100,714,000) (47,590,000) 6.50 The amounts that may be spent from this 6.51 appropriation for each purpose are as 6.52 follows: 6.53 (a) Group Residential Housing Grants 7.1 (4,562,000) (3,874,000) 7.2 (b) MA Long-Term Care Facilities 7.3 (24,640,000) 3,231,000 7.4 (c) MA Long-Term Care Waivers 7.5 and Home Care 7.6 (5,945,000) 2,422,000 7.7 (d) MA Managed Care and 7.8 Fee-for-Service 7.9 (2,164,000) (2,733,000) 7.10 (e) General Assistance Medical Care 7.11 (63,873,000) (47,276,000) 7.12 (f) Administration and Other Grants 7.13 470,000 640,000 7.14 [NEW ICF/MR.] A newly constructed or 7.15 newly established intermediate care 7.16 facility for persons with mental 7.17 retardation that is developed and 7.18 financed during fiscal year 1997 shall 7.19 not be subject to the equity 7.20 requirements in Minnesota Statutes, 7.21 section 256B.501, subdivision 11, 7.22 paragraph (d), or Minnesota Rules, part 7.23 9553.0060, subpart 3, item F, provided 7.24 that the provider's interest rate does 7.25 not exceed the interest rate available 7.26 through state agency tax exempt 7.27 financing. 7.28 [ICF/MR RECEIVERSHIP.] If a facility 7.29 which is in receivership under 7.30 Minnesota Statutes, section 245A.12 or 7.31 245A.13, is sold during fiscal year 7.32 1997 to an unrelated organization: (1) 7.33 the facility shall be considered a 7.34 newly established facility for rate 7.35 setting purposes notwithstanding any 7.36 provisions to the contrary in Minnesota 7.37 Statutes, section 256B.501, subdivision 7.38 11; and (2) the facility's historical 7.39 basis for the physical plant, land, and 7.40 land improvements for each facility 7.41 must not exceed the prior owner's 7.42 aggregate historical basis for these 7.43 same assets for each facility. The 7.44 allocation of the purchase price 7.45 between land, land improvements, and 7.46 physical plant shall be based on the 7.47 real estate appraisal using the 7.48 depreciated replacement cost method. 7.49 [ICF/MR RATE EXEMPTION.] If the 7.50 commissioner of human services is 7.51 unable to complete the rulemaking 7.52 revisions to the ICF/MR reimbursement 7.53 rule by September 30, 1996, for the 7.54 rate year beginning October 1, 1996, 7.55 the commissioner shall exempt ICF/MR 7.56 facilities from reductions to the 7.57 payment rates under Minnesota Statutes, 7.58 section 256B.501, subdivision 5b, 8.1 paragraph (d), clause (6), if the 8.2 facility: (1) has had a settle-up 8.3 payment rate established in the 8.4 reporting year preceding the rate year 8.5 for the one-time rate adjustment; (2) 8.6 is a newly established facility; (3) is 8.7 an A to B conversion under the 8.8 reimbursement rule; (4) has a payment 8.9 rate subject to a community conversion 8.10 project under Minnesota Statutes, 8.11 section 252.292; (5) has a payment rate 8.12 established under Minnesota Statutes, 8.13 section 245A.12 or 245A.13; or (6) is a 8.14 facility created by the relocation of 8.15 more than 25 percent of the capacity of 8.16 a related facility during the reporting 8.17 year. 8.18 [COUNTY WAIVERED SERVICES RESERVE.] 8.19 Notwithstanding the provisions of 8.20 Minnesota Statutes, section 256B.092, 8.21 subdivision 4, and Minnesota Rules, 8.22 part 9525.1830, subpart 2, the 8.23 commissioner may approve written 8.24 procedures and criteria for the 8.25 allocation of home- and community-based 8.26 waivered services funding for persons 8.27 with mental retardation or related 8.28 conditions which enables a county to 8.29 maintain a reserve resource account. 8.30 The reserve resource account may not 8.31 exceed five percent of the county 8.32 agency's total annual allocation of 8.33 home- and community-based waivered 8.34 services funds. The reserve may be 8.35 utilized to ensure the county's ability 8.36 to meet the changing needs of current 8.37 recipients, to ensure the health and 8.38 safety needs of current recipients, or 8.39 to provide short-term emergency 8.40 intervention care to eligible waiver 8.41 recipients. 8.42 [PREADMISSION SCREENING TRANSFER.] 8.43 Effective the day following final 8.44 enactment, up to $40,000 of the 8.45 appropriation for preadmission 8.46 screening and alternative care for 8.47 fiscal year 1996 may be transferred to 8.48 the health care administration account 8.49 to pay the state's share of county 8.50 claims for conducting nursing home 8.51 assessments for persons with mental 8.52 illness or mental retardation as 8.53 required by Public Law Number 100-203. 8.54 [SERVICE ALLOWANCE TRANSFER.] For the 8.55 fiscal year ending June 30, 1997, the 8.56 commissioner may transfer $848,000 from 8.57 the medical assistance grants account 8.58 to the alternative care grants account 8.59 for allocation as service allowances to 8.60 counties under Minnesota Statutes 1995 8.61 Supplement, section 256B.0913, 8.62 subdivision 15. 8.63 [HIV/AIDS DRUG REIMBURSEMENT PROGRAM.] 8.64 Of this appropriation, $150,000 in 8.65 fiscal year 1997 is for the HIV/AIDS 8.66 drug reimbursement program and shall be 8.67 added to federal funds available for 9.1 that program. 9.2 [ICF/MR ALTERNATIVE RATE STRUCTURE.] 9.3 The commissioner, in conjunction with 9.4 ICF/MR service providers, shall present 9.5 to the legislature by January 31, 1997, 9.6 recommendations for an alternative rate 9.7 structure that recognizes the small 9.8 size and individual needs of ICFs/MR. 9.9 The system proposed must recognize 9.10 costs incurred, must not penalize 9.11 facilities converted since 1990 as part 9.12 of the A to B conversion project, and 9.13 must reimburse the costs associated 9.14 with federal active treatment 9.15 standards. As part of developing these 9.16 recommendations the commissioner shall 9.17 also examine issues related to the 9.18 relative size and cost of these 9.19 facilities and shall develop 9.20 recommendations regarding whether 9.21 allowing the development of larger 9.22 facilities can be a high-quality, 9.23 cost-efficient service option. 9.24 [TEFRA CRITERIA MODIFICATIONS.] The 9.25 commissioner shall report to the 9.26 legislature by February 1, 1997, on the 9.27 number of children found eligible for 9.28 medical assistance under the TEFRA 9.29 option as a result of the modifications 9.30 in Minnesota Statutes, section 9.31 256B.055, subdivision 12, paragraph 9.32 (e), adopted in this chapter. The 9.33 report must include information on the 9.34 medical condition of the children found 9.35 eligible and on the services provided 9.36 to them. The report must include 9.37 recommendations on any changes in these 9.38 criteria developed in consultation with 9.39 interested family, client, provider, 9.40 and county representatives. 9.41 [TEFRA DENIALS.] Effective the day 9.42 following final enactment, for children 9.43 found ineligible for medical assistance 9.44 under the TEFRA option under criteria 9.45 in Minnesota Statutes, section 9.46 256B.055, subdivision 12, established 9.47 in Laws 1995, chapter 207, article 6, 9.48 if the reason for denial is lack of 9.49 information on the child's condition, 9.50 the commissioner shall notify the 9.51 family of the lack of documentation at 9.52 least 60 days prior to termination of 9.53 eligibility for notices sent between 9.54 April 1 and July 1, l996. All TEFRA 9.55 ineligibility notices sent between 9.56 April 1 and July 1, 1996, must contain 9.57 the telephone number of a department of 9.58 human services staff person whom the 9.59 family can contact about alternative 9.60 sources of health coverage, including 9.61 MinnesotaCare, the Minnesota 9.62 comprehensive health association, 9.63 services for children with special 9.64 health care needs, and other types of 9.65 assistance for children with 9.66 disabilities or chronic illnesses. 9.67 [PUBLIC HEALTH NURSE ASSESSMENT.] 10.1 Effective for public health nurse 10.2 visits on or after July 1, 1996, the 10.3 reimbursement for public health nurse 10.4 visits relating to the provision of 10.5 personal care assistant services under 10.6 Minnesota Statutes, sections 256B.0625, 10.7 subdivision 19a, and 256B.0627, is 10.8 $204.36 for the initial assessment 10.9 visit and $102.18 for each reassessment 10.10 visit. 10.11 [NF PAYMENT INCREASE.] For the rate 10.12 year beginning July 1, 1996, the 10.13 commissioner shall increase each 10.14 nursing facility's payment rate for 10.15 those facilities whose rates are 10.16 determined under Minnesota Statutes, 10.17 section 256B.431, subdivision 25, by 10.18 $0.06 per resident per day. 10.19 Subd. 6. Community Mental Health 10.20 and State-Operated Services 10.21 General 10.22 (440,000) (83,000) 10.23 The amounts that are reduced from this 10.24 appropriation for each purpose are as 10.25 follows: 10.26 (a) Mental Health Grants - Children 10.27 (400,000) 277,000 10.28 (b) Mental Health Grants - Adults 10.29 (40,000) (360,000) 10.30 [CRISIS SERVICES.] Crisis services for 10.31 developmentally disabled persons in 10.32 each regional center catchment area, 10.33 including crisis beds and mobile 10.34 intervention teams, shall be at 10.35 Brainerd, Cambridge, Fergus Falls, St. 10.36 Peter, and Willmar regional centers in 10.37 accordance with the agreement reached 10.38 in 1989, and codified in Minnesota 10.39 Statutes, section 252.025. The program 10.40 design must be negotiated and agreed to 10.41 by the affected exclusive 10.42 representatives. The parties also must 10.43 meet and discuss ways to provide the 10.44 highest quality services, while 10.45 maintaining or increasing cost 10.46 effectiveness. 10.47 [COMPULSIVE GAMBLING.] For the fiscal 10.48 year beginning July 1, 1996, the state 10.49 lottery board shall deposit $800,000 in 10.50 the general fund for use by the 10.51 commissioner of human services to pay 10.52 for compulsive gambling services as 10.53 follows: $500,000 is allocated for 10.54 treatment of compulsive gamblers; 10.55 $150,000 is allocated for the 10.56 compulsive gambling treatment pilot 10.57 project for treating individual 10.58 compulsive gamblers; and $150,000 is 10.59 allocated for education and prevention 10.60 efforts, of which $50,000 is for a 11.1 grant to a compulsive gambling council 11.2 located in St. Louis county for the 11.3 extension of the information gathering 11.4 and dissemination network and the 11.5 establishment of training 11.6 scholarships. The amount deposited by 11.7 the board shall be deducted from the 11.8 lottery prize fund established under 11.9 Minnesota Statutes, section 349A.10, 11.10 subdivision 2. The amount deposited is 11.11 appropriated to the commissioner of 11.12 human services for this purpose. None 11.13 of the amount appropriated for 11.14 compulsive gambling services under this 11.15 section may be used to pay 11.16 administrative costs of the department 11.17 of human services. 11.18 [COMPULSIVE GAMBLING GRANT FOR 11.19 ADOLESCENT PROGRAMS.] Of this 11.20 appropriation, $40,000 in fiscal year 11.21 1997 is for a grant to a compulsive 11.22 gambling council located in St. Louis 11.23 county for a compulsive gambling 11.24 prevention and education project for 11.25 adolescents. This appropriation shall 11.26 not become part of the base level 11.27 funding for the 1998-1999 biennial 11.28 budget. The appropriation in Laws 11.29 1995, chapter 207, article 1, section 11.30 2, subdivision 7, for compulsive 11.31 gambling programs for fiscal year 1996 11.32 is reduced by $40,000. 11.33 [RTC DENTAL SERVICES REPORT.] The 11.34 commissioner shall report to the chairs 11.35 of the house health and human services 11.36 committee and the senate health care 11.37 committee by November 1, 1996, on the 11.38 implementation of Minnesota Statutes, 11.39 section 246,57, subdivision 6. 11.40 Sec. 3. COMMISSIONER OF HEALTH 11.41 Subdivision 1. Total 11.42 Appropriation -0- 2,280,000 11.43 Summary by Fund 11.44 General -0- 2,080,000 11.45 State Government 11.46 Special Revenue -0- 200,000 11.47 This appropriation is added to the 11.48 appropriation in Laws 1995, chapter 11.49 207, article 1, section 3. 11.50 The amounts that may be spent from this 11.51 appropriation for each program are 11.52 specified in the following subdivisions. 11.53 Subd. 2. Health Systems and 11.54 Special Populations -0- 1,985,000 11.55 Summary by Fund 11.56 General -0- 1,785,000 11.57 State Government 11.58 Special Revenue -0- 200,000 12.1 [CORE PUBLIC HEALTH FUNCTIONS.] Of this 12.2 appropriation, $1,500,000 in fiscal 12.3 year 1997 is for core public health 12.4 functions. Of this amount, up to five 12.5 percent is available to the 12.6 commissioner for administrative and 12.7 technical support of community health 12.8 boards. Funds distributed shall not be 12.9 used to displace current appropriations 12.10 or to provide individual personal 12.11 health care services which compete with 12.12 or duplicate services otherwise 12.13 available through the prepaid medical 12.14 assistance program. These funds shall 12.15 be distributed on a pro rata basis 12.16 according to the existing community 12.17 health services subsidy formula to 12.18 those community health service areas 12.19 which are participating in the state's 12.20 prepaid medical assistance program. 12.21 This appropriation shall not become 12.22 part of the base for the 1998-1999 12.23 biennial budget. 12.24 [DIRECT CONTRACTING REPORT.] The 12.25 commissioners of health and commerce 12.26 shall jointly study and report to the 12.27 legislative oversight commission on 12.28 health care access by December 15, 12.29 1996, on the feasibility of allowing 12.30 direct provider contracting of health 12.31 care services. Included in this report 12.32 shall be recommendations on the 12.33 consumer protections, reserve 12.34 requirements, and protections for 12.35 consumers who will not have direct 12.36 contracting available to them that the 12.37 legislature should consider to ensure 12.38 protection of persons receiving health 12.39 coverage through networks allowed to 12.40 conduct direct provider contracting. 12.41 [HOSPITAL CONVERSION; SUPPLEMENTAL 12.42 ALLOCATION.] Of the appropriation from 12.43 the general fund, for the fiscal year 12.44 ending June 30, 1997, the commissioner 12.45 of health shall provide $25,000 to a 12.46 28-bed hospital located in Chisago 12.47 county, to enable that facility to plan 12.48 for closure and conversion, in 12.49 partnership with other entities, in 12.50 order to offer outpatient and emergency 12.51 services at the site. This allocation 12.52 is in addition to funds authorized by 12.53 Laws 1995, article 1, section 3, 12.54 subdivision 2. 12.55 [MEDICARE INITIAL SURVEYS.] (a) 12.56 $200,000 is appropriated to the 12.57 commissioner from the general fund for 12.58 the fiscal year ending June 30, 1997, 12.59 to support initial surveys of Medicare 12.60 providers. This appropriation shall be 12.61 available until the federal law 12.62 prohibiting the collection of fees for 12.63 Medicare initial surveys is repealed. 12.64 (b) $200,000 is appropriated to the 12.65 commissioner from the state government 12.66 special revenue fund for the fiscal 13.1 year ending June 30, 1997, to support 13.2 initial surveys of Medicare providers 13.3 once the federal law prohibiting the 13.4 collection of fees for this activity is 13.5 repealed. Upon repeal of the federal 13.6 law, the commissioner shall charge fees 13.7 as provided under Minnesota Statutes, 13.8 section 144.122, paragraph (e). 13.9 [PROJECT REVIEW BEFORE CONSTRUCTION.] 13.10 Before construction may commence on the 13.11 project authorized in Minnesota 13.12 Statutes, section 144A.071, subdivision 13.13 4a, paragraph (w), the interagency 13.14 long-term care planning committee must 13.15 review the project to ascertain the 13.16 extent to which the project meets the 13.17 objectives of Minnesota Statutes, 13.18 section 144A.073, subdivision 4, and 13.19 approve the project if it meets the 13.20 objectives. 13.21 [SHARED ADMINISTRATOR.] Notwithstanding 13.22 the provisions of Minnesota Statutes, 13.23 section 144A.04, subdivision 5, the 13.24 administrator of a county owned nursing 13.25 home may serve, until September 30, 13.26 1996, as the administrator of a nursing 13.27 home located in a county owned hospital 13.28 provided that the total number of 13.29 nursing home beds in both facilities 13.30 does not exceed 153 beds. This 13.31 provision is effective the day 13.32 following final enactment. 13.33 Subd. 3. Health Protection -0- 295,000 13.34 [BIRTH DEFECTS REGISTRY.] Of this 13.35 appropriation, $195,000 in fiscal year 13.36 1997 is for the birth defects registry 13.37 system under Minnesota Statutes, 13.38 section 144.2215. The startup costs 13.39 shall not become part of the base for 13.40 the 1998-1999 biennial budget. 13.41 [LEAD HAZARD REDUCTION.] Of this 13.42 appropriation, $100,000 in fiscal year 13.43 1997 is for lead hazard reduction under 13.44 Minnesota Statutes, section 144.9504, 13.45 subdivisions 1 and 7, and section 13.46 144.9503, subdivision 9. 13.47 [REPORT ON INSPECTION FEES.] The 13.48 commissioner may spend up to $20,000 of 13.49 the money appropriated for the fiscal 13.50 year ending June 30, 1997, to develop 13.51 recommendations for options to reduce 13.52 inspection fees for establishments 13.53 licensed under Minnesota Statutes, 13.54 chapter 157, which are operating in the 13.55 category of small establishment with 13.56 full menu selection, and which have ten 13.57 or fewer employees. The 13.58 recommendations must not include the 13.59 option of a general fund appropriation 13.60 as a way to reduce inspection fees. 13.61 The commissioner must report the 13.62 recommendations to the legislature by 13.63 October 1, 1996. 13.64 Sec. 4. VETERANS NURSING 14.1 HOMES BOARD -0- 125,000 14.2 This appropriation is added to the 14.3 appropriation in Laws 1995, chapter 14.4 207, article 1, section 4. 14.5 [VETERANS NURSING HOMES BOARD.] 14.6 $125,000 is appropriated from the 14.7 general fund to the veterans nursing 14.8 homes board for the fiscal year ending 14.9 June 30, 1997, for the nursing home in 14.10 Fergus Falls. This appropriation is to 14.11 fund positions and support services, to 14.12 coordinate and oversee the construction 14.13 of the facility, and to begin planning 14.14 for the opening of the facility. 14.15 Sec. 5. HEALTH-RELATED BOARDS 14.16 Subdivision 1. Total 14.17 Appropriation 50,000 175,000 14.18 Summary by Fund 14.19 General -0- 75,000 14.20 State Government 14.21 Special Revenue 50,000 100,000 14.22 This appropriation is added to the 14.23 appropriation in Laws 1995, chapter 14.24 207, article 1, section 5. 14.25 Subd. 2. Emergency Medical Services 14.26 Regulatory Board 14.27 General Fund -0- 75,000 14.28 [EMS TRANSFER EXPENSES.] $75,000 is 14.29 appropriated to the emergency medical 14.30 services regulatory board from the 14.31 general fund for the fiscal year ending 14.32 June 30, 1997, for expenses incurred in 14.33 transferring regulatory authority from 14.34 the commissioner of health to the board 14.35 under Laws 1995, chapter 207, article 14.36 9. This appropriation shall not become 14.37 part of the base for the 1998-1999 14.38 biennial budget. 14.39 Subd. 3. Board of Medical 14.40 Practice 14.41 State Government Special 14.42 Fund 50,000 100,000 14.43 [MEDICAL PRACTICE BOARD.] $50,000 in 14.44 fiscal year 1996 and $100,000 in fiscal 14.45 year 1997 is appropriated from the 14.46 state government special revenue fund 14.47 to the board of medical practice for 14.48 the health professionals services 14.49 program, and is added to the 14.50 appropriation in Laws 1995, chapter 14.51 207, article 1, section 5, subdivision 14.52 6. 14.53 [STATE GOVERNMENT SPECIAL REVENUE 14.54 FUND.] The appropriations in this 14.55 subdivision are from the state 14.56 government special revenue fund. 15.1 [NO SPENDING IN EXCESS OF REVENUES.] 15.2 The commissioner of finance shall not 15.3 permit the allotment, encumbrance, or 15.4 expenditure of money appropriated in 15.5 this subdivision in excess of the 15.6 anticipated biennial revenues or 15.7 accumulated surplus revenues from fees 15.8 collected by the boards. Neither this 15.9 provision nor Minnesota Statutes, 15.10 section 214.06, applies to transfers 15.11 from the general contingent account, if 15.12 the amount transferred does not exceed 15.13 the amount of surplus revenue 15.14 accumulated by the transferee during 15.15 the previous five years. 15.16 Sec. 6. [CARRYOVER LIMITATION.] 15.17 None of the appropriations in this 15.18 article which are allowed to be carried 15.19 forward from fiscal year 1996 to fiscal 15.20 year 1997 shall become part of the base 15.21 level funding for the 1998-1999 15.22 biennial budget, unless specifically 15.23 directed by the legislature. 15.24 Sec. 7. [SUNSET OF UNCODIFIED 15.25 LANGUAGE.] 15.26 All uncodified language contained in 15.27 this article expires on June 30, 1997, 15.28 unless a different expiration is 15.29 explicit. 15.30 ARTICLE 2 15.31 HEALTH AND CONTINUING CARE RELATED TO 15.32 MEDICAL ASSISTANCE AND GENERAL ASSISTANCE MEDICAL CARE 15.33 Section 1. Minnesota Statutes 1995 Supplement, section 15.34 62Q.19, subdivision 1, is amended to read: 15.35 Subdivision 1. [DESIGNATION.] The commissioner shall 15.36 designate essential community providers. The criteria for 15.37 essential community provider designation shall be the following: 15.38 (1) a demonstrated ability to integrate applicable 15.39 supportive and stabilizing services with medical care for 15.40 uninsured persons and high-risk and special needs populations as 15.41 defined in section 62Q.07, subdivision 2, paragraph (e), 15.42 underserved, and other special needs populations; and 15.43 (2) a commitment to serve low-income and underserved 15.44 populations by meeting the following requirements: 15.45 (i) has nonprofit status in accordance with chapter 317A; 15.46 (ii) has tax exempt status in accordance with the Internal 15.47 Revenue Service Code, section 501(c)(3); 15.48 (iii) charges for services on a sliding fee schedule based 16.1 on current poverty income guidelines; and 16.2 (iv) does not restrict access or services because of a 16.3 client's financial limitation;or16.4 (3) status as a local government unit as defined in section 16.5 62D.02, subdivision 11, an Indian tribal government, an Indian 16.6 health service unit, or community health board as defined in 16.7 chapter 145A; or 16.8 (4) a former state hospital that specializes in the 16.9 treatment of cerebral palsy, spina bifida, epilepsy, closed head 16.10 injuries, specialized orthopedic problems, and other disabling 16.11 conditions. 16.12 Prior to designation, the commissioner shall publish the 16.13 names of all applicants in the State Register. The public shall 16.14 have 30 days from the date of publication to submit written 16.15 comments to the commissioner on the application. No designation 16.16 shall be made by the commissioner until the 30-day period has 16.17 expired. 16.18 The commissioner may designate an eligible provider as an 16.19 essential community provider for all the services offered by 16.20 that provider or for specific services designated by the 16.21 commissioner. 16.22 For the purpose of this subdivision, supportive and 16.23 stabilizing services include at a minimum, transportation, child 16.24 care, cultural, and linguistic services where appropriate. 16.25 Sec. 2. Minnesota Statutes 1995 Supplement, section 16.26 62Q.19, subdivision 5, is amended to read: 16.27 Subd. 5. [CONTRACT PAYMENT RATES.] An essential community 16.28 provider and a health plan company may negotiate the payment 16.29 rate for covered services provided by the essential community 16.30 provider. This rate must be at least the same rate per unit of 16.31 service as is paid to other health plan providers for the same 16.32 or similar services. 16.33 Sec. 3. Minnesota Statutes 1995 Supplement, section 16.34 252.27, subdivision 2a, is amended to read: 16.35 Subd. 2a. [CONTRIBUTION AMOUNT.] (a) The natural or 16.36 adoptive parents of a minor child, including a child determined 17.1 eligible for medical assistance without consideration of 17.2 parental income, must contribute monthly to the cost of 17.3 services, unless the child is married or has been married, 17.4 parental rights have been terminated, or the child's adoption is 17.5 subsidized according to section 259.67 or through title IV-E of 17.6 the Social Security Act. 17.7 (b) The parental contribution shall be the greater of a 17.8 minimum monthly fee of $25 for households with adjusted gross 17.9 income of $30,000 and over, or an amount to be computed by 17.10 applying to the adjusted gross income of the natural or adoptive 17.11 parents that exceeds 150 percent of the federal poverty 17.12 guidelines for the applicable household size, the following 17.13 schedule of rates: 17.14 (1) on the amount of adjusted gross income over 150 percent 17.15 of poverty, but not over $50,000, ten percent; 17.16 (2) on the amount of adjusted gross income over 150 percent 17.17 of poverty and over $50,000 but not over $60,000, 12 percent; 17.18 (3) on the amount of adjusted gross income over 150 percent 17.19 of poverty, and over $60,000 but not over $75,000, 14 percent; 17.20 and 17.21 (4) on all adjusted gross income amounts over 150 percent 17.22 of poverty, and over $75,000, 15 percent. 17.23 If the child lives with the parent, the parental 17.24 contribution is reduced by $200, except that the parent must pay 17.25 the minimum monthly $25 fee under this paragraph. If the child 17.26 resides in an institution specified in section 256B.35, the 17.27 parent is responsible for the personal needs allowance specified 17.28 under that section in addition to the parental contribution 17.29 determined under this section. The parental contribution is 17.30 reduced by any amount required to be paid directly to the child 17.31 pursuant to a court order, but only if actually paid. 17.32 (c) The household size to be used in determining the amount 17.33 of contribution under paragraph (b) includes natural and 17.34 adoptive parents and their dependents under age 21, including 17.35 the child receiving services. Adjustments in the contribution 17.36 amount due to annual changes in the federal poverty guidelines 18.1 shall be implemented on the first day of July following 18.2 publication of the changes. 18.3 (d) For purposes of paragraph (b), "income" means the 18.4 adjusted gross income of the natural or adoptive parents 18.5 determined according to the previous year's federal tax form. 18.6 (e) The contribution shall be explained in writing to the 18.7 parents at the time eligibility for services is being 18.8 determined. The contribution shall be made on a monthly basis 18.9 effective with the first month in which the child receives 18.10 services. Annually upon redetermination or at termination of 18.11 eligibility, if the contribution exceeded the cost of services 18.12 provided, the local agency or the state shall reimburse that 18.13 excess amount to the parents, either by direct reimbursement if 18.14 the parent is no longer required to pay a contribution, or by a 18.15 reduction in or waiver of parental fees until the excess amount 18.16 is exhausted. 18.17 (f) The monthly contribution amount must be reviewed at 18.18 least every 12 months; when there is a change in household size; 18.19 and when there is a loss of or gain in income from one month to 18.20 another in excess of ten percent. The local agency shall mail a 18.21 written notice 30 days in advance of the effective date of a 18.22 change in the contribution amount. A decrease in the 18.23 contribution amount is effective in the month that the parent 18.24 verifies a reduction in income or change in household size. 18.25 (g) Parents of a minor child who do not live with each 18.26 other shall each pay the contribution required under paragraph 18.27 (a), except that a court-ordered child support payment actually 18.28 paid on behalf of the child receiving services shall be deducted 18.29 from the contribution of the parent making the payment. 18.30 (h) The contribution under paragraph (b) shall be increased 18.31 by an additional five percent if the local agency determines 18.32 that insurance coverage is available but not obtained for the 18.33 child. For purposes of this section, "available" means the 18.34 insurance is a benefit of employment for a family member at an 18.35 annual cost of no more than five percent of the family's annual 18.36 income. For purposes of this section, insurance means health 19.1 and accident insurance coverage, enrollment in a nonprofit 19.2 health service plan, health maintenance organization, 19.3 self-insured plan, or preferred provider organization. 19.4 Parents who have more than one child receiving services 19.5 shall not be required to pay more than the amount for the child 19.6 with the highest expenditures. There shall be no resource 19.7 contribution from the parents. The parent shall not be required 19.8 to pay a contribution in excess of the cost of the services 19.9 provided to the child, not counting payments made to school 19.10 districts for education-related services. Notice of an increase 19.11 in fee payment must be given at least 30 days before the 19.12 increased fee is due. 19.13 (i) The contribution under paragraph (b) shall be reduced 19.14 by $300 per fiscal year if, in the 12 months prior to July 1; 19.15 (1) the parent applied for insurance for the child, 19.16 (2) the insurer denied insurance, 19.17 (3) the parents submitted a complaint or appeal, in writing 19.18 to the insurer, submitted a complaint or appeal, in writing, to 19.19 the commissioner of health or the commissioner of commerce, or 19.20 litigated the complaint or appeal, and 19.21 (4) as a result of the dispute, the insurer reversed its 19.22 decision and granted insurance. 19.23 For purposes of this section, insurance has the meaning 19.24 given in paragraph (h). 19.25 A parent who has requested a reduction in the contribution 19.26 amount under this paragraph shall submit proof in the form and 19.27 manner prescribed by the commissioner or county agency, 19.28 including, but not limited to, the insurer's denial of 19.29 insurance, the written letter or complaint of the parents, court 19.30 documents, and the written response of the insurer approving 19.31 insurance. The determinations of the commissioner or county 19.32 agency under this paragraph are not rules subject to chapter 14. 19.33 Sec. 4. [252.54] [DAY TRAINING AND HABILITATION SERVICES.] 19.34 Day training and habilitation license holders are exempt 19.35 from the requirements of Minnesota Rules, part 9525.1630, 19.36 subparts 3 (review of progress toward individual habilitation 20.1 plan goals), 4 (initial assessment), and 5 (reassessment), for 20.2 persons for whom progress reviews, initial assessments, and 20.3 reassessments are completed by the license holder according to 20.4 requirements established in the person's individual service plan 20.5 developed by the county case manager under Minnesota Statutes, 20.6 section 256B.092, subdivision 1b. 20.7 Sec. 5. Minnesota Statutes 1995 Supplement, section 20.8 256.969, subdivision 9, is amended to read: 20.9 Subd. 9. [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 20.10 SERVED.] (a) For admissions occurring on or after October 1, 20.11 1992, through December 31, 1992, the medical assistance 20.12 disproportionate population adjustment shall comply with federal 20.13 law and shall be paid to a hospital, excluding regional 20.14 treatment centers and facilities of the federal Indian Health 20.15 Service, with a medical assistance inpatient utilization rate in 20.16 excess of the arithmetic mean. The adjustment must be 20.17 determined as follows: 20.18 (1) for a hospital with a medical assistance inpatient 20.19 utilization rate above the arithmetic mean for all hospitals 20.20 excluding regional treatment centers and facilities of the 20.21 federal Indian Health Service but less than or equal to one 20.22 standard deviation above the mean, the adjustment must be 20.23 determined by multiplying the total of the operating and 20.24 property payment rates by the difference between the hospital's 20.25 actual medical assistance inpatient utilization rate and the 20.26 arithmetic mean for all hospitals excluding regional treatment 20.27 centers and facilities of the federal Indian Health Service; and 20.28 (2) for a hospital with a medical assistance inpatient 20.29 utilization rate above one standard deviation above the mean, 20.30 the adjustment must be determined by multiplying the adjustment 20.31 that would be determined under clause (1) for that hospital by 20.32 1.1. If federal matching funds are not available for all 20.33 adjustments under this subdivision, the commissioner shall 20.34 reduce payments on a pro rata basis so that all adjustments 20.35 qualify for federal match. The commissioner may establish a 20.36 separate disproportionate population operating payment rate 21.1 adjustment under the general assistance medical care program. 21.2 For purposes of this subdivision medical assistance does not 21.3 include general assistance medical care. The commissioner shall 21.4 report annually on the number of hospitals likely to receive the 21.5 adjustment authorized by this paragraph. The commissioner shall 21.6 specifically report on the adjustments received by public 21.7 hospitals and public hospital corporations located in cities of 21.8 the first class. 21.9 (b) For admissions occurring on or after July 1, 1993, the 21.10 medical assistance disproportionate population adjustment shall 21.11 comply with federal law and shall be paid to a hospital, 21.12 excluding regional treatment centers and facilities of the 21.13 federal Indian Health Service, with a medical assistance 21.14 inpatient utilization rate in excess of the arithmetic mean. 21.15 The adjustment must be determined as follows: 21.16 (1) for a hospital with a medical assistance inpatient 21.17 utilization rate above the arithmetic mean for all hospitals 21.18 excluding regional treatment centers and facilities of the 21.19 federal Indian Health Service but less than or equal to one 21.20 standard deviation above the mean, the adjustment must be 21.21 determined by multiplying the total of the operating and 21.22 property payment rates by the difference between the hospital's 21.23 actual medical assistance inpatient utilization rate and the 21.24 arithmetic mean for all hospitals excluding regional treatment 21.25 centers and facilities of the federal Indian Health Service; 21.26 (2) for a hospital with a medical assistance inpatient 21.27 utilization rate above one standard deviation above the mean, 21.28 the adjustment must be determined by multiplying the adjustment 21.29 that would be determined under clause (1) for that hospital by 21.30 1.1. The commissioner may establish a separate disproportionate 21.31 population operating payment rate adjustment under the general 21.32 assistance medical care program. For purposes of this 21.33 subdivision, medical assistance does not include general 21.34 assistance medical care. The commissioner shall report annually 21.35 on the number of hospitals likely to receive the adjustment 21.36 authorized by this paragraph. The commissioner shall 22.1 specifically report on the adjustments received by public 22.2 hospitals and public hospital corporations located in cities of 22.3 the first class; and 22.4 (3) for a hospital that had medical assistance 22.5 fee-for-service payment volume during calendar year 1991 in 22.6 excess of 13 percent of total medical assistance fee-for-service 22.7 payment volume, a medical assistance disproportionate population 22.8 adjustment shall be paid in addition to any other 22.9 disproportionate payment due under this subdivision as follows: 22.10 $1,515,000 due on the 15th of each month after noon, beginning 22.11 July 15, 1995. For a hospital that had medical assistance 22.12 fee-for-service payment volume during calendar year 1991 in 22.13 excess of eight percent of total medical assistance 22.14 fee-for-service payment volume andiswas the primary hospital 22.15 affiliated with the University of Minnesota, a medical 22.16 assistance disproportionate population adjustment shall be paid 22.17 in addition to any other disproportionate payment due under this 22.18 subdivision as follows: $505,000 due on the 15th of each month 22.19 after noon, beginning July 15, 1995. 22.20 (c) The commissioner shall adjust rates paid to a health 22.21 maintenance organization under contract with the commissioner to 22.22 reflect rate increases provided in paragraph (b), clauses (1) 22.23 and (2), on a nondiscounted hospital-specific basis but shall 22.24 not adjust those rates to reflect payments provided in clause 22.25 (3). 22.26 (d) If federal matching funds are not available for all 22.27 adjustments under paragraph (b), the commissioner shall reduce 22.28 payments under paragraph (b), clauses (1) and (2), on a pro rata 22.29 basis so that all adjustments under paragraph (b) qualify for 22.30 federal match. 22.31 (e) For purposes of this subdivision, medical assistance 22.32 does not include general assistance medical care. 22.33 Sec. 6. [256.9692] [EFFECT OF INTEGRATION AGREEMENT ON 22.34 DIVISION OF COST.] 22.35 Beginning in the first calendar month after there is a 22.36 definitive integration agreement affecting the University of 23.1 Minnesota hospital and clinics and Fairview hospital and health 23.2 care services, Fairview hospital and health care services shall 23.3 pay the University of Minnesota $505,000 on the 15th of each 23.4 month, after receiving the state payment, provided that the 23.5 University of Minnesota has fulfilled the requirements of 23.6 section 256B.19, subdivision 1c. 23.7 Sec. 7. Minnesota Statutes 1995 Supplement, section 23.8 256B.055, subdivision 12, is amended to read: 23.9 Subd. 12. [DISABLED CHILDREN.] (a) A person is eligible 23.10 for medical assistance if the person is under age 19 and 23.11 qualifies as a disabled individual under United States Code, 23.12 title 42, section 1382c(a), and would be eligible for medical 23.13 assistance under the state plan if residing in a medical 23.14 institution, and the child requires a level of care provided in 23.15 a hospital, nursing facility, or intermediate care facility for 23.16 persons with mental retardation or related conditions, for whom 23.17 home care is appropriate, provided that the cost to medical 23.18 assistance under this section is not more than the amount that 23.19 medical assistance would pay for if the child resides in an 23.20 institution.Eligibility under this section must be determined23.21annuallyAfter the child is determined to be eligible under this 23.22 section, the commissioner shall review the child's disability 23.23 under United States Code, title 42, section 1382c(a) and level 23.24 of care defined under this section no more often than annually 23.25 and may elect, based on the recommendation of health care 23.26 professionals under contract with the state medical review team, 23.27 to extend the review of disability and level of care up to a 23.28 maximum of four years. The commissioner's decision on the 23.29 frequency of continuing review of disability and level of care 23.30 is not subject to administrative appeal under section 256.045. 23.31 Nothing in this subdivision shall be construed as affecting 23.32 other redeterminations of medical assistance eligibility under 23.33 chapter 256B and annual cost effective reviews under this 23.34 section. 23.35 (b) For purposes of this subdivision, "hospital" means an 23.36 institution as defined in section 144.696, subdivision 3, 24.1 144.55, subdivision 3, or Minnesota Rules, part 4640.3600, and 24.2 licensed pursuant to sections 144.50 to 144.58 . For purposes 24.3 of this subdivision, a child requires a level of care provided 24.4 in a hospital if the child is determined by the commissioner to 24.5 need an extensive array of health services, including mental 24.6 health services, for an undetermined period of time, whose 24.7 health condition requires frequent monitoring and treatment by a 24.8 health care professional or by a person supervised by a health 24.9 care professional, who would reside in a hospital or require 24.10 frequent hospitalization if these services were not provided, 24.11 and the daily care needs are more complex than a nursing 24.12 facility level of care. 24.13 A child with serious emotional disturbance requires a level 24.14 of care provided in a hospital if the commissioner determines 24.15 that the individual requires 24-hour supervision because the 24.16 person exhibits recurrent or frequent suicidal or homicidal 24.17 ideation or behavior, recurrent or frequent psychosomatic 24.18 disorders or somatopsychic disorders that may become life 24.19 threatening, recurrent or frequent severe socially unacceptable 24.20 behavior associated with psychiatric disorder, ongoing and 24.21 chronic psychosis or severe, ongoing and chronic developmental 24.22 problems requiring continuous skilled observation, or severe 24.23 disabling symptoms for which office-centered outpatient 24.24 treatment is not adequate, and which overall severely impact the 24.25 individual's ability to function. 24.26 (c) For purposes of this subdivision, "nursing facility" 24.27 means a facility which provides nursing care as defined in 24.28 section 144A.01, subdivision 5, licensed pursuant to sections 24.29 144A.02 to 144A.10, which is appropriate if a person is in 24.30 active restorative treatment; is in need of special treatments 24.31 provided or supervised by a licensed nurse; or has unpredictable 24.32 episodes of active disease processes requiring immediate 24.33 judgment by a licensed nurse. For purposes of this subdivision, 24.34 a child requires the level of care provided in a nursing 24.35 facility if the child is determined by the commissioner to meet 24.36 the requirements of the preadmission screening assessment 25.1 document under section 256B.0911 and the home care independent 25.2 rating document under section 256B.0627, subdivision 5, 25.3 paragraph (f), item (iii), adjusted to address age-appropriate 25.4 standards for children age 18 and under, pursuant to section 25.5 256B.0627, subdivision 5, paragraph (d), clause (2). 25.6 (d) For purposes of this subdivision, "intermediate care 25.7 facility for persons with mental retardation or related 25.8 conditions" or "ICF/MR" means a program licensed to provide 25.9 services to persons with mental retardation under section 25.10 252.28, and chapter 245A, and a physical plant licensed as a 25.11 supervised living facility under chapter 144, which together are 25.12 certified by the Minnesota department of health as meeting the 25.13 standards in Code of Federal Regulations, title 42, part 483, 25.14 for an intermediate care facility which provides services for 25.15 persons with mental retardation or persons with related 25.16 conditions who require 24-hour supervision and active treatment 25.17 for medical, behavioral, or habilitation needs. For purposes of 25.18 this subdivision, a child requires a level of care provided in 25.19 an ICF/MR if the commissioner finds that the child has mental 25.20 retardation or a related condition in accordance with section 25.21 256B.092, is in need of a 24-hour plan of care and active 25.22 treatment similar to persons with mental retardation, and there 25.23 is a reasonable indication that the child will need ICF/MR 25.24 services. 25.25 (e) For purposes of this subdivision, a person requires the 25.26 level of care provided in a nursing facility if the person 25.27 requires 24-hour monitoring or supervision and a plan of mental 25.28 health treatment because of specific symptoms or functional 25.29 impairments associated with a serious mental illness or disorder 25.30 diagnosis, which meet severity criteria for mental health 25.31 established by the commissioner based on standards developed for 25.32 the Wisconsin Katie Beckett program published in July 1994. 25.33 (f) The determination of the level of care needed by the 25.34 child shall be made by the commissioner based on information 25.35 supplied to the commissioner by the parent or guardian, the 25.36 child's physician or physicians, and other professionals as 26.1 requested by the commissioner. The commissioner shall establish 26.2 a screening team to conduct the level of care determinations 26.3 according to this subdivision. 26.4(f)(g) If a child meets the conditions in paragraph (b), 26.5 (c),or(d), or (e), the commissioner must assess the case to 26.6 determine whether: 26.7 (1) the child qualifies as a disabled individual under 26.8 United States Code, title 42, section 1382c(a) and would be 26.9 eligible for medical assistance if residing in a medical 26.10 institution; and 26.11 (2) the cost of medical assistance services for the child, 26.12 if eligible under this subdivision, would not be more than the 26.13 cost to medical assistance if the child resides in a medical 26.14 institution to be determined as follows: 26.15 (i) for a child who requires a level of care provided in an 26.16 ICF/MR, the cost of care for the child in an institution shall 26.17 be determined using the average payment rate established for the 26.18 regional treatment centers that are certified as ICFs/MR; 26.19 (ii) for a child who requires a level of care provided in 26.20 an inpatient hospital setting according to paragraph (b), 26.21 cost-effectiveness shall be determined according to Minnesota 26.22 Rules, part 9505.3520, items F and G; and 26.23 (iii) for a child who requires a level of care provided in 26.24 a nursing facility according to paragraph (c) or (e), 26.25 cost-effectiveness shall be determined according to Minnesota 26.26 Rules, part 9505.3040, except that the nursing facility average 26.27 rate shall be adjusted to reflect rates which would be paid for 26.28 children under age 16. The commissioner may authorize an amount 26.29 up to the amount medical assistance would pay for a child 26.30 referred to the commissioner by the preadmission screening team 26.31 under section 256B.0911. 26.32 (g) Children eligible for medical assistance services under 26.33 section 256B.055, subdivision 12, as of June 30, 1995, must be 26.34 screened according to the criteria in this subdivision prior to 26.35 January 1, 1996. Children found to be ineligible may not be 26.36 removed from the program until January 1, 1996. 27.1 Sec. 8. Minnesota Statutes 1994, section 256B.056, 27.2 subdivision 1, is amended to read: 27.3 Subdivision 1. [RESIDENCY.] To be eligible for medical 27.4 assistance, a person mustresidehave resided in Minnesota for 27.5 at least 30 days, or, if absent from the state, be deemed to be 27.6 a resident of Minnesota in accordance with the rules of the 27.7 state agency. 27.8 A person who has resided in the state for less than 30 days 27.9 is considered to be a Minnesota resident if the person: 27.10 (1) was born in the state; 27.11 (2) has in the past resided in the state for at least 365 27.12 consecutive days; 27.13 (3) has come to the state to join a close relative, which, 27.14 for purposes of this subdivision means a parent, grandparent, 27.15 brother, sister, spouse, or child; or 27.16 (4) has come to this state to accept a bona fide offer of 27.17 employment for which the person is eligible. 27.18 A county agency shall waive the 30-day residency 27.19 requirement in cases of medical emergency or where unusual 27.20 hardship would result from denial of assistance. The county 27.21 agency must report to the commissioner within 30 days on any 27.22 waiver granted under this section. The county shall not deny an 27.23 application solely because the applicant does not meet at least 27.24 one of the criteria in this subdivision, but shall continue to 27.25 process the application and leave the application pending until 27.26 the residency requirement is met or until eligibility or 27.27 ineligibility is established. 27.28 Sec. 9. Minnesota Statutes 1994, section 256B.056, 27.29 subdivision 1a, is amended to read: 27.30 Subd. 1a. [INCOME AND ASSETS GENERALLY.] Unless 27.31 specifically required by state law or rule or federal law or 27.32 regulation, the methodologies used in counting income and assets 27.33 to determine eligibility for medical assistance for persons 27.34 whose eligibility category is based on blindness, disability, or 27.35 age of 65 or more years, the methodologies for the supplemental 27.36 security income program shall be used, except that payments made 28.1 pursuant to a court order for the support of children shall be 28.2 excluded from income in an amount not to exceed the difference 28.3 between the applicable income standard used in the state's 28.4 medical assistance program for aged, blind, and disabled persons 28.5 and the applicable income standard used in the state's medical 28.6 assistance program for families with children. Exclusion of 28.7 court-ordered child support payments is subject to the condition 28.8 that if there has been a change in the financial circumstances 28.9 of the person with the legal obligation to pay support since the 28.10 support order was entered, the person with the legal obligation 28.11 to pay support has petitioned for modification of the support 28.12 order. For families and children, which includes all other 28.13 eligibility categories, the methodologies for the aid to 28.14 families with dependent children program under section 256.73 28.15 shall be used. Effective upon federal approval, in-kind 28.16 contributions to, and payments made on behalf of, a recipient, 28.17 by an obligor, in satisfaction of or in addition to a temporary 28.18 or permanent order for child support or maintenance, shall be 28.19 considered income to the recipient. For these purposes, a 28.20 "methodology" does not include an asset or income standard, or 28.21 accounting method, or method of determining effective dates. 28.22 Sec. 10. Minnesota Statutes 1995 Supplement, section 28.23 256B.0575, is amended to read: 28.24 256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 28.25 PERSONS.] 28.26 When an institutionalized person is determined eligible for 28.27 medical assistance, the income that exceeds the deductions in 28.28 paragraphs (a) and (b) must be applied to the cost of 28.29 institutional care. 28.30 (a) The following amounts must be deducted from the 28.31 institutionalized person's income in the following order: 28.32 (1) the personal needs allowance under section 256B.35 or, 28.33 for a veteran who does not have a spouse or child, or a 28.34 surviving spouse of a veteran having no child, the amount of an 28.35 improved pension received from the veteran's administration not 28.36 exceeding $90 per month; 29.1 (2) the personal allowance for disabled individuals under 29.2 section 256B.36; 29.3 (3) if the institutionalized person has a legally appointed 29.4 guardian or conservator, five percent of the recipient's gross 29.5 monthly income up to $100 as reimbursement for guardianship or 29.6 conservatorship services; 29.7 (4) a monthly income allowance determined under section 29.8 256B.058, subdivision 2, but only to the extent income of the 29.9 institutionalized spouse is made available to the community 29.10 spouse; 29.11 (5) a monthly allowance for children under age 18 which, 29.12 together with the net income of the children, would provide 29.13 income equal to the medical assistance standard for families and 29.14 children according to section 256B.056, subdivision 4, for a 29.15 family size that includes only the minor children. This 29.16 deduction applies only if the children do not live with the 29.17 community spouse and only to the extent that the deduction is 29.18 not included in the personal needs allowance under section 29.19 256B.35, subdivision 1, as child support garnished under a court 29.20 order; 29.21 (6) a monthly family allowance for other family members, 29.22 equal to one-third of the difference between 122 percent of the 29.23 federal poverty guidelines and the monthly income for that 29.24 family member; 29.25 (7) reparations payments made by the Federal Republic of 29.26 Germany and reparations payments made by the Netherlands for 29.27 victims of Nazi persecution between 1940 and 1945; and 29.28 (8) amounts for reasonable expenses incurred for necessary 29.29 medical or remedial care for the institutionalized spouse that 29.30 are not medical assistance covered expenses and that are not 29.31 subject to payment by a third party. 29.32 For purposes of clause (6), "other family member" means a 29.33 person who resides with the community spouse and who is a minor 29.34 or dependent child, dependent parent, or dependent sibling of 29.35 either spouse. "Dependent" means a person who could be claimed 29.36 as a dependent for federal income tax purposes under the 30.1 Internal Revenue Code. 30.2 (b) Income shall be allocated to an institutionalized 30.3 person for a period of up to three calendar months, in an amount 30.4 equal to the medical assistance standard for a family size of 30.5 one if: 30.6 (1) a physician certifies that the person is expected to 30.7 reside in the long-term care facility for three calendar months 30.8 or less; 30.9 (2) if the person has expenses of maintaining a residence 30.10 in the community; and 30.11 (3) if one of the following circumstances apply: 30.12 (i) the person was not living together with a spouse or a 30.13 family member as defined in paragraph (a) when the person 30.14 entered a long-term care facility; or 30.15 (ii) the person and the person's spouse become 30.16 institutionalized on the same date, in which case the allocation 30.17 shall be applied to the income of one of the spouses. 30.18 For purposes of this paragraph, a person is determined to be 30.19 residing in a licensed nursing home, regional treatment center, 30.20 or medical institution if the person is expected to remain for a 30.21 period of one full calendar month or more. 30.22 Sec. 11. Minnesota Statutes 1995 Supplement, section 30.23 256B.0595, subdivision 1, is amended to read: 30.24 Subdivision 1. [PROHIBITED TRANSFERS.] (a) For transfers 30.25 of assets made on or before August 10, 1993, if a person or the 30.26 person's spouse has given away, sold, or disposed of, for less 30.27 than fair market value, any asset or interest therein, except 30.28 assets other than the homestead that are excluded under the 30.29 supplemental security program, within 30 months before or any 30.30 time after the date of institutionalization if the person has 30.31 been determined eligible for medical assistance, or within 30 30.32 months before or any time after the date of the first approved 30.33 application for medical assistance if the person has not yet 30.34 been determined eligible for medical assistance, the person is 30.35 ineligible for long-term care services for the period of time 30.36 determined under subdivision 2. 31.1 (b) Effective for transfers made after August 10, 1993, a 31.2 person, a person's spouse, or any person, court, or 31.3 administrative body with legal authority to act in place of, on 31.4 behalf of, at the direction of, or upon the request of the 31.5 person or person's spouse, may not give away, sell, or dispose 31.6 of, for less than fair market value, any asset or interest 31.7 therein, except assets other than the homestead that are 31.8 excluded under the supplemental security income program, for the 31.9 purpose of establishing or maintaining medical assistance 31.10 eligibility. For purposes of determining eligibility for 31.11 long-term care services, any transfer of such assets within 36 31.12 months before or any time after an institutionalized person 31.13 applies for medical assistance, or 36 months before or any time 31.14 after a medical assistance recipient becomes institutionalized, 31.15 for less than fair market value may be considered. Any such 31.16 transfer is presumed to have been made for the purpose of 31.17 establishing or maintaining medical assistance eligibility and 31.18 the person is ineligible for long-term care services for the 31.19 period of time determined under subdivision 2, unless the person 31.20 furnishes convincing evidence to establish that the transaction 31.21 was exclusively for another purpose, or unless the transfer is 31.22 permitted under subdivision 3 or 4. Notwithstanding the 31.23 provisions of this paragraph, in the case of payments from a 31.24 trust or portions of a trust that are considered transfers of 31.25 assets under federal law, any transfers made within 60 months 31.26 before or any time after an institutionalized person applies for 31.27 medical assistance and within 60 months before or any time after 31.28 a medical assistance recipient becomes institutionalized, may be 31.29 considered. 31.30 (c) This section applies to transfers, for less than fair 31.31 market value, of income or assets, including assets that are 31.32 considered income in the month received, such as inheritances, 31.33 court settlements, and retroactive benefit payments or income to 31.34 which the person or the person's spouse is entitled but does not 31.35 receive due to action by the person, the person's spouse, or any 31.36 person, court, or administrative body with legal authority to 32.1 act in place of, on behalf of, at the direction of, or upon the 32.2 request of the person or the person's spouse. 32.3 (d) This section applies to payments for care or personal 32.4 services provided by a relative, unless the compensation was 32.5 stipulated in a notarized, written agreement which was in 32.6 existence when the service was performed, the care or services 32.7 directly benefited the person, and the payments made represented 32.8 reasonable compensation for the care or services provided. A 32.9 notarized written agreement is not required if payment for the 32.10 services was made within 60 days after the service was provided. 32.11 (e) This section applies to the portion of any asset or 32.12 interest that a person, a person's spouse, or any person, court, 32.13 or administrative body with legal authority to act in place of, 32.14 on behalf of, at the direction of, or upon the request of the 32.15 person or the person's spouse, transfers to anytrust,annuity,32.16or other instrument,that exceeds the value of the benefit 32.17 likely to be returned to the person or spouse while alive, based 32.18 on estimated life expectancy using the life expectancy tables 32.19 employed by the supplemental security income program to 32.20 determine the value of an agreement for services for life. The 32.21 commissioner may adopt rules reducing life expectancies based on 32.22 the need for long-term care. 32.23 (f) For purposes of this section, long-term care services 32.24 include services in a nursing facility, services that are 32.25 eligible for payment according to section 256B.0625, subdivision 32.26 2, because they are provided in a swing bed, intermediate care 32.27 facility for persons with mental retardation, and home and 32.28 community-based services provided pursuant to sections 32.29 256B.0915, 256B.092, and 256B.49. For purposes of this 32.30 subdivision and subdivisions 2, 3, and 4, "institutionalized 32.31 person" includes a person who is an inpatient in a nursing 32.32 facility or in a swing bed, or intermediate care facility for 32.33 persons with mental retardation or who is receiving home and 32.34 community-based services under sections 256B.0915, 256B.092, and 32.35 256B.49. 32.36 (g) Effective for transfers made on or after July 1, 1995, 33.1 or upon federal approval, whichever is later, a person, a 33.2 person's spouse, or any person, court, or administrative body 33.3 with legal authority to act in place of, on behalf of, at the 33.4 direction of, or upon the request of the person or person's 33.5 spouse, may not give away, sell, or dispose of, for less than 33.6 fair market value, any asset or interest therein, for the 33.7 purpose of establishing or maintaining medical assistance 33.8 eligibility. For purposes of determining eligibility for 33.9 long-term care services, any transfer of such assets within 60 33.10 months before, or any time after, an institutionalized person 33.11 applies for medical assistance, or 60 months before, or any time 33.12 after, a medical assistance recipient becomes institutionalized, 33.13 for less than fair market value may be considered. Any such 33.14 transfer is presumed to have been made for the purpose of 33.15 establishing or maintaining medical assistance eligibility and 33.16 the person is ineligible for long-term care services for the 33.17 period of time determined under subdivision 2, unless the person 33.18 furnishes convincing evidence to establish that the transaction 33.19 was exclusively for another purpose, or unless the transfer is 33.20 permitted under subdivision 3 or 4. 33.21 Sec. 12. Minnesota Statutes 1994, section 256B.0595, is 33.22 amended by adding a subdivision to read: 33.23 Subd. 1a. [PROHIBITED TRANSFERS.] (a) Notwithstanding any 33.24 contrary provisions of this section, this subdivision applies to 33.25 transfers involving recipients of medical assistance that are 33.26 made on or after its effective date and to all transfers 33.27 involving persons who apply for medical assistance on or after 33.28 its effective date if the transfer occurred within 72 months 33.29 before the person applies for medical assistance, except that 33.30 this subdivision does not apply to transfers made prior to March 33.31 1, 1996. A person, a person's spouse, or any person, court, or 33.32 administrative body with legal authority to act in place of, on 33.33 behalf of, at the direction of, or upon the request of the 33.34 person or the person's spouse, may not give away, sell, dispose 33.35 of, or reduce ownership or control of any income, asset, or 33.36 interest therein for less than fair market value for the purpose 34.1 of establishing or maintaining medical assistance eligibility 34.2 for the person. For purposes of determining eligibility for 34.3 medical assistance services, any transfer of such income or 34.4 assets for less than fair market value within 72 months before 34.5 or any time after a person applies for medical assistance may be 34.6 considered. Any such transfer is presumed to have been made for 34.7 the purpose of establishing or maintaining medical assistance 34.8 eligibility, and the person is ineligible for medical assistance 34.9 services for the period of time determined under subdivision 2a, 34.10 unless the person furnishes convincing evidence to establish 34.11 that the transaction was exclusively for another purpose, or 34.12 unless the transfer is permitted under subdivision 3a or 4a. 34.13 (b) This section applies to transfers of income or assets 34.14 for less than fair market value, including assets that are 34.15 considered income in the month received, such as inheritances, 34.16 court settlements, and retroactive benefit payments or income to 34.17 which the person or the person's spouse is entitled but does not 34.18 receive due to action by the person, the person's spouse, or any 34.19 person, court, or administrative body with legal authority to 34.20 act in place of, on behalf of, at the direction of, or upon the 34.21 request of the person or the person's spouse. 34.22 (c) This section applies to payments for care or personal 34.23 services provided by a relative, unless the compensation was 34.24 stipulated in a notarized, written agreement which was in 34.25 existence when the service was performed, the care or services 34.26 directly benefited the person, and the payments made represented 34.27 reasonable compensation for the care or services provided. A 34.28 notarized written agreement is not required if payment for the 34.29 services was made within 60 days after the service was provided. 34.30 (d) This section applies to the portion of any income, 34.31 asset, or interest therein that a person, a person's spouse, or 34.32 any person, court, or administrative body with legal authority 34.33 to act in place of, on behalf of, at the direction of, or upon 34.34 the request of the person or the person's spouse, transfers to 34.35 any annuity that exceeds the value of the benefit likely to be 34.36 returned to the person or spouse while alive, based on estimated 35.1 life expectancy of adults entering long-term care. The 35.2 commissioner shall adopt rules establishing life expectancies of 35.3 adults entering long-term care. 35.4 Sec. 13. Minnesota Statutes 1995 Supplement, section 35.5 256B.0595, subdivision 2, is amended to read: 35.6 Subd. 2. [PERIOD OF INELIGIBILITY.] (a) For any 35.7 uncompensated transfer occurring on or before August 10, 1993, 35.8 the number of months of ineligibility for long-term care 35.9 services shall be the lesser of 30 months, or the uncompensated 35.10 transfer amount divided by the average medical assistance rate 35.11 for nursing facility services in the state in effect on the date 35.12 of application. The amount used to calculate the average 35.13 medical assistance payment rate shall be adjusted each July 1 to 35.14 reflect payment rates for the previous calendar year. The 35.15 period of ineligibility begins with the month in which the 35.16 assets were transferred. If the transfer was not reported to 35.17 the local agency at the time of application, and the applicant 35.18 received long-term care services during what would have been the 35.19 period of ineligibility if the transfer had been reported, a 35.20 cause of action exists against the transferee for the cost of 35.21 long-term care services provided during the period of 35.22 ineligibility, or for the uncompensated amount of the transfer, 35.23 whichever is less. The action may be brought by the state or 35.24 the local agency responsible for providing medical assistance 35.25 under chapter 256G. The uncompensated transfer amount is the 35.26 fair market value of the asset at the time it was given away, 35.27 sold, or disposed of, less the amount of compensation received. 35.28 (b) For uncompensated transfers made after August 10, 1993, 35.29 the number of months of ineligibility for long-term care 35.30 services shall be the total uncompensated value of the resources 35.31 transferred divided by the average medical assistance rate for 35.32 nursing facility services in the state in effect on the date of 35.33 application. The amount used to calculate the average medical 35.34 assistance payment rate shall be adjusted each July 1 to reflect 35.35 payment rates for the previous calendar year. The period of 35.36 ineligibility begins with the month in which the assets were 36.1 transferred except that if one or more uncompensated transfers 36.2 are made during a period of ineligibility, the total assets 36.3 transferred during the ineligibility period shall be combined 36.4 and a penalty period calculated to begin in the month the first 36.5 uncompensated transfer was made. If the transfer was not 36.6 reported to the local agency at the time of application, and the 36.7 applicant received medical assistance services during what would 36.8 have been the period of ineligibility if the transfer had been 36.9 reported, a cause of action exists against the transferee for 36.10 the cost of medical assistance services provided during the 36.11 period of ineligibility, or for the uncompensated amount of the 36.12 transfer, whichever is less. The action may be brought by the 36.13 state or the local agency responsible for providing medical 36.14 assistance under chapter 256G. The uncompensated transfer 36.15 amount is the fair market value of the asset at the time it was 36.16 given away, sold, or disposed of, less the amount of 36.17 compensation received. 36.18 (c) If a calculation of a penalty period results in a 36.19 partial month, payments for long-term care services shall be 36.20 reduced in an amount equal to the fraction, except that in 36.21 calculating the value of uncompensated transfers, if the total 36.22 value of all uncompensated transfers made in a month not 36.23 included in an existing penalty period does not exceed 36.24$1,000$500, then such transfers shall be disregarded for each 36.25 month prior to the month of application for or during receipt of 36.26 medical assistance. 36.27 Sec. 14. Minnesota Statutes 1994, section 256B.0595, is 36.28 amended by adding a subdivision to read: 36.29 Subd. 2a. [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 36.30 any contrary provisions of this section, this subdivision 36.31 applies to transfers involving recipients of medical assistance 36.32 that are made on or after its effective date and to all 36.33 transfers involving persons who apply for medical assistance on 36.34 or after its effective date, regardless of when the transfer 36.35 occurred, except that this subdivision does not apply to 36.36 transfers made prior to March 1, 1996. For any uncompensated 37.1 transfer occurring within 72 months prior to the date of 37.2 application, at any time after application, or while eligible, 37.3 the number of months of cumulative ineligibility for medical 37.4 assistance services shall be the total uncompensated value of 37.5 the assets and income transferred divided by the statewide 37.6 average per person nursing facility payment made by the state in 37.7 effect on the date of application. The amount used to calculate 37.8 the average per person payment shall be adjusted each July 1 to 37.9 reflect average payments for the previous calendar year. For 37.10 applicants, the period of ineligibility begins with the month in 37.11 which the person applied for medical assistance and satisfied 37.12 all other requirements for eligibility, or the month the local 37.13 agency becomes aware of the transfer, if later. For recipients, 37.14 the period of ineligibility begins in the month the agency 37.15 becomes aware of the transfer, except that penalty periods for 37.16 transfers made during a period of ineligibility as determined 37.17 under this section shall begin in the month following the 37.18 existing period of ineligibility. If the transfer was not 37.19 reported to the local agency at the time of application, and the 37.20 applicant received medical assistance services during what would 37.21 have been the period of ineligibility if the transfer had been 37.22 reported, a cause of action exists against the transferee for 37.23 the cost of medical assistance services provided during the 37.24 period of ineligibility, or for the uncompensated amount of the 37.25 transfer that was not recovered from the transferor through the 37.26 implementation of a penalty period under this subdivision, 37.27 whichever is less. The action may be brought by the state or 37.28 the local agency responsible for providing medical assistance 37.29 under chapter 256G. The total uncompensated value is the fair 37.30 market value of the income or asset at the time it was given 37.31 away, sold, or disposed of, less the amount of compensation 37.32 received. No cause of action exists for a transfer, unless: 37.33 (1) the transferee knew or should have known that the transfer 37.34 was being made by a person who was a resident of a long-term 37.35 care facility or was receiving that level of care in the 37.36 community at the time of the transfer; (2) the transferee knew 38.1 or should have known that the transfer was being made to assist 38.2 the person to qualify for or retain medical assistance 38.3 eligibility; or (3) the transferee actively solicited the 38.4 transfer with intent to assist the person to qualify for or 38.5 retain eligibility for medical assistance. 38.6 (b) If a calculation of a penalty period results in a 38.7 partial month, payments for medical assistance services shall be 38.8 reduced in an amount equal to the fraction, except that in 38.9 calculating the value of uncompensated transfers, if the total 38.10 value of all uncompensated transfers made in a month not 38.11 included in an existing penalty period does not exceed $500, 38.12 then such transfers shall be disregarded for each month prior to 38.13 the month of application for or during receipt of medical 38.14 assistance. 38.15 Sec. 15. Minnesota Statutes 1995 Supplement, section 38.16 256B.0595, subdivision 3, is amended to read: 38.17 Subd. 3. [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 38.18 (a) An institutionalized person is not ineligible for long-term 38.19 care services due to a transfer of assets for less than fair 38.20 market value if the asset transferred was a homestead and: 38.21 (1) title to the homestead was transferred to the 38.22 individual's 38.23 (i) spouse; 38.24 (ii) child who is under age 21; 38.25 (iii) blind or permanently and totally disabled child as 38.26 defined in the supplemental security income program; 38.27 (iv) sibling who has equity interest in the home and who 38.28 was residing in the home for a period of at least one year 38.29 immediately before the date of the individual's admission to the 38.30 facility; or 38.31 (v) son or daughter who was residing in the individual's 38.32 home for a period of at least two years immediately before the 38.33 date of the individual's admission to the facility, and who 38.34 provided care to the individual that, as certified by the 38.35 individual's attending physician, permitted the individual to 38.36 reside at home rather than in an institution or facility; 39.1 (2) a satisfactory showing is made that the individual 39.2 intended to dispose of the homestead at fair market value or for 39.3 other valuable consideration; or 39.4 (3) the local agency grants a waiver ofthe excess39.5resources created by the uncompensated transfera penalty 39.6 resulting from a transfer for less than fair market value 39.7 because denial of eligibility would cause undue hardship for the 39.8 individual, based on imminent threat to the individual's health 39.9 and well-being. Whenever an applicant or recipient is denied 39.10 eligibility because of a transfer for less than fair market 39.11 value, the local agency shall notify the applicant or recipient 39.12 that they may request a waiver of the penalty if the denial of 39.13 eligibility will cause undue hardship. In evaluating a waiver, 39.14 the local agency shall take into account whether the individual 39.15 was the victim of financial exploitation, whether the individual 39.16 has made reasonable efforts to recover the transferred property 39.17 or resource, and other factors relevant to a determination of 39.18 hardship. If the local agency does not approve a hardship 39.19 waiver, the local agency shall issue a written notice to the 39.20 individual stating the reasons for the denial and the process 39.21 for appealing the local agency's decision. 39.22 (b) When a waiver is granted under paragraph (a), clause 39.23 (3), a cause of action exists against the person to whom the 39.24 homestead was transferred for that portion of long-term care 39.25 services granted within: 39.26 (1) 30 months of a transfer made on or before August 10, 39.27 1993; 39.28 (2) 60 months if the homestead was transferred after August 39.29 10, 1993, to a trust or portion of a trust that is considered a 39.30 transfer of assets under federal law; or 39.31 (3) 36 months if transferred in any other manner after 39.32 August 10, 1993, 39.33 or the amount of the uncompensated transfer, whichever is less, 39.34 together with the costs incurred due to the action. The action 39.35mayshall be brought by the stateorunless the state delegates 39.36 this responsibility to the local agency responsible for 40.1 providing medical assistance under chapter 256G. 40.2 Sec. 16. Minnesota Statutes 1994, section 256B.0595, is 40.3 amended by adding a subdivision to read: 40.4 Subd. 3a. [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 40.5 (a) This subdivision applies to transfers involving recipients 40.6 of medical assistance that are made on or after its effective 40.7 date and to all transfers involving persons who apply for 40.8 medical assistance on or after its effective date, regardless of 40.9 when the transfer occurred, except that this subdivision does 40.10 not apply to transfers made prior to March 1, 1996. A person is 40.11 not ineligible for medical assistance services due to a transfer 40.12 of assets for less than fair market value as described in 40.13 subdivision 1a if the asset transferred was a homestead and: 40.14 (1) title to the homestead was transferred to the 40.15 individual's relatives who are residing in the homestead and are 40.16 the individual's 40.17 (i) spouse; 40.18 (ii) child who is under age 21; 40.19 (iii) blind or permanently and totally disabled child as 40.20 defined in the supplemental security income program; 40.21 (iv) sibling who has equity interest in the home and who 40.22 was residing in the home for a period of at least one year 40.23 immediately before the date of the individual's admission to the 40.24 facility; or 40.25 (v) son or daughter who was residing in the individual's 40.26 home for a period of at least two years immediately before the 40.27 date of the individual's admission to the facility, and who 40.28 provided care to the individual that, as certified by the 40.29 individual's attending physician, permitted the individual to 40.30 reside at home rather than in an institution or facility; 40.31 (2) a satisfactory showing is made that the individual 40.32 intended to dispose of the homestead at fair market value or for 40.33 other valuable consideration; or 40.34 (3) the local agency grants a waiver of a penalty resulting 40.35 from a transfer for less than fair market value because denial 40.36 of eligibility would cause undue hardship for the individual and 41.1 there exists an imminent threat to the individual's health and 41.2 well-being. Whenever an applicant or recipient is denied 41.3 eligibility because of a transfer for less than fair market 41.4 value, the local agency shall notify the applicant or recipient 41.5 that they may request a waiver of the penalty if the denial of 41.6 eligibility will cause undue hardship. In evaluating a waiver, 41.7 the local agency shall take into account whether the individual 41.8 was the victim of financial exploitation, whether the individual 41.9 has made reasonable efforts to recover the transferred property 41.10 or resource, and other factors relevant to a determination of 41.11 hardship. If the local agency does not approve a hardship 41.12 waiver, the local agency shall issue a written notice to the 41.13 individual stating the reasons for the denial and the process 41.14 for appealing the local agency's decision. 41.15 (b) When a waiver is granted under paragraph (a), clause 41.16 (3), a cause of action exists against the person to whom the 41.17 homestead was transferred for that portion of medical assistance 41.18 services granted within 72 months of the date the transferor 41.19 applied for medical assistance and satisfied all other 41.20 requirements for eligibility, or the amount of the uncompensated 41.21 transfer, whichever is less, together with the costs incurred 41.22 due to the action. The action shall be brought by the state 41.23 unless the state delegates this responsibility to the local 41.24 agency responsible for providing medical assistance under 41.25 chapter 256G. 41.26 Sec. 17. Minnesota Statutes 1995 Supplement, section 41.27 256B.0595, subdivision 4, is amended to read: 41.28 Subd. 4. [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 41.29 institutionalized person who has made, or whose spouse has made 41.30 a transfer prohibited by subdivision 1, is not ineligible for 41.31 long-term care services if one of the following conditions 41.32 applies: 41.33 (1) the assets were transferred to the individual's spouse 41.34 or to another for the sole benefit of the spouse; or 41.35 (2) the institutionalized spouse, prior to being 41.36 institutionalized, transferred assets to a spouse, provided that 42.1 the spouse to whom the assets were transferred does not then 42.2 transfer those assets to another person for less than fair 42.3 market value. (At the time when one spouse is 42.4 institutionalized, assets must be allocated between the spouses 42.5 as provided under section 256B.059); or 42.6 (3) the assets were transferred to the individual's child 42.7 who is blind or permanently and totally disabled as determined 42.8 in the supplemental security income program; or 42.9 (4) a satisfactory showing is made that the individual 42.10 intended to dispose of the assets either at fair market value or 42.11 for other valuable consideration; or 42.12 (5) the local agency determines that denial of eligibility 42.13 for long-term care services would work an undue hardship and 42.14 grants a waiver ofexcess assetsa penalty resulting from a 42.15 transfer for less than fair market value based on an imminent 42.16 threat to the individual's health and well-being. Whenever an 42.17 applicant or recipient is denied eligibility because of a 42.18 transfer for less than fair market value, the local agency shall 42.19 notify the applicant or recipient that they may request a waiver 42.20 of the penalty if the denial of eligibility will cause undue 42.21 hardship. In evaluating a waiver, the local agency shall take 42.22 into account whether the individual was the victim of financial 42.23 exploitation, whether the individual has made reasonable efforts 42.24 to recover the transferred property or resource, and other 42.25 factors relevant to a determination of hardship. If the local 42.26 agency does not approve a hardship waiver, the local agency 42.27 shall issue a written notice to the individual stating the 42.28 reasons for the denial and the process for appealing the local 42.29 agency's decision. When a waiver is granted, a cause of action 42.30 exists against the person to whom the assets were transferred 42.31 for that portion of long-term care services granted within: 42.32 (i) 30 months of a transfer made on or before August 10, 42.33 1993; 42.34 (ii) 60 months of a transfer if the assets were transferred 42.35 after August 30, 1993, to a trust or portion of a trust that is 42.36 considered a transfer of assets under federal law; or 43.1 (iii) 36 months of a transfer if transferred in any other 43.2 manner after August 10, 1993, 43.3 or the amount of the uncompensated transfer, whichever is less, 43.4 together with the costs incurred due to the action. The action 43.5mayshall be brought by the stateorunless the state delegates 43.6 this responsibility to the local agency responsible for 43.7 providing medical assistance under this chapter; or 43.8 (6) for transfers occurring after August 10, 1993, the 43.9 assets were transferred by the person or person's spouse: (i) 43.10 into a trust established solely for the benefit of a son or 43.11 daughter of any age who is blind or disabled as defined by the 43.12 Supplemental Security Income program; or (ii) into a trust 43.13 established solely for the benefit of an individual who is under 43.14 65 years of age who is disabled as defined by the Supplemental 43.15 Security Income program. 43.16 Sec. 18. Minnesota Statutes 1994, section 256B.0595, is 43.17 amended by adding a subdivision to read: 43.18 Subd. 4a. [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] This 43.19 subdivision applies to transfers involving recipients of medical 43.20 assistance that are made on or after its effective date and to 43.21 all transfers involving persons who apply for medical assistance 43.22 on or after its effective date, regardless of when the transfer 43.23 occurred, except that this subdivision does not apply to 43.24 transfers made prior to March 1, 1996. A person or a person's 43.25 spouse who has made a transfer prohibited by subdivision 1a is 43.26 not ineligible for medical assistance services if one of the 43.27 following conditions applies: 43.28 (1) the assets or income were transferred to the 43.29 individual's spouse or to another for the sole benefit of the 43.30 spouse, except that after eligibility is established, transfers 43.31 to a spouse are permitted only to comply with the provisions of 43.32 section 256B.059; or 43.33 (2) the institutionalized spouse, prior to being 43.34 institutionalized, transferred assets or income to a spouse, 43.35 provided that the spouse to whom the assets or income were 43.36 transferred does not then transfer those assets or income to 44.1 another person for less than fair market value. (At the time 44.2 when one spouse is institutionalized, assets must be allocated 44.3 between the spouses as provided under section 256B.059); or 44.4 (3) the assets or income were transferred to a trust for 44.5 the sole benefit of the individual's child who is blind or 44.6 permanently and totally disabled as determined in the 44.7 supplemental security income program and the trust reverts to 44.8 the state upon the disabled child's death to the extent medical 44.9 assistance has paid for services for the child. This paragraph 44.10 paragraph applies to a trust established after the commissioner 44.11 publishes a notice in the State Register that the commissioner 44.12 has been authorized to implement this paragraph due to a change 44.13 in federal law or the approval of a federal waiver; or 44.14 (4) a satisfactory showing is made that the individual 44.15 intended to dispose of the assets or income either at fair 44.16 market value or for other valuable consideration; or 44.17 (5) the local agency determines that denial of eligibility 44.18 for medical assistance services would work an undue hardship and 44.19 grants a waiver of a penalty resulting from a transfer for less 44.20 than fair market value because there exists an imminent threat 44.21 to the individual's health and well-being. Whenever an 44.22 applicant or recipient is denied eligibility because of a 44.23 transfer for less than fair market value, the local agency shall 44.24 notify the applicant or recipient that they may request a waiver 44.25 of the penalty if the denial of eligibility will cause undue 44.26 hardship. In evaluating a waiver, the local agency shall take 44.27 into account whether the individual was the victim of financial 44.28 exploitation, whether the individual has made reasonable efforts 44.29 to recover the transferred property or resource, and other 44.30 factors relevant to a determination of hardship. If the local 44.31 agency does not approve a hardship waiver, the local agency 44.32 shall issue a written notice to the individual stating the 44.33 reasons for the denial and the process for appealing the local 44.34 agency's decision. When a waiver is granted, a cause of action 44.35 exists against the person to whom the assets were transferred 44.36 for that portion of medical assistance services granted within 45.1 72 months of the date the transferor applied for medical 45.2 assistance and satisfied all other requirements for eligibility, 45.3 or the amount of the uncompensated transfer, whichever is less, 45.4 together with the costs incurred due to the action. The action 45.5 shall be brought by the state unless the state delegates this 45.6 responsibility to the local agency responsible for providing 45.7 medical assistance under this chapter. 45.8 Sec. 19. Minnesota Statutes 1994, section 256B.0595, is 45.9 amended by adding a subdivision to read: 45.10 Subd. 8. [NOTICE OF RIGHTS.] If a period of ineligibility 45.11 is imposed under subdivision 2 or 2a, the local agency shall 45.12 inform the applicant or recipient subject to the penalty of the 45.13 person's rights under section 325F.71, subdivision 2. 45.14 Sec. 20. Minnesota Statutes 1995 Supplement, section 45.15 256B.0625, subdivision 19a, is amended to read: 45.16 Subd. 19a. [PERSONAL CARE SERVICES.] Medical assistance 45.17 covers personal care services in a recipient's home. To qualify 45.18 for personal care services, recipients or responsible parties 45.19 must be able to identifytheirthe recipient's needs, direct and 45.20 evaluate task accomplishment, andassure theirprovide for 45.21 health and safety. Approved hours may be used outside the home 45.22 when normal life activities take them outside the home and when, 45.23 without the provision of personal care, their health and safety 45.24 would be jeopardized. Total hours for services, whether 45.25 actually performed inside or outside the recipient's home, 45.26 cannot exceed that which is otherwise allowed for personal care 45.27 services in an in-home setting according to section 256B.0627. 45.28 Medical assistance does not cover personal care services for 45.29 residents of a hospital, nursing facility, intermediate care 45.30 facility, health care facility licensed by the commissioner of 45.31 health, or unless a resident who is otherwise eligible is on 45.32 leave from the facility and the facility either pays for the 45.33 personal care services or forgoes the facility per diem for the 45.34 leave days that personal care services are used. All personal 45.35 care services must be provided according to section 256B.0627. 45.36 Personal care services may not be reimbursed if the personal 46.1 care assistant is the spouse or legal guardian of the recipient 46.2 or the parent of a recipient under age 18, or the responsible 46.3 party or the foster care provider of a recipient who cannot 46.4 direct the recipient's own care unless, in the case of a foster 46.5 care provider, a county or state case manager visits the 46.6 recipient as needed, but not less than every six months, to 46.7 monitor the health and safety of the recipient and to ensure the 46.8 goals of the care plan are met. Parents of adult recipients, 46.9 adult children of the recipient or adult siblings of the 46.10 recipient may be reimbursed for personal care services if they 46.11 are not the recipient's legal guardian and are granted a waiver 46.12 under section 256B.0627. 46.13 Sec. 21. Minnesota Statutes 1995 Supplement, section 46.14 256B.0628, subdivision 2, is amended to read: 46.15 Subd. 2. [DUTIES.] (a) The commissioner may contract with 46.16 or employ qualified registered nurses and necessary support 46.17 staff, or contract with qualified agencies, to provide home care 46.18 prior authorization and review services for medical assistance 46.19 recipients who are receiving home care services. 46.20 (b) Reimbursement for the prior authorization function 46.21 shall be made through the medical assistance administrative 46.22 authority. The state shall pay the nonfederal share. The 46.23 functions will be to: 46.24 (1) assess the recipient's individual need for services 46.25 required to be cared for safely in the community; 46.26 (2) ensure that a service plan that meets the recipient's 46.27 needs is developed by the appropriate agency or individual; 46.28 (3) ensure cost-effectiveness of medical assistance home 46.29 care services; 46.30 (4) recommend the approval or denial of the use of medical 46.31 assistance funds to pay for home care services; 46.32 (5) reassess the recipient's need for and level of home 46.33 care services at a frequency determined by the commissioner; and 46.34 (6) conduct on-site assessments when determined necessary 46.35 by the commissioner and recommend changes to care plans that 46.36 will provide more efficient and appropriate home care. 47.1 (c) In addition, the commissioner or the commissioner's 47.2 designee may: 47.3 (1) review service plans and reimbursement data for 47.4 utilization of services that exceed community-based standards 47.5 for home care, inappropriate home care services, medical 47.6 necessity, home care services that do not meet quality of care 47.7 standards, or unauthorized services and make appropriate 47.8 referrals within the department or to other appropriate entities 47.9 based on the findings; 47.10 (2) assist the recipient in obtaining services necessary to 47.11 allow the recipient to remain safely in or return to the 47.12 community; 47.13 (3) coordinate home care services with other medical 47.14 assistance services under section 256B.0625; 47.15 (4) assist the recipient with problems related to the 47.16 provision of home care services;and47.17 (5) assure the quality of home care services.; and 47.18 (6) assure that all liable third-party payers including 47.19 Medicare have been used prior to medical assistance for home 47.20 care services, including but not limited to, home health agency, 47.21 elected hospice benefit, waivered services, alternative care 47.22 program services, and personal care services. 47.23 (d) For the purposes of this section, "home care services" 47.24 means medical assistance services defined under section 47.25 256B.0625, subdivisions 6a, 7, and 19a. 47.26 Sec. 22. [256B.07] [MEDICARE MAXIMIZATION PROGRAM.] 47.27 Subdivision 1. [DEFINITION.] (a) "Dual entitlees" means 47.28 recipients eligible for either the medical assistance program or 47.29 the alternative care program who are also eligible for the 47.30 federal Medicare program. 47.31 (b) For purposes of this section "home care services" means 47.32 home health agency services, private duty nursing services, 47.33 personal care assistant services, waivered services, alternative 47.34 care program services, hospice services, rehabilitation therapy 47.35 services, and medical supplies and equipment. 47.36 Subd. 2. [TECHNICAL ASSISTANCE TO PROVIDERS.] (a) The 48.1 commissioner shall establish a technical assistance program to 48.2 require providers of services and equipment under this section 48.3 to maximize collections from the federal Medicare program. The 48.4 technical assistance may include the provision of materials to 48.5 help providers determine those services and equipment likely to 48.6 be reimbursed by Medicare. The technical assistance may also 48.7 include the provision of computer software to providers to 48.8 assist in this process. The commissioner may expand the 48.9 technical assistance program to include providers of other 48.10 services under this chapter. 48.11 (b) Any provider of home care services enrolled in the 48.12 medical assistance program, or county public health nursing 48.13 agency responsible for personal care assessments, or county case 48.14 managers for alternative care or medical assistance waiver 48.15 programs, is required to use the method developed and supplied 48.16 by the department of human services for determining Medicare 48.17 coverage for home care equipment and services provided to dual 48.18 entitlees to ensure appropriate billing of Medicare. The method 48.19 will be developed in two phases; the first phase is a manual 48.20 system effective July 1, 1996, and the second phase will 48.21 automate the manual procedure by expanding the current Medicaid 48.22 Management Information System (MMIS) effective January 1, 1997. 48.23 Both methods will determine Medicare coverage for the dates of 48.24 service, Medicare coverage for home care services, and create an 48.25 audit trail including reports. Both methods will be linked to 48.26 prior authorization, therefore, either method must be used 48.27 before home care services are authorized and when there is a 48.28 change of condition affecting medical assistance authorization. 48.29 The department will conduct periodic reviews of participant 48.30 performance with the method and upon demonstrating appropriate 48.31 referral and billing of Medicare, participants may be determined 48.32 exempt from regular performance audits. 48.33 Subd. 3. [REFERRALS TO MEDICARE CERTIFIED PROVIDERS 48.34 REQUIRED.] Non-Medicare certified and nonparticipating Medicare 48.35 certified home care service providers must refer dual eligible 48.36 recipients to Medicare certified providers when Medicare is 49.1 determined to be the appropriate payer for supplies and 49.2 equipment or services. Non-Medicare certified and 49.3 nonparticipating Medicare certified home care service providers 49.4 will be terminated from participation in the medical assistance 49.5 program for failure to make such referrals. 49.6 Subd. 4. [MEDICARE CERTIFICATION REQUIREMENT.] Medicare 49.7 certification is required of all medical assistance enrolled 49.8 home care service providers as defined in subdivision 1 within 49.9 one year of the date the Minnesota department of health gives 49.10 notice to the department that initial Medicare surveys will 49.11 resume. 49.12 Subd. 5. [ADVISORY COMMITTEE.] The commissioner shall 49.13 establish an advisory committee comprised of home care services 49.14 recipients, providers, county public health nurses, home care 49.15 and county nursing associations, and department of human 49.16 services staff to make recommendations to the Medicare 49.17 maximization program. The recommendations shall include: 49.18 nursing practice issues as they relate to home care services 49.19 funded by Medicare and medical assistance; and streamlining 49.20 assessment, prior authorization, and up-front payer 49.21 determination processes to achieve administrative efficiencies. 49.22 Sec. 23. Minnesota Statutes 1995 Supplement, section 49.23 256B.0913, subdivision 15a, is amended to read: 49.24 Subd. 15a. [REIMBURSEMENT RATE; ANOKA COUNTY.] 49.25 Notwithstanding subdivision 14, paragraph (e),or any other law49.26to the contrary, for services rendered on or aftereffective 49.27 January 1, 1996, Anokacounty may pay vendors, and the49.28commissioner shall reimburse the county, for actual costs up to49.29a limit which is the maximum rate in effect on December 31,49.301995, plus half the difference between that rate and the maximum49.31allowed statecounty's maximum allowed rate for home health aide 49.32 services per 15-minute unit is $4.39, and its maximum allowed 49.33 rate for homemaker services per 15-minute unit is $2.90. Any 49.34 adjustments in fiscal year 1997 to the maximum allowed rates for 49.35 home health aide or homemaker services for Anoka county shall be 49.36 calculated from the maximum rate in effect on January 1, 1996. 50.1 Sec. 24. Minnesota Statutes 1994, section 256B.0913, is 50.2 amended by adding a subdivision to read: 50.3 Subd. 15b. [REIMBURSEMENT RATE; AITKIN COUNTY.] 50.4 Notwithstanding subdivision 14, paragraph (e), effective April 50.5 1, 1996, Aitkin county's maximum allowed rate for in-home 50.6 respite care services is $6.62 per 30-minute unit. Any 50.7 adjustments in fiscal year 1997 to the maximum allowed rate for 50.8 in-home respite care services for Aitkin county shall be 50.9 calculated from the maximum rate in effect on April 1, 1996. 50.10 Sec. 25. Minnesota Statutes 1994, section 256B.0913, is 50.11 amended by adding a subdivision to read: 50.12 Subd. 15c. [REIMBURSEMENT RATE; POLK AND PENNINGTON 50.13 COUNTIES.] Notwithstanding subdivision 14, paragraph (e), 50.14 effective July 1, 1996, Polk and Pennington counties' maximum 50.15 allowed rate for homemaker services is $6.18 per 30-minute 50.16 unit. Any adjustments in fiscal year 1997 to the maximum 50.17 allowed rate for homemaker services for Polk and Pennington 50.18 counties shall be calculated from the maximum rate in effect on 50.19 July 1, 1996. 50.20 Sec. 26. Minnesota Statutes 1995 Supplement, section 50.21 256B.0915, subdivision 3a, is amended to read: 50.22 Subd. 3a. [REIMBURSEMENT RATE; ANOKA COUNTY.] 50.23 Notwithstanding subdivision 3, paragraph (h),or any other law50.24to the contrary, for services rendered on or aftereffective 50.25 January 1, 1996, Anokacounty may pay vendors, and the50.26commissioner shall reimburse the county, for actual costs up to50.27a limit which is the maximum rate in effect on December 31,50.281995, plus half the difference between that rate and the maximum50.29allowed statecounty's maximum allowed rate for home health aide 50.30 services per 15-minute unit is $4.43, and its maximum allowed 50.31 rate for homemaker services per 15-minute unit is $2.93. Any 50.32 adjustments in fiscal year 1997 to the maximum allowed rates for 50.33 home health aide or homemaker services for Anoka county shall be 50.34 calculated from the maximum rate in effect on January 1, 1996. 50.35 Sec. 27. Minnesota Statutes 1994, section 256B.0915, is 50.36 amended by adding a subdivision to read: 51.1 Subd. 3b. [REIMBURSEMENT RATE; AITKIN COUNTY.] 51.2 Notwithstanding subdivision 3, paragraph (h), effective April 1, 51.3 1996, Aitkin county's maximum allowed rate for in-home respite 51.4 care services is $6.67 per 30-minute unit. Any adjustments in 51.5 fiscal year 1997 to the maximum allowed rate for in-home respite 51.6 care services for Aitkin county shall be calculated from the 51.7 maximum rate in effect on April 1, 1996. 51.8 Sec. 28. Minnesota Statutes 1994, section 256B.0915, is 51.9 amended by adding a subdivision to read: 51.10 Subd. 3c. [REIMBURSEMENT RATE; POLK AND PENNINGTON 51.11 COUNTIES.] Notwithstanding subdivision 3, paragraph (h), 51.12 effective July 1, 1996, Polk and Pennington counties' maximum 51.13 allowed rate for homemaker services is $6.25 per 30-minute 51.14 unit. Any adjustments in fiscal year 1997 to the maximum 51.15 allowed rate for homemaker services for Polk and Pennington 51.16 counties shall be calculated from the maximum rate in effect on 51.17 July 1, 1996. 51.18 Sec. 29. Minnesota Statutes 1994, section 256B.15, is 51.19 amended by adding a subdivision to read: 51.20 Subd. 1b. [CLAIMS ON THE ESTATE OF A PREDECEASED 51.21 SPOUSE.] Upon the death of a spouse who did not receive medical 51.22 assistance and who predeceases a spouse who did or does receive 51.23 medical assistance, a claim for the total amount paid for 51.24 medical assistance rendered for the surviving spouse through the 51.25 date the deceased spouse died shall be filed against the 51.26 deceased spouse's estate in the court having jurisdiction to 51.27 probate the estate. The claim shall be filed if medical 51.28 assistance was rendered for the surviving spouse under any one 51.29 of the circumstances in subdivision 1a, paragraphs (a), (b), or 51.30 (c). Claims under this subdivision shall have the same priority 51.31 for purposes of section 524.3-805, and the same exceptions with 51.32 respect to statutes of limitations as claims under subdivision 51.33 1a. 51.34 Sec. 30. Minnesota Statutes 1994, section 256B.15, is 51.35 amended by adding a subdivision to read: 51.36 Subd. 2a. [LIMITATIONS ON CLAIMS ON THE ESTATE OF A 52.1 PREDECEASED SPOUSE.] A claim under subdivision 1b shall include 52.2 only the total amount of medical assistance rendered after age 52.3 55 or during a period of institutionalization described in 52.4 subdivision 1a, clause (b), and the total amount of general 52.5 assistance medical care rendered, and shall not include 52.6 interest. Claims that have been allowed but not paid shall bear 52.7 interest according to section 524.3-806, paragraph (d). A claim 52.8 against the estate of a spouse who did not receive medical 52.9 assistance who predeceases the spouse who did receive medical 52.10 assistance, for medical assistance rendered for the spouse, is 52.11 limited to the value of the assets of the estate that were 52.12 marital property or jointly owned property at any time during 52.13 the marriage. 52.14 Sec. 31. Minnesota Statutes 1994, section 256B.35, 52.15 subdivision 1, is amended to read: 52.16 Subdivision 1. [PERSONAL NEEDS ALLOWANCE.] (a) 52.17 Notwithstanding any law to the contrary, welfare allowances for 52.18 clothing and personal needs for individuals receiving medical 52.19 assistance while residing in any skilled nursing home, 52.20 intermediate care facility, or medical institution including 52.21 recipients of supplemental security income, in this state shall 52.22 not be less than $45 per month from all sources. When benefit 52.23 amounts for social security or supplemental security income 52.24 recipients are increased pursuant to United States Code, title 52.25 42, sections 415(i) and 1382f, the commissioner shall, effective 52.26 in the month in which the increase takes effect, increase by the 52.27 same percentage to the nearest whole dollar the clothing and 52.28 personal needs allowance for individuals receiving medical 52.29 assistance while residing in any skilled nursing home, medical 52.30 institution, or intermediate care facility. The commissioner 52.31 shall provide timely notice to local agencies, providers, and 52.32 recipients of increases under this provision. 52.33 (b) The personal needs allowance may be paid as part of the 52.34 Minnesota supplemental aid program, notwithstanding the 52.35 provisions of section 256D.37, subdivision 2, and payments to 52.36 recipients of Minnesota supplemental aid may be made once each 53.1 three months covering liabilities that accrued during the 53.2 preceding three months. 53.3 (c) The personal needs allowance shall be increased to 53.4 include income garnished for child support under a court order, 53.5 up to a maximum of $250 per month but only to the extent that 53.6 the amount garnished is not deducted as a monthly allowance for 53.7 children under section 256B.0575, paragraph (a), clause (5). 53.8 Sec. 32. Minnesota Statutes 1994, section 256B.37, 53.9 subdivision 5, is amended to read: 53.10 Subd. 5. [PRIVATE BENEFITS TO BE USED FIRST.] Private 53.11 accident and health care coverage including Medicare for medical 53.12 services is primary coverage and must be exhausted before 53.13 medical assistance is paid for medical services including home 53.14 health care, personal care assistant services, hospice, or 53.15 services covered under a Health Care Financing Administration 53.16 (HCFA) waiver. When a person who is otherwise eligible for 53.17 medical assistance has private accident or health care coverage, 53.18 including Medicare or a prepaid health plan, the private health 53.19 care benefits available to the person must be used first and to 53.20 the fullest extent. 53.21 Sec. 33. Minnesota Statutes 1995 Supplement, section 53.22 256B.69, subdivision 3a, is amended to read: 53.23 Subd. 3a. [COUNTY AUTHORITY.] (a) The commissioner, when 53.24 implementing the general assistance medical care, or medical 53.25 assistance prepayment program within a county, must include the 53.26 county board in the process of development, approval, and 53.27 issuance of the request for proposals to provide services to 53.28 eligible individuals within the proposed county. County boards 53.29 must be given reasonable opportunity to make recommendations 53.30 regarding the development, issuance, review of responses, and 53.31 changes needed in the request for proposals. The commissioner 53.32 must provide county boards the opportunity to review each 53.33 proposal based on the identification of community needs under 53.34 chapters 145A and 256E and county advocacy activities. If a 53.35 county board finds that a proposal does not address certain 53.36 community needs, the county board and commissioner shall 54.1 continue efforts for improving the proposal and network prior to 54.2 the approval of the contract. The county board shall make 54.3 recommendations regarding the approval of local networks and 54.4 their operations to ensure adequate availability and access to 54.5 covered services. The provider or health plan must respond 54.6 directly to county advocates and the state prepaid medical 54.7 assistance ombudsperson regarding service delivery and must be 54.8 accountable to the state regarding contracts with medical 54.9 assistance and general assistance medical care funds. The 54.10 county board may recommend a maximum number of participating 54.11 health plans after considering the size of the enrolling 54.12 population; ensuring adequate access and capacity; considering 54.13 the client and county administrative complexity; and considering 54.14 the need to promote the viability of locally developed health 54.15 plans. The commissioner in conjunction with the county board, 54.16 shall actively seek to develop a mutually agreeable timetable 54.17 prior to the development of the request for proposal, there54.18shall be established a mutually agreed upon timetable.This54.19process shall in no way delay the department's ability to secure54.20and finalize contracts for the medical assistance prepayment54.21program.At least 90 days before enrollment in the medical 54.22 assistance and general assistance medical care prepaid programs 54.23 begins in a county in which the prepaid programs have not been 54.24 established, the commissioner shall provide a report to the 54.25 chairs of senate and house committees having jurisdiction over 54.26 state health care programs which verifies that the commissioner 54.27 complied with the requirements for county involvement that are 54.28 specified in this subdivision. 54.29 (b) The commissioner shall seek a federal waiver to allow a 54.30 fee-for-service plan option to MinnesotaCare enrollees. The 54.31 commissioner shall develop an increase of the premium fees 54.32 required under section 256.9356 up to 20 percent of the premium 54.33 fees for the enrollees who elect the fee-for-service option. 54.34 Prior to implementation, the commissioner shall submit this fee 54.35 schedule to the chair and ranking minority member of the senate 54.36 health care committee, the senate health care and family 55.1 services funding division, the house of representatives health 55.2 and human services committee, and the house of representatives 55.3 health and human services finance division. 55.4 Sec. 34. Minnesota Statutes 1995 Supplement, section 55.5 256B.69, subdivision 4, is amended to read: 55.6 Subd. 4. [LIMITATION OF CHOICE.] The commissioner shall 55.7 develop criteria to determine when limitation of choice may be 55.8 implemented in the experimental counties. The criteria shall 55.9 ensure that all eligible individuals in the county have 55.10 continuing access to the full range of medical assistance 55.11 services as specified in subdivision 6. The commissioner shall 55.12 exempt the following persons from participation in the project, 55.13 in addition to those who do not meet the criteria for limitation 55.14 of choice: (1) persons eligible for medical assistance 55.15 according to section 256B.055, subdivision 1; (2) persons 55.16 eligible for medical assistance due to blindness or disability 55.17 as determined by the social security administration or the state 55.18 medical review team, unless: (i) they are 65 years of age or 55.19 older, or (ii)they are eligible for medical assistance55.20according to section 256B.055, subdivision 12, or (iii) unless55.21 they reside in Itasca county or they reside in a county in which 55.22 the commissioner conducts a pilot project under a waiver granted 55.23 pursuant to section 1115 of the Social Security Act; (3) 55.24 recipients who currently have private coverage through a health 55.25 maintenance organization; (4) recipients who are eligible for 55.26 medical assistance by spending down excess income for medical 55.27 expenses other than the nursing facility per diem 55.28 expense;and(5) recipients who receive benefits under the 55.29 Refugee Assistance Program, established under United States 55.30 Code, title 8, section 1522(e); (6) children who are both 55.31 determined to be severely emotionally disturbed and receiving 55.32 case management services according to section 256B.0625, 55.33 subdivision 20; and (7) adults who are both determined to be 55.34 seriously and persistently mentally ill and received case 55.35 management services according to section 256B.0625, subdivision 55.36 20. Children under age 21 who are in foster placement may 56.1 enroll in the project on an elective basis. Individuals excluded 56.2 under clauses (6) and (7) may choose to enroll on an elective 56.3 basis. The commissioner may allow persons with a one-month 56.4 spenddown who are otherwise eligible to enroll to voluntarily 56.5 enroll or remain enrolled, if they elect to prepay their monthly 56.6 spenddown to the state. Beginning on or after July 1, 1997, the 56.7 commissioner may require those individuals to enroll in the 56.8 prepaid medical assistance program who otherwise would have been 56.9 excluded under clauses (1) and (3) and under Minnesota Rules, 56.10 part 9500.1452, subpart 2, items H, K, and L. Before limitation 56.11 of choice is implemented, eligible individuals shall be notified 56.12 and after notification, shall be allowed to choose only among 56.13 demonstration providers. The commissioner may assign an 56.14 individual with private coverage through a health maintenance 56.15 organization, to the same health maintenance organization for 56.16 medical assistance coverage, if the health maintenance 56.17 organization is under contract for medical assistance in the 56.18 individual's county of residence. After initially choosing a 56.19 provider, the recipient is allowed to change that choice only at 56.20 specified times as allowed by the commissioner. If a 56.21 demonstration provider ends participation in the project for any 56.22 reason, a recipient enrolled with that provider must select a 56.23 new provider but may change providers without cause once more 56.24 within the first 60 days after enrollment with the second 56.25 provider. 56.26 Sec. 35. Minnesota Statutes 1995 Supplement, section 56.27 256B.69, subdivision 5b, is amended to read: 56.28 Subd. 5b. [PROSPECTIVE REIMBURSEMENT RATES.] For prepaid 56.29 medical assistance and general assistance medical care program 56.30 contract rates set by the commissioner under subdivision 5 and 56.31 effective on or after January 1,19961997, through December 31, 56.3219961998, capitation rates for nonmetropolitan counties shall 56.33 on a weighted average be no less than 85 percent of the 56.34 capitation rates for metropolitan counties, excluding Hennepin 56.35 county. 56.36 Sec. 36. Minnesota Statutes 1995 Supplement, section 57.1 256B.69, subdivision 21, is amended to read: 57.2 Subd. 21. [PREPAYMENT COORDINATOR.] Thelocal agency57.3 county board shall designate a prepayment coordinator to assist 57.4 the state agency in implementing this section and section 57.5 256D.03, subdivision 4. Assistance must include educating 57.6 recipients about available health care options, enrolling 57.7 recipients under subdivision 5, providing necessary eligibility 57.8 and enrollment information to health plans and the state agency, 57.9 and coordinating complaints and appeals with the ombudsman 57.10 established in subdivision 18. 57.11 Sec. 37. Minnesota Statutes 1994, section 256B.69, is 57.12 amended by adding a subdivision to read: 57.13 Subd. 24. [SOCIAL SERVICE AND PUBLIC HEALTH COSTS.] The 57.14 commissioner shall report on recommendations to the legislature 57.15 by January 15, 1997, identifying county social services and 57.16 public health administrative costs for each target population 57.17 that should be excluded from the overall capitation rate. 57.18 Sec. 38. Minnesota Statutes 1995 Supplement, section 57.19 256D.02, subdivision 12a, is amended to read: 57.20 Subd. 12a. [RESIDENT.] (a) For purposes of eligibility for 57.21 general assistanceunder section 256D.05, and payments under57.22section 256D.051and general assistance medical care, a 57.23 "resident" is a person living in the state for at least 30 days 57.24 with the intention of making the person's home here and not for 57.25 any temporary purpose. All applicants for these programs are 57.26 required to demonstrate the requisite intent and can do so in 57.27 any of the following ways: 57.28 (1) by showing that the applicant maintains a residence at 57.29 a verified address, other than a place of public accommodation. 57.30 An applicant may verify a residence address by presenting a 57.31 valid state driver's license, a state identification card, a 57.32 voter registration card, a rent receipt, a statement by the 57.33 landlord, apartment manager, or homeowner verifying that the 57.34 individual is residing at the address, or other form of 57.35 verification approved by the commissioner; or 57.36 (2) byproviding written documentationverifying residence 58.1 in accordance with Minnesota Rules, part 9500.1219, subpart 3, 58.2 item (c). 58.3 (b) An applicant who has been in the state for less than 30 58.4 days shall be considered a resident if the applicant can provide 58.5 documentation: 58.6 (1) that the applicantcame towas born in the statein58.7response to an offer of employment; 58.8(3) by providing verification(2) that the applicant has 58.9 been a long-time resident of the state or was formerly a 58.10 resident of the state for at least 365 days and is returning to 58.11 the state from a temporary absence, as those terms are defined 58.12 in rulesto beadopted by the commissioner; 58.13 (3) that the applicant has come to the state to join a 58.14 close relative which, for purposes of this subdivision, means a 58.15 parent, grandparent, brother, sister, spouse, or child; or 58.16 (4)by providing other persuasive evidence to show that the58.17applicant is a resident of the state, according to rules adopted58.18by the commissionerthat the applicant has come to this state to 58.19 accept a bona fide offer of employment for which the applicant 58.20 is eligible. 58.21 A county agency shall waive the 30-day residency 58.22 requirement in cases of emergencies, including medical 58.23 emergencies, or where unusual hardship would result from denial 58.24 of general assistance medical care. A county may waive the 58.25 30-day residency requirement in cases of emergencies, including 58.26 medical emergencies, or where unusual hardship would result from 58.27 denial of general assistance. The county agency must report to 58.28 the commissioner within 30 days on any waiver granted under this 58.29 section. The county shall not deny an application solely 58.30 because the applicant does not meet at least one of the criteria 58.31 in this subdivision, but shall continue to process the 58.32 application and leave the application pending until the 58.33 residency requirement is met or until eligibility or 58.34 ineligibility is established. 58.35 Sec. 39. Minnesota Statutes 1995 Supplement, section 58.36 256D.045, is amended to read: 59.1 256D.045 [SOCIAL SECURITY NUMBER REQUIRED.] 59.2 To be eligible for general assistance under sections 59.3 256D.01 to 256D.21, an individual must provide the individual's 59.4 social security number to the county agency or submit proof that 59.5 an application has been made. The provisions of this section do 59.6 not apply to the determination of eligibility for emergency 59.7 general assistance under section 256D.06, subdivision 2. This 59.8 provision applies to eligible children under the age of 18 59.9 effective July 1, 1997. 59.10 Sec. 40. Minnesota Statutes 1994, section 256G.01, 59.11 subdivision 3, is amended to read: 59.12 Subd. 3. [PROGRAM COVERAGE.] This chapter applies to 59.13 all social service programs administered by the commissioner in 59.14 which residence is the determining factor in establishing 59.15 financial responsibility. These include, but are not limited 59.16 to:aid to families with dependent children; medical59.17assistance; general assistance; work readiness; general59.18assistance medical care; Minnesota supplemental aid;commitment 59.19 proceedings, including voluntary admissions; emergency holds; 59.20 poor relief funded wholly through local agencies;andsocial 59.21 services, including title XX, IV-E and other components of the 59.22 community social services act, sections 256E.01 to 256E.12; 59.23 social services programs funded wholly through the resources of 59.24 county agencies; social services provided under the Minnesota 59.25 Indian family preservation act, sections 257.35 to 257.356; 59.26 costs for delinquency confinement under section 393.07, 59.27 subdivision 2; service responsibility for these programs; and 59.28 group residential housing. 59.29 Sec. 41. Minnesota Statutes 1994, section 256G.01, is 59.30 amended by adding a subdivision to read: 59.31 Subd. 4. [ADDITIONAL COVERAGE.] The provisions in sections 59.32 256G.02, subdivision 4, paragraphs (a) to (d); 256G.02, 59.33 subdivisions 5 to 8; 256G.03; 256G.04; 256G.05; and 256G.07, 59.34 subdivisions 1 to 3, apply to the following programs: aid to 59.35 families with dependent children; medical assistance; general 59.36 assistance; family general assistance; general assistance 60.1 medical care; and Minnesota supplemental aid. 60.2 Sec. 42. Minnesota Statutes 1994, section 256G.01, is 60.3 amended by adding a subdivision to read: 60.4 Subd. 5. [SCOPE AND EFFECT.] Unless stated otherwise, the 60.5 provisions of this chapter also apply to disputes involving 60.6 financial responsibility for social services when another 60.7 definition of the county of financial responsibility has been 60.8 created in Minnesota Statutes. 60.9 Sec. 43. Minnesota Statutes 1994, section 256G.02, 60.10 subdivision 4, is amended to read: 60.11 Subd. 4. [COUNTY OF FINANCIAL RESPONSIBILITY.] (a) "County 60.12 of financial responsibility" has the meanings in paragraphs (b) 60.13 to (h). 60.14 (b) For an applicant who resides in the state and is not in 60.15 a facility described in subdivision 6, it means the county in 60.16 which the applicant resides at the time of application. 60.17 (c) For an applicant who resides in a facility described in 60.18 subdivision 6, it means the county in which the applicant last 60.19 resided in nonexcluded status immediately before entering the 60.20 facility. 60.21 (d) For an applicant who has not resided in this state for 60.22 any time other than the excluded time, and subject to the 60.23 limitations in section 256G.03, subdivision 2, it means the 60.24 county in which the applicant resides at the time of making 60.25 application. 60.26 (e)For medical assistance purposes only, and for an infant60.27who has resided only in an excluded time facility, it means the60.28county that would have been responsible for the infant if60.29eligibility had been established, based on that of the birth60.30mother, at the time of application.60.31(f) Notwithstanding paragraphs (b) to (d), the county of60.32financial responsibility for medical assistance recipients is60.33the county from which a recipient is receiving a maintenance60.34grant or money payment under the program of aid to families with60.35dependent children or Minnesota supplemental aid.60.36(g) Notwithstanding paragraphs (b) to (f), the county of61.1financial responsibility for social services for a person61.2receiving aid to families with dependent children, general61.3assistance, general assistance medical care, medical assistance,61.4or Minnesota supplemental aid is the county from which that61.5person is receiving the aid or assistance. If more than one61.6named program is open concurrentlyFor an individual already 61.7 having a social service case open in one county, financial 61.8 responsibility for any additional social services attaches to 61.9 theprogramcase that has the earliest date of application and 61.10 has been open without interruption. 61.11(h)(f) Notwithstanding paragraphs (b) to(g)(e), the 61.12 county of financial responsibility for semi-independent living 61.13 services provided under section 252.275, and Minnesota Rules, 61.14 parts 9525.0500 to 9525.0660, is the county of residence in 61.15 nonexcluded status immediately before the placement into or 61.16 request for those services. 61.17 Sec. 44. Minnesota Statutes 1994, section 256G.02, 61.18 subdivision 6, is amended to read: 61.19 Subd. 6. [EXCLUDED TIME.] "Excluded time" means: 61.20 (a) any period an applicant spends in a hospital, 61.21 sanitarium, nursing home, shelter other than an emergency 61.22 shelter, halfway house, foster home, semi-independent living 61.23 domicile or services program, residential facility offering 61.24 care, board and lodging facility or other institution for the 61.25 hospitalization or care of human beings, as defined in section 61.26 144.50, 144A.01, or 245A.02, subdivision 14;or in amaternity 61.27 home, battered women's shelter, or correctional facility.61.28"Excluded time" also means that time during which an applicant61.29participates in a rehabilitation facility as defined in section61.30268A.01, or is receiving personal care assistant services61.31pursuant to section 256B.0625, subdivision 19.; or any facility 61.32 based on an emergency hold under sections 253B.05, subdivisions 61.33 1 and 2, and 253B.07, subdivision 6; 61.34 (b) any period an applicant spends on a placement basis in 61.35 a training and habilitation program, including a rehabilitation 61.36 facility or work or employment program as defined in section 62.1 268A.01; or receiving personal care assistant services pursuant 62.2 to section 256B.0627, subdivision 4; semi-independent living 62.3 services provided under section 252.275, and Minnesota Rules, 62.4 parts 9525.0500 to 9525.0660; day training and habilitation 62.5 programs, and community-based services and assisted living 62.6 services; and 62.7 (c) any placement for a person with an indeterminate 62.8 commitment, including independent living. 62.9 Sec. 45. Minnesota Statutes 1994, section 256G.03, is 62.10 amended to read: 62.11 256G.03 [ESTABLISHING RESIDENCE.] 62.12 Subdivision 1. [STATE RESIDENCE.] For purposes of this 62.13 chapter, a resident of any Minnesota county is considered a 62.14 state resident.For purposes of eligibility for general62.15assistance or work readiness, residency must be substantiated62.16according to section 256D.02, subdivision 12a.62.17 Subd. 2. [NO DURATIONAL TEST.] Except as otherwise 62.18 provided in sections 256.73, subdivisions 1 and 1a; 256B.056, 62.19 subdivision 1; and 256D.02, subdivision 12a, for purposes of 62.20 this chapter, no waiting period is required before securing 62.21 county or state residence. A person cannot, however, gain 62.22 residence while physically present in an excluded time facility 62.23 unless otherwise specified in this chapter or in a federal 62.24 regulation controlling a federally funded human service program. 62.25 Subd. 3. [USE OF CODE OF FEDERAL REGULATIONS.] In the 62.26 event that federal legislation eliminates the federal regulatory 62.27 basis for medical assistance, the state shall continue to 62.28 determine eligibility for Minnesota's medical assistance program 62.29 using the provisions of Code of Federal Regulations, title 42, 62.30 as construed on the day prior to their federal repeal, except as 62.31 expressly superseded in chapter 256B, or as superseded by 62.32 federal law, or as modified by state rule or by regulatory 62.33 waiver granted to the state. 62.34 Sec. 46. Minnesota Statutes 1994, section 256G.06, is 62.35 amended to read: 62.36 256G.06 [DETOXIFICATION SERVICES.] 63.1 The county of financial responsibility for detoxification 63.2 services is the county where the client is physically present 63.3 when the need for services is identified. If that need is 63.4 identified while the client is a resident of a chemical 63.5 dependency facility, the provisions of section 256G.02, 63.6 subdivision 4, paragraphs(b),(c),and(e)(d), apply. 63.7 Sec. 47. Minnesota Statutes 1994, section 256G.07, 63.8 subdivision 1, is amended to read: 63.9 Subdivision 1. [EFFECT OF MOVING.] Except as provided in 63.10 subdivision 4, a person who has applied for and is receiving 63.11 services or assistance under a program governed by this chapter, 63.12 in any county in this state, and who moves to another county in 63.13 this state, is entitled to continue to receive thatassistance63.14 service from the county from which that person has moved until 63.15 that person has resided in nonexcluded status for two full 63.16 calendar months in the county to which that person has 63.17 moved.For purposes of general assistance and general63.18assistance medical care, this time period is, however, one full63.19calendar month.63.20 Sec. 48. Minnesota Statutes 1994, section 256G.07, 63.21 subdivision 2, is amended to read: 63.22 Subd. 2. [TRANSFER OF RECORDS.] Before the person has 63.23 resided in nonexcluded status for two calendar monthsor one63.24calendar month in the case of general assistance and general63.25assistance medical care,in the county to which that person has 63.26 moved, the local agency of the county from which the person has 63.27 moved shall complete an eligibility review and transfer all 63.28 necessary records relating to that person to the local agency of 63.29 the county to which the person has moved. 63.30 Sec. 49. Minnesota Statutes 1994, section 256G.08, 63.31 subdivision 1, is amended to read: 63.32 Subdivision 1. [COMMITMENTSCOMMITMENT ACT PROCEEDINGS.] 63.33 In cases of voluntary admission or commitment to state or other 63.34 institutions, the committing county shall initially pay for all 63.35 costs. This includes the expenses of the taking into custody, 63.36 confinement, emergency holds under sections 253B.05, 64.1 subdivisions 1 and 2, and 253B.07, examination, commitment, 64.2 conveyance to the place of detention, and rehearing. 64.3 Sec. 50. Minnesota Statutes 1994, section 256G.09, 64.4 subdivision 2, is amended to read: 64.5 Subd. 2. [FINANCIAL DISPUTES.] (a) If the county receiving 64.6 the transmittal does not believe it is financially responsible, 64.7 it should provide to the department and the initially 64.8 responsible county a statement of all facts and documents 64.9 necessary for the department to make the requested determination 64.10 of financial responsibility. The submission must clearly state 64.11 the program area in dispute and must state the specific basis 64.12 upon which the submitting county is denying financial 64.13 responsibility. 64.14 (b) The initially responsible county then has 15 calendar 64.15 days to submit its position and any supporting evidence to the 64.16 department. The absence of a submission by the initially 64.17 responsible county does not limit the right of the department to 64.18 issue a binding opinion based on the evidence actually submitted. 64.19 (c) A case must not be submitted until the local agency 64.20 taking the application or making the commitment has made an 64.21 initial determination about eligibility and financial 64.22 responsibility, and servicesor assistance hashave been 64.23 initiated. This paragraph does not prohibit the submission of 64.24 closed cases that otherwise meet the applicable statute of 64.25 limitations. 64.26 Sec. 51. Minnesota Statutes 1994, section 256G.10, is 64.27 amended to read: 64.28 256G.10 [DERIVATIVE SETTLEMENTELIMINATED.] 64.29Except as described in section 256G.02, subdivision 4,64.30paragraph (e), residence under this chapter must be determined64.31independently for each applicant.The residence of the parent 64.32 of a minor child, with whom that child last lived in a 64.33 nonexcluded time setting, or guardiandoes notof a ward shall 64.34 determine the residence of the child or ward for all social 64.35 services governed by this chapter. 64.36 For purposes of this chapter, a minor child is defined as 65.1 being under 18 years of age unless otherwise specified in a 65.2 program administered by the commissioner. 65.3 Physical or legal custody has no bearing on residence 65.4 determinations. This section does not, however, apply to 65.5 situations involving another stateor, limit the application of 65.6 an interstate compact, or apply to situations involving state 65.7 wards where the commissioner is defined by law as the guardian. 65.8 Sec. 52. Minnesota Statutes 1994, section 256I.05, is 65.9 amended by adding a subdivision to read: 65.10 Subd. 7c. [DEMONSTRATION PROJECT.] The commissioner is 65.11 authorized to pursue a demonstration project under federal food 65.12 stamp regulation for the purpose of gaining federal 65.13 reimbursement of food and nutritional costs currently paid by 65.14 the state group residential housing program. 65.15 Sec. 53. Minnesota Statutes 1994, section 325F.71, 65.16 subdivision 2, is amended to read: 65.17 Subd. 2. [SUPPLEMENTAL CIVIL PENALTY.] (a) In addition to 65.18 any liability for a civil penalty pursuant to Minnesota 65.19 Statutes, sections 325D.43 to 325D.48, regarding deceptive trade 65.20 practices; 325F.67, regarding false advertising; and 325F.68 to 65.21 325F.70, regarding consumer fraud; a person who engages in any 65.22 conduct prohibited by those statutes, and whose conduct is 65.23 perpetrated against one or more senior citizens or handicapped 65.24 persons, is liable for an additional civil penalty not to exceed 65.25 $10,000 for each violation, if one or more of the factors in 65.26 paragraph (b) are present. 65.27 (b) In determining whether to impose a civil penalty 65.28 pursuant to paragraph (a), and the amount of the penalty, the 65.29 court shall consider, in addition to other appropriate factors, 65.30 the extent to which one or more of the following factors are 65.31 present: 65.32 (1) whether the defendant knew or should have known that 65.33 the defendant's conduct was directed to one or more senior 65.34 citizens or handicapped persons; 65.35 (2) whether the defendant's conduct caused senior citizens 65.36 or handicapped persons to suffer: loss or encumbrance of a 66.1 primary residence, principal employment, or source of income; 66.2 substantial loss of property set aside for retirement or for 66.3 personal or family care and maintenance; substantial loss of 66.4 payments received under a pension or retirement plan or a 66.5 government benefits program; or assets essential to the health 66.6 or welfare of the senior citizen or handicapped person; 66.7 (3) whether one or more senior citizens or handicapped 66.8 persons are more vulnerable to the defendant's conduct than 66.9 other members of the public because of age, poor health or 66.10 infirmity, impaired understanding, restricted mobility, or 66.11 disability, and actually suffered physical, emotional, or 66.12 economic damage resulting from the defendant's conduct; or 66.13 (4) whether the defendant's conduct caused senior citizens 66.14 or handicapped persons to make an uncompensated asset transfer 66.15 that resulted in the person being found ineligible for medical 66.16 assistance. 66.17 Sec. 54. Minnesota Statutes 1994, section 524.2-403, is 66.18 amended to read: 66.19 524.2-403 [EXEMPT PROPERTY.] 66.20 (a) If there is a surviving spouse, then, in addition to 66.21 the homestead and family allowance, the surviving spouse is 66.22 entitled from the estate to: 66.23 (1) property not exceeding $10,000 in value in excess of 66.24 any security interests therein, in household furniture, 66.25 furnishings, appliances, and personal effects, subject to an 66.26 award of sentimental value property under section 525.152; and 66.27 (2) one automobile, if any, without regard to value. 66.28 (b) If there is no surviving spouse, the decedent's 66.29 children are entitled jointly to the same property as provided 66.30 in paragraph (a). 66.31 (c) If encumbered chattels are selected and the value in 66.32 excess of security interests, plus that of other exempt 66.33 property, is less than $10,000, or if there is not $10,000 worth 66.34 of exempt property in the estate, the surviving spouse or 66.35 children are entitled to other personal property of the estate, 66.36 if any, to the extent necessary to make up the $10,000 value. 67.1 (d) Rights to exempt property and assets needed to make up 67.2 a deficiency of exempt property have priority over all claims 67.3 against the estate, but the right to any assets to make up a 67.4 deficiency of exempt property abates as necessary to permit 67.5 earlier payment of the family allowance. 67.6 (e) The rights granted by this section are in addition to 67.7 any benefit or share passing to the surviving spouse or children 67.8 by the decedent's will, unless otherwise provided by intestate 67.9 succession or by way of elective share. 67.10 (f) A claim under section 246.53, 261.04, 256B.15, or 67.11 256D.16 takes precedence over any rights granted to a decedent's 67.12 adult children under this section. 67.13 Sec. 55. Minnesota Statutes 1994, section 524.3-801, is 67.14 amended to read: 67.15 524.3-801 [NOTICE TO CREDITORS.] 67.16 (a) Unless notice has already been given under this 67.17 section, upon appointment of a general personal representative 67.18 in informal proceedings or upon the filing of a petition for 67.19 formal appointment of a general personal representative, notice 67.20 thereof, in the form prescribed by court rule, shall be given 67.21 under the direction of the court administrator by publication 67.22 once a week for two successive weeks in a legal newspaper in the 67.23 county wherein the proceedings are pending giving the name and 67.24 address of the general personal representative and notifying 67.25 creditors of the estate to present their claims within four 67.26 months after the date of the court administrator's notice which 67.27 is subsequently published or be forever barred, unless they are 67.28 entitled to further service of notice under paragraph (b) or (c). 67.29 (b)(1) Within three months after: (i) the date of the 67.30 first publication of the notice; or (ii) June 16, 1989, 67.31 whichever is later, the personal representative may determine, 67.32 in the personal representative's discretion, that it is or is 67.33 not advisable to conduct a reasonably diligent search for 67.34 creditors of the decedent who are either not known or not 67.35 identified. If the personal representative determines that a 67.36 reasonably diligent search is advisable, the personal 68.1 representative shall conduct the search. 68.2 (2) If the notice is first published after June 16, 1989, 68.3 the personal representative shall, within three months after the 68.4 date of the first publication of the notice, serve a copy of the 68.5 notice upon each then known and identified creditor in the 68.6 manner provided in paragraph (c). If the decedent or a 68.7 predeceased spouse of the decedent received assistance for which 68.8 a claim could be filed under section 246.53, 256B.15, 256D.16, 68.9 or 261.04, the personal representative shall serve a copy of the 68.10 notice on the commissioner of human services in the manner 68.11 provided in paragraph (c) on or before the date of the first 68.12 publication of the notice. The copy of the notice served on the 68.13 commissioner of human services shall include the full name, date 68.14 of birth, and social security number of the decedent or the 68.15 predeceased spouse who received assistance for which a claim 68.16 could be filed under any of the sections listed in this 68.17 paragraph. Notwithstanding any will or other instrument or law 68.18 to the contrary, except as allowed in this paragraph no property 68.19 subject to administration by the estate may be distributed by 68.20 the estate or the personal representative until 70 days after 68.21 the date the notice is served upon the commissioner, as provided 68.22 in paragraph (c) unless the local agency consents. An affidavit 68.23 of service shall be prima facie evidence of service and, if it 68.24 contains a legal description of the affected real property, may 68.25 be filed or recorded in the office of the county recorder or 68.26 registrar of titles to establish compliance with the notice 68.27 requirement established in this paragraph. This restriction on 68.28 distribution does not apply to the personal representative's 68.29 sale of real or personal property while the estate is open but 68.30 does apply to the net proceeds the estate receives from the 68.31 sale. If notice was first published under the applicable 68.32 provisions of law under the direction of the court administrator 68.33 before June 16, 1989, and if a personal representative is 68.34 empowered to act at any time after June 16, 1989, the personal 68.35 representative shall, within three months after June 16, 1989, 68.36 serve upon the then known and identified creditors in the manner 69.1 provided in paragraph (c) a copy of the notice as published, 69.2 together with a supplementary notice requiring each of the 69.3 creditors to present any claim within one month after the date 69.4 of the service of the notice or be forever barred. 69.5 (3) Under this section, a creditor is "known" if: (i) the 69.6 personal representative knows that the creditor has asserted a 69.7 claim that arose during the decedent's life against either the 69.8 decedent or the decedent's estate; or (ii) the creditor has 69.9 asserted a claim that arose during the decedent's life and the 69.10 fact is clearly disclosed in accessible financial records known 69.11 and available to the personal representative. Under this 69.12 section, a creditor is "identified" if the personal 69.13 representative's knowledge of the name and address of the 69.14 creditor will permit service of notice to be made under 69.15 paragraph (c). 69.16 (c) The personal representative shall serve a copy of any 69.17 notice and any supplementary notice required by paragraph (b), 69.18 clause (1) or (2), upon each creditor of the decedent who is 69.19 then known to the personal representative and identified, except 69.20 a creditor whose claim has either been presented to the personal 69.21 representative or paid, either by delivery of a copy of the 69.22 required notice to the creditor, or by mailing a copy of the 69.23 notice to the creditor by certified, registered, or ordinary 69.24 first class mail addressed to the creditor at the creditor's 69.25 office or place of residence. 69.26 Sec. 56. [INDIVIDUAL COMPULSIVE GAMBLING TREATMENT PILOT 69.27 PROJECT.] 69.28 Subdivision 1. [ESTABLISHMENT.] The commissioner of human 69.29 services shall establish a pilot project in the southeast area 69.30 of the state to provide compulsive gambling treatment services 69.31 to individuals seeking treatment. The pilot project shall 69.32 directly reimburse qualified providers for treatment to 69.33 individuals on a case-by-case basis. The pilot project shall 69.34 seek to utilize existing qualified providers and shall provide 69.35 treatment reimbursement to the maximum number of persons who 69.36 qualify for treatment. 70.1 Subd. 2. [PLAN.] The commissioner shall submit to the 70.2 legislature by December 15, 1996, a plan for expansion of the 70.3 treatment pilot project to all areas of the state. The plan 70.4 shall include the necessary legislative changes needed to move 70.5 from a treatment center model to a provider reimbursement model. 70.6 Sec. 57. [REPORT ON COMPENSATING CLIENTS ON PUBLIC HEALTH 70.7 CARE PROGRAMS.] 70.8 The commissioner of human services shall study and report 70.9 to the legislature by January 15, 1997, the advisability and 70.10 feasibility of compensating clients on the public health care 70.11 programs if a client has successfully reversed a private 70.12 insurer's denial of health insurance. The report shall also 70.13 include recommendations on reducing the parental fees under 70.14 Minnesota Statutes, section 252.27, subdivision 2a, if a parent 70.15 has successfully reversed a private insurer's denial of 70.16 insurance. The commissioner shall ask clients, advocates, other 70.17 interested persons, and the parental fee advisory committee to 70.18 assist with the study. 70.19 Sec. 58. [WAIVER AUTHORITY.] 70.20 The commissioner of human services shall seek federal 70.21 waivers as necessary to implement section 8. 70.22 Sec. 59. [SEVERABILITY.] 70.23 If any provision of sections 8 and 39 are found to be 70.24 unconstitutional or void by a court of competent jurisdiction, 70.25 all remaining provisions of the law shall remain valid and shall 70.26 be given full effect. 70.27 Sec. 60. [AUGMENTATIVE COMMUNICATION DEVICES.] 70.28 Augmentative communication devices that are prior 70.29 authorized through pass through vendors during the period July 70.30 1, 1995, to December 31, 1996, and have not been delivered shall 70.31 be paid under the medical assistance program at the actual price 70.32 charged the pass through vendor for the device as limited to the 70.33 suggested retail price on March 1, 1996. For retroactive 70.34 periods in which a state plan had not been submitted to reflect 70.35 this payment, the state shall not seek a federal share. The 70.36 governor's advisory council on technology for people with 71.1 disabilities, in consultation with the commissioner of human 71.2 services, shall study alternatives to this payment approach and 71.3 make recommendations to the legislature by December 31, 1996, 71.4 related to effective methods of cost control and the following: 71.5 (1) comparative payment equity between augmentative 71.6 communication device vendors and other provider groups that 71.7 provide equipment to medical assistance recipients; 71.8 (2) methods, including competitive bidding, that create 71.9 incentives for dealers and manufacturers to provide augmentative 71.10 communication devices at a price that is discounted from retail; 71.11 (3) substitution between augmentative communication devices 71.12 and alternative methods of access by recipients to augmentative 71.13 communication devices; and 71.14 (4) payment equity between pass through vendors and 71.15 distributors of augmentative communication devices. 71.16 Sec. 61. [REPEALER.] 71.17 Minnesota Statutes 1995 Supplement, sections 256B.15, 71.18 subdivision 5; 256G.05, subdivision 1; and 256G.07, subdivision 71.19 3a, are repealed. 71.20 Sec. 62. [EFFECTIVE DATE; APPLICATION.] 71.21 (a) Sections 12, 14, 16, 18, 29, 30, and the portion of 71.22 section 61 that repeals section 256B.15, subdivision 5, are 71.23 effective the day following final enactment to the extent 71.24 permitted by federal law. If any provisions of these sections 71.25 are prohibited by federal law, the provisions shall become 71.26 effective when federal law is changed to permit their 71.27 application or a waiver is received. The commissioner of human 71.28 services shall notify the revisor of statutes when federal law 71.29 is enacted or a waiver is received and publish a notice in the 71.30 State Register. The commissioner must include the notice in the 71.31 first State Register published after the effective date of the 71.32 federal changes. 71.33 (b) If, by July 1, 1996, any provisions of the sections 71.34 mentioned in paragraph (a) are not effective because of 71.35 prohibitions in federal law, the commissioner shall apply to the 71.36 federal government for a waiver of those prohibitions, and those 72.1 provisions shall become effective upon receipt of a federal 72.2 waiver, notification to the revisor of statutes, and publication 72.3 of a notice in the State Register to that effect. If the 72.4 commissioner applies for a waiver of the lookback period, the 72.5 commissioner shall seek the longest lookback period the health 72.6 care financing administration will approve, not to exceed 72 72.7 months. 72.8 (c) Section 54 applies to estates of decedents dying on or 72.9 after its effective date. Section 55 applies to estates where 72.10 the notice under Minnesota Statutes, section 524.3-801, 72.11 paragraph (a), was first published on or after its effective 72.12 date. Section 55 does not affect any right or duty to provide 72.13 notice to known creditors, including a local agency, before its 72.14 effective date. 72.15 (d) Sections 7, 13, 15, 17, 33, 34, 35, 38, and 60 are 72.16 effective the day following final enactment. 72.17 (e) Section 11 is effective retroactive to October 1, 1993. 72.18 (f) Sections 8, 22, subdivision 3, and 34 are effective 72.19 upon federal approval. 72.20 (g) Sections 10 and 31 are effective upon receipt of 72.21 federal approval, retroactive to January 1, 1996. 72.22 ARTICLE 3 72.23 LONG-TERM CARE 72.24 Section 1. Minnesota Statutes 1995 Supplement, section 72.25 144A.071, subdivision 3, is amended to read: 72.26 Subd. 3. [EXCEPTIONS AUTHORIZING AN INCREASE IN BEDS.] The 72.27 commissioner of health, in coordination with the commissioner of 72.28 human services, may approve the addition of a new certified bed 72.29 or the addition of a new licensed nursing home bed, under the 72.30 following conditions: 72.31 (a) to license or certify a new bed in place of one 72.32 decertified after July 1, 1993, as long as the number of 72.33 certified plus newly certified or recertified beds does not 72.34 exceed the number of beds licensed or certified on July 1, 1993, 72.35 or to address an extreme hardship situation, in a particular 72.36 county that, together with all contiguous Minnesota counties, 73.1 has fewer nursing home beds per 1,000 elderly than the number 73.2 that is ten percent higher than the national average of nursing 73.3 home beds per 1,000 elderly individuals. For the purposes of 73.4 this section, the national average of nursing home beds shall be 73.5 the most recent figure that can be supplied by the federal 73.6 health care financing administration and the number of elderly 73.7 in the county or the nation shall be determined by the most 73.8 recent federal census or the most recent estimate of the state 73.9 demographer as of July 1, of each year of persons age 65 and 73.10 older, whichever is the most recent at the time of the request 73.11 for replacement. An extreme hardship situation can only be 73.12 found after the county documents the existence of unmet medical 73.13 needs that cannot be addressed by any other alternatives; 73.14 (b) to certify or license new beds in a new facility that 73.15 is to be operated by the commissioner of veterans affairs or 73.16 when the costs of constructing and operating the new beds are to 73.17 be reimbursed by the commissioner of veterans affairs or the 73.18 United States Veterans Administration; 73.19 (c) to license or certify beds in a facility that has been 73.20 involuntarily delicensed or decertified for participation in the 73.21 medical assistance program, provided that an application for 73.22 relicensure or recertification is submitted to the commissioner 73.23 within 120 days after delicensure or decertification;or73.24 (d) to certify two existing beds in a facility with 66 73.25 licensed beds on January 1, 1994, that had an average occupancy 73.26 rate of 98 percent or higher in both calendar years 1992 and 73.27 1993, and which began construction of four attached assisted 73.28 living units in April 1993; or 73.29 (e) to certify four existing beds in a facility in Winona 73.30 with 139 beds, of which 129 beds are certified. 73.31 Sec. 2. Minnesota Statutes 1995 Supplement, section 73.32 144A.071, subdivision 4a, is amended to read: 73.33 Subd. 4a. [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 73.34 best interest of the state to ensure that nursing homes and 73.35 boarding care homes continue to meet the physical plant 73.36 licensing and certification requirements by permitting certain 74.1 construction projects. Facilities should be maintained in 74.2 condition to satisfy the physical and emotional needs of 74.3 residents while allowing the state to maintain control over 74.4 nursing home expenditure growth. 74.5 The commissioner of health in coordination with the 74.6 commissioner of human services, may approve the renovation, 74.7 replacement, upgrading, or relocation of a nursing home or 74.8 boarding care home, under the following conditions: 74.9 (a) to license or certify beds in a new facility 74.10 constructed to replace a facility or to make repairs in an 74.11 existing facility that was destroyed or damaged after June 30, 74.12 1987, by fire, lightning, or other hazard provided: 74.13 (i) destruction was not caused by the intentional act of or 74.14 at the direction of a controlling person of the facility; 74.15 (ii) at the time the facility was destroyed or damaged the 74.16 controlling persons of the facility maintained insurance 74.17 coverage for the type of hazard that occurred in an amount that 74.18 a reasonable person would conclude was adequate; 74.19 (iii) the net proceeds from an insurance settlement for the 74.20 damages caused by the hazard are applied to the cost of the new 74.21 facility or repairs; 74.22 (iv) the new facility is constructed on the same site as 74.23 the destroyed facility or on another site subject to the 74.24 restrictions in section 144A.073, subdivision 5; 74.25 (v) the number of licensed and certified beds in the new 74.26 facility does not exceed the number of licensed and certified 74.27 beds in the destroyed facility; and 74.28 (vi) the commissioner determines that the replacement beds 74.29 are needed to prevent an inadequate supply of beds. 74.30 Project construction costs incurred for repairs authorized under 74.31 this clause shall not be considered in the dollar threshold 74.32 amount defined in subdivision 2; 74.33 (b) to license or certify beds that are moved from one 74.34 location to another within a nursing home facility, provided the 74.35 total costs of remodeling performed in conjunction with the 74.36 relocation of beds does not exceed 25 percent of the appraised 75.1 value of the facility or $500,000, whichever is less; 75.2 (c) to license or certify beds in a project recommended for 75.3 approval under section 144A.073; 75.4 (d) to license or certify beds that are moved from an 75.5 existing state nursing home to a different state facility, 75.6 provided there is no net increase in the number of state nursing 75.7 home beds; 75.8 (e) to certify and license as nursing home beds boarding 75.9 care beds in a certified boarding care facility if the beds meet 75.10 the standards for nursing home licensure, or in a facility that 75.11 was granted an exception to the moratorium under section 75.12 144A.073, and if the cost of any remodeling of the facility does 75.13 not exceed 25 percent of the appraised value of the facility or 75.14 $500,000, whichever is less. If boarding care beds are licensed 75.15 as nursing home beds, the number of boarding care beds in the 75.16 facility must not increase beyond the number remaining at the 75.17 time of the upgrade in licensure. The provisions contained in 75.18 section 144A.073 regarding the upgrading of the facilities do 75.19 not apply to facilities that satisfy these requirements; 75.20 (f) to license and certify up to 40 beds transferred from 75.21 an existing facility owned and operated by the Amherst H. Wilder 75.22 Foundation in the city of St. Paul to a new unit at the same 75.23 location as the existing facility that will serve persons with 75.24 Alzheimer's disease and other related disorders. The transfer 75.25 of beds may occur gradually or in stages, provided the total 75.26 number of beds transferred does not exceed 40. At the time of 75.27 licensure and certification of a bed or beds in the new unit, 75.28 the commissioner of health shall delicense and decertify the 75.29 same number of beds in the existing facility. As a condition of 75.30 receiving a license or certification under this clause, the 75.31 facility must make a written commitment to the commissioner of 75.32 human services that it will not seek to receive an increase in 75.33 its property-related payment rate as a result of the transfers 75.34 allowed under this paragraph; 75.35 (g) to license and certify nursing home beds to replace 75.36 currently licensed and certified boarding care beds which may be 76.1 located either in a remodeled or renovated boarding care or 76.2 nursing home facility or in a remodeled, renovated, newly 76.3 constructed, or replacement nursing home facility within the 76.4 identifiable complex of health care facilities in which the 76.5 currently licensed boarding care beds are presently located, 76.6 provided that the number of boarding care beds in the facility 76.7 or complex are decreased by the number to be licensed as nursing 76.8 home beds and further provided that, if the total costs of new 76.9 construction, replacement, remodeling, or renovation exceed ten 76.10 percent of the appraised value of the facility or $200,000, 76.11 whichever is less, the facility makes a written commitment to 76.12 the commissioner of human services that it will not seek to 76.13 receive an increase in its property-related payment rate by 76.14 reason of the new construction, replacement, remodeling, or 76.15 renovation. The provisions contained in section 144A.073 76.16 regarding the upgrading of facilities do not apply to facilities 76.17 that satisfy these requirements; 76.18 (h) to license as a nursing home and certify as a nursing 76.19 facility a facility that is licensed as a boarding care facility 76.20 but not certified under the medical assistance program, but only 76.21 if the commissioner of human services certifies to the 76.22 commissioner of health that licensing the facility as a nursing 76.23 home and certifying the facility as a nursing facility will 76.24 result in a net annual savings to the state general fund of 76.25 $200,000 or more; 76.26 (i) to certify, after September 30, 1992, and prior to July 76.27 1, 1993, existing nursing home beds in a facility that was 76.28 licensed and in operation prior to January 1, 1992; 76.29 (j) to license and certify new nursing home beds to replace 76.30 beds in a facility condemned as part of an economic 76.31 redevelopment plan in a city of the first class, provided the 76.32 new facility is located within one mile of the site of the old 76.33 facility. Operating and property costs for the new facility 76.34 must be determined and allowed under existing reimbursement 76.35 rules; 76.36 (k) to license and certify up to 20 new nursing home beds 77.1 in a community-operated hospital and attached convalescent and 77.2 nursing care facility with 40 beds on April 21, 1991, that 77.3 suspended operation of the hospital in April 1986. The 77.4 commissioner of human services shall provide the facility with 77.5 the same per diem property-related payment rate for each 77.6 additional licensed and certified bed as it will receive for its 77.7 existing 40 beds; 77.8 (l) to license or certify beds in renovation, replacement, 77.9 or upgrading projects as defined in section 144A.073, 77.10 subdivision 1, so long as the cumulative total costs of the 77.11 facility's remodeling projects do not exceed 25 percent of the 77.12 appraised value of the facility or $500,000, whichever is less; 77.13 (m) to license and certify beds that are moved from one 77.14 location to another for the purposes of converting up to five 77.15 four-bed wards to single or double occupancy rooms in a nursing 77.16 home that, as of January 1, 1993, was county-owned and had a 77.17 licensed capacity of 115 beds; 77.18 (n) to allow a facility that on April 16, 1993, was a 77.19 106-bed licensed and certified nursing facility located in 77.20 Minneapolis to layaway all of its licensed and certified nursing 77.21 home beds. These beds may be relicensed and recertified in a 77.22 newly-constructed teaching nursing home facility affiliated with 77.23 a teaching hospital upon approval by the legislature. The 77.24 proposal must be developed in consultation with the interagency 77.25 committee on long-term care planning. The beds on layaway 77.26 status shall have the same status as voluntarily delicensed and 77.27 decertified beds, except that beds on layaway status remain 77.28 subject to the surcharge in section 256.9657. This layaway 77.29 provision expires July 1, 1997; 77.30 (o) to allow a project which will be completed in 77.31 conjunction with an approved moratorium exception project for a 77.32 nursing home in southern Cass county and which is directly 77.33 related to that portion of the facility that must be repaired, 77.34 renovated, or replaced, to correct an emergency plumbing problem 77.35 for which a state correction order has been issued and which 77.36 must be corrected by August 31, 1993; 78.1 (p) to allow a facility that on April 16, 1993, was a 78.2 368-bed licensed and certified nursing facility located in 78.3 Minneapolis to layaway, upon 30 days prior written notice to the 78.4 commissioner, up to 30 of the facility's licensed and certified 78.5 beds by converting three-bed wards to single or double 78.6 occupancy. Beds on layaway status shall have the same status as 78.7 voluntarily delicensed and decertified beds except that beds on 78.8 layaway status remain subject to the surcharge in section 78.9 256.9657, remain subject to the license application and renewal 78.10 fees under section 144A.07 and shall be subject to a $100 per 78.11 bed reactivation fee. In addition, at any time within three 78.12 years of the effective date of the layaway, the beds on layaway 78.13 status may be: 78.14 (1) relicensed and recertified upon relocation and 78.15 reactivation of some or all of the beds to an existing licensed 78.16 and certified facility or facilities located in Pine River, 78.17 Brainerd, or International Falls; provided that the total 78.18 project construction costs related to the relocation of beds 78.19 from layaway status for any facility receiving relocated beds 78.20 may not exceed the dollar threshold provided in subdivision 2 78.21 unless the construction project has been approved through the 78.22 moratorium exception process under section 144A.073; 78.23 (2) relicensed and recertified, upon reactivation of some 78.24 or all of the beds within the facility which placed the beds in 78.25 layaway status, if the commissioner has determined a need for 78.26 the reactivation of the beds on layaway status. 78.27 The property-related payment rate of a facility placing 78.28 beds on layaway status must be adjusted by the incremental 78.29 change in its rental per diem after recalculating the rental per 78.30 diem as provided in section 256B.431, subdivision 3a, paragraph 78.31 (d). The property-related payment rate for a facility 78.32 relicensing and recertifying beds from layaway status must be 78.33 adjusted by the incremental change in its rental per diem after 78.34 recalculating its rental per diem using the number of beds after 78.35 the relicensing to establish the facility's capacity day 78.36 divisor, which shall be effective the first day of the month 79.1 following the month in which the relicensing and recertification 79.2 became effective. Any beds remaining on layaway status more 79.3 than three years after the date the layaway status became 79.4 effective must be removed from layaway status and immediately 79.5 delicensed and decertified; 79.6 (q) to license and certify beds in a renovation and 79.7 remodeling project to convert 13 three-bed wards into 13 two-bed 79.8 rooms and 13 single-bed rooms, expand space, and add 79.9 improvements in a nursing home that, as of January 1, 1994, met 79.10 the following conditions: the nursing home was located in 79.11 Ramsey county; was not owned by a hospital corporation; had a 79.12 licensed capacity of 64 beds; and had been ranked among the top 79.13 15 applicants by the 1993 moratorium exceptions advisory review 79.14 panel. The total project construction cost estimate for this 79.15 project must not exceed the cost estimate submitted in 79.16 connection with the 1993 moratorium exception process; 79.17 (r) to license and certify beds in a renovation and 79.18 remodeling project to convert 12 four-bed wards into 24 two-bed 79.19 rooms, expand space, and add improvements in a nursing home 79.20 that, as of January 1, 1994, met the following conditions: the 79.21 nursing home was located in Ramsey county; had a licensed 79.22 capacity of 154 beds; and had been ranked among the top 15 79.23 applicants by the 1993 moratorium exceptions advisory review 79.24 panel. The total project construction cost estimate for this 79.25 project must not exceed the cost estimate submitted in 79.26 connection with the 1993 moratorium exception process; 79.27 (s) to license and certify up to 117 beds that are 79.28 relocated from a licensed and certified 138-bed nursing facility 79.29 located in St. Paul to a hospital with 130 licensed hospital 79.30 beds located in South St. Paul, provided that the nursing 79.31 facility and hospital are owned by the same or a related 79.32 organization and that prior to the date the relocation is 79.33 completed the hospital ceases operation of its inpatient 79.34 hospital services at that hospital. After relocation, the 79.35 nursing facility's status under section 256B.431, subdivision 79.36 2j, shall be the same as it was prior to relocation. The 80.1 nursing facility's property-related payment rate resulting from 80.2 the project authorized in this paragraph shall become effective 80.3 no earlier than April 1, 1996. For purposes of calculating the 80.4 incremental change in the facility's rental per diem resulting 80.5 from this project, the allowable appraised value of the nursing 80.6 facility portion of the existing health care facility physical 80.7 plant prior to the renovation and relocation may not exceed 80.8 $2,490,000; 80.9 (t) to license and certify two beds in a facility to 80.10 replace beds that were voluntarily delicensed and decertified on 80.11 June 28, 1991; 80.12 (u) to allow 16 licensed and certified beds located on July 80.13 1, 1994, in a 142-bed nursing home and 21-bed boarding care home 80.14 facility in Minneapolis, notwithstanding the licensure and 80.15 certification after July 1, 1995, of the Minneapolis facility as 80.16 a 147-bed nursing home facility after completion of a 80.17 construction project approved in 1993 under section 144A.073, to 80.18 be laid away upon 30 days' prior written notice to the 80.19 commissioner. Beds on layaway status shall have the same status 80.20 as voluntarily delicensed or decertified beds except that they 80.21 shall remain subject to the surcharge in section 256.9657. The 80.22 16 beds on layaway status may be relicensed as nursing home beds 80.23 and recertified at any time within five years of the effective 80.24 date of the layaway upon relocation of some or all of the beds 80.25 to a licensed and certified facility located in Watertown, 80.26 provided that the total project construction costs related to 80.27 the relocation of beds from layaway status for the Watertown 80.28 facility may not exceed the dollar threshold provided in 80.29 subdivision 2 unless the construction project has been approved 80.30 through the moratorium exception process under section 144A.073. 80.31 The property-related payment rate of the facility placing 80.32 beds on layaway status must be adjusted by the incremental 80.33 change in its rental per diem after recalculating the rental per 80.34 diem as provided in section 256B.431, subdivision 3a, paragraph 80.35 (d). The property-related payment rate for the facility 80.36 relicensing and recertifying beds from layaway status must be 81.1 adjusted by the incremental change in its rental per diem after 81.2 recalculating its rental per diem using the number of beds after 81.3 the relicensing to establish the facility's capacity day 81.4 divisor, which shall be effective the first day of the month 81.5 following the month in which the relicensing and recertification 81.6 became effective. Any beds remaining on layaway status more 81.7 than five years after the date the layaway status became 81.8 effective must be removed from layaway status and immediately 81.9 delicensed and decertified;or81.10 (v) to license and certify beds that are moved within an 81.11 existing area of a facility or to a newly-constructed addition 81.12 which is built for the purpose of eliminating three- and 81.13 four-bed rooms and adding space for dining, lounge areas, 81.14 bathing rooms, and ancillary service areas in a nursing home 81.15 that, as of January 1, 1995, was located in Fridley and had a 81.16 licensed capacity of 129 beds; or 81.17 (w) to relocate 36 beds in Crow Wing county and four beds 81.18 from Hennepin county to a 160-bed facility in Crow Wing county, 81.19 provided all the affected beds are under common ownership. 81.20 Sec. 3. Minnesota Statutes 1995 Supplement, section 81.21 256B.431, subdivision 25, is amended to read: 81.22 Subd. 25. [CHANGES TO NURSING FACILITY REIMBURSEMENT 81.23 BEGINNING JULY 1, 1995.] The nursing facility reimbursement 81.24 changes in paragraphs (a) to(g)(h) shall apply in the sequence 81.25 specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 81.26 this section, beginning July 1, 1995. 81.27 (a) The eight-cent adjustment to care-related rates in 81.28 subdivision 22, paragraph (e), shall no longer apply. 81.29 (b) For rate years beginning on or after July 1, 1995, the 81.30 commissioner shall limit a nursing facility's allowable 81.31 operating per diem for each case mix category for each rate year 81.32 as in clauses (1) to (3). 81.33 (1) For the rate year beginning July 1, 1995, the 81.34 commissioner shall group nursing facilities into two groups, 81.35 freestanding and nonfreestanding, within each geographic group, 81.36 using their operating cost per diem for the case mix A 82.1 classification. A nonfreestanding nursing facility is a nursing 82.2 facility whose other operating cost per diem is subject to the 82.3 hospital attached, short length of stay, or the rule 80 limits. 82.4 All other nursing facilities shall be considered freestanding 82.5 nursing facilities. The commissioner shall then array all 82.6 nursing facilities in each grouping by their allowable case mix 82.7 A operating cost per diem. In calculating a nursing facility's 82.8 operating cost per diem for this purpose, the commissioner shall 82.9 exclude the raw food cost per diem related to providing special 82.10 diets that are based on religious beliefs, as determined in 82.11 subdivision 2b, paragraph (h). For those nursing facilities in 82.12 each grouping whose case mix A operating cost per diem: 82.13 (i) is at or below the median minus 1.0 standard deviation 82.14 of the array, the commissioner shall limit the nursing 82.15 facility's allowable operating cost per diem for each case mix 82.16 category to the lesser of the prior reporting year's allowable 82.17 operating cost per diems plus the inflation factor as 82.18 established in paragraph (f), clause (2), increased by six 82.19 percentage points, or the current reporting year's corresponding 82.20 allowable operating cost per diem; 82.21 (ii) is between minus .5 standard deviation and minus 1.0 82.22 standard deviation below the median of the array, the 82.23 commissioner shall limit the nursing facility's allowable 82.24 operating cost per diem for each case mix category to the lesser 82.25 of the prior reporting year's allowable operating cost per diems 82.26 plus the inflation factor as established in paragraph (f), 82.27 clause (2), increased by four percentage points, or the current 82.28 reporting year's corresponding allowable operating cost per 82.29 diem; or 82.30 (iii) is equal to or above minus .5 standard deviation 82.31 below the median of the array, the commissioner shall limit the 82.32 nursing facility's allowable operating cost per diem for each 82.33 case mix category to the lesser of the prior reporting year's 82.34 allowable operating cost per diems plus the inflation factor as 82.35 established in paragraph (f), clause (2), increased by three 82.36 percentage points, or the current reporting year's corresponding 83.1 allowable operating cost per diem. 83.2 (2) For the rate year beginning on July 1, 1996, the 83.3 commissioner shall limit the nursing facility's allowable 83.4 operating cost per diem for each case mix category to the lesser 83.5 of the prior reporting year's allowable operating cost per diems 83.6 plus the inflation factor as established in paragraph (f), 83.7 clause (2), increased by one percentage point or the current 83.8 reporting year's corresponding allowable operating cost per 83.9 diems; and 83.10 (3) For rate years beginning on or after July 1, 1997, the 83.11 commissioner shall limit the nursing facility's allowable 83.12 operating cost per diem for each case mix category to the lesser 83.13 of the reporting year prior to the current reporting year's 83.14 allowable operating cost per diems plus the inflation factor as 83.15 established in paragraph (f), clause (2), or the current 83.16 reporting year's corresponding allowable operating cost per 83.17 diems. 83.18 (c) For rate years beginning on July 1, 1995, the 83.19 commissioner shall limit the allowable operating cost per diems 83.20 for high cost nursing facilities. After application of the 83.21 limits in paragraph (b) to each nursing facility's operating 83.22 cost per diems, the commissioner shall group nursing facilities 83.23 into two groups, freestanding or nonfreestanding, within each 83.24 geographic group. A nonfreestanding nursing facility is a 83.25 nursing facility whose other operating cost per diems are 83.26 subject to hospital attached, short length of stay, or rule 80 83.27 limits. All other nursing facilities shall be considered 83.28 freestanding nursing facilities. The commissioner shall then 83.29 array all nursing facilities within each grouping by their 83.30 allowable case mix A operating cost per diems. In calculating a 83.31 nursing facility's operating cost per diem for this purpose, the 83.32 commissioner shall exclude the raw food cost per diem related to 83.33 providing special diets that are based on religious beliefs, as 83.34 determined in subdivision 2b, paragraph (h). For those nursing 83.35 facilities in each grouping whose case mix A operating cost per 83.36 diem exceeds 1.0 standard deviation above the median, the 84.1 commissioner shall reduce their allowable operating cost per 84.2 diems by two percent. For those nursing facilities in each 84.3 grouping whose case mix A operating cost per diem exceeds 0.5 84.4 standard deviation above the median but is less than or equal to 84.5 1.0 standard deviation above the median, the commissioner shall 84.6 reduce their allowable operating cost per diems by one percent. 84.7 (d) For rate years beginning on or after July 1, 1996, the 84.8 commissioner shall limit the allowable operating cost per diems 84.9 for high cost nursing facilities. After application of the 84.10 limits in paragraph (b) to each nursing facility's operating 84.11 cost per diems, the commissioner shall group nursing facilities 84.12 into two groups, freestanding or nonfreestanding, within each 84.13 geographic group. A nonfreestanding nursing facility is a 84.14 nursing facility whose other operating cost per diems are 84.15 subject to hospital attached, short length of stay, or rule 80 84.16 limits. All other nursing facilities shall be considered 84.17 freestanding nursing facilities. The commissioner shall then 84.18 array all nursing facilities within each grouping by their 84.19 allowable case mix A operating cost per diems. In calculating a 84.20 nursing facility's operating cost per diem for this purpose, the 84.21 commissioner shall exclude the raw food cost per diem related to 84.22 providing special diets that are based on religious beliefs, as 84.23 determined in subdivision 2b, paragraph (h). In those nursing 84.24 facilities in each grouping whose case mix A operating cost per 84.25 diem exceeds 1.0 standard deviation above the median, the 84.26 commissioner shall reduce their allowable operating cost per 84.27 diems by three percent. For those nursing facilities in each 84.28 grouping whose case mix A operating cost per diem exceeds 0.5 84.29 standard deviation above the median but is less than or equal to 84.30 1.0 standard deviation above the median, the commissioner shall 84.31 reduce their allowable operating cost per diems by two percent. 84.32 (e) For rate years beginning on or after July 1, 1995, the 84.33 commissioner shall determine a nursing facility's efficiency 84.34 incentive by first computing the allowable difference, which is 84.35 the lesser of $4.50 or the amount by which the facility's other 84.36 operating cost limit exceeds its nonadjusted other operating 85.1 cost per diem for that rate year. The commissioner shall 85.2 compute the efficiency incentive by: 85.3 (1) subtracting the allowable difference from $4.50 and 85.4 dividing the result by $4.50; 85.5 (2) multiplying 0.20 by the ratio resulting from clause 85.6 (1), and then; 85.7 (3) adding 0.50 to the result from clause (2); and 85.8 (4) multiplying the result from clause (3) times the 85.9 allowable difference. 85.10 The nursing facility's efficiency incentive payment shall 85.11 be the lesser of $2.25 or the product obtained in clause (4). 85.12 (f) For rate years beginning on or after July 1, 1995, the 85.13 forecasted price index for a nursing facility's allowable 85.14 operating cost per diems shall be determined under clauses (1) 85.15 to (3) using the change in the Consumer Price Index-All Items 85.16 (United States city average) (CPI-U) or the change in the 85.17 Nursing Home Market Basket, both as forecasted by Data Resources 85.18 Inc., whichever is applicable. The commissioner shall use the 85.19 indices as forecasted in the fourth quarter of the calendar year 85.20 preceding the rate year, subject to subdivision 2l, paragraph 85.21 (c). If, as a result of federal legislative or administrative 85.22 action, the methodology used to calculate the Consumer Price 85.23 Index-All Items (United States city average) (CPI-U) changes, 85.24 the commissioner shall develop a conversion factor or other 85.25 methodology to convert the CPI-U index factor that results from 85.26 the new methodology to an index factor that approximates, as 85.27 closely as possible, the index factor that would have resulted 85.28 from application of the original CPI-U methodology prior to any 85.29 changes in methodology. The commissioner shall use the 85.30 conversion factor or other methodology to calculate an adjusted 85.31 inflation index. The adjusted inflation index must be used to 85.32 calculate payment rates under this section instead of the CPI-U 85.33 index specified in paragraph (d). If the commissioner is 85.34 required to develop an adjusted inflation index, the 85.35 commissioner shall report to the legislature as part of the next 85.36 budget submission the fiscal impact of applying this index. 86.1 (1) The CPI-U forecasted index for allowable operating cost 86.2 per diems shall be based on the 21-month period from the 86.3 midpoint of the nursing facility's reporting year to the 86.4 midpoint of the rate year following the reporting year. 86.5 (2) The Nursing Home Market Basket forecasted index for 86.6 allowable operating costs and per diem limits shall be based on 86.7 the 12-month period between the midpoints of the two reporting 86.8 years preceding the rate year. 86.9 (3) For rate years beginning on or after July 1, 1996, the 86.10 forecasted index for operating cost limits referred to in 86.11 subdivision 21, paragraph (b), shall be based on the CPI-U for 86.12 the 12-month period between the midpoints of the two reporting 86.13 years preceding the rate year. 86.14 (g) After applying these provisions for the respective rate 86.15 years, the commissioner shall index these allowable operating 86.16 costs per diems by the inflation factor provided for in 86.17 paragraph (f), clause (1), and add the nursing facility's 86.18 efficiency incentive as computed in paragraph (e). 86.19 (h) A nursing facility licensed for 302 beds on September 86.20 30, 1993, that was approved under the moratorium exception 86.21 process in section 144A.073 for a partial replacement, and 86.22 completed the replacement project in December 1994, is exempt 86.23 from paragraphs (b) to (d) for rate years beginning on or after 86.24 July 1, 1995. 86.25 (i) Notwithstanding section 11, paragraph (h), for the rate 86.26 years beginning on July 1, 1996, July 1, 1997, and July 1, 1998, 86.27 a nursing facility licensed for 40 beds effective May 1, 1992, 86.28 with a subsequent increase of 20 Medicare/Medicaid certified 86.29 beds, effective January 26, 1993, in accordance with an increase 86.30 in licensure is exempt from paragraphs (b) to (d). 86.31 Sec. 4. Minnesota Statutes 1995 Supplement, section 86.32 256B.501, subdivision 5b, is amended to read: 86.33 Subd. 5b. [ICF/MR OPERATING COST LIMITATION AFTER 86.34 SEPTEMBER 30, 1995.] (a) For the rateyearsyear beginning on 86.35 October 1, 1995,and October 1, 1996and for rate years 86.36 beginning on or after October 1, 1997, the commissioner shall 87.1 limit the allowable operating cost per diems, as determined 87.2 under this subdivision and the reimbursement rules, for high 87.3 cost ICF's/MR. Prior to indexing each facility's operating cost 87.4 per diems for inflation, the commissioner shall group the 87.5 facilities into eight groups. The commissioner shall then array 87.6 all facilities within each grouping by their general operating 87.7 cost per service unit per diems. 87.8 (b) The commissioner shall annually review and adjust the 87.9 general operating costs incurred by the facility during the 87.10 reporting year preceding the rate year to determine the 87.11 facility's allowable historical general operating costs. For 87.12 this purpose, the term general operating costs means the 87.13 facility's allowable operating costs included in the program, 87.14 maintenance, and administrative operating costs categories, as 87.15 well as the facility's related payroll taxes and fringe 87.16 benefits, real estate insurance, and professional liability 87.17 insurance. A facility's total operating cost payment rate shall 87.18 be limited according to paragraphs (c) and (d) as follows: 87.19 (c) A facility's total operating cost payment rate shall be 87.20 equal to its allowable historical operating cost per diems for 87.21 program, maintenance, and administrative cost categories 87.22 multiplied by the forecasted inflation index in subdivision 3c, 87.23 clause (1), subject to the limitations in paragraph (d). 87.24 (d) For the rate years beginning on or after October 1, 87.25 1995, the commissioner shall establish maximum overall general 87.26 operating cost per service unit limits for facilities according 87.27 to clauses (1) to (8). Each facility's allowable historical 87.28 general operating costs and client assessment information 87.29 obtained from client assessments completed under subdivision 3g 87.30 for the reporting year ending December 31, 1994 (the base year), 87.31 shall be used for establishing the overall limits. If a 87.32 facility's proportion of temporary care resident days to total 87.33 resident days exceeds 80 percent, the commissioner must exempt 87.34 that facility from the overall general operating cost per 87.35 service unit limits in clauses (1) to (8). For this purpose, 87.36 "temporary care" means care provided by a facility to a client 88.1 for less than 30 consecutive resident days. 88.2 (1) The commissioner shall determine each facility's 88.3 weighted service units for the reporting year by multiplying its 88.4 resident days in each client classification level as established 88.5 in subdivision 3g, paragraph (d), by the corresponding weights 88.6 for that classification level, as established in subdivision 3g, 88.7 paragraph (i), and summing the results. For the reporting year 88.8 ending December 31, 1994, the commissioner shall use the service 88.9 unit score computed from the client classifications determined 88.10 by the Minnesota department of health's annual review, including 88.11 those of clients admitted during that year. 88.12 (2) The facility's service unit score is equal to its 88.13 weighted service units as computed in clause (1), divided by the 88.14 facility's total resident days excluding temporary care resident 88.15 days, for the reporting year. 88.16 (3) For each facility, the commissioner shall determine the 88.17 facility's cost per service unit by dividing its allowable 88.18 historical general operating costs for the reporting year by the 88.19 facility's service unit score in clause (2) multiplied by its 88.20 total resident days, or 85 percent of the facility's capacity 88.21 days times its service unit score in clause (2), if the 88.22 facility's occupancy is less than 85 percent of licensed 88.23 capacity. If a facility reports temporary care resident days, 88.24 the temporary care resident days shall be multiplied by the 88.25 service unit score in clause (2), and the resulting weighted 88.26 resident days shall be added to the facility's weighted service 88.27 units in clause (1) prior to computing the facility's cost per 88.28 service unit under this clause. 88.29 (4) The commissioner shall group facilities based on class 88.30 A or class B licensure designation, number of licensed beds, and 88.31 geographic location. For purposes of this grouping, facilities 88.32 with six beds or less shall be designated as small facilities 88.33 and facilities with more than six beds shall be designated as 88.34 large facilities. If a facility has both class A and class B 88.35 licensed beds, the facility shall be considered a class A 88.36 facility for this purpose if the number of class A beds is more 89.1 than half its total number of ICF/MR beds; otherwise the 89.2 facility shall be considered a class B facility. The 89.3 metropolitan geographic designation shall include Anoka, Carver, 89.4 Dakota, Hennepin, Ramsey, Scott, and Washington counties. All 89.5 other Minnesota counties shall be designated as the 89.6 nonmetropolitan geographic group. These characteristics result 89.7 in the following eight groupings: 89.8 (i) small class A metropolitan; 89.9 (ii) large class A metropolitan; 89.10 (iii) small class B metropolitan; 89.11 (iv) large class B metropolitan; 89.12 (v) small class A nonmetropolitan; 89.13 (vi) large class A nonmetropolitan; 89.14 (vii) small class B nonmetropolitan; and 89.15 (viii) large class B nonmetropolitan. 89.16 (5) The commissioner shall array facilities within each 89.17 grouping in clause (4) by each facility's cost per service unit 89.18 as determined in clause (3). 89.19 (6) In each array established under clause (5), facilities 89.20 with a cost per service unit at or above the median shall be 89.21 limited to the lesser of: (i) the current reporting year's cost 89.22 per service unit; or (ii) the prior reporting year's allowable 89.23 historical general operating cost per service unit plus the 89.24 inflation factor as established in subdivision 3c, clause (2), 89.25 increased by three percentage points. 89.26 (7) The overall operating cost per service unit limit for 89.27 each group shall be established as follows: 89.28 (i) each array established under clause (5) shall be 89.29 arrayed again after the application of clause (6); 89.30 (ii) in each array established in clause (5), two general 89.31 operating cost limits shall be determined. The first cost per 89.32 service unit limit shall be established at 0.5 and less than or 89.33 equal to 1.0 standard deviation above the median of that array. 89.34 The second cost per service unit limit shall be established at 89.35 1.0 standard deviation above the median of the array; and 89.36 (iii) the overall operating cost per service unit limits 90.1 shall be indexed for inflation annually beginning with the 90.2 reporting year ending December 31, 1995, using the forecasted 90.3 inflation index in subdivision 3c, clause (2). 90.4 (8) Annually, facilities shall be arrayed using the method 90.5 described in clauses (5) and (7). Each facility with a cost per 90.6 service unit at or above its group's first cost per service unit 90.7 limit, but less than the second cost per service unit limit for 90.8 that group, shall be limited to 98 percent of its total 90.9 operating cost per diems then add the forecasted inflation index 90.10 in subdivision 3c, clause (1). Each facility with a cost per 90.11 service unit at or above the second cost per service unit limit 90.12 will be limited to 97 percent of its total operating cost per 90.13 diems, then add the forecasted inflation index in subdivision 90.14 3c, clause (1). Facilities that have undergone a class A to 90.15 class B conversion since January 1, 1990, are exempt from the 90.16 limitations in this clause for six years after the completion of 90.17 the conversion process. 90.18 (9) The commissioner may rebase these overall limits, using 90.19 the method described in this subdivision but no more frequently 90.20 than once every three years. 90.21 (e) For rate years beginning on or after October 1, 1995, 90.22 the facility's efficiency incentive shall be determined as 90.23 provided in the reimbursement rule. 90.24 (f) The total operating cost payment rate shall be the sum 90.25 of paragraphs (c) and (e). 90.26 (g) For the rate year beginning on October 1, 1996, the 90.27 commissioner shall exempt a facility from the reductions in this 90.28 subdivision if the facility is involved in a bed relocation 90.29 project where more than 25 percent of the facility's beds are 90.30 transferred to another facility, the relocated beds are six or 90.31 fewer, there is no change in the total number of ICF/MR beds for 90.32 the parent organization of the facility, and the relocation is 90.33 not part of an interim or settle-up rate. 90.34 Sec. 5. Minnesota Statutes 1995 Supplement, section 90.35 256B.501, subdivision 5c, is amended to read: 90.36 Subd. 5c. [OPERATING COSTS AFTER SEPTEMBER 30,19971999.] 91.1 (a) In general, the commissioner shall establish maximum 91.2 standard rates for the prospective reimbursement of facility 91.3 costs. The maximum standard rates must take into account the 91.4 level of reimbursement which is adequate to cover the base-level 91.5 costs of economically operated facilities. In determining the 91.6 base-level costs, the commissioner shall consider geographic 91.7 location, types of facilities (class A or class B), minimum 91.8 staffing standards, resident assessment under subdivision 3g, 91.9 and other factors as determined by the commissioner. 91.10 (b) The commissionershallmay also develop additional 91.11 incentive-based payments which, if achieved for specified 91.12 outcomes, will be added to the maximum standard rates. The 91.13 specified outcomes must be measurable and shall be based on 91.14 criteria to be developed by the commissionerduring fiscal year91.151996. The commissioner may establish various levels of 91.16 achievement within an outcome. Once the outcomes are 91.17 established, the commissioner shall assign various levels of 91.18 payment associated with achieving the outcome. In establishing 91.19 the specified outcomes and the related criteria, the 91.20 commissioner shall consider the following state policy 91.21 objectives: 91.22 (1) resident transitioned into cost-effective community 91.23 alternatives; 91.24 (2) the results of a uniform consumer satisfaction survey; 91.25 (3) the achievement of no major licensure or certification 91.26 deficiencies; or 91.27 (4) any other outcomes the commissioner finds 91.28 desirable. The commissioner may also consider the findings of 91.29 projects examining services to persons with developmental 91.30 disabilities, including outcome-based quality assurance methods, 91.31 and the inclusion of persons with developmental disabilities in 91.32 managed care alternative service delivery models. 91.33 (c) In developing the maximum standard rates and the 91.34 incentive-based payments, desirable outcomes, and related 91.35 criteria, the commissioner, in collaboration with the 91.36 commissioner of health, shall form an advisory committee. The 92.1 membership of the advisory committee shall include 92.2 representation from the consumers advocacy groups(3),the two92.3 facility trade associations(3 each), counties(3), commissioner92.4of finance (1), the legislature(2 each from both the house and92.5senate), and others the commissioners find appropriate. 92.6 (d) Beginning July 1,19961998, the commissioner shall 92.7 collect the data from the facilities, the department of health, 92.8 or others as necessary to determine the extent to which a 92.9 facility has met any of the outcomes and related criteria. 92.10 Payment rates under this subdivision shall be effective October 92.11 1,19971999. 92.12 (e) The commissioner shall report to the legislature on the 92.13 progress of the advisory committee by January 31,1996, any92.14necessary changes to the reimbursement methodology proposed92.15under this subdivision1998. By January 15,19971999, the 92.16 commissioner shall recommend to the legislature legislation 92.17 which will implement this reimbursement methodology for rate 92.18 years beginning on or after the proposed effective date of 92.19 October 1,19971999. 92.20 Sec. 6. Minnesota Statutes 1994, section 256B.501, is 92.21 amended by adding a subdivision to read: 92.22 Subd. 5d. [ADJUSTMENT FOR OUTREACH CRISIS SERVICES.] An 92.23 ICF/MR with crisis services developed under the authority of 92.24 Laws 1992, chapter 513, article 9, section 40, shall have its 92.25 operating cost per diem calculated according to paragraphs (a) 92.26 and (b). 92.27 (a) Effective for services rendered from April 1, 1996, to 92.28 September 30, 1996, and for rate years beginning on or after 92.29 October 1, 1996, the maintenance limitation in Minnesota Rules, 92.30 part 9553.0050, subpart 1, item A, subitem (2), shall be 92.31 calculated to reflect capacity as of October 1, 1992. The 92.32 maintenance limit shall be the per diem limitation otherwise in 92.33 effect adjusted by the ratio of licensed capacity days as of 92.34 October 1, 1992, divided by resident days in the reporting year 92.35 ending December 31, 1993. 92.36 (b) Effective for rate years beginning on or after October 93.1 1, 1996, the operating cost per service unit, for purposes of 93.2 the cost per service unit limit in section 256B.501, subdivision 93.3 5b, paragraph (d), clauses (7) and (8), shall be calculated 93.4 after excluding the costs directly identified to the provision 93.5 of outreach crisis services and a four-bed crisis unit. 93.6 (c) The efficiency incentive paid to an ICF/MR shall not be 93.7 increased as a result of this subdivision. 93.8 Sec. 7. Minnesota Statutes 1994, section 256B.501, is 93.9 amended by adding a subdivision to read: 93.10 Subd. 5e. [RATE ADJUSTMENT FOR CARE PROVIDED TO A 93.11 MEDICALLY FRAGILE INDIVIDUAL.] Beginning July 1, 1996, the 93.12 commissioner shall increase reimbursement rates for a facility 93.13 located in Chisholm and licensed as an intermediate care 93.14 facility for persons with mental retardation and related 93.15 conditions since 1972, to cover the cost to the facility for 93.16 providing 24-hour licensed practical nurse care to a medically 93.17 fragile individual admitted on March 8, 1996. The commissioner 93.18 shall include in this higher rate a temporary adjustment to 93.19 reimburse the facility for costs incurred between March 8, 1996, 93.20 and June 30, 1996. Once this resident is discharged, the 93.21 commissioner shall reduce the facility's payment rate by the 93.22 amount of the cost of the 24-hour licensed practical nurse care. 93.23 Sec. 8. Minnesota Statutes 1994, section 256I.05, 93.24 subdivision 1c, is amended to read: 93.25 Subd. 1c. [RATE INCREASES.] A county agency may not 93.26 increase the rates negotiated for group residential housing 93.27 above those in effect on June 30, 1993, except:as provided in 93.28 paragraphs (a) to (g). 93.29 (a) A county may increase the rates for group residential 93.30 housing settings to the MSA equivalent rate for those settings 93.31 whose current rate is below the MSA equivalent rate. 93.32 (b) A county agency may increase the rates for residents in 93.33 adult foster care whose difficulty of care has increased. The 93.34 total group residential housing rate for these residents must 93.35 not exceed the maximum rate specified in subdivisions 1 and 1a. 93.36 County agencies must not include nor increase group residential 94.1 housing difficulty of care rates for adults in foster care whose 94.2 difficulty of care is eligible for funding by home and 94.3 community-based waiver programs under title XIX of the Social 94.4 Security Act. 94.5 (c) The room and board rates will be increased each year 94.6 when the MSA equivalent rate is adjusted for SSI cost-of-living 94.7 increases by the amount of the annual SSI increase, less the 94.8 amount of the increase in the medical assistance personal needs 94.9 allowance under section 256B.35. 94.10 (d) When a group residential housing rate is used to pay 94.11 for an individual's room and board, or other costs necessary to 94.12 provide room and board, the rate payable to the residence must 94.13 continue for up to 18 calendar days per incident that the person 94.14 is temporarily absent from the residence, not to exceed 60 days 94.15 in a calendar year, if the absence or absences have received the 94.16 prior approval of the county agency's social service staff. 94.17 Prior approval is not required for emergency absences due to 94.18 crisis, illness, or injury. 94.19 (e) For facilities meeting substantial change criteria 94.20 within the prior year. Substantial change criteria exists if 94.21 the group residential housing establishment experiences a 25 94.22 percent increase or decrease in the total number of its beds, if 94.23 the net cost of capital additions or improvements is in excess 94.24 of 15 percent of the current market value of the residence, or 94.25 if the residence physically moves, or changes its licensure, and 94.26 incurs a resulting increase in operation and property costs. 94.27 (f) Until June 30, 1994, a county agency may increase by up 94.28 to five percent the total rate paid for recipients of assistance 94.29 under sections 256D.01 to 256D.21 or 256D.33 to 256D.54 who 94.30 reside in residences that are licensed by the commissioner of 94.31 health as a boarding care home, but are not certified for the 94.32 purposes of the medical assistance program. However, an 94.33 increase under this clause must not exceed an amount equivalent 94.34 to 65 percent of the 1991 medical assistance reimbursement rate 94.35 for nursing home resident class A, in the geographic grouping in 94.36 which the facility is located, as established under Minnesota 95.1 Rules, parts 9549.0050 to 9549.0058. 95.2 (g) For the rate year beginning July 1, 1996, a county 95.3 agency may increase the total rate paid for recipients of 95.4 assistance under sections 256D.01 to 256D.21 or 256D.33 to 95.5 256D.54 who reside in a residence that meets the following 95.6 criteria: 95.7 (1) it is licensed by the commissioner of health as a 95.8 boarding care home; 95.9 (2) it is not certified for the purposes of the medical 95.10 assistance program; 95.11 (3) at least 50 percent of its residents have a primary 95.12 diagnosis of mental illness; 95.13 (4) it has at least 17 beds; and 95.14 (5) it provides medication administration to residents. 95.15 The rate following an increase under this paragraph must not 95.16 exceed an amount equivalent to the average 1995 medical 95.17 assistance payment for nursing home resident class A under the 95.18 age of 65, in the geographic grouping in which the facility is 95.19 located, as established under Minnesota Rules, parts 9549.0010 95.20 to 9549.0080. 95.21 Sec. 9. [VENDOR RATE ADJUSTMENT.] 95.22 Notwithstanding the requirements of Minnesota Statutes, 95.23 section 252.46, subdivisions 3 and 6, the commissioner of human 95.24 services shall, at the request of the responsible board of 95.25 county commissioners and subject to conditions the commissioner 95.26 finds appropriate consistent with the service principles in 95.27 Minnesota Statutes, section 252.42, grant a variance to the 95.28 payment rate for vendors defined in Minnesota Statutes, section 95.29 252.41, subdivision 9, and located in Hennepin county that serve 95.30 persons with very severe self-injurious or assaultive behavior, 95.31 as those terms are used in Minnesota Statutes, section 252.46, 95.32 subdivision 4, paragraph (b). The adjusted rate shall: 95.33 (1) be limited to provisions of services to no more than 42 95.34 such persons; 95.35 (2) not exceed 200 percent of the statewide average rate as 95.36 calculated in accordance with Minnesota Statutes, section 96.1 252.46, subdivision 4, paragraph (b); 96.2 (3) become effective July 1, 1996; and 96.3 (4) be used as the basis for calculating the rate maximum 96.4 for that vendor for calendar year 1997 in accordance with the 96.5 requirements of Minnesota Statutes, section 252.46, subdivision 96.6 3. 96.7 Sec. 10. [DOWNSIZING PILOT PROJECT.] 96.8 (a) The commissioner of human services shall establish a 96.9 pilot project in Pennington county to downsize to 11 beds an 96.10 existing 15-bed intermediate care facility for persons with 96.11 mental retardation or related conditions, and develop a four-bed 96.12 supportive living service facility utilizing the conversion of 96.13 ICF/MR slots to medical assistance waiver conversion slots for 96.14 the displaced residents. The project must be approved by the 96.15 commissioner under Minnesota Statutes, section 252.28, and must 96.16 include criteria for determining how individuals are selected 96.17 for alternative services and the use of a request for proposal 96.18 process in selecting the vendors for alternative services. The 96.19 project must include: 96.20 (1) alternative services for the residents being relocated; 96.21 (2) timelines for resident relocation and decertification 96.22 of beds; and 96.23 (3) adjustment of the facility's operating cost rate under 96.24 Minnesota Rules, part 9553.0075, as necessary to implement the 96.25 project. 96.26 (b) The facility's aggregate investment-per-bed limit in 96.27 effect before downsizing must be the facility's 96.28 investment-per-bed limit after downsizing. The facility's total 96.29 revenues after downsizing must not increase as a result of the 96.30 downsizing project. The facility's total revenues before 96.31 downsizing are determined by multiplying the payment rate in 96.32 effect the day before the downsizing is effective by the number 96.33 of resident days for the reporting year preceding the downsizing 96.34 project. For the purpose of this project, the average medical 96.35 assistance rate for home and community-based services must not 96.36 exceed the rate made available under Laws 1995, chapter 207, 97.1 article 8, section 34. 97.2 Sec. 11. [NURSING FACILITY REIMBURSEMENT FOR FISCAL YEAR 97.3 1997.] 97.4 (a) Notwithstanding any contrary provisions of Minnesota 97.5 Statutes, section 256B.431, subdivision 25, the provisions of 97.6 this section shall apply for the rate year beginning July 1, 97.7 1996. 97.8 (b) The commissioner of human services shall group nursing 97.9 facilities into two groups, freestanding and nonfreestanding, 97.10 within each geographic group, using their operating cost per 97.11 diem for the case mix A classification. A nonfreestanding 97.12 nursing facility is a nursing facility whose other operating 97.13 cost per diem is subject to the hospital attached, short length 97.14 stay, or the rule 80 limits. All other nursing facilities shall 97.15 be considered freestanding nursing facilities. The commissioner 97.16 shall then array all nursing facilities in each grouping by 97.17 their allowable case mix A operating cost per diem. In 97.18 calculating a nursing facility's operating cost per diem for 97.19 this purpose, the commissioner shall exclude the raw food cost 97.20 per diem related to providing special diets that are based on 97.21 religious beliefs, as determined in Minnesota Statutes, section 97.22 256B.431, subdivision 2b, paragraph (h). For those nursing 97.23 facilities in each grouping whose case mix A operating cost per 97.24 diem: 97.25 (1) is at or above the median plus 1.0 standard deviation 97.26 of the array, the commissioner shall limit the nursing 97.27 facility's allowable operating cost per diem for each case mix 97.28 category to the lesser of the prior reporting year's allowable 97.29 operating cost per diems plus the inflation factor as 97.30 established in paragraph (d), or the current reporting year's 97.31 corresponding allowable operating cost per diem; 97.32 (2) is between .5 standard deviation and 1.0 standard 97.33 deviation above the median of the array, the commissioner shall 97.34 limit the nursing facility's allowable operating cost per diem 97.35 for each case mix category to the lesser of the prior reporting 97.36 year's allowable operating cost per diems plus the inflation 98.1 factor as established in paragraph (d), increase by one 98.2 percentage point, or the current reporting year's corresponding 98.3 allowable operating cost per diem; or 98.4 (3) is equal to or below .5 standard deviation above the 98.5 median of the array, the commissioner shall limit the nursing 98.6 facility's allowable operating cost per diem for each case mix 98.7 category to the lesser of the prior reporting year's allowable 98.8 operating cost per diems plus the inflation factor as 98.9 established in paragraph (d), increased by two percentage 98.10 points, or the current reporting year's corresponding allowable 98.11 operating cost per diem. 98.12 (c) For the rate year beginning July 1, 1996, the 98.13 provisions of Minnesota Statutes, section 256B.431, subdivision 98.14 25, paragraph (d), shall not apply. 98.15 (d) For the rate year beginning July 1, 1996, the 98.16 forecasted index for operating cost limits referred to in 98.17 Minnesota Statutes, section 256B.431, subdivision 21, paragraph 98.18 (b), shall be based on the change in the nursing home market 98.19 basket as forecasted by Data Resources Inc., for the 12-month 98.20 period between the midpoints of the two reporting years 98.21 preceding the rate year. 98.22 (e) For the rate year beginning July 1, 1996, the operating 98.23 cost limits established in Minnesota Statutes, section 256B.431, 98.24 subdivisions 2b, 2i, and 3c, and any previously effective 98.25 corresponding limits in law or rule shall not apply, except that 98.26 these cost limits shall still be calculated for purposes of 98.27 determining efficiency incentive per diems. 98.28 (f) For the rate year beginning July 1, 1996, the 98.29 commissioner shall exempt all rule 80 facilities from any limits 98.30 described in Minnesota Statutes, section 256B.431, subdivision 98.31 25, paragraph (b), clause (2), that affect care-related 98.32 operating per diems. For the rate year beginning July 1, 1996, 98.33 the operating cost per diem referred to in paragraph (b), clause 98.34 (2), is the sum of the care-related and other operating cost per 98.35 diems for a given case mix class. 98.36 (g) Any reductions to the combined operating per diem shall 99.1 be divided proportionately between the care-related and other 99.2 operating per diems. 99.3 (h) Notwithstanding paragraphs (a) to (f), the commissioner 99.4 must also compute nursing facility payment rates based on the 99.5 laws in effect on March 1, 1996, and use the resulting allowable 99.6 care-related and other operating cost per diems as the basis for 99.7 the spend-up limits for the rate year beginning July 1, 1997. 99.8 Sec. 12. [ICF/MR REIMBURSEMENT OCTOBER 1, 1996, TO OCTOBER 99.9 1, 1997.] 99.10 (a) Notwithstanding any contrary provisions of Minnesota 99.11 Statutes, section 256B.501, for the rate year beginning October 99.12 1, 1996, the commissioner of human services shall, for purposes 99.13 of the spend-up limit, array facilities within each grouping in 99.14 Minnesota Statutes, section 256B.501, subdivision 5b, paragraph 99.15 (d), clause (4), by each facility's cost per resident day. A 99.16 facility's cost per resident day shall be determined by dividing 99.17 its allowable historical general operating cost for the 99.18 reporting year by the facility's resident days for that 99.19 reporting year. Facilities with a cost per resident day at or 99.20 above the median shall be limited to the lesser of: (1) the 99.21 current reporting year's cost per resident day; or (2) the prior 99.22 reporting year's cost per resident day plus the inflation factor 99.23 as established in Minnesota Statutes, section 256B.501, 99.24 subdivision 3c, clause (2), increased by three percentage points. 99.25 However, in no case shall the amount of this reduction exceed: 99.26 three percent for a facility with a licensed capacity greater 99.27 than 16 beds; two percent for a facility with a licensed 99.28 capacity of nine to 16 beds; and one percent for a facility with 99.29 a licensed capacity of eight or fewer beds. 99.30 (b) The commissioner must not apply the limits in Minnesota 99.31 Statutes, section 256B.501, subdivision 5b, paragraph (d), 99.32 clause (8), for the rate year beginning October 1, 1996. 99.33 (c) Notwithstanding paragraphs (a) and (b), the 99.34 commissioner must also compute facility payment rates based on 99.35 the laws in effect on March 1, 1996, and use the resulting 99.36 allowable operating cost per diems as the basis for the spend-up