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HF 1638

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 06/21/2017 11:01am

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A bill for an act
relating to state government; establishing the health and human services
budget; modifying provisions governing health care, MinnesotaCare, MNsure,
continuing care, nursing facility payments and workforce development, public
health and health care delivery, children and family services, chemical and
mental health, direct care and treatment, withdrawal management programs,
and health-related licensing boards; establishing uniform requirements for
public assistance programs related to income calculation, reporting income,
and correcting overpayments and underpayments; making changes to medical
assistance, home and community-based services, Northstar Care for Children,
child protection, child support, and civil commitment; making changes to and
eliminating MinnesotaCare; creating a state tax credit for MNsure premium
payments; establishing a federally facilitated marketplace; providing for certain
provider rate and grant increases; establishing the Minnesota ABLE plan and
accounts; modifying requirements for administrative expenses and audits of
certain public health care programs; providing for protection of born alive infants;
establishing standards for withdrawal management programs; requiring reports
and studies; authorizing rulemaking; making technical changes; modifying
certain fees for health-related licensing boards; making human services forecast
adjustments; appropriating money; amending Minnesota Statutes 2014, sections
13.46, subdivisions 2, 7; 13.461, by adding a subdivision; 15A.0815, subdivision
3; 43A.241; 62A.02, subdivision 2; 62A.045; 62Q.55, subdivision 3; 62V.02,
by adding a subdivision; 62V.03, subdivision 2; 62V.04, subdivisions 1, 2, 4;
62V.05, subdivisions 1, 5, 6, by adding subdivisions; 62V.11, subdivision 2,
by adding a subdivision; 119B.011, subdivision 15; 119B.025, subdivision
1; 119B.035, subdivision 4; 119B.09, subdivision 4; 144.293, subdivision 5;
144A.071, subdivision 4a; 144A.75, subdivision 13; 144E.001, by adding a
subdivision; 144E.275, subdivision 1, by adding a subdivision; 145.4131,
subdivision 1; 145.423; 145.56, subdivisions 2, 4; 145.928, subdivision 13;
146B.01, subdivision 28; 146B.03, subdivisions 4, 6, by adding a subdivision;
146B.07, subdivisions 1, 2; 147.091, subdivision 1; 148.271; 148.52; 148.54;
148.57, subdivisions 1, 2, by adding a subdivision; 148.574; 148.575, subdivision
2; 148.577; 148.59; 148.603; 148E.075; 148E.080, subdivisions 1, 2; 148E.180,
subdivisions 2, 5; 150A.06, subdivision 1b; 150A.091, subdivisions 4, 5,
11, by adding subdivisions; 150A.31; 151.01, subdivisions 15a, 27; 151.02;
151.065, subdivisions 1, 2, 3, 4; 151.102; 151.58, subdivisions 2, 5; 152.34;
157.15, subdivision 8; 214.077; 214.10, subdivisions 2, 2a; 214.32, subdivision
6; 245.467, subdivision 6; 245.4876, subdivision 7; 245A.06, by adding a
subdivision; 245A.155, subdivisions 1, 2; 245A.65, subdivision 2; 245C.03, by
adding a subdivision; 245C.10, by adding a subdivision; 245D.02, by adding
a subdivision; 245D.05, subdivisions 1, 2; 245D.06, subdivisions 1, 2, 7;
245D.07, subdivision 2; 245D.071, subdivision 5; 245D.09, subdivisions 3, 5;
245D.22, subdivision 4; 245D.31, subdivisions 3, 4, 5; 252.27, subdivision 2a;
253B.18, subdivisions 4c, 5; 256.01, by adding a subdivision; 256.478; 256.741,
subdivisions 1, 2; 256.962, by adding a subdivision; 256.969, subdivisions
2b, 9; 256.975, subdivision 2, by adding a subdivision; 256.98, subdivision
1; 256B.021, subdivision 4; 256B.056, subdivision 5c; 256B.057, subdivision
9; 256B.0625, subdivisions 3b, 13, 13e, 13h, 17, 28a, 31, 58, by adding
subdivisions; 256B.0631; 256B.0644; 256B.0913, subdivision 4; 256B.0915,
subdivisions 3a, 3e, 3h; 256B.097, subdivisions 3, 4; 256B.431, subdivisions 2b,
36; 256B.434, subdivision 4, by adding a subdivision; 256B.441, subdivisions 1,
5, 6, 13, 14, 17, 30, 31, 33, 35, 40, 44, 46c, 48, 50, 51, 51a, 53, 54, 55a, 56, 63, by
adding subdivisions; 256B.4914, subdivision 6; 256B.492; 256B.50, subdivision
1; 256B.5012, by adding a subdivision; 256B.69, subdivisions 5a, 5i, 9c, 9d, by
adding subdivisions; 256B.75; 256B.76, subdivisions 1, 2; 256B.766; 256B.767;
256D.01, subdivision 1a; 256D.02, subdivision 8, by adding subdivisions;
256D.06, subdivision 1; 256D.405, subdivision 3; 256E.35, subdivision 2,
by adding a subdivision; 256I.03, subdivision 7, by adding a subdivision;
256I.04, subdivision 1; 256I.05, subdivision 2; 256I.06, subdivision 6; 256J.08,
subdivisions 26, 86; 256J.30, subdivisions 1, 9; 256J.35; 256J.40; 256J.95,
subdivision 19; 256K.45, subdivision 1a; 256L.01, subdivisions 3a, 5; 256L.03,
subdivision 5; 256L.04, subdivisions 1c, 7b, 10; 256L.05, subdivisions 3, 3a, 4, by
adding a subdivision; 256L.06, subdivision 3; 256L.121, subdivision 1; 256N.22,
subdivisions 9, 10; 256N.24, subdivision 4; 256N.25, subdivision 1; 256N.27,
subdivision 2; 256P.001; 256P.01, subdivision 3, by adding subdivisions;
256P.02, by adding a subdivision; 256P.03, subdivision 1; 256P.04, subdivisions
1, 4; 256P.05, subdivision 1; 259A.75; 260C.007, subdivisions 27, 32; 260C.203;
260C.212, subdivision 1, by adding subdivisions; 260C.331, subdivision 1;
260C.451, subdivisions 2, 6; 260C.515, subdivision 5; 260C.521, subdivisions
1, 2; 260C.607, subdivision 4; 270A.03, subdivision 5; 270B.14, subdivision
1; 518A.32, subdivision 2; 518A.39, subdivision 1, by adding a subdivision;
518A.41, subdivisions 1, 3, 4, 14, 15; 518A.46, subdivision 3, by adding a
subdivision; 518A.51; 518A.53, subdivision 4; 518C.802; 626.556, subdivisions
1, as amended, 2, 3, 6a, 7, as amended, 10, 10e, 11c, by adding subdivisions;
Laws 2008, chapter 363, article 18, section 3, subdivision 5; Laws 2011, First
Special Session chapter 9, article 6, section 97, subdivision 6; Laws 2012, chapter
247, article 4, section 47, as amended; Laws 2014, chapter 189, sections 5; 10; 11;
16; 17; 18; 19; 23; 24; 27; 28; 29; 31; 43; 50; 51; 73; proposing coding for new
law in Minnesota Statutes, chapters 62A; 62Q; 62V; 144; 145; 148; 245; 245A;
256B; 256P; 290; proposing coding for new law as Minnesota Statutes, chapters
245F; 256Q; repealing Minnesota Statutes 2014, sections 13.461, subdivision 26;
13D.08, subdivision 5a; 16A.724, subdivision 3; 62A.046, subdivision 5; 62V.01;
62V.02; 62V.03; 62V.04; 62V.05; 62V.06; 62V.07; 62V.08; 62V.09; 62V.10;
62V.11; 148.57, subdivisions 3, 4; 148.571; 148.572; 148.573, subdivision 1;
148.575, subdivisions 1, 3, 5, 6; 148.576; 148E.060, subdivision 12; 148E.075,
subdivisions 4, 5, 6, 7; 214.105; 256B.434, subdivision 19b; 256B.441,
subdivisions 14a, 19, 50a, 52, 55, 58, 62; 256D.0513; 256D.06, subdivision 8;
256D.09, subdivision 6; 256D.49; 256J.38; 256L.01, subdivisions 1, 1a, 1b, 2,
3, 3a, 5, 6, 7; 256L.02, subdivisions 1, 2, 3, 5, 6; 256L.03, subdivisions 1, 1a,
1b, 2, 3, 3a, 3b, 4, 4a, 5, 6; 256L.04, subdivisions 1, 1a, 1c, 2, 2a, 7, 7a, 7b, 8,
10, 12, 13, 14; 256L.05, subdivisions 1, 1a, 1b, 1c, 2, 3, 3a, 3c, 4, 5, 6; 256L.06,
subdivision 3; 256L.07, subdivisions 1, 2, 3, 4; 256L.09, subdivisions 1, 2, 4,
5, 6, 7; 256L.10; 256L.11, subdivisions 1, 2, 2a, 3, 4, 7; 256L.12; 256L.121;
256L.15, subdivisions 1, 1a, 1b, 2; 256L.18; 256L.22; 256L.24; 256L.26;
256L.28; Minnesota Rules, part 3400.0170, subparts 5, 6, 12, 13.

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

ARTICLE 1

HEALTH CARE

Section 1.

Minnesota Statutes 2014, section 62A.045, is amended to read:


62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT
HEALTH PROGRAMS.

(a) As a condition of doing business in Minnesota or providing coverage to
residents of Minnesota covered by this section, each health insurer shall comply with the
requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171, including
any federal regulations adopted under that act, to the extent that it imposes a requirement
that applies in this state and that is not also required by the laws of this state. This section
does not require compliance with any provision of the federal act prior to the effective date
provided for that provision in the federal act. The commissioner shall enforce this section.

For the purpose of this section, "health insurer" includes self-insured plans, group
health plans (as defined in section 607(1) of the Employee Retirement Income Security
Act of 1974), service benefit plans, managed care organizations, pharmacy benefit
managers, or other parties that are by contract legally responsible to pay a claim for a
health-care item or service for an individual receiving benefits under paragraph (b).

(b) No plan offered by a health insurer issued or renewed to provide coverage to
a Minnesota resident shall contain any provision denying or reducing benefits because
services are rendered to a person who is eligible for or receiving medical benefits pursuant
to title XIX of the Social Security Act (Medicaid) in this or any other state; chapter 256;
256B; or 256D or services pursuant to section 252.27; 256L.01 to 256L.10; 260B.331,
subdivision 2
; 260C.331, subdivision 2; or 393.07, subdivision 1 or 2. No health insurer
providing benefits under plans covered by this section shall use eligibility for medical
programs named in this section as an underwriting guideline or reason for nonacceptance
of the risk.

(c) If payment for covered expenses has been made under state medical programs for
health care items or services provided to an individual, and a third party has a legal liability
to make payments, the rights of payment and appeal of an adverse coverage decision for the
individual, or in the case of a child their responsible relative or caretaker, will be subrogated
to the state agency. The state agency may assert its rights under this section within three
years of the date the service was rendered. For purposes of this section, "state agency"
includes prepaid health plans under contract with the commissioner according to sections
256B.69, 256D.03, subdivision 4, paragraph (c), and 256L.12; children's mental health
collaboratives under section 245.493; demonstration projects for persons with disabilities
under section 256B.77; nursing homes under the alternative payment demonstration project
under section 256B.434; and county-based purchasing entities under section 256B.692.

(d) Notwithstanding any law to the contrary, when a person covered by a plan
offered by a health insurer receives medical benefits according to any statute listed in this
section, payment for covered services or notice of denial for services billed by the provider
must be issued directly to the provider. If a person was receiving medical benefits through
the Department of Human Services at the time a service was provided, the provider must
indicate this benefit coverage on any claim forms submitted by the provider to the health
insurer for those services. If the commissioner of human services notifies the health
insurer that the commissioner has made payments to the provider, payment for benefits or
notices of denials issued by the health insurer must be issued directly to the commissioner.
Submission by the department to the health insurer of the claim on a Department of
Human Services claim form is proper notice and shall be considered proof of payment of
the claim to the provider and supersedes any contract requirements of the health insurer
relating to the form of submission. Liability to the insured for coverage is satisfied to the
extent that payments for those benefits are made by the health insurer to the provider or
the commissioner as required by this section.

(e) When a state agency has acquired the rights of an individual eligible for medical
programs named in this section and has health benefits coverage through a health insurer,
the health insurer shall not impose requirements that are different from requirements
applicable to an agent or assignee of any other individual covered.

(f) A health insurer must process a claim made by a state agency for covered
expenses paid under state medical programs within 90 business days of the claim's
submission. If the health insurer needs additional information to process the claim,
the health insurer may be granted an additional 30 business days to process the claim,
provided the health insurer submits the request for additional information to the state
agency within 30 business days after the health insurer received the claim.

(g) A health insurer may request a refund of a claim paid in error to the Department
of Human Services within two years of the date the payment was made to the department.
A request for a refund shall not be honored by the department if the health insurer makes
the request after the time period has lapsed.

Sec. 2.

[62Q.671] PROVISION OF HEALTH PLAN INFORMATION.

Subdivision 1.

Availability on Web site.

A health plan company shall make
information describing the health plans offered and their availability, including all required
elements as specified in section 2715, subsection (b), paragraph (3), of the Public Health
Service Act, available to the public on the health plan company's Web site. A health
plan company shall also make this information available by other means to individuals
without access to the Internet.

Subd. 2.

Information on individual and small group health plans.

(a) Health
plan companies shall provide to the commissioner, for each health plan certified and
selected to be offered as a qualified health plan through MNsure and each individual and
small group health plan offered outside of MNsure, information regarding premiums and
cost-sharing and a summary of benefits and coverage, as required in Code of Federal
Regulations, title 45, section 155.205, subsection (b), paragraph (1), clauses (i) and (ii),
and Code of Federal Regulations, title 45, section 156.220.

(b) Health plan companies shall also provide to the commissioner, for each health
plan certified and selected to be offered as a qualified health plan through MNsure and
for each individual and small group health plan offered outside of MNsure, the following
information:

(1) any exclusions from coverage and any restrictions on the use or quantity of
covered items and services in each category of benefits, including prescription drugs and
drugs administered in a physician's office or clinic;

(2) any item or service, including a drug that has a coinsurance requirement, where
the cost-sharing required depends on the cost of the item or service;

(3) any item or service that has a co-payment and the dollar amount of the co-payment;

(4) whether a specific drug is available on formulary, whether a specific drug
is covered when furnished by a physician or clinic, and any clinical prerequisites or
authorization requirements for coverage of a drug;

(5) whether specific types of specialists are in network and whether a named
physician is in network;

(6) the process for a patient to obtain reversal of a health plan company's denial of
an item or service prescribed or ordered by the treating physician; and

(7) how medications will specifically be included in, or excluded from, the
deductible, including a description of out-of-pocket costs for a medication that may not
apply to the deductible.

(c) Health plan companies must submit the information required by this subdivision
to the commissioner at least two months prior to the start of each MNsure open enrollment
period. The commissioner shall make the information available to the public on the
agency Web site.

(d) The commissioner of commerce, in consultation with the commissioner of
health, shall develop and make available to the public a user-friendly Web tool that allows
the information provided under this section to be compared across health plan companies
and across health plans.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 3.

Minnesota Statutes 2014, section 150A.06, subdivision 1b, is amended to read:


Subd. 1b.

Resident dentists.

A person who is a graduate of a dental school and
is an enrolled graduate student or student of an accredited advanced dental education
program and who is not licensed to practice dentistry in the state shall obtain from the
board a license to practice dentistry as a resident dentist. The license must be designated
"resident dentist license" and authorizes the licensee to practice dentistry only under the
supervision of a licensed dentist. A University of Minnesota School of Dentistry dental
resident holding a resident dentist license is eligible for enrollment in medical assistance,
as provided under section 256B.0625, subdivision 9b.
A resident dentist license must be
renewed annually pursuant to the board's rules. An applicant for a resident dentist license
shall pay a nonrefundable fee set by the board for issuing and renewing the license. The
requirements of sections 150A.01 to 150A.21 apply to resident dentists except as specified
in rules adopted by the board. A resident dentist license does not qualify a person for
licensure under subdivision 1.

Sec. 4.

Minnesota Statutes 2014, section 151.58, subdivision 2, is amended to read:


Subd. 2.

Definitions.

For purposes of this section only, the terms defined in this
subdivision have the meanings given.

(a) "Automated drug distribution system" or "system" means a mechanical system
approved by the board that performs operations or activities, other than compounding or
administration, related to the storage, packaging, or dispensing of drugs, and collects,
controls, and maintains all required transaction information and records.

(b) "Health care facility" means a nursing home licensed under section 144A.02;
a housing with services establishment registered under section 144D.01, subdivision 4,
in which a home provider licensed under chapter 144A is providing centralized storage
of medications; a boarding care home licensed under sections 144.50 to 144.58 that is
providing centralized storage of medications;
or a Minnesota sex offender program facility
operated by the Department of Human Services.

(c) "Managing pharmacy" means a pharmacy licensed by the board that controls and
is responsible for the operation of an automated drug distribution system.

Sec. 5.

Minnesota Statutes 2014, section 151.58, subdivision 5, is amended to read:


Subd. 5.

Operation of automated drug distribution systems.

(a) The managing
pharmacy and the pharmacist in charge are responsible for the operation of an automated
drug distribution system.

(b) Access to an automated drug distribution system must be limited to pharmacy
and nonpharmacy personnel authorized to procure drugs from the system, except that field
service technicians may access a system located in a health care facility for the purposes of
servicing and maintaining it while being monitored either by the managing pharmacy, or a
licensed nurse within the health care facility. In the case of an automated drug distribution
system that is not physically located within a licensed pharmacy, access for the purpose
of procuring drugs shall be limited to licensed nurses. Each person authorized to access
the system must be assigned an individual specific access code. Alternatively, access to
the system may be controlled through the use of biometric identification procedures. A
policy specifying time access parameters, including time-outs, logoffs, and lockouts,
must be in place.

(c) For the purposes of this section only, the requirements of section 151.215 are met
if the following clauses are met:

(1) a pharmacist employed by and working at the managing pharmacy, or at a
pharmacy that is acting as a central services pharmacy for the managing pharmacy,
pursuant to Minnesota Rules, part 6800.4075, must review, interpret, and approve all
prescription drug orders before any drug is distributed from the system to be administered
to a patient. A pharmacy technician may perform data entry of prescription drug orders
provided that a pharmacist certifies the accuracy of the data entry before the drug can
be released from the automated drug distribution system. A pharmacist employed by
and working at the managing pharmacy must certify the accuracy of the filling of any
cassettes, canisters, or other containers that contain drugs that will be loaded into the
automated drug distribution system, unless the filled cassettes, canisters, or containers
have been provided by a repackager registered with the United States Food and Drug
Administration and licensed by the board as a manufacturer
; and

(2) when the automated drug dispensing system is located and used within the
managing pharmacy, a pharmacist must personally supervise and take responsibility for all
packaging and labeling associated with the use of an automated drug distribution system.

(d) Access to drugs when a pharmacist has not reviewed and approved the
prescription drug order is permitted only when a formal and written decision to allow such
access is issued by the pharmacy and the therapeutics committee or its equivalent. The
committee must specify the patient care circumstances in which such access is allowed,
the drugs that can be accessed, and the staff that are allowed to access the drugs.

(e) In the case of an automated drug distribution system that does not utilize bar
coding in the loading process, the loading of a system located in a health care facility may
be performed by a pharmacy technician, so long as the activity is continuously supervised,
through a two-way audiovisual system by a pharmacist on duty within the managing
pharmacy. In the case of an automated drug distribution system that utilizes bar coding
in the loading process, the loading of a system located in a health care facility may be
performed by a pharmacy technician or a licensed nurse, provided that the managing
pharmacy retains an electronic record of loading activities.

(f) The automated drug distribution system must be under the supervision of a
pharmacist. The pharmacist is not required to be physically present at the site of the
automated drug distribution system if the system is continuously monitored electronically
by the managing pharmacy. A pharmacist on duty within a pharmacy licensed by the
board must be continuously available to address any problems detected by the monitoring
or to answer questions from the staff of the health care facility. The licensed pharmacy
may be the managing pharmacy or a pharmacy which is acting as a central services
pharmacy, pursuant to Minnesota Rules, part 6800.4075, for the managing pharmacy.

Sec. 6.

Minnesota Statutes 2014, section 256.969, subdivision 2b, is amended to read:


Subd. 2b.

Hospital payment rates.

(a) For discharges occurring on or after
November 1, 2014, hospital inpatient services for hospitals located in Minnesota shall be
paid according to the following:

(1) critical access hospitals as defined by Medicare shall be paid using a cost-based
methodology;

(2) long-term hospitals as defined by Medicare shall be paid on a per diem
methodology under subdivision 25;

(3) rehabilitation hospitals or units of hospitals that are recognized as rehabilitation
distinct parts as defined by Medicare shall be paid according to the methodology under
subdivision 12; and

(4) all other hospitals shall be paid on a diagnosis-related group (DRG) methodology.

(b) For the period beginning January 1, 2011, through October 31, 2014, rates shall
not be rebased, except that a Minnesota long-term hospital shall be rebased effective
January 1, 2011, based on its most recent Medicare cost report ending on or before
September 1, 2008, with the provisions under subdivisions 9 and 23, based on the rates
in effect on December 31, 2010. For rate setting periods after November 1, 2014, in
which the base years are updated, a Minnesota long-term hospital's base year shall remain
within the same period as other hospitals.

(c) Effective for discharges occurring on and after November 1, 2014, payment rates
for hospital inpatient services provided by hospitals located in Minnesota or the local trade
area, except for the hospitals paid under the methodologies described in paragraph (a),
clauses (2) and (3), shall be rebased, incorporating cost and payment methodologies in a
manner similar to Medicare. The base year for the rates effective November 1, 2014, shall
be calendar year 2012. The rebasing under this paragraph shall be budget neutral, ensuring
that the total aggregate payments under the rebased system are equal to the total aggregate
payments that were made for the same number and types of services in the base year.
Separate budget neutrality calculations shall be determined for payments made to critical
access hospitals and payments made to hospitals paid under the DRG system. Only the rate
increases or decreases under subdivision 3a or 3c that applied to the hospitals being rebased
during the entire base period shall be incorporated into the budget neutrality calculation.

(d) For discharges occurring on or after November 1, 2014, through June 30, 2016,
the rebased rates under paragraph (c) shall include adjustments to the projected rates that
result in no greater than a five percent increase or decrease from the base year payments
for any hospital. Any adjustments to the rates made by the commissioner under this
paragraph and paragraph (e) shall maintain budget neutrality as described in paragraph (c).

(e) For discharges occurring on or after November 1, 2014, through June 30, 2016,
the commissioner may make additional adjustments to the rebased rates, and when
evaluating whether additional adjustments should be made, the commissioner shall
consider the impact of the rates on the following:

(1) pediatric services;

(2) behavioral health services;

(3) trauma services as defined by the National Uniform Billing Committee;

(4) transplant services;

(5) obstetric services, newborn services, and behavioral health services provided
by hospitals outside the seven-county metropolitan area;

(6) outlier admissions;

(7) low-volume providers; and

(8) services provided by small rural hospitals that are not critical access hospitals.

(f) Hospital payment rates established under paragraph (c) must incorporate the
following:

(1) for hospitals paid under the DRG methodology, the base year payment rate per
admission is standardized by the applicable Medicare wage index and adjusted by the
hospital's disproportionate population adjustment;

(2) for critical access hospitals, interim per diem payment rates shall be based on the
ratio of cost and charges reported on the base year Medicare cost report or reports and
applied to medical assistance utilization data. Final settlement payments for a state fiscal
year must be determined based on a review of the medical assistance cost report required
under subdivision 4b for the applicable state fiscal year;

(3) the cost and charge data used to establish hospital payment rates must only
reflect inpatient services covered by medical assistance; and

(4) in determining hospital payment rates for discharges occurring on or after the
rate year beginning January 1, 2011, through December 31, 2012, the hospital payment
rate per discharge shall be based on the cost-finding methods and allowable costs of the
Medicare program in effect during the base year or years.

(g) The commissioner shall validate the rates effective November 1, 2014, by
applying the rates established under paragraph (c), and any adjustments made to the rates
under paragraph (d) or (e), to hospital claims paid in calendar year 2013 to determine
whether the total aggregate payments for the same number and types of services under the
rebased rates are equal to the total aggregate payments made during calendar year 2013.

(h) Effective for discharges occurring on or after July 1, 2017, and every two
years thereafter, payment rates under this section shall be rebased to reflect only those
changes in hospital costs between the existing base year and the next base year. The
commissioner shall establish the base year for each rebasing period considering the most
recent year for which filed Medicare cost reports are available. The estimated change in
the average payment per hospital discharge resulting from a scheduled rebasing must be
calculated and made available to the legislature by January 15 of each year in which
rebasing is scheduled to occur, and must include by hospital the differential in payment
rates compared to the individual hospital's costs.

(i) Effective for discharges occurring on or after July 1, 2015, payment rates for
critical access hospitals located in Minnesota or the local trade area shall be determined
using a new cost-based methodology. The commissioner shall establish within the
methodology tiers of payment designed to promote efficiency and cost-effectiveness.
Annual payments to hospitals under this paragraph shall equal the total cost for critical
access hospitals as reflected in base year cost reports. The new cost-based rate shall be
the final rate and shall not be settled to actual incurred costs. The factors used to develop
the new methodology may include but are not limited to:

(1) the ratio between the hospital's costs for treating medical assistance patients and
the hospital's charges to the medical assistance program;

(2) the ratio between the hospital's costs for treating medical assistance patients and
the hospital's payments received from the medical assistance program for the care of
medical assistance patients;

(3) the ratio between the hospital's charges to the medical assistance program and
the hospital's payments received from the medical assistance program for the care of
medical assistance patients;

(4) the statewide average increases in the ratios identified in clauses (1), (2), and (3);

(5) the proportion of that hospital's costs that are administrative and trends in
administrative costs; and

(6) geographic location.

Sec. 7.

Minnesota Statutes 2014, section 256.969, subdivision 9, is amended to read:


Subd. 9.

Disproportionate numbers of low-income patients served.

(a) For
admissions occurring on or after July 1, 1993, the medical assistance disproportionate
population adjustment shall comply with federal law and shall be paid to a hospital,
excluding regional treatment centers and facilities of the federal Indian Health Service,
with a medical assistance inpatient utilization rate in excess of the arithmetic mean. The
adjustment must be determined as follows:

(1) for a hospital with a medical assistance inpatient utilization rate above the
arithmetic mean for all hospitals excluding regional treatment centers and facilities of the
federal Indian Health Service but less than or equal to one standard deviation above the
mean, the adjustment must be determined by multiplying the total of the operating and
property payment rates by the difference between the hospital's actual medical assistance
inpatient utilization rate and the arithmetic mean for all hospitals excluding regional
treatment centers and facilities of the federal Indian Health Service; and

(2) for a hospital with a medical assistance inpatient utilization rate above one
standard deviation above the mean, the adjustment must be determined by multiplying
the adjustment that would be determined under clause (1) for that hospital by 1.1.
The commissioner may establish a separate disproportionate population payment rate
adjustment for critical access hospitals. The commissioner shall report annually on the
number of hospitals likely to receive the adjustment authorized by this paragraph. The
commissioner shall specifically report on the adjustments received by public hospitals and
public hospital corporations located in cities of the first class.

(b) Certified public expenditures made by Hennepin County Medical Center shall
be considered Medicaid disproportionate share hospital payments. Hennepin County
and Hennepin County Medical Center shall report by June 15, 2007, on payments made
beginning July 1, 2005, or another date specified by the commissioner, that may qualify
for reimbursement under federal law. Based on these reports, the commissioner shall
apply for federal matching funds.

(c) Upon federal approval of the related state plan amendment, paragraph (b) is
effective retroactively from July 1, 2005, or the earliest effective date approved by the
Centers for Medicare and Medicaid Services.

(d) Effective July 1, 2015, disproportionate share hospital (DSH) payments shall
be paid in accordance with a new methodology. Annual DSH payments made under
this paragraph shall equal the total amount of DSH payments made for 2012. The new
methodology shall take into account a variety of factors, including but not limited to:

(1) the medical assistance utilization rate of the hospitals that receive payments
under this subdivision;

(2) whether the hospital is located within Minnesota;

(3) the difference between a hospital's costs for treating medical assistance patients
and the total amount of payments received from medical assistance;

(4) the percentage of uninsured patient days at each qualifying hospital in relation
to the total number of uninsured patient days statewide;

(5) the hospital's status as a hospital authorized to make presumptive eligibility
determinations for medical assistance in accordance with section 256B.057, subdivision 12;

(6) the hospital's status as a safety net, critical access, children's, rehabilitation, or
long-term hospital;

(7) whether the hospital's administrative cost of compiling the necessary DSH
reports exceeds the anticipated value of any calculated DSH payment; and

(8) whether the hospital provides specific services designated by the commissioner
to be of particular importance to the medical assistance program.

(e) Any payments or portion of payments made to a hospital under this subdivision
that are subsequently returned to the commissioner because the payments are found to
exceed the hospital-specific DSH limit for that hospital shall be redistributed to other
DSH-eligible hospitals in a manner established by the commissioner.

Sec. 8.

Minnesota Statutes 2014, section 256B.056, subdivision 5c, is amended to read:


Subd. 5c.

Excess income standard.

(a) The excess income standard for parents
and caretaker relatives, pregnant women, infants, and children ages two through 20 is the
standard specified in subdivision 4, paragraph (b).

(b) The excess income standard for a person whose eligibility is based on blindness,
disability, or age of 65 or more years shall equal 75 80 percent of the federal poverty
guidelines.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 9.

Minnesota Statutes 2014, section 256B.0625, is amended by adding a
subdivision to read:


Subd. 9b.

Dental services provided by faculty members and resident dentists
at a dental school.

(a) A dentist who is not enrolled as a medical assistance provider,
is a faculty or adjunct member at the University of Minnesota or a resident dentist
licensed under section 150A.06, subdivision 1b, and is providing dental services at a
dental clinic owned or operated by the University of Minnesota, may be enrolled as a
medical assistance provider if the provider completes and submits to the commissioner an
agreement form developed by the commissioner. The agreement must specify that the
faculty or adjunct member or resident dentist:

(1) will not receive payment for the services provided to medical assistance or
MinnesotaCare enrollees performed at the dental clinics owned or operated by the
University of Minnesota;

(2) will not be listed in the medical assistance or MinnesotaCare provider directory;
and

(3) is not required to serve medical assistance and MinnesotaCare enrollees when
providing nonvolunteer services in a private practice.

(b) A dentist or resident dentist enrolled under this subdivision as a fee-for-service
provider shall not otherwise be enrolled in or receive payments from medical assistance or
MinnesotaCare as a fee-for-service provider.

Sec. 10.

Minnesota Statutes 2014, section 256B.0625, subdivision 13, is amended to
read:


Subd. 13.

Drugs.

(a) Medical assistance covers drugs, except for fertility drugs
when specifically used to enhance fertility, if prescribed by a licensed practitioner and
dispensed by a licensed pharmacist, by a physician enrolled in the medical assistance
program as a dispensing physician, or by a physician, physician assistant, or a nurse
practitioner employed by or under contract with a community health board as defined in
section 145A.02, subdivision 5, for the purposes of communicable disease control.

(b) The dispensed quantity of a prescription drug must not exceed a 34-day supply,
unless authorized by the commissioner.

(c) For the purpose of this subdivision and subdivision 13d, an "active
pharmaceutical ingredient" is defined as a substance that is represented for use in a drug
and when used in the manufacturing, processing, or packaging of a drug becomes an
active ingredient of the drug product. An "excipient" is defined as an inert substance
used as a diluent or vehicle for a drug. The commissioner shall establish a list of active
pharmaceutical ingredients and excipients which are included in the medical assistance
formulary. Medical assistance covers selected active pharmaceutical ingredients and
excipients used in compounded prescriptions when the compounded combination is
specifically approved by the commissioner or when a commercially available product:

(1) is not a therapeutic option for the patient;

(2) does not exist in the same combination of active ingredients in the same strengths
as the compounded prescription; and

(3) cannot be used in place of the active pharmaceutical ingredient in the
compounded prescription.

(d) Medical assistance covers the following over-the-counter drugs when prescribed
by a licensed practitioner or by a licensed pharmacist who meets standards established by
the commissioner, in consultation with the board of pharmacy: antacids, acetaminophen,
family planning products, aspirin, insulin, products for the treatment of lice, vitamins for
adults with documented vitamin deficiencies, vitamins for children under the age of seven
and pregnant or nursing women, and any other over-the-counter drug identified by the
commissioner, in consultation with the formulary committee, as necessary, appropriate,
and cost-effective for the treatment of certain specified chronic diseases, conditions,
or disorders, and this determination shall not be subject to the requirements of chapter
14. A pharmacist may prescribe over-the-counter medications as provided under this
paragraph for purposes of receiving reimbursement under Medicaid. When prescribing
over-the-counter drugs under this paragraph, licensed pharmacists must consult with the
recipient to determine necessity, provide drug counseling, review drug therapy for potential
adverse interactions, and make referrals as needed to other health care professionals.
Over-the-counter medications must be dispensed in a quantity that is the lower lowest of:

(1) the number of dosage units contained in the manufacturer's original package; and

(2) the number of dosage units required to complete the patient's course of therapy; or

(3) if applicable, the number of dosage units dispensed from a system using
retrospective billing, as provided under subdivision 13e, paragraph (b)
.

(e) Effective January 1, 2006, medical assistance shall not cover drugs that
are coverable under Medicare Part D as defined in the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Public Law 108-173, section 1860D-2(e),
for individuals eligible for drug coverage as defined in the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, Public Law 108-173, section
1860D-1(a)(3)(A). For these individuals, medical assistance may cover drugs from the
drug classes listed in United States Code, title 42, section 1396r-8(d)(2), subject to this
subdivision and subdivisions 13a to 13g, except that drugs listed in United States Code,
title 42, section 1396r-8(d)(2)(E), shall not be covered.

(f) Medical assistance covers drugs acquired through the federal 340B Drug Pricing
Program and dispensed by 340B covered entities and ambulatory pharmacies under
common ownership of the 340B covered entity. Medical assistance does not cover drugs
acquired through the federal 340B Drug Pricing Program and dispensed by 340B contract
pharmacies.

EFFECTIVE DATE.

This section is effective January 1, 2016, or upon federal
approval, whichever is later.

Sec. 11.

Minnesota Statutes 2014, section 256B.0625, subdivision 13e, is amended to
read:


Subd. 13e.

Payment rates.

(a) The basis for determining the amount of payment
shall be the lower of the actual acquisition costs of the drugs or the maximum allowable
cost by the commissioner plus the fixed dispensing fee; or the usual and customary price
charged to the public. The amount of payment basis must be reduced to reflect all discount
amounts applied to the charge by any provider/insurer agreement or contract for submitted
charges to medical assistance programs. The net submitted charge may not be greater
than the patient liability for the service. The pharmacy dispensing fee shall be $3.65
for legend prescription drugs, except that the dispensing fee for intravenous solutions
which must be compounded by the pharmacist shall be $8 per bag, $14 per bag for cancer
chemotherapy products, and $30 per bag for total parenteral nutritional products dispensed
in one liter quantities, or $44 per bag for total parenteral nutritional products dispensed in
quantities greater than one liter. The pharmacy dispensing fee for over-the-counter drugs
shall be $3.65, except that the fee shall be $1.31 for retrospectively billing pharmacies
when billing for quantities less than the number of units contained in the manufacturer's
original package.
Actual acquisition cost includes quantity and other special discounts
except time and cash discounts. The actual acquisition cost of a drug shall be estimated
by the commissioner at wholesale acquisition cost plus four percent for independently
owned pharmacies located in a designated rural area within Minnesota, and at wholesale
acquisition cost plus two percent for all other pharmacies. A pharmacy is "independently
owned" if it is one of four or fewer pharmacies under the same ownership nationally. A
"designated rural area" means an area defined as a small rural area or isolated rural area
according to the four-category classification of the Rural Urban Commuting Area system
developed for the United States Health Resources and Services Administration. Effective
January 1, 2014, the actual acquisition cost of a drug acquired through the federal 340B
Drug Pricing Program shall be estimated by the commissioner at wholesale acquisition
cost minus 40 percent. Wholesale acquisition cost is defined as the manufacturer's list
price for a drug or biological to wholesalers or direct purchasers in the United States, not
including prompt pay or other discounts, rebates, or reductions in price, for the most
recent month for which information is available, as reported in wholesale price guides or
other publications of drug or biological pricing data. The maximum allowable cost of a
multisource drug may be set by the commissioner and it shall be comparable to, but no
higher than, the maximum amount paid by other third-party payors in this state who have
maximum allowable cost programs. Establishment of the amount of payment for drugs
shall not be subject to the requirements of the Administrative Procedure Act.

(b) Pharmacies dispensing prescriptions to residents of long-term care facilities
using an automated drug distribution system meeting the requirements of section 151.58,
or a packaging system meeting the packaging standards set forth in Minnesota Rules, part
6800.2700, that govern the return of unused drugs to the pharmacy for reuse, may employ
retrospective billing for prescriptions dispensed to long-term care facility residents. A
retrospectively billing pharmacy must submit a claim only for the quantity of medication
used by the enrolled recipient during the defined billing period. A retrospectively billing
pharmacy must use a billing period of not less than one calendar month or 30 days.

(c) An additional dispensing fee of $.30 may be added to the dispensing fee paid to
pharmacists for legend drug prescriptions dispensed to residents of long-term care facilities
when a unit dose blister card system, approved by the department, is used. Under this type
of dispensing system, the pharmacist must dispense a 30-day supply of drug. The National
Drug Code (NDC) from the drug container used to fill the blister card must be identified on
the claim to the department. The unit dose blister card containing the drug must meet the
packaging standards set forth in Minnesota Rules, part 6800.2700, that govern the return
of unused drugs to the pharmacy for reuse. The A pharmacy provider using packaging
that meets the standards set forth in Minnesota Rules, part 6800.2700, subpart 2,
will be
required to credit the department for the actual acquisition cost of all unused drugs that are
eligible for reuse, unless the pharmacy is using retrospective billing. The commissioner
may permit the drug clozapine to be dispensed in a quantity that is less than a 30-day supply.

(c) (d) Whenever a maximum allowable cost has been set for a multisource drug,
payment shall be the lower of the usual and customary price charged to the public or the
maximum allowable cost established by the commissioner unless prior authorization
for the brand name product has been granted according to the criteria established by
the Drug Formulary Committee as required by subdivision 13f, paragraph (a), and the
prescriber has indicated "dispense as written" on the prescription in a manner consistent
with section 151.21, subdivision 2.

(d) (e) The basis for determining the amount of payment for drugs administered in
an outpatient setting shall be the lower of the usual and customary cost submitted by
the provider, 106 percent of the average sales price as determined by the United States
Department of Health and Human Services pursuant to title XVIII, section 1847a of the
federal Social Security Act, the specialty pharmacy rate, or the maximum allowable cost
set by the commissioner. If average sales price is unavailable, the amount of payment
must be lower of the usual and customary cost submitted by the provider, the wholesale
acquisition cost, the specialty pharmacy rate, or the maximum allowable cost set by the
commissioner. Effective January 1, 2014, the commissioner shall discount the payment
rate for drugs obtained through the federal 340B Drug Pricing Program by 20 percent. The
payment for drugs administered in an outpatient setting shall be made to the administering
facility or practitioner. A retail or specialty pharmacy dispensing a drug for administration
in an outpatient setting is not eligible for direct reimbursement.

(e) (f) The commissioner may negotiate lower reimbursement rates for specialty
pharmacy products than the rates specified in paragraph (a). The commissioner may
require individuals enrolled in the health care programs administered by the department
to obtain specialty pharmacy products from providers with whom the commissioner has
negotiated lower reimbursement rates. Specialty pharmacy products are defined as those
used by a small number of recipients or recipients with complex and chronic diseases
that require expensive and challenging drug regimens. Examples of these conditions
include, but are not limited to: multiple sclerosis, HIV/AIDS, transplantation, hepatitis
C, growth hormone deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms
of cancer. Specialty pharmaceutical products include injectable and infusion therapies,
biotechnology drugs, antihemophilic factor products, high-cost therapies, and therapies
that require complex care. The commissioner shall consult with the formulary committee
to develop a list of specialty pharmacy products subject to this paragraph. In consulting
with the formulary committee in developing this list, the commissioner shall take into
consideration the population served by specialty pharmacy products, the current delivery
system and standard of care in the state, and access to care issues. The commissioner shall
have the discretion to adjust the reimbursement rate to prevent access to care issues.

(f) (g) Home infusion therapy services provided by home infusion therapy
pharmacies must be paid at rates according to subdivision 8d.

EFFECTIVE DATE.

This section is effective January 1, 2016, or upon federal
approval, whichever is later.

Sec. 12.

Minnesota Statutes 2014, section 256B.0625, subdivision 13h, is amended to
read:


Subd. 13h.

Medication therapy management services.

(a) Medical assistance and
general assistance medical care cover covers medication therapy management services
for a recipient taking three or more prescriptions to treat or prevent one or more chronic
medical conditions; a recipient with a drug therapy problem that is identified by the
commissioner or identified by a pharmacist and approved by the commissioner; or prior
authorized by the commissioner that has resulted or is likely to result in significant
nondrug program costs. The commissioner may cover medical therapy management
services under MinnesotaCare if the commissioner determines this is cost-effective
. For
purposes of this subdivision, "medication therapy management" means the provision
of the following pharmaceutical care services by a licensed pharmacist to optimize the
therapeutic outcomes of the patient's medications:

(1) performing or obtaining necessary assessments of the patient's health status;

(2) formulating a medication treatment plan;

(3) monitoring and evaluating the patient's response to therapy, including safety
and effectiveness;

(4) performing a comprehensive medication review to identify, resolve, and prevent
medication-related problems, including adverse drug events;

(5) documenting the care delivered and communicating essential information to
the patient's other primary care providers;

(6) providing verbal education and training designed to enhance patient
understanding and appropriate use of the patient's medications;

(7) providing information, support services, and resources designed to enhance
patient adherence with the patient's therapeutic regimens; and

(8) coordinating and integrating medication therapy management services within the
broader health care management services being provided to the patient.

Nothing in this subdivision shall be construed to expand or modify the scope of practice of
the pharmacist as defined in section 151.01, subdivision 27.

(b) To be eligible for reimbursement for services under this subdivision, a pharmacist
must meet the following requirements:

(1) have a valid license issued by the Board of Pharmacy of the state in which the
medication therapy management service is being performed;

(2) have graduated from an accredited college of pharmacy on or after May 1996, or
completed a structured and comprehensive education program approved by the Board of
Pharmacy and the American Council of Pharmaceutical Education for the provision and
documentation of pharmaceutical care management services that has both clinical and
didactic elements;

(3) be practicing in an ambulatory care setting as part of a multidisciplinary team or
have developed a structured patient care process that is offered in a private or semiprivate
patient care area that is separate from the commercial business that also occurs in the
setting, or in home settings, including long-term care settings, group homes, and facilities
providing assisted living services, but excluding skilled nursing facilities; and

(4) make use of an electronic patient record system that meets state standards.

(c) For purposes of reimbursement for medication therapy management services,
the commissioner may enroll individual pharmacists as medical assistance and general
assistance medical care
providers. The commissioner may also establish contact
requirements between the pharmacist and recipient, including limiting the number of
reimbursable consultations per recipient.

(d) If there are no pharmacists who meet the requirements of paragraph (b) practicing
within a reasonable geographic distance of the patient, a pharmacist who meets the
requirements may provide the services via two-way interactive video. Reimbursement
shall be at the same rates and under the same conditions that would otherwise apply to
the services provided. To qualify for reimbursement under this paragraph, the pharmacist
providing the services must meet the requirements of paragraph (b), and must be
located within an ambulatory care setting approved by the commissioner that meets the
requirements of paragraph (b), clause (3)
. The patient must also be located within an
ambulatory care setting approved by the commissioner that meets the requirements of
paragraph (b), clause (3)
. Services provided under this paragraph may not be transmitted
into the patient's residence.

(e) The commissioner shall establish a pilot project for an intensive medication
therapy management program for patients identified by the commissioner with multiple
chronic conditions and a high number of medications who are at high risk of preventable
hospitalizations, emergency room use, medication complications, and suboptimal
treatment outcomes due to medication-related problems. For purposes of the pilot
project, medication therapy management services may be provided in a patient's home
or community setting, in addition to other authorized settings. The commissioner may
waive existing payment policies and establish special payment rates for the pilot project.
The pilot project must be designed to produce a net savings to the state compared to the
estimated costs that would otherwise be incurred for similar patients without the program.
The pilot project must begin by January 1, 2010, and end June 30, 2012.

(e) Medication therapy management services may be delivered into a patient's
residence via secure interactive video if the medication therapy management services
are performed electronically during a covered home care visit by an enrolled provider.
Reimbursement shall be at the same rates and under the same conditions that would
otherwise apply to the services provided. To qualify for reimbursement under this
paragraph, the pharmacist providing the services must meet the requirements of paragraph
(b) and must be located within an ambulatory care setting that meets the requirements of
paragraph (b), clause (3).

Sec. 13.

Minnesota Statutes 2014, section 256B.0625, subdivision 17, is amended to
read:


Subd. 17.

Transportation costs.

(a) "Nonemergency medical transportation
service" means motor vehicle transportation provided by a public or private person
that serves Minnesota health care program beneficiaries who do not require emergency
ambulance service, as defined in section 144E.001, subdivision 3, to obtain covered
medical services. Nonemergency medical transportation service includes, but is not
limited to, special transportation service, defined in section 174.29, subdivision 1.

(b) Medical assistance covers medical transportation costs incurred solely for
obtaining emergency medical care or transportation costs incurred by eligible persons in
obtaining emergency or nonemergency medical care when paid directly to an ambulance
company, common carrier, or other recognized providers of transportation services.
Medical transportation must be provided by:

(1) nonemergency medical transportation providers who meet the requirements
of this subdivision;

(2) ambulances, as defined in section 144E.001, subdivision 2;

(3) taxicabs and public transit, as defined in section 174.22, subdivision 7; or

(4) not-for-hire vehicles, including volunteer drivers.

(c) Medical assistance covers nonemergency medical transportation provided by
nonemergency medical transportation providers enrolled in the Minnesota health care
programs. All nonemergency medical transportation providers must comply with the
operating standards for special transportation service as defined in sections 174.29 to
174.30 and Minnesota Rules, chapter 8840, and in consultation with the Minnesota
Department of Transportation. All nonemergency medical transportation providers shall
bill for nonemergency medical transportation services in accordance with Minnesota
health care programs criteria. Publicly operated transit systems, volunteers, and
not-for-hire vehicles are exempt from the requirements outlined in this paragraph.

(d) The administrative agency of nonemergency medical transportation must:

(1) adhere to the policies defined by the commissioner in consultation with the
Nonemergency Medical Transportation Advisory Committee;

(2) pay nonemergency medical transportation providers for services provided to
Minnesota health care programs beneficiaries to obtain covered medical services;

(3) provide data monthly to the commissioner on appeals, complaints, no-shows,
canceled trips, and number of trips by mode; and

(4) by July 1, 2016, in accordance with subdivision 18e, utilize a Web-based single
administrative structure assessment tool that meets the technical requirements established
by the commissioner, reconciles trip information with claims being submitted by
providers, and ensures prompt payment for nonemergency medical transportation services.

(e) Until the commissioner implements the single administrative structure and
delivery system under subdivision 18e, clients shall obtain their level-of-service certificate
from the commissioner or an entity approved by the commissioner that does not dispatch
rides for clients using modes under paragraph (h), clauses (4), (5), (6), and (7).

(f) The commissioner may use an order by the recipient's attending physician or a
medical or mental health professional to certify that the recipient requires nonemergency
medical transportation services. Nonemergency medical transportation providers shall
perform driver-assisted services for eligible individuals, when appropriate. Driver-assisted
service includes passenger pickup at and return to the individual's residence or place of
business, assistance with admittance of the individual to the medical facility, and assistance
in passenger securement or in securing of wheelchairs or stretchers in the vehicle.
Nonemergency medical transportation providers must have trip logs, which include pickup
and drop-off times, signed by the medical provider or client attesting mileage traveled to
obtain covered medical services, whichever is deemed most appropriate. Nonemergency
medical transportation providers may not bill for separate base rates for the continuation
of a trip beyond the original destination. Nonemergency medical transportation providers
must take clients to the health care provider, using the most direct route, and must not
exceed 30 miles for a trip to a primary care provider or 60 miles for a trip to a specialty
care provider, unless the client receives authorization from the local agency. The minimum
medical assistance reimbursement rates for special transportation services are:

(1)(i) $17 for the base rate and $1.35 per mile for special transportation services to
eligible persons who need a wheelchair-accessible van;

(ii) $11.50 for the base rate and $1.30 per mile for special transportation services to
eligible persons who do not need a wheelchair-accessible van; and

(iii) $60 for the base rate and $2.40 per mile, and an attendant rate of $9 per trip,
for special transportation services to eligible persons who need a stretcher-accessible
vehicle; and

(2) clients requesting client mileage reimbursement must sign the trip log attesting
mileage traveled to obtain covered medical services.

(g) The covered modes of nonemergency medical transportation include
transportation provided directly by clients or family members of clients with their own
transportation, volunteers using their own vehicles, taxicabs, and public transit, or
provided to a client who needs a stretcher-accessible vehicle, a lift/ramp equipped vehicle,
or a vehicle that is not stretcher-accessible or lift/ramp equipped designed to transport ten
or fewer persons. Upon implementation of a new rate structure, a new covered mode of
nonemergency medical transportation shall include transportation provided to a client who
needs a protected vehicle that is not an ambulance or police car and has safety locks, a
video recorder, and a transparent thermoplastic partition between the passenger and the
vehicle driver.

(h) The administrative agency shall use the level of service process established by the
commissioner in consultation with the Nonemergency Medical Transportation Advisory
Committee to determine the client's most appropriate mode of transportation. If public
transit or a certified transportation provider is not available to provide the appropriate
service mode for the client, the client may receive a onetime service upgrade. The new
modes of transportation, which may not be implemented without a new rate structure, are:

(1) client reimbursement, which includes client mileage reimbursement provided
to clients who have their own transportation or family who provides transportation to
the client;

(2) volunteer transport, which includes transportation by volunteers using their
own vehicle;

(3) unassisted transport, which includes transportation provided to a client by a
taxicab or public transit. If a taxicab or publicly operated transit system is not available,
the client can receive transportation from another nonemergency medical transportation
provider;

(4) assisted transport, which includes transport provided to clients who require
assistance by a nonemergency medical transportation provider;

(5) lift-equipped/ramp transport, which includes transport provided to a client who
is dependent on a device and requires a nonemergency medical transportation provider
with a vehicle containing a lift or ramp;

(6) protected transport, which includes transport to a client who has received a
prescreening that has deemed other forms of transportation inappropriate and who requires
a provider certified as a protected transport provider; and

(7) stretcher transport, which includes transport for a client in a prone or supine
position and requires a nonemergency medical transportation provider with a vehicle that
can transport a client in a prone or supine position.

(i) In accordance with subdivision 18e, by July 1, 2016, The local agency shall be
the single administrative agency and shall administer and reimburse for modes defined in
paragraph (h) according to a new rate structure, once this is adopted when the commissioner
has developed, made available, and funded the Web-based single administrative structure,
assessment tool, and level of need assessment under subdivision 18e
. The local agency's
financial obligation is limited to funds provided by the state or the federal government.

(j) The commissioner shall:

(1) in consultation with the Nonemergency Medical Transportation Advisory
Committee, verify that the mode and use of nonemergency medical transportation is
appropriate;

(2) verify that the client is going to an approved medical appointment; and

(3) investigate all complaints and appeals.

(k) The administrative agency shall pay for the services provided in this subdivision
and seek reimbursement from the commissioner, if appropriate. As vendors of medical
care, local agencies are subject to the provisions in section 256B.041, the sanctions and
monetary recovery actions in section 256B.064, and Minnesota Rules, parts 9505.2160
to 9505.2245.

(l) The base rates for special transportation services in areas defined under RUCA to
be super rural shall be equal to the reimbursement rate established in paragraph (f), clause
(1), plus 11.3 percent, and for special transportation services in areas defined under RUCA
to be rural or super rural areas:

(1) for a trip equal to 17 miles or less, mileage reimbursement shall be equal to 125
percent of the respective mileage rate in paragraph (f), clause (1); and

(2) for a trip between 18 and 50 miles, mileage reimbursement shall be equal to
112.5 percent of the respective mileage rate in paragraph (f), clause (1).

(m) For purposes of reimbursement rates for special transportation services under
paragraph (c), the zip code of the recipient's place of residence shall determine whether
the urban, rural, or super rural reimbursement rate applies.

(n) For purposes of this subdivision, "rural urban commuting area" or "RUCA"
means a census-tract based classification system under which a geographical area is
determined to be urban, rural, or super rural.

(o) Effective for services provided on or after September 1, 2011, nonemergency
transportation rates, including special transportation, taxi, and other commercial carriers,
are reduced 4.5 percent. Payments made to managed care plans and county-based
purchasing plans must be reduced for services provided on or after January 1, 2012,
to reflect this reduction.

Sec. 14.

Minnesota Statutes 2014, section 256B.0625, subdivision 28a, is amended to
read:


Subd. 28a.

Licensed physician assistant services.

(a) Medical assistance covers
services performed by a licensed physician assistant if the service is otherwise covered
under this chapter as a physician service and if the service is within the scope of practice
of a licensed physician assistant as defined in section 147A.09.

(b) Licensed physician assistants, who are supervised by a physician certified by
the American Board of Psychiatry and Neurology or eligible for board certification in
psychiatry, may bill for medication management and evaluation and management services
provided to medical assistance enrollees in inpatient hospital settings, and in outpatient
settings after the licensed physician assistant completes 2,000 hours of clinical experience
in the evaluation and treatment of mental health
, consistent with their authorized scope of
practice, as defined in section 147A.09, with the exception of performing psychotherapy
or diagnostic assessments or providing clinical supervision.

Sec. 15.

Minnesota Statutes 2014, section 256B.0625, subdivision 31, is amended to
read:


Subd. 31.

Medical supplies and equipment.

(a) Medical assistance covers medical
supplies and equipment. Separate payment outside of the facility's payment rate shall
be made for wheelchairs and wheelchair accessories for recipients who are residents
of intermediate care facilities for the developmentally disabled. Reimbursement for
wheelchairs and wheelchair accessories for ICF/DD recipients shall be subject to the same
conditions and limitations as coverage for recipients who do not reside in institutions. A
wheelchair purchased outside of the facility's payment rate is the property of the recipient.
The commissioner may set reimbursement rates for specified categories of medical
supplies at levels below the Medicare payment rate.

(b) Vendors of durable medical equipment, prosthetics, orthotics, or medical supplies
must enroll as a Medicare provider.

(c) When necessary to ensure access to durable medical equipment, prosthetics,
orthotics, or medical supplies, the commissioner may exempt a vendor from the Medicare
enrollment requirement if:

(1) the vendor supplies only one type of durable medical equipment, prosthetic,
orthotic, or medical supply;

(2) the vendor serves ten or fewer medical assistance recipients per year;

(3) the commissioner finds that other vendors are not available to provide same or
similar durable medical equipment, prosthetics, orthotics, or medical supplies; and

(4) the vendor complies with all screening requirements in this chapter and Code of
Federal Regulations, title 42, part 455. The commissioner may also exempt a vendor from
the Medicare enrollment requirement if the vendor is accredited by a Centers for Medicare
and Medicaid Services approved national accreditation organization as complying with
the Medicare program's supplier and quality standards and the vendor serves primarily
pediatric patients.

(d) Durable medical equipment means a device or equipment that:

(1) can withstand repeated use;

(2) is generally not useful in the absence of an illness, injury, or disability; and

(3) is provided to correct or accommodate a physiological disorder or physical
condition or is generally used primarily for a medical purpose.

(e) Electronic tablets may be considered durable medical equipment if the electronic
tablet will be used as an augmentative and alternative communication system as defined
under subdivision 31a, paragraph (a). To be covered by medical assistance, the device
must be locked in order to prevent use not related to communication.

Sec. 16.

Minnesota Statutes 2014, section 256B.0625, subdivision 58, is amended to
read:


Subd. 58.

Early and periodic screening, diagnosis, and treatment services.

Medical assistance covers early and periodic screening, diagnosis, and treatment services
(EPSDT). The payment amount for a complete EPSDT screening shall not include charges
for vaccines health care services and products that are available at no cost to the provider
and shall not exceed the rate established per Minnesota Rules, part 9505.0445, item M,
effective October 1, 2010.

Sec. 17.

Minnesota Statutes 2014, section 256B.0631, is amended to read:


256B.0631 MEDICAL ASSISTANCE CO-PAYMENTS.

Subdivision 1.

Cost-sharing.

(a) Except as provided in subdivision 2, the medical
assistance benefit plan shall include the following cost-sharing for all recipients, effective
for services provided on or after September 1, 2011:

(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes
of this subdivision, a visit means an episode of service which is required because of
a recipient's symptoms, diagnosis, or established illness, and which is delivered in an
ambulatory setting by a physician or physician ancillary, chiropractor, podiatrist, nurse
midwife, advanced practice nurse, audiologist, optician, or optometrist;

(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that
this co-payment shall be increased to $20 upon federal approval;

(3) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $12 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness;

(4) effective January 1, 2012, a family deductible equal to the maximum amount
allowed under Code of Federal Regulations, title 42, part 447.54
$2.75 per month per
family and adjusted annually by the percentage increase in the medical care component
of the CPI-U for the period of September to September of the preceding calendar year,
rounded to the next higher five-cent increment
; and

(5) for individuals identified by the commissioner with income at or below 100
percent of the federal poverty guidelines,
total monthly cost-sharing must not exceed five
percent of family income. For purposes of this paragraph, family income is the total
earned and unearned income of the individual and the individual's spouse, if the spouse is
enrolled in medical assistance and also subject to the five percent limit on cost-sharing.
This paragraph does not apply to premiums charged to individuals described under section
256B.057, subdivision 9.

(b) Recipients of medical assistance are responsible for all co-payments and
deductibles in this subdivision.

(c) Notwithstanding paragraph (b), the commissioner, through the contracting
process under sections 256B.69 and 256B.692, may allow managed care plans and
county-based purchasing plans to waive the family deductible under paragraph (a),
clause (4). The value of the family deductible shall not be included in the capitation
payment to managed care plans and county-based purchasing plans. Managed care plans
and county-based purchasing plans shall certify annually to the commissioner the dollar
value of the family deductible.

(d) Notwithstanding paragraph (b), the commissioner may waive the collection of
the family deductible described under paragraph (a), clause (4), from individuals and
allow long-term care and waivered service providers to assume responsibility for payment.

(e) Notwithstanding paragraph (b), the commissioner, through the contracting
process under section 256B.0756 shall allow the pilot program in Hennepin County to
waive co-payments. The value of the co-payments shall not be included in the capitation
payment amount to the integrated health care delivery networks under the pilot program.

Subd. 2.

Exceptions.

Co-payments and deductibles shall be subject to the following
exceptions:

(1) children under the age of 21;

(2) pregnant women for services that relate to the pregnancy or any other medical
condition that may complicate the pregnancy;

(3) recipients expected to reside for at least 30 days in a hospital, nursing home, or
intermediate care facility for the developmentally disabled;

(4) recipients receiving hospice care;

(5) 100 percent federally funded services provided by an Indian health service;

(6) emergency services;

(7) family planning services;

(8) services that are paid by Medicare, resulting in the medical assistance program
paying for the coinsurance and deductible;

(9) co-payments that exceed one per day per provider for nonpreventive visits,
eyeglasses, and nonemergency visits to a hospital-based emergency room; and

(10) services, fee-for-service payments subject to volume purchase through
competitive bidding. ;

(11) American Indians who meet the requirements in Code of Federal Regulations,
title 42, section 447.51;

(12) persons needing treatment for breast or cervical cancer as described under
section 256B.057, subdivision 10; and

(13) services that currently have a rating of A or B from the United States Preventive
Services Task Force (USPSTF), immunizations recommended by the Advisory Committee
on Immunization Practices of the Centers for Disease Control and Prevention, and
preventive services and screenings provided to women as described in Code of Federal
Regulations, title 45, section 147.130.

Subd. 3.

Collection.

(a) The medical assistance reimbursement to the provider shall
be reduced by the amount of the co-payment or deductible, except that reimbursements
shall not be reduced:

(1) once a recipient has reached the $12 per month maximum for prescription drug
co-payments; or

(2) for a recipient identified by the commissioner under 100 percent of the federal
poverty guidelines
who has met their monthly five percent cost-sharing limit.

(b) The provider collects the co-payment or deductible from the recipient. Providers
may not deny services to recipients who are unable to pay the co-payment or deductible.

(c) Medical assistance reimbursement to fee-for-service providers and payments to
managed care plans shall not be increased as a result of the removal of co-payments or
deductibles effective on or after January 1, 2009.

EFFECTIVE DATE.

The amendment to subdivision 1, paragraph (a), clause (4), is
effective retroactively from January 1, 2014.

Sec. 18.

Minnesota Statutes 2014, section 256B.0644, is amended to read:


256B.0644 REIMBURSEMENT UNDER OTHER STATE HEALTH CARE
PROGRAMS.

(a) A vendor of medical care, as defined in section 256B.02, subdivision 7, and a
health maintenance organization, as defined in chapter 62D, must participate as a provider
or contractor in the medical assistance program and MinnesotaCare as a condition of
participating as a provider in health insurance plans and programs or contractor for state
employees established under section 43A.18, the public employees insurance program
under section 43A.316, for health insurance plans offered to local statutory or home
rule charter city, county, and school district employees, the workers' compensation
system under section 176.135, and insurance plans provided through the Minnesota
Comprehensive Health Association under sections 62E.01 to 62E.19. The limitations
on insurance plans offered to local government employees shall not be applicable in
geographic areas where provider participation is limited by managed care contracts
with the Department of Human Services. This section does not apply to dental service
providers providing dental services outside the seven-county metropolitan area.

(b) For providers other than health maintenance organizations, participation in the
medical assistance program means that:

(1) the provider accepts new medical assistance and MinnesotaCare patients;

(2) for providers other than dental service providers, at least 20 percent of the
provider's patients are covered by medical assistance and MinnesotaCare as their primary
source of coverage; or

(3) for dental service providers providing dental services in the seven-county
metropolitan area
, at least ten percent of the provider's patients are covered by medical
assistance and MinnesotaCare as their primary source of coverage, or the provider accepts
new medical assistance and MinnesotaCare patients who are children with special health
care needs. For purposes of this section, "children with special health care needs" means
children up to age 18 who: (i) require health and related services beyond that required
by children generally; and (ii) have or are at risk for a chronic physical, developmental,
behavioral, or emotional condition, including: bleeding and coagulation disorders;
immunodeficiency disorders; cancer; endocrinopathy; developmental disabilities;
epilepsy, cerebral palsy, and other neurological diseases; visual impairment or deafness;
Down syndrome and other genetic disorders; autism; fetal alcohol syndrome; and other
conditions designated by the commissioner after consultation with representatives of
pediatric dental providers and consumers.

(c) Patients seen on a volunteer basis by the provider at a location other than
the provider's usual place of practice may be considered in meeting the participation
requirement in this section. The commissioner shall establish participation requirements
for health maintenance organizations. The commissioner shall provide lists of participating
medical assistance providers on a quarterly basis to the commissioner of management and
budget, the commissioner of labor and industry, and the commissioner of commerce. Each
of the commissioners shall develop and implement procedures to exclude as participating
providers in the program or programs under their jurisdiction those providers who do
not participate in the medical assistance program. The commissioner of management
and budget shall implement this section through contracts with participating health and
dental carriers.

(d) A volunteer dentist who has signed a volunteer agreement under section
256B.0625, subdivision 9a, shall not be considered to be participating in medical
assistance or MinnesotaCare for the purpose of this section.

EFFECTIVE DATE.

This section is effective upon receipt of any necessary federal
waiver or approval. The commissioner of human services shall notify the revisor of
statutes if a federal waiver or approval is sought and, if sought, when a federal waiver
or approval is obtained.

Sec. 19.

[256B.0758] HEALTH CARE DELIVERY PILOT PROGRAM.

(a) The commissioner may establish a health care delivery pilot program to test
alternative and innovative integrated health care delivery networks, including accountable
care organizations or a community-based collaborative care network created by or
including North Memorial Health Care. If required, the commissioner shall seek federal
approval of a new waiver request or amend an existing demonstration pilot project waiver.

(b) Individuals eligible for the pilot program shall be individuals who are eligible for
medical assistance under section 256B.055. The commissioner may identify individuals
to be enrolled in the pilot program based on zip code or whether the individuals would
benefit from an integrated health care delivery network.

(c) In developing a payment system for the pilot programs, the commissioner shall
establish a total cost of care for the individuals enrolled in the pilot program that equals
the cost of care that would otherwise be spent for these enrollees in the prepaid medical
assistance program.

Sec. 20.

Minnesota Statutes 2014, section 256B.69, subdivision 5a, is amended to read:


Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section
and section 256L.12 shall be entered into or renewed on a calendar year basis. The
commissioner may issue separate contracts with requirements specific to services to
medical assistance recipients age 65 and older.

(b) A prepaid health plan providing covered health services for eligible persons
pursuant to chapters 256B and 256L is responsible for complying with the terms of its
contract with the commissioner. Requirements applicable to managed care programs
under chapters 256B and 256L established after the effective date of a contract with the
commissioner take effect when the contract is next issued or renewed.

(c) The commissioner shall withhold five percent of managed care plan payments
under this section and county-based purchasing plan payments under section 256B.692
for the prepaid medical assistance program pending completion of performance targets.
Each performance target must be quantifiable, objective, measurable, and reasonably
attainable, except in the case of a performance target based on a federal or state law
or rule. Criteria for assessment of each performance target must be outlined in writing
prior to the contract effective date. Clinical or utilization performance targets and their
related criteria must consider evidence-based research and reasonable interventions when
available or applicable to the populations served, and must be developed with input from
external clinical experts and stakeholders, including managed care plans, county-based
purchasing plans, and providers. The managed care or county-based purchasing plan
must demonstrate, to the commissioner's satisfaction, that the data submitted regarding
attainment of the performance target is accurate. The commissioner shall periodically
change the administrative measures used as performance targets in order to improve plan
performance across a broader range of administrative services. The performance targets
must include measurement of plan efforts to contain spending on health care services and
administrative activities. The commissioner may adopt plan-specific performance targets
that take into account factors affecting only one plan, including characteristics of the
plan's enrollee population. The withheld funds must be returned no sooner than July of the
following year if performance targets in the contract are achieved. The commissioner may
exclude special demonstration projects under subdivision 23.

(d) The commissioner shall require that managed care plans use the assessment and
authorization processes, forms, timelines, standards, documentation, and data reporting
requirements, protocols, billing processes, and policies consistent with medical assistance
fee-for-service or the Department of Human Services contract requirements consistent
with medical assistance fee-for-service or the Department of Human Services contract
requirements for all personal care assistance services under section 256B.0659.

(e) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction
in the health plan's emergency department utilization rate for medical assistance and
MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reduction
shall be based on the health plan's utilization in 2009. To earn the return of the withhold
each subsequent year, the managed care plan or county-based purchasing plan must
achieve a qualifying reduction of no less than ten percent of the plan's emergency
department utilization rate for medical assistance and MinnesotaCare enrollees, excluding
enrollees in programs described in subdivisions 23 and 28, compared to the previous
measurement year until the final performance target is reached. When measuring
performance, the commissioner must consider the difference in health risk in a managed
care or county-based purchasing plan's membership in the baseline year compared to the
measurement year, and work with the managed care or county-based purchasing plan to
account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31
of the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate
was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract
period until the plan's emergency room utilization rate for state health care program
enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical
assistance and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate
with the health plans in meeting this performance target and shall accept payment
withholds that may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction
in the plan's hospitalization admission rate for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each
year, the managed care plan or county-based purchasing plan must achieve a qualifying
reduction of no less than five percent of the plan's hospital admission rate for medical
assistance and MinnesotaCare enrollees, excluding enrollees in programs described in
subdivisions 23 and 28, compared to the previous calendar year until the final performance
target is reached. When measuring performance, the commissioner must consider the
difference in health risk in a managed care or county-based purchasing plan's membership
in the baseline year compared to the measurement year, and work with the managed care
or county-based purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following calendar year if the managed care plan or county-based purchasing
plan demonstrates to the satisfaction of the commissioner that this reduction in the
hospitalization rate was achieved. The commissioner shall structure the withhold so that
the commissioner returns a portion of the withheld funds in amounts commensurate with
achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospital admission rate compared to the hospital admission rates in
calendar year 2011, as determined by the commissioner. The hospital admissions in this
performance target do not include the admissions applicable to the subsequent hospital
admission performance target under paragraph (g). Hospitals shall cooperate with the
plans in meeting this performance target and shall accept payment withholds that may be
returned to the hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner
shall include as part of the performance targets described in paragraph (c) a reduction in
the plan's hospitalization admission rates for subsequent hospitalizations within 30 days of
a previous hospitalization of a patient regardless of the reason, for medical assistance and
MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the
withhold each year, the managed care plan or county-based purchasing plan must achieve
a qualifying reduction of the subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23
and 28, of no less than five percent compared to the previous calendar year until the
final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following calendar year if the managed care plan or county-based purchasing
plan demonstrates to the satisfaction of the commissioner that a qualifying reduction in
the subsequent hospitalization rate was achieved. The commissioner shall structure the
withhold so that the commissioner returns a portion of the withheld funds in amounts
commensurate with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive
contract period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23
and 28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar
year 2011. Hospitals shall cooperate with the plans in meeting this performance target and
shall accept payment withholds that must be returned to the hospitals if the performance
target is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December
31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments
under this section and county-based purchasing plan payments under section 256B.692
for the prepaid medical assistance program. The withheld funds must be returned no
sooner than July 1 and no later than July 31 of the following year. The commissioner may
exclude special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner
shall withhold three percent of managed care plan payments under this section and
county-based purchasing plan payments under section 256B.692 for the prepaid medical
assistance program. The withheld funds must be returned no sooner than July 1 and
no later than July 31 of the following year. The commissioner may exclude special
demonstration projects under subdivision 23.

(j) A managed care plan or a county-based purchasing plan under section 256B.692
may include as admitted assets under section 62D.044 any amount withheld under this
section that is reasonably expected to be returned.

(k) Contracts between the commissioner and a prepaid health plan are exempt from
the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph
(a), and 7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the
requirements of paragraph (c).

(m) Managed care plans and county-based purchasing plans shall maintain current
and fully executed agreements for all subcontractors, including bargaining groups, for
administrative services that are expensed to the state's public programs. Subcontractor
agreements of over $200,000 in annual payments must be in the form of a written
instrument or electronic document containing the elements of offer, acceptance, and
consideration, and must clearly indicate how the agreements relate to state public
programs. Upon request, the commissioner shall have access to all subcontractor
documentation under this paragraph. Nothing in this paragraph shall allow release of
information that is nonpublic data pursuant to section 13.02.

Sec. 21.

Minnesota Statutes 2014, section 256B.69, subdivision 5i, is amended to read:


Subd. 5i.

Administrative expenses.

(a) Managed care plan and county-based
purchasing plan
Administrative costs for a prepaid health plan provided paid to managed
care plans and county-based purchasing plans
under this section or , section 256B.692 , and
section 256L.12
must not exceed by more than five 6.6 percent that prepaid health plan's or
county-based purchasing plan's actual calculated administrative spending for the previous
calendar year as a percentage of total revenue
of total payments expected to be made to
all managed care plans and county-based purchasing plans in aggregate across all state
public programs at the beginning of each calendar year
. The penalty for exceeding this
limit must be the amount of administrative spending in excess of 105 percent of the actual
calculated amount. The commissioner may waive this penalty if the excess administrative
spending is the result of unexpected shifts in enrollment or member needs or new program
requirements.
The commissioner may reduce or eliminate administrative requirements to
meet the administrative cost limit. For purposes of this paragraph, administrative costs do
not include any state or federal taxes, surcharges, or assessments.

(b) The following expenses are not allowable administrative expenses for rate-setting
purposes under this section:

(1) charitable contributions made by the managed care plan or the county-based
purchasing plan;

(2) any portion of an individual's compensation in excess of $200,000 paid by the
managed care plan or county-based purchasing plan
compensation of individuals within
the organization, other than the medical director, in excess of $200,000 such that the
allocation of compensation for an individual across all state public programs in total
cannot exceed $200,000
;

(3) any penalties or fines assessed against the managed care plan or county-based
purchasing plan; and

(4) any indirect marketing or advertising expenses of the managed care plan or
county-based purchasing plan. for marketing that does not specifically target state public
programs beneficiaries and that has not been approved by the commissioner;

(5) any lobbying and political activities, events, or contributions;

(6) administrative expenses related to the provision of services not covered under
the state plan or waiver;

(7) alcoholic beverages and related costs;

(8) membership in any social, dining, or country club or organization; and

(9) entertainment, including amusement, diversion, and social activities, and any
costs directly associated with these costs, including but not limited to tickets to shows or
sporting events, meals, lodging, rentals, transportation, and gratuities.

For the purposes of this subdivision, compensation includes salaries, bonuses and
incentives, other reportable compensation on an IRS 990 form, retirement and other
deferred compensation, and nontaxable benefits. Contributions include payments for
or to any organization or entity selected by the health maintenance organization that
is operated for charitable, educational, political, religious, or scientific purposes and
not related to the provision of medical and administrative services covered under the
state public programs, except to the extent that they improve access to or the quality of
covered services for state public programs beneficiaries, or improve the health status of
state public programs beneficiaries.

(c) Administrative expenses must be reported using the formats designated by the
commissioner as part of the rate-setting process and must include, at a minimum, the
following categories:

(1) employee benefit expenses;

(2) sales expenses;

(3) general business and office expenses;

(4) taxes and assessments;

(5) consulting and professional fees; and

(6) outsourced services.

Definitions of items to be included in each category shall be provided by the commissioner
with quarterly financial filing requirements and shall be aligned with definitions used
by the Departments of Commerce and Health in financial reporting for commercial
carriers. Where reasonably possible, expenses for an administrative item shall be directly
allocated so as to assign costs for an item to an individual state public program when the
cost can be specifically identified with and benefits the individual state public program.
For administrative services expensed to the state's public programs, managed care plans
and county-based purchasing plans must clearly identify and separately record expense
items listed under paragraph (b) in their accounting systems in a manner that allows for
independent verification of unallowable expenses for purposes of determining payment
rates for state public programs.

(d) The administrative expenses requirement of this subdivision also apply to
demonstration providers under section 256B.0755.

Sec. 22.

Minnesota Statutes 2014, section 256B.69, subdivision 9c, is amended to read:


Subd. 9c.

Managed care financial reporting.

(a) The commissioner shall collect
detailed data regarding financials, provider payments, provider rate methodologies, and
other data as determined by the commissioner. The commissioner, in consultation with the
commissioners of health and commerce, and in consultation with managed care plans and
county-based purchasing plans, shall set uniform criteria, definitions, and standards for the
data to be submitted, and shall require managed care and county-based purchasing plans
to comply with these criteria, definitions, and standards when submitting data under this
section. In carrying out the responsibilities of this subdivision, the commissioner shall
ensure that the data collection is implemented in an integrated and coordinated manner
that avoids unnecessary duplication of effort. To the extent possible, the commissioner
shall use existing data sources and streamline data collection in order to reduce public
and private sector administrative costs. Nothing in this subdivision shall allow release of
information that is nonpublic data pursuant to section 13.02.

(b) Effective January 1, 2014, each managed care and county-based purchasing plan
must quarterly provide to the commissioner the following information on state public
programs, in the form and manner specified by the commissioner, according to guidelines
developed by the commissioner in consultation with managed care plans and county-based
purchasing plans under contract:

(1) an income statement by program;

(2) financial statement footnotes;

(3) quarterly profitability by program and population group;

(4) a medical liability summary by program and population group;

(5) received but unpaid claims report by program;

(6) services versus payment lags by program for hospital services, outpatient
services, physician services, other medical services, and pharmaceutical benefits;

(7) utilization reports that summarize utilization and unit cost information by
program for hospitalization services, outpatient services, physician services, and other
medical services;

(8) pharmaceutical statistics by program and population group for measures of price
and utilization of pharmaceutical services;

(9) subcapitation expenses by population group;

(10) third-party payments by program;

(11) all new, active, and closed subrogation cases by program;

(12) all new, active, and closed fraud and abuse cases by program;

(13) medical loss ratios by program;

(14) administrative expenses by category and subcategory by program that reconcile
to other state and federal regulatory agencies;

(15) revenues by program, including investment income;

(16) nonadministrative service payments, provider payments, and reimbursement
rates by provider type or service category, by program, paid by the managed care plan
under this section or the county-based purchasing plan under section 256B.692 to
providers and vendors for administrative services under contract with the plan, including
but not limited to:

(i) individual-level provider payment and reimbursement rate data;

(ii) provider reimbursement rate methodologies by provider type, by program,
including a description of alternative payment arrangements and payments outside the
claims process;

(iii) data on implementation of legislatively mandated provider rate changes; and

(iv) individual-level provider payment and reimbursement rate data and plan-specific
provider reimbursement rate methodologies by provider type, by program, including
alternative payment arrangements and payments outside the claims process, provided to
the commissioner under this subdivision are nonpublic data as defined in section 13.02;

(17) data on the amount of reinsurance or transfer of risk by program; and

(18) contribution to reserve, by program.

(c) In the event a report is published or released based on data provided under
this subdivision, the commissioner shall provide the report to managed care plans and
county-based purchasing plans 15 days prior to the publication or release of the report.
Managed care plans and county-based purchasing plans shall have 15 days to review the
report and provide comment to the commissioner.

The quarterly reports shall be submitted to the commissioner no later than 60 days after the
end of the previous quarter, except the fourth-quarter report, which shall be submitted by
April 1 of each year. The fourth-quarter report shall include audited financial statements,
parent company audited financial statements, an income statement reconciliation report,
and any other documentation necessary to reconcile the detailed reports to the audited
financial statements.

(d) Managed care plans and county-based purchasing plans shall certify to the
commissioner, for the purpose of managed care financial reporting for state public
health care programs under this subdivision, that costs related to state public health care
programs include only services covered under the state plan and waivers, and related
allowable administrative expenses. Managed care plans and county-based purchasing
plans shall certify and report to the commissioner the dollar value of any unallowable and
nonstate plan services, including both medical and administrative expenditures, for the
purposes of managed care financial reporting under this subdivision.

(e) The financial reporting requirements of this subdivision also apply to
demonstration providers under section 256B.0755.

Sec. 23.

Minnesota Statutes 2014, section 256B.69, subdivision 9d, is amended to read:


Subd. 9d.

Financial audit and quality assurance audits.

(a) The legislative
auditor shall contract with an audit firm to conduct a biennial independent third-party
financial audit of the information required to be provided by managed care plans and
county-based purchasing plans under subdivision 9c, paragraph (b). The audit shall be
conducted in accordance with generally accepted government auditing standards issued
by the United States Government Accountability Office. The contract with the audit
firm shall be designed and administered so as to render the independent third-party audit
eligible for a federal subsidy, if available. The contract shall require the audit to include
a determination of compliance with the federal Medicaid rate certification process. The
contract shall require the audit to determine if the administrative expenses and investment
income reported by the managed care plans and county-based purchasing plans are
compliant with state and federal law.

(b) For purposes of this subdivision, "independent third party" means an audit firm
that is independent in accordance with government auditing standards issued by the United
States Government Accountability Office and licensed in accordance with chapter 326A.
An audit firm under contract to provide services in accordance with this subdivision must
not have provided services to a managed care plan or county-based purchasing plan during
the period for which the audit is being conducted.

(c) (a) The commissioner shall require, in the request for bids and resulting contracts
with managed care plans and county-based purchasing plans under this section and
section 256B.692, that each managed care plan and county-based purchasing plan submit
to and fully cooperate with the independent third-party financial audit audits by the
legislative auditor under subdivision 9e
of the information required under subdivision 9c,
paragraph (b). Each contract with a managed care plan or county-based purchasing plan
under this section or section 256B.692 must provide the commissioner and the audit firm
vendors contracting with the legislative auditor access to all data required to complete
the audit. For purposes of this subdivision, the contracting audit firm shall have the same
investigative power as the legislative auditor under section 3.978, subdivision 2
audits
under subdivision 9e
.

(d) (b) Each managed care plan and county-based purchasing plan providing services
under this section shall provide to the commissioner biweekly encounter data and claims
data for state public health care programs and shall participate in a quality assurance
program that verifies the timeliness, completeness, accuracy, and consistency of the data
provided. The commissioner shall develop written protocols for the quality assurance
program and shall make the protocols publicly available. The commissioner shall contract
for an independent third-party audit to evaluate the quality assurance protocols as to
the capacity of the protocols to ensure complete and accurate data and to evaluate the
commissioner's implementation of the protocols. The audit firm under contract to provide
this evaluation must meet the requirements in paragraph (b).

(e) Upon completion of the audit under paragraph (a) and receipt by the legislative
auditor, the legislative auditor shall provide copies of the audit report to the commissioner,
the state auditor, the attorney general, and the chairs and ranking minority members of the
health and human services finance committees of the legislature.
(c) Upon completion
of the evaluation under paragraph (d) (b), the commissioner shall provide copies of the
report to the legislative auditor and the chairs and ranking minority members of the health
finance committees of the legislature
legislative committees with jurisdiction over health
care policy and financing
.

(f) (d) Any actuary under contract with the commissioner to provide actuarial
services must meet the independence requirements under the professional code for fellows
in the Society of Actuaries and must not have provided actuarial services to a managed
care plan or county-based purchasing plan that is under contract with the commissioner
pursuant to this section and section 256B.692 during the period in which the actuarial
services are being provided. An actuary or actuarial firm meeting the requirements
of this paragraph must certify and attest to the rates paid to the managed care plans
and county-based purchasing plans under this section and section 256B.692, and the
certification and attestation must be auditable.

(e) The commissioner may conduct ad hoc audits of the state public programs
administrative and medical expenses of managed care organizations and county-based
purchasing plans. This includes: financial and encounter data reported to the commissioner
under subdivision 9c, including payments to providers and subcontractors; supporting
documentation for expenditures; categorization of administrative and medical expenses;
and allocation methods used to attribute administrative expenses to state public programs.
These audits also must monitor compliance with data and financial certifications provided
to the commissioner for the purposes of managed care capitation payment rate-setting.
The managed care plans and county-based purchasing plans shall fully cooperate with the
audits in this subdivision.

(g) (f) Nothing in this subdivision shall allow the release of information that is
nonpublic data pursuant to section 13.02.

(g) The audit requirements of this subdivision also apply to demonstration providers
under section 256B.0755.

Sec. 24.

Minnesota Statutes 2014, section 256B.69, is amended by adding a
subdivision to read:


Subd. 9e.

Financial audits.

(a) The legislative auditor shall contract with vendors
to conduct independent third-party financial audits of the Department of Human Services'
use of the information required to be provided by managed care plans and county-based
purchasing plans under subdivision 9c, paragraph (b). The audits by the vendors shall
be conducted as vendor resources permit and in accordance with generally accepted
government auditing standards issued by the United States Government Accountability
Office. The contract with the vendors shall be designed and administered so as to render
the independent third-party audits eligible for a federal subsidy, if available. The contract
shall require the audits to include a determination of compliance by the Department of
Human Services with the federal Medicaid rate certification process.

(b) For purposes of this subdivision, "independent third-party" means a vendor that
is independent in accordance with government auditing standards issued by the United
States Government Accountability Office.

Sec. 25.

Minnesota Statutes 2014, section 256B.69, is amended by adding a
subdivision to read:


Subd. 36.

Information on health plan coverage.

The commissioner shall require
each managed care plan and county-based purchasing plan to report the information
required under section 62Q.671, subdivision 2, paragraph (b), as applicable, for health
plans offered to medical assistance enrollees. The commissioner shall make this
information available to the public on the agency Web site.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 26.

Minnesota Statutes 2014, section 256B.75, is amended to read:


256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.

(a) For outpatient hospital facility fee payments for services rendered on or after
October 1, 1992, the commissioner of human services shall pay the lower of (1) submitted
charge, or (2) 32 percent above the rate in effect on June 30, 1992, except for those
services for which there is a federal maximum allowable payment. Effective for services
rendered on or after January 1, 2000, payment rates for nonsurgical outpatient hospital
facility fees and emergency room facility fees shall be increased by eight percent over the
rates in effect on December 31, 1999, except for those services for which there is a federal
maximum allowable payment. Services for which there is a federal maximum allowable
payment shall be paid at the lower of (1) submitted charge, or (2) the federal maximum
allowable payment. Total aggregate payment for outpatient hospital facility fee services
shall not exceed the Medicare upper limit. If it is determined that a provision of this
section conflicts with existing or future requirements of the United States government with
respect to federal financial participation in medical assistance, the federal requirements
prevail. The commissioner may, in the aggregate, prospectively reduce payment rates to
avoid reduced federal financial participation resulting from rates that are in excess of
the Medicare upper limitations.

(b) Notwithstanding paragraph (a), payment for outpatient, emergency, and
ambulatory surgery hospital facility fee services for critical access hospitals designated
under section 144.1483, clause (9), shall be paid on a cost-based payment system that is
based on the cost-finding methods and allowable costs of the Medicare program.

(c) Effective for services provided on or after July 1, 2003, rates that are based
on the Medicare outpatient prospective payment system shall be replaced by a budget
neutral prospective payment system that is derived using medical assistance data. The
commissioner shall provide a proposal to the 2003 legislature to define and implement
this provision.

(d) For fee-for-service services provided on or after July 1, 2002, the total payment,
before third-party liability and spenddown, made to hospitals for outpatient hospital
facility services is reduced by .5 percent from the current statutory rate.

(e) In addition to the reduction in paragraph (d), the total payment for fee-for-service
services provided on or after July 1, 2003, made to hospitals for outpatient hospital
facility services before third-party liability and spenddown, is reduced five percent from
the current statutory rates. Facilities defined under section 256.969, subdivision 16, are
excluded from this paragraph.

(f) In addition to the reductions in paragraphs (d) and (e), the total payment for
fee-for-service services provided on or after July 1, 2008, made to hospitals for outpatient
hospital facility services before third-party liability and spenddown, is reduced three
percent from the current statutory rates. Mental health services and facilities defined under
section 256.969, subdivision 16, are excluded from this paragraph.

(g) Effective for services provided on or after July 1, 2015, rates established for
critical access hospitals under paragraph (b) for the applicable payment year shall be the
final payment and shall not be settled to actual costs.

Sec. 27.

Minnesota Statutes 2014, section 256B.76, subdivision 1, is amended to read:


Subdivision 1.

Physician reimbursement.

(a) Effective for services rendered on
or after October 1, 1992, the commissioner shall make payments for physician services
as follows:

(1) payment for level one Centers for Medicare and Medicaid Services' common
procedural coding system codes titled "office and other outpatient services," "preventive
medicine new and established patient," "delivery, antepartum, and postpartum care,"
"critical care," cesarean delivery and pharmacologic management provided to psychiatric
patients, and level three codes for enhanced services for prenatal high risk, shall be paid
at the lower of (i) submitted charges, or (ii) 25 percent above the rate in effect on June
30, 1992. If the rate on any procedure code within these categories is different than the
rate that would have been paid under the methodology in section 256B.74, subdivision 2,
then the larger rate shall be paid;

(2) payments for all other services shall be paid at the lower of (i) submitted charges,
or (ii) 15.4 percent above the rate in effect on June 30, 1992; and

(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases
except that payment rates for home health agency services shall be the rates in effect
on September 30, 1992.

(b) Effective for services rendered on or after January 1, 2000, payment rates for
physician and professional services shall be increased by three percent over the rates
in effect on December 31, 1999, except for home health agency and family planning
agency services. The increases in this paragraph shall be implemented January 1, 2000,
for managed care.

(c) Effective for services rendered on or after July 1, 2009, payment rates for
physician and professional services shall be reduced by five percent, except that for the
period July 1, 2009, through June 30, 2010, payment rates shall be reduced by 6.5 percent
for the medical assistance and general assistance medical care programs, over the rates in
effect on June 30, 2009. This reduction and the reductions in paragraph (d) do not apply
to office or other outpatient visits, preventive medicine visits and family planning visits
billed by physicians, advanced practice nurses, or physician assistants in a family planning
agency or in one of the following primary care practices: general practice, general internal
medicine, general pediatrics, general geriatrics, and family medicine. This reduction
and the reductions in paragraph (d) do not apply to federally qualified health centers,
rural health centers, and Indian health services. Effective October 1, 2009, payments
made to managed care plans and county-based purchasing plans under sections 256B.69,
256B.692, and 256L.12 shall reflect the payment reduction described in this paragraph.

(d) Effective for services rendered on or after July 1, 2010, payment rates for
physician and professional services shall be reduced an additional seven percent over
the five percent reduction in rates described in paragraph (c). This additional reduction
does not apply to physical therapy services, occupational therapy services, and speech
pathology and related services provided on or after July 1, 2010. This additional reduction
does not apply to physician services billed by a psychiatrist or an advanced practice nurse
with a specialty in mental health. Effective October 1, 2010, payments made to managed
care plans and county-based purchasing plans under sections 256B.69, 256B.692, and
256L.12 shall reflect the payment reduction described in this paragraph.

(e) Effective for services rendered on or after September 1, 2011, through June 30,
2013, payment rates for physician and professional services shall be reduced three percent
from the rates in effect on August 31, 2011. This reduction does not apply to physical
therapy services, occupational therapy services, and speech pathology and related services.

(f) Effective for services rendered on or after September 1, 2014, payment rates for
physician and professional services, including physical therapy, occupational therapy,
speech pathology, and mental health services shall be increased by five percent from the
rates in effect on August 31, 2014. In calculating this rate increase, the commissioner
shall not include in the base rate for August 31, 2014, the rate increase provided under
section 256B.76, subdivision 7. This increase does not apply to federally qualified health
centers, rural health centers, and Indian health services. Payments made to managed
care plans and county-based purchasing plans shall not be adjusted to reflect payments
under this paragraph.

(g) Effective for services rendered on or after July 1, 2015, payment rates for
physical therapy, occupational therapy, and speech pathology and related services provided
by a hospital meeting the criteria specified in section 62Q.19, subdivision 1, paragraph
(a), clause (4), shall be increased by 90 percent from the rates in effect on June 30, 2015.
Payments made to managed care plans and county-based purchasing plans shall not be
adjusted to reflect payments under this paragraph.

Sec. 28.

Minnesota Statutes 2014, section 256B.76, subdivision 2, is amended to read:


Subd. 2.

Dental reimbursement.

(a) Effective for services rendered on or after
October 1, 1992, the commissioner shall make payments for dental services as follows:

(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25
percent above the rate in effect on June 30, 1992; and

(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases.

(b) Beginning October 1, 1999, the payment for tooth sealants and fluoride treatments
shall be the lower of (1) submitted charge, or (2) 80 percent of median 1997 charges.

(c) Effective for services rendered on or after January 1, 2000, payment rates for
dental services shall be increased by three percent over the rates in effect on December
31, 1999.

(d) Effective for services provided on or after January 1, 2002, payment for
diagnostic examinations and dental x-rays provided to children under age 21 shall be the
lower of (1) the submitted charge, or (2) 85 percent of median 1999 charges.

(e) The increases listed in paragraphs (b) and (c) shall be implemented January 1,
2000, for managed care.

(f) Effective for dental services rendered on or after October 1, 2010, by a
state-operated dental clinic, payment shall be paid on a reasonable cost basis that is based
on the Medicare principles of reimbursement. This payment shall be effective for services
rendered on or after January 1, 2011, to recipients enrolled in managed care plans or
county-based purchasing plans.

(g) Beginning in fiscal year 2011, if the payments to state-operated dental clinics
in paragraph (f), including state and federal shares, are less than $1,850,000 per fiscal
year, a supplemental state payment equal to the difference between the total payments
in paragraph (f) and $1,850,000 shall be paid from the general fund to state-operated
services for the operation of the dental clinics.

(h) If the cost-based payment system for state-operated dental clinics described in
paragraph (f) does not receive federal approval, then state-operated dental clinics shall be
designated as critical access dental providers under subdivision 4, paragraph (b), and shall
receive the critical access dental reimbursement rate as described under subdivision 4,
paragraph (a).

(i) Effective for services rendered on or after September 1, 2011, through June 30,
2013, payment rates for dental services shall be reduced by three percent. This reduction
does not apply to state-operated dental clinics in paragraph (f).

(j) Effective for services rendered on or after January 1, 2014, payment rates for
dental services shall be increased by five percent from the rates in effect on December
31, 2013. This increase does not apply to state-operated dental clinics in paragraph (f),
federally qualified health centers, rural health centers, and Indian health services. Effective
January 1, 2014, payments made to managed care plans and county-based purchasing
plans under sections 256B.69, 256B.692, and 256L.12 shall reflect the payment increase
described in this paragraph.

(k) Effective for services rendered on or after July 1, 2015, payment rates for dental
services shall be increased by five percent from the rates in effect on June 30, 2015. This
increase does not apply to state-operated dental clinics in paragraph (f), federally qualified
health centers, rural health centers, and Indian health services. Effective January 1, 2016,
payments to managed care plans and county-based purchasing plans under sections
256B.69 and 256B.692 shall reflect the payment increase described in this paragraph.

Sec. 29.

Minnesota Statutes 2014, section 256B.766, is amended to read:


256B.766 REIMBURSEMENT FOR BASIC CARE SERVICES.

(a) Effective for services provided on or after July 1, 2009, total payments for basic
care services, shall be reduced by three percent, except that for the period July 1, 2009,
through June 30, 2011, total payments shall be reduced by 4.5 percent for the medical
assistance and general assistance medical care programs, prior to third-party liability and
spenddown calculation. Effective July 1, 2010, the commissioner shall classify physical
therapy services, occupational therapy services, and speech-language pathology and
related services as basic care services. The reduction in this paragraph shall apply to
physical therapy services, occupational therapy services, and speech-language pathology
and related services provided on or after July 1, 2010.

(b) Payments made to managed care plans and county-based purchasing plans shall
be reduced for services provided on or after October 1, 2009, to reflect the reduction
effective July 1, 2009, and payments made to the plans shall be reduced effective October
1, 2010, to reflect the reduction effective July 1, 2010.

(c) Effective for services provided on or after September 1, 2011, through June 30,
2013, total payments for outpatient hospital facility fees shall be reduced by five percent
from the rates in effect on August 31, 2011.

(d) Effective for services provided on or after September 1, 2011, through June
30, 2013, total payments for ambulatory surgery centers facility fees, medical supplies
and durable medical equipment not subject to a volume purchase contract, prosthetics
and orthotics, renal dialysis services, laboratory services, public health nursing services,
physical therapy services, occupational therapy services, speech therapy services,
eyeglasses not subject to a volume purchase contract, hearing aids not subject to a volume
purchase contract, and anesthesia services shall be reduced by three percent from the
rates in effect on August 31, 2011.

(e) Effective for services provided on or after September 1, 2014, payments
for ambulatory surgery centers facility fees, hospice services, renal dialysis services,
laboratory services, public health nursing services, eyeglasses not subject to a volume
purchase contract, and hearing aids not subject to a volume purchase contract shall be
increased by three percent and payments for outpatient hospital facility fees shall be
increased by three percent. Payments made to managed care plans and county-based
purchasing plans shall not be adjusted to reflect payments under this paragraph.

(f) Payments for medical supplies and durable medical equipment not subject to a
volume purchase contract, and prosthetics and orthotics, provided on or after July 1, 2014,
through June 30, 2015, shall be decreased by .33 percent. Payments for medical supplies
and durable medical equipment not subject to a volume purchase contract, and prosthetics
and orthotics, provided on or after July 1, 2015, shall be increased by three percent from
the rates in effect on June 30, 2014 as determined under paragraph (i).

(g) Effective for services provided on or after July 1, 2015, payments for outpatient
hospital facility fees, medical supplies and durable medical equipment not subject to a
volume purchase contract, prosthetics and orthotics, and laboratory services to a hospital
meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause (4),
shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments made
to managed care plans and county-based purchasing plans shall not be adjusted to reflect
payments under this paragraph.

(h) This section does not apply to physician and professional services, inpatient
hospital services, family planning services, mental health services, dental services,
prescription drugs, medical transportation, federally qualified health centers, rural health
centers, Indian health services, and Medicare cost-sharing.

(i) Effective July 1, 2015, the medical assistance payment rate for durable medical
equipment, prosthetics, orthotics, or supplies shall be restored to the January 1, 2008,
medical assistance fee schedule, updated to include subsequent rate increases in the
Medicare and medical assistance fee schedules, and including individually priced
items for the following categories: enteral nutrition and supplies, customized and other
specialized tracheostomy tubes and supplies, electric patient lifts, and durable medical
equipment repair and service. This paragraph does not apply to medical supplies and
durable medical equipment subject to a volume purchase contract, products subject to the
preferred diabetic testing supply program, and items provided to dually eligible recipients
when Medicare is the primary payer for the item.

Sec. 30.

Minnesota Statutes 2014, section 256B.767, is amended to read:


256B.767 MEDICARE PAYMENT LIMIT.

(a) Effective for services rendered on or after July 1, 2010, fee-for-service payment
rates for physician and professional services under section 256B.76, subdivision 1, and
basic care services subject to the rate reduction specified in section 256B.766, shall not
exceed the Medicare payment rate for the applicable service, as adjusted for any changes
in Medicare payment rates after July 1, 2010. The commissioner shall implement this
section after any other rate adjustment that is effective July 1, 2010, and shall reduce rates
under this section by first reducing or eliminating provider rate add-ons.

(b) This section does not apply to services provided by advanced practice certified
nurse midwives licensed under chapter 148 or traditional midwives licensed under chapter
147D. Notwithstanding this exemption, medical assistance fee-for-service payment rates
for advanced practice certified nurse midwives and licensed traditional midwives shall
equal and shall not exceed the medical assistance payment rate to physicians for the
applicable service.

(c) This section does not apply to mental health services or physician services billed
by a psychiatrist or an advanced practice registered nurse with a specialty in mental health.

(d) Effective for durable medical equipment, prosthetics, orthotics, or supplies
provided on or after July 1, 2013, through June 30, 2015, the payment rate for items
that are subject to the rates established under Medicare's National Competitive Bidding
Program shall be equal to the rate that applies to the same item when not subject to the
rate established under Medicare's National Competitive Bidding Program. This paragraph
does not apply to mail-order diabetic supplies and does not apply to items provided to
dually eligible recipients when Medicare is the primary payer of the item.

(d) Effective July 1, 2015, this section shall not apply to durable medical equipment,
prosthetics, orthotics, or supplies.

(e) This section does not apply to physical therapy, occupational therapy, speech
pathology and related services, and basic care services provided by a hospital meeting the
criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause (4).

Sec. 31.

Laws 2008, chapter 363, article 18, section 3, subdivision 5, is amended to read:


Subd. 5.

Basic Health Care Grants

(a) MinnesotaCare Grants
Health Care Access
-0-
(770,000)

Incentive Program and Outreach Grants.
Of the appropriation for the Minnesota health
care outreach program in Laws 2007, chapter
147, article 19, section 3, subdivision 7,
paragraph (b):

(1) $400,000 in fiscal year 2009 from the
general fund and $200,000 in fiscal year 2009
from the health care access fund are for the
incentive program under Minnesota Statutes,
section 256.962, subdivision 5. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $360,000
from the general fund and $160,000 from the
health care access fund; and

(2) $100,000 in fiscal year 2009 from the
general fund and $50,000 in fiscal year 2009
from the health care access fund are for the
outreach grants under Minnesota Statutes,
section 256.962, subdivision 2. For the
biennium beginning July 1, 2009, base level
funding for this activity shall be $90,000
from the general fund and $40,000 from the
health care access fund.

(b) MA Basic Health Care Grants - Families
and Children
-0-
(17,280,000)

Third-Party Liability. (a) During
fiscal year 2009, the commissioner shall
employ a contractor paid on a percentage
basis to improve third-party collections.
Improvement initiatives may include, but not
be limited to, efforts to improve postpayment
collection from nonresponsive claims and
efforts to uncover third-party payers the
commissioner has been unable to identify.

(b) In fiscal year 2009, the first $1,098,000
of recoveries, after contract payments and
federal repayments, is appropriated to
the commissioner for technology-related
expenses.

Administrative Costs. (a) For contracts
effective on or after January 1, 2009,
the commissioner shall limit aggregate
administrative costs paid to managed care
plans under Minnesota Statutes, section
256B.69, and to county-based purchasing
plans under Minnesota Statutes, section
256B.692, to an overall average of 6.6 percent
of total contract payments under Minnesota
Statutes, sections 256B.69 and 256B.692,
for each calendar year. For purposes of
this paragraph, administrative costs do not
include premium taxes paid under Minnesota
Statutes, section 297I.05, subdivision 5, and
provider surcharges paid under Minnesota
Statutes, section 256.9657, subdivision 3.

(b) Notwithstanding any law to the contrary,
the commissioner may reduce or eliminate
administrative requirements to meet the
administrative target under paragraph (a).

(c) Notwithstanding any contrary provision
of this article, this rider shall not expire.

Hospital Payment Delay. Notwithstanding
Laws 2005, First Special Session chapter 4,
article 9, section 2, subdivision 6, payments
from the Medicaid Management Information
System that would otherwise have been made
for inpatient hospital services for medical
assistance enrollees are delayed as follows:
(1) for fiscal year 2008, June payments must
be included in the first payments in fiscal
year 2009; and (2) for fiscal year 2009,
June payments must be included in the first
payment of fiscal year 2010. The provisions
of Minnesota Statutes, section 16A.124,
do not apply to these delayed payments.
Notwithstanding any contrary provision in
this article, this paragraph expires on June
30, 2010.

(c) MA Basic Health Care Grants - Elderly and
Disabled
(14,028,000)
(9,368,000)

Minnesota Disability Health Options Rate
Setting Methodology.
The commissioner
shall develop and implement a methodology
for risk adjusting payments for community
alternatives for disabled individuals (CADI)
and traumatic brain injury (TBI) home
and community-based waiver services
delivered under the Minnesota disability
health options program (MnDHO) effective
January 1, 2009. The commissioner shall
take into account the weighting system used
to determine county waiver allocations in
developing the new payment methodology.
Growth in the number of enrollees receiving
CADI or TBI waiver payments through
MnDHO is limited to an increase of 200
enrollees in each calendar year from January
2009 through December 2011. If those limits
are reached, additional members may be
enrolled in MnDHO for basic care services
only as defined under Minnesota Statutes,
section 256B.69, subdivision 28, and the
commissioner may establish a waiting list for
future access of MnDHO members to those
waiver services.

MA Basic Elderly and Disabled
Adjustments.
For the fiscal year ending June
30, 2009, the commissioner may adjust the
rates for each service affected by rate changes
under this section in such a manner across
the fiscal year to achieve the necessary cost
savings and minimize disruption to service
providers, notwithstanding the requirements
of Laws 2007, chapter 147, article 7, section
71.

(d) General Assistance Medical Care Grants
-0-
(6,971,000)
(e) Other Health Care Grants
-0-
(17,000)

MinnesotaCare Outreach Grants Special
Revenue Account.
The balance in the
MinnesotaCare outreach grants special
revenue account on July 1, 2009, estimated
to be $900,000, must be transferred to the
general fund.

Grants Reduction. Effective July 1, 2008,
base level funding for nonforecast, general
fund health care grants issued under this
paragraph shall be reduced by 1.8 percent at
the allotment level.

Sec. 32.

REDUCTION IN ADMINISTRATIVE COSTS.

The commissioner of human services, when contracting with managed care and
county-based purchasing plans for the provision of services under Minnesota Statutes,
sections 256B.69 and 256B.692, for calendar years 2016 and 2017, shall negotiate
reductions in managed care and county-based purchasing plan administrative costs,
sufficient to achieve a state medical assistance savings of $100,000,000 for the biennium
ending June 30, 2017.

Sec. 33. ADVISORY GROUP ON ADMINISTRATIVE EXPENSES.

Subdivision 1.

Duties.

The commissioner of health shall reconvene the Advisory
Group on Administrative Expenses, established under Laws 2010, First Special Session
chapter 1, article 20, section 3, to develop detailed standards and procedures for examining
the reasonableness of administrative expenses by individual state public programs.
The advisory group shall develop consistent guidelines, definitions, and reporting
requirements, including a common standardized public reporting template for health
maintenance organizations and county-based purchasing plans that participate in state
public programs. The advisory group shall take into consideration relevant reporting
standards of the National Association of Insurance Commissioners and the Centers for
Medicare and Medicaid Services. The advisory group shall expire on January 1, 2016.

Subd. 2.

Membership.

The advisory group shall be composed of the following
members, who serve at the pleasure of their appointing authority:

(1) the commissioner of health or the commissioner's designee;

(2) the commissioner of human services or the commissioner's designee;

(3) the commissioner of commerce or the commissioner's designee; and

(4) representatives of health maintenance organizations and county-based purchasing
plans appointed by the commissioner of health.

Sec. 34. CAPITATION PAYMENT DELAY.

(a) The commissioner of human services shall delay $135,000,000 of the medical
assistance capitation payment to managed care plans and county-based purchasing plans
due in May 2017 and the payment due in April 2017 for special needs basic care until
July 1, 2017. The payment shall be made no earlier than July 1, 2017, and no later than
July 31, 2017.

(b) The commissioner of human services shall delay $135,000,000 of the medical
assistance capitation payment to managed care plans and county-based purchasing plans
due in the second quarter of calendar year 2019 and the April 2019 payment for special
needs basic care until July 1, 2019. The payment shall be made no earlier than July 1,
2019, and no later than July 31, 2019.

Sec. 35. HEALTH AND ECONOMIC ASSISTANCE PROGRAM ELIGIBILITY
VERIFICATION AUDIT SERVICES.

Subdivision 1.

Request for proposals.

By October 1, 2015, the commissioner of
human services shall issue a request for proposals for a contract to provide eligibility
verification audit services for benefits provided through health and economic assistance
programs. The request for proposals must require that the vendor:

(1) conduct an eligibility verification audit of all health and economic assistance
program recipients that includes, but is not limited to, appropriate data matching against
relevant state and federal databases;

(2) identify any ineligible recipients in these programs and report those findings
to the commissioner; and

(3) identify a process for ongoing eligibility verification of health and economic
assistance program recipients and applicants, following the conclusion of the eligibility
verification audit required by this section.

Subd. 2.

Additional vendor criteria.

The request for proposals must require the
vendor to provide the following minimum capabilities and experience in performing the
services described in subdivision 1:

(1) a rules-based process for making objective eligibility determinations;

(2) assigned eligibility advocates to assist recipients through the verification process;

(3) a formal claims and appeals process; and

(4) experience in the performance of eligibility verification audits.

Subd. 3.

Contract required.

(a) By January 1, 2016, the commissioner must enter
into a contract for the services specified in subdivision 1. The contract must:

(1) incorporate performance-based vendor financing that compensates the vendor
based on the amount of savings generated by the work performed under the contract;

(2) require the vendor to reimburse the commissioner and county agencies for all
reasonable costs incurred in implementing this section, out of savings generated by the
work performed under the contract;

(3) require the vendor to comply with enrollee data privacy requirements and to use
encryption to safeguard enrollee identity; and

(4) provide penalties for vendor noncompliance.

(b) The commissioner may renew the contract for up to three additional one-year
periods. The commissioner may require additional eligibility verification audits, if
the commissioner or the legislative auditor determines that the MNsure information
technology system and agency eligibility determination systems cannot effectively verify
the eligibility of health and economic assistance program recipients.

Subd. 4.

Health and economic assistance program.

For purposes of this section,
"health and economic assistance program" means the medical assistance program under
Minnesota Statutes, chapter 256B, Minnesota family investment and diversionary
work programs under Minnesota Statutes, chapter 256J, child care assistance programs
under Minnesota Statutes, chapter 119B, general assistance under Minnesota Statutes,
sections 256D.01 to 256D.23, alternative care program under Minnesota Statutes, section
256B.0913, and chemical dependency programs funded under Minnesota Statutes, chapter
254B.

Sec. 36. REQUEST FOR PROPOSALS.

(a) The commissioner of human services shall issue a request for proposals
for a contract to use technologically advanced software and services to improve the
identification and rejection or elimination of:

(1) improper Medicaid payments before payment is made to the provider; and

(2) improper provision of benefits by a health and economic assistance program
to ineligible individuals.

(b) The request for proposals must ensure that a system recommended and
implemented by the contractor will:

(1) implement a more comprehensive, robust, and technologically advanced
improper payments and benefits identification program;

(2) utilize state of the art fraud detection methods and technologies such as predictive
modeling, link analysis, and anomaly and outlier detection;

(3) have the ability to identify and report improper claims before the claims are paid;

(4) have the ability to identify and report the improper provision of benefits under a
health and economic assistance program;

(5) include a mechanism so that the system improves its detection capabilities over
time;

(6) leverage technology to make the Medicaid claims evaluation process more
transparent and cost-efficient; and

(7) result in increased state savings by reducing or eliminating payouts of wrongful
Medicaid claims and the improper provision of health and economic assistance program
benefits.

(c) Based on responses to the request for proposals, the commissioner must enter
into a contract for the services specified in paragraphs (a) and (b) by October 1, 2015. The
contract shall incorporate a performance-based vendor financing option whereby the
vendor shares in the risk of the project's success.

(d) For purposes of this section, "health and economic assistance program" means
the medical assistance program under Minnesota Statutes, chapter 256B, Minnesota family
investment and diversionary work programs under Minnesota Statutes, chapter 256J, child
care assistance programs under Minnesota Statutes, chapter 119B, general assistance
under Minnesota Statutes, sections 256D.01 to 256D.23, alternative care program under
Minnesota Statutes, section 256B.0913, and chemical dependency programs funded under
Minnesota Statutes, chapter 254B.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 37. FEDERAL WAIVER OR APPROVAL.

The commissioner of human services shall seek any federal waiver or approval
necessary to implement the amendments to Minnesota Statutes, section 256B.0644.

ARTICLE 2

MINNESOTACARE

Section 1.

Minnesota Statutes 2014, section 62V.05, subdivision 5, is amended to read:


Subd. 5.

Health carrier and health plan requirements; participation.

(a)
Beginning January 1, 2015, the board may establish certification requirements for health
carriers and health plans to be offered through MNsure that satisfy federal requirements
under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(b) Paragraph (a) does not apply if by June 1, 2013, the legislature enacts regulatory
requirements that:

(1) apply uniformly to all health carriers and health plans in the individual market;

(2) apply uniformly to all health carriers and health plans in the small group market;
and

(3) satisfy minimum federal certification requirements under section 1311(c)(1) of
the Affordable Care Act, Public Law 111-148.

(c) In accordance with section 1311(e) of the Affordable Care Act, Public Law
111-148, the board shall establish policies and procedures for certification and selection
of health plans to be offered as qualified health plans through MNsure. The board shall
certify and select a health plan as a qualified health plan to be offered through MNsure, if:

(1) the health plan meets the minimum certification requirements established in
paragraph (a) or the market regulatory requirements in paragraph (b);

(2) the board determines that making the health plan available through MNsure is in
the interest of qualified individuals and qualified employers;

(3) the health carrier applying to offer the health plan through MNsure also applies
to offer health plans at each actuarial value level and service area that the health carrier
currently offers in the individual and small group markets; and

(4) the health carrier does not apply to offer health plans in the individual and
small group markets through MNsure under a separate license of a parent organization
or holding company under section 60D.15, that is different from what the health carrier
offers in the individual and small group markets outside MNsure.

(d) In determining the interests of qualified individuals and employers under
paragraph (c), clause (2), the board may not exclude a health plan for any reason specified
under section 1311(e)(1)(B) of the Affordable Care Act, Public Law 111-148. The board
may consider:

(1) affordability;

(2) quality and value of health plans;

(3) promotion of prevention and wellness;

(4) promotion of initiatives to reduce health disparities;

(5) market stability and adverse selection;

(6) meaningful choices and access;

(7) alignment and coordination with state agency and private sector purchasing
strategies and payment reform efforts; and

(8) other criteria that the board determines appropriate.

(e) For qualified health plans offered through MNsure on or after January 1, 2015,
the board shall establish policies and procedures under paragraphs (c) and (d) for selection
of health plans to be offered as qualified health plans through MNsure by February 1
of each year, beginning February 1, 2014. The board shall consistently and uniformly
apply all policies and procedures and any requirements, standards, or criteria to all health
carriers and health plans. For any policies, procedures, requirements, standards, or criteria
that are defined as rules under section 14.02, subdivision 4, the board may use the process
described in subdivision 9.

(f) For 2014, the board shall not have the power to select health carriers and health
plans for participation in MNsure. The board shall permit all health plans that meet the
certification requirements under section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148, to be offered through MNsure.

(g) Under this subdivision, the board shall have the power to verify that health
carriers and health plans are properly certified to be eligible for participation in MNsure.

(h) The board has the authority to decertify health carriers and health plans that
fail to maintain compliance with section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148.

(i) For qualified health plans offered through MNsure beginning January 1, 2015,
health carriers must use the most current addendum for Indian health care providers
approved by the Centers for Medicare and Medicaid Services and the tribes as part of their
contracts with Indian health care providers. MNsure shall comply with all future changes
in federal law with regard to health coverage for the tribes.

(j) Health carriers offering coverage through MNsure shall provide a premium
advance to qualified individuals eligible for a state tax credit under section 290.0661,
equal to the amount of the tax credit calculated under that section. Individuals receiving
a premium advance under this paragraph must pay to the health carrier the full amount
of the premium advance by April 15 of the year following the coverage year for which
the premium advance was provided. The MNsure eligibility system must automatically
notify health carriers:

(1) if an enrollee is eligible for a state tax credit under section 290.0661; and

(2) the amount of the applicable state tax credit.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 2.

Minnesota Statutes 2014, section 256.98, subdivision 1, is amended to read:


Subdivision 1.

Wrongfully obtaining assistance.

A person who commits any of
the following acts or omissions with intent to defeat the purposes of sections 145.891
to 145.897, the MFIP program formerly codified in sections 256.031 to 256.0361, the
AFDC program formerly codified in sections 256.72 to 256.871, chapters 256B, 256D,
256J, 256K, or 256L, and child care assistance programs, is guilty of theft and shall be
sentenced under section 609.52, subdivision 3, clauses (1) to (5):

(1) obtains or attempts to obtain, or aids or abets any person to obtain by means of
a willfully false statement or representation, by intentional concealment of any material
fact, or by impersonation or other fraudulent device, assistance or the continued receipt of
assistance, to include child care assistance or vouchers produced according to sections
145.891 to 145.897 and MinnesotaCare services according to sections premium assistance
under section
256.9365 , 256.94, and 256L.01 to 256L.15 , to which the person is not
entitled or assistance greater than that to which the person is entitled;

(2) knowingly aids or abets in buying or in any way disposing of the property of a
recipient or applicant of assistance without the consent of the county agency; or

(3) obtains or attempts to obtain, alone or in collusion with others, the receipt of
payments to which the individual is not entitled as a provider of subsidized child care, or
by furnishing or concurring in a willfully false claim for child care assistance.

The continued receipt of assistance to which the person is not entitled or greater
than that to which the person is entitled as a result of any of the acts, failure to act, or
concealment described in this subdivision shall be deemed to be continuing offenses from
the date that the first act or failure to act occurred.

EFFECTIVE DATE.

This section is effective January 1, 2016.

Sec. 3.

Minnesota Statutes 2014, section 256B.021, subdivision 4, is amended to read:


Subd. 4.

Projects.

The commissioner shall request permission and funding to
further the following initiatives.

(a) Health care delivery demonstration projects. This project involves testing
alternative payment and service delivery models in accordance with sections 256B.0755
and 256B.0756. These demonstrations will allow the Minnesota Department of Human
Services to engage in alternative payment arrangements with provider organizations that
provide services to a specified patient population for an agreed upon total cost of care or
risk/gain sharing payment arrangement, but are not limited to these models of care delivery
or payment. Quality of care and patient experience will be measured and incorporated into
payment models alongside the cost of care. Demonstration sites should include Minnesota
health care programs fee-for-services recipients and managed care enrollees and support a
robust primary care model and improved care coordination for recipients.

(b) Promote personal responsibility and encourage and reward healthy outcomes.
This project provides Medicaid funding to provide individual and group incentives to
encourage healthy behavior, prevent the onset of chronic disease, and reward healthy
outcomes. Focus areas may include diabetes prevention and management, tobacco
cessation, reducing weight, lowering cholesterol, and lowering blood pressure.

(c) Encourage utilization of high quality, cost-effective care. This project creates
incentives through Medicaid and MinnesotaCare enrollee cost-sharing and other means to
encourage the utilization of high-quality, low-cost, high-value providers, as determined by
the state's provider peer grouping initiative under section 62U.04.

(d) Adults without children. This proposal includes requesting federal authority to
impose a limit on assets for adults without children in medical assistance, as defined in
section 256B.055, subdivision 15, who have a household income equal to or less than
75 percent of the federal poverty limit, and to impose a 180-day durational residency
requirement in MinnesotaCare, consistent with section 256L.09, subdivision 4, for adults
without children, regardless of income
.

(e) Empower and encourage work, housing, and independence. This project provides
services and supports for individuals who have an identified health or disabling condition
but are not yet certified as disabled, in order to delay or prevent permanent disability,
reduce the need for intensive health care and long-term care services and supports, and to
help maintain or obtain employment or assist in return to work. Benefits may include:

(1) coordination with health care homes or health care coordinators;

(2) assessment for wellness, housing needs, employment, planning, and goal setting;

(3) training services;

(4) job placement services;

(5) career counseling;

(6) benefit counseling;

(7) worker supports and coaching;

(8) assessment of workplace accommodations;

(9) transitional housing services; and

(10) assistance in maintaining housing.

(f) Redesign home and community-based services. This project realigns existing
funding, services, and supports for people with disabilities and older Minnesotans to
ensure community integration and a more sustainable service system. This may involve
changes that promote a range of services to flexibly respond to the following needs:

(1) provide people less expensive alternatives to medical assistance services;

(2) offer more flexible and updated community support services under the Medicaid
state plan;

(3) provide an individual budget and increased opportunity for self-direction;

(4) strengthen family and caregiver support services;

(5) allow persons to pool resources or save funds beyond a fiscal year to cover
unexpected needs or foster development of needed services;

(6) use of home and community-based waiver programs for people whose needs
cannot be met with the expanded Medicaid state plan community support service options;

(7) target access to residential care for those with higher needs;

(8) develop capacity within the community for crisis intervention and prevention;

(9) redesign case management;

(10) offer life planning services for families to plan for the future of their child
with a disability;

(11) enhance self-advocacy and life planning for people with disabilities;

(12) improve information and assistance to inform long-term care decisions; and

(13) increase quality assurance, performance measurement, and outcome-based
reimbursement.

This project may include different levels of long-term supports that allow seniors to
remain in their homes and communities, and expand care transitions from acute care to
community care to prevent hospitalizations and nursing home placement. The levels
of support for seniors may range from basic community services for those with lower
needs, access to residential services if a person has higher needs, and targets access to
nursing home care to those with rehabilitation or high medical needs. This may involve
the establishment of medical need thresholds to accommodate the level of support
needed; provision of a long-term care consultation to persons seeking residential services,
regardless of payer source; adjustment of incentives to providers and care coordination
organizations to achieve desired outcomes; and a required coordination with medical
assistance basic care benefit and Medicare/Medigap benefit. This proposal will improve
access to housing and improve capacity to maintain individuals in their existing home;
adjust screening and assessment tools, as needed; improve transition and relocation
efforts; seek federal financial participation for alternative care and essential community
supports; and provide Medigap coverage for people having lower needs.

(g) Coordinate and streamline services for people with complex needs, including
those with multiple diagnoses of physical, mental, and developmental conditions. This
project will coordinate and streamline medical assistance benefits for people with complex
needs and multiple diagnoses. It would include changes that:

(1) develop community-based service provider capacity to serve the needs of this
group;

(2) build assessment and care coordination expertise specific to people with multiple
diagnoses;

(3) adopt service delivery models that allow coordinated access to a range of services
for people with complex needs;

(4) reduce administrative complexity;

(5) measure the improvements in the state's ability to respond to the needs of this
population; and

(6) increase the cost-effectiveness for the state budget.

(h) Implement nursing home level of care criteria. This project involves obtaining
any necessary federal approval in order to implement the changes to the level of care
criteria in section 144.0724, subdivision 11, and implement further changes necessary to
achieve reform of the home and community-based service system.

(i) Improve integration of Medicare and Medicaid. This project involves reducing
fragmentation in the health care delivery system to improve care for people eligible for
both Medicare and Medicaid, and to align fiscal incentives between primary, acute, and
long-term care. The proposal may include:

(1) requesting an exception to the new Medicare methodology for payment
adjustment for fully integrated special needs plans for dual eligible individuals;

(2) testing risk adjustment models that may be more favorable to capturing the
needs of frail dually eligible individuals;

(3) requesting an exemption from the Medicare bidding process for fully integrated
special needs plans for the dually eligible;

(4) modifying the Medicare bid process to recognize additional costs of health
home services; and

(5) requesting permission for risk-sharing and gain-sharing.

(j) Intensive residential treatment services. This project would involve providing
intensive residential treatment services for individuals who have serious mental illness
and who have other complex needs. This proposal would allow such individuals to remain
in these settings after mental health symptoms have stabilized, in order to maintain their
mental health and avoid more costly or unnecessary hospital or other residential care due
to their other complex conditions. The commissioner may pursue a specialized rate for
projects created under this section.

(k) Seek federal Medicaid matching funds for Anoka Metro Regional Treatment
Center (AMRTC). This project involves seeking Medicaid reimbursement for medical
services provided to patients to AMRTC, including requesting a waiver of United States
Code, title 42, section 1396d, which prohibits Medicaid reimbursement for expenditures
for services provided by hospitals with more than 16 beds that are primarily focused on
the treatment of mental illness. This waiver would allow AMRTC to serve as a statewide
resource to provide diagnostics and treatment for people with the most complex conditions.

(l) Waivers to allow Medicaid eligibility for children under age 21 receiving care
in residential facilities. This proposal would seek Medicaid reimbursement for any
Medicaid-covered service for children who are placed in residential settings that are
determined to be "institutions for mental diseases," under United States Code, title 42,
section 1396d.

EFFECTIVE DATE.

This section is effective January 1, 2016.

Sec. 4.

Minnesota Statutes 2014, section 256L.01, subdivision 3a, is amended to read:


Subd. 3a.

Family.

(a) Except as provided in paragraphs (c) and (d), "family" has
the meaning given for family and family size as defined in Code of Federal Regulations,
title 26, section 1.36B-1.

(b) The term includes children who are temporarily absent from the household in
settings such as schools, camps, or parenting time with noncustodial parents.

(c) For an individual who does not expect to file a federal tax return and does not
expect to be claimed as a dependent for the applicable tax year, "family" has the meaning
given in Code of Federal Regulations, title 42, section 435.603(f)(3).

(d) For a married couple, "family" has the meaning given in Code of Federal
Regulations, title 42, section 435.603(f)(4).

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Minnesota Statutes 2014, section 256L.01, subdivision 5, is amended to read:


Subd. 5.

Income.

"Income" has the meaning given for modified adjusted gross
income, as defined in Code of Federal Regulations, title 26, section 1.36B-1. , and means a
household's projected annual income for the applicable tax year.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2014, section 256L.03, subdivision 5, is amended to read:


Subd. 5.

Cost-sharing.

(a) Except as otherwise provided in this subdivision, the
MinnesotaCare benefit plan shall include the following cost-sharing requirements for all
enrollees:

(1) $3 per prescription for adult enrollees;

(2) $25 for eyeglasses for adult enrollees;

(3) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist;

(4) $6 for nonemergency visits to a hospital-based emergency room for services
provided through December 31, 2010, and $3.50 effective January 1, 2011; and

(5) a family deductible equal to the maximum amount allowed under Code of
Federal Regulations, title 42, part 447.54
. $2.75 per month per family and adjusted
annually by the percentage increase in the medical care component of the CPI-U for
the period of September to September of the preceding calendar year, rounded to the
next-higher five-cent increment.

(b) Paragraph (a) does not apply to children under the age of 21 and to American
Indians as defined in Code of Federal Regulations, title 42, section 447.51
.

(c) Paragraph (a), clause (3), does not apply to mental health services.

(d) MinnesotaCare reimbursements to fee-for-service providers and payments to
managed care plans or county-based purchasing plans shall not be increased as a result of
the reduction of the co-payments in paragraph (a), clause (4), effective January 1, 2011.

(e) The commissioner, through the contracting process under section 256L.12,
may allow managed care plans and county-based purchasing plans to waive the family
deductible under paragraph (a), clause (5). The value of the family deductible shall not be
included in the capitation payment to managed care plans and county-based purchasing
plans. Managed care plans and county-based purchasing plans shall certify annually to the
commissioner the dollar value of the family deductible.

EFFECTIVE DATE.

The amendment to paragraph (a), clause (5), is effective
retroactively from January 1, 2014. The amendment to paragraph (b) is effective the
day following final enactment.

Sec. 7.

Minnesota Statutes 2014, section 256L.04, subdivision 1c, is amended to read:


Subd. 1c.

General requirements.

To be eligible for coverage under MinnesotaCare,
a person must meet the eligibility requirements of this section. A person eligible for
MinnesotaCare shall not be considered a qualified individual under section 1312 of the
Affordable Care Act, and is not eligible for enrollment in a qualified health plan offered
through MNsure under chapter 62V.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 8.

Minnesota Statutes 2014, section 256L.04, subdivision 7b, is amended to read:


Subd. 7b.

Annual income limits adjustment.

The commissioner shall adjust the
income limits under this section each July 1 by the annual update of the federal poverty
guidelines following publication by the United States Department of Health and Human
Services except that the income standards shall not go below those in effect on July 1,
2009
annually on January 1 as provided in Code of Federal Regulations, title 26, section
1.36B-1(h)
.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 9.

Minnesota Statutes 2014, section 256L.04, subdivision 10, is amended to read:


Subd. 10.

Citizenship requirements.

(a) Eligibility for MinnesotaCare is limited
to citizens or nationals of the United States and lawfully present noncitizens as defined
in Code of Federal Regulations, title 8 45, section 103.12 152.2. Undocumented
noncitizens are ineligible for MinnesotaCare. For purposes of this subdivision, an
undocumented noncitizen is an individual who resides in the United States without the
approval or acquiescence of the United States Citizenship and Immigration Services.
Families with children who are citizens or nationals of the United States must cooperate in
obtaining satisfactory documentary evidence of citizenship or nationality according to the
requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171.

(b) Notwithstanding subdivisions 1 and 7, eligible persons include families and
individuals who are lawfully present and ineligible for medical assistance by reason of
immigration status and who have incomes equal to or less than 200 percent of federal
poverty guidelines.

Sec. 10.

Minnesota Statutes 2014, section 256L.05, is amended by adding a subdivision
to read:


Subd. 2a.

Eligibility and coverage.

For purposes of this chapter, an individual
is eligible for MinnesotaCare following a determination by the commissioner that the
individual meets the eligibility criteria for the applicable period of eligibility. For an
individual required to pay a premium, coverage is only available in each month of the
applicable period of eligibility for which a premium is paid.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 11.

Minnesota Statutes 2014, section 256L.05, subdivision 3, is amended to read:


Subd. 3.

Effective date of coverage.

(a) The effective date of coverage is the first
day of the month following the month in which eligibility is approved and the first premium
payment has been received. The effective date of coverage for new members added to the
family is the first day of the month following the month in which the change is reported. All
eligibility criteria must be met by the family at the time the new family member is added.
The income of the new family member is included with the family's modified adjusted gross
income and the adjusted premium begins in the month the new family member is added.

(b) The initial premium must be received by the last working day of the month for
coverage to begin the first day of the following month.

(c) Notwithstanding any other law to the contrary, benefits under sections 256L.01 to
256L.18 are secondary to a plan of insurance or benefit program under which an eligible
person may have coverage and the commissioner shall use cost avoidance techniques to
ensure coordination of any other health coverage for eligible persons. The commissioner
shall identify eligible persons who may have coverage or benefits under other plans of
insurance or who become eligible for medical assistance.

(d) The effective date of coverage for individuals or families who are exempt from
paying premiums under section 256L.15, subdivision 1, paragraph (c), is the first day of
the month following the month in which verification of American Indian status is received
or
eligibility is approved, whichever is later.

Sec. 12.

Minnesota Statutes 2014, section 256L.05, subdivision 3a, is amended to read:


Subd. 3a.

Renewal Redetermination of eligibility.

(a) Beginning July 1, 2007, An
enrollee's eligibility must be renewed every 12 months redetermined on an annual basis.
The 12-month period begins in the month after the month the application is approved. The
period of eligibility is the entire calendar year following the year in which eligibility is
redetermined. Beginning in calendar year 2015, eligibility redeterminations shall occur
during the open enrollment period for qualified health plans as specified in Code of
Federal Regulations, title 45, section 155.410.

(b) Each new period of eligibility must take into account any changes in
circumstances that impact eligibility and premium amount. An enrollee must provide all
the information needed to redetermine eligibility by the first day of the month that ends
the eligibility period. The premium for the new period of eligibility must be received
Coverage begins as provided in section 256L.06 in order for eligibility to continue.

(c) For children enrolled in MinnesotaCare, the first period of renewal begins the
month the enrollee turns 21 years of age.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 13.

Minnesota Statutes 2014, section 256L.05, subdivision 4, is amended to read:


Subd. 4.

Application processing.

The commissioner of human services shall
determine an applicant's eligibility for MinnesotaCare no more than 30 45 days from the
date that the application is received by the Department of Human Services as set forth in
Code of Federal Regulations, title 42, section 435.911
. Beginning January 1, 2000, this
requirement also applies to local county human services agencies that determine eligibility
for MinnesotaCare.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 14.

Minnesota Statutes 2014, section 256L.06, subdivision 3, is amended to read:


Subd. 3.

Commissioner's duties and payment.

(a) Premiums are dedicated to the
commissioner for MinnesotaCare.

(b) The commissioner shall develop and implement procedures to: (1) require
enrollees to report changes in income; (2) adjust sliding scale premium payments, based
upon both increases and decreases in enrollee income, at the time the change in income
is reported; and (3) disenroll enrollees from MinnesotaCare for failure to pay required
premiums. Failure to pay includes payment with a dishonored check, a returned automatic
bank withdrawal, or a refused credit card or debit card payment. The commissioner may
demand a guaranteed form of payment, including a cashier's check or a money order, as
the only means to replace a dishonored, returned, or refused payment.

(c) Premiums are calculated on a calendar month basis and may be paid on a
monthly, quarterly, or semiannual basis, with the first payment due upon notice from the
commissioner of the premium amount required. The commissioner shall inform applicants
and enrollees of these premium payment options. Premium payment is required before
enrollment is complete and to maintain eligibility in MinnesotaCare. Premium payments
received before noon are credited the same day. Premium payments received after noon
are credited on the next working day.

(d) Nonpayment of the premium will result in disenrollment from the plan
effective for the calendar month following the month for which the premium was due.
Persons disenrolled for nonpayment who pay all past due premiums as well as current
premiums due, including premiums due for the period of disenrollment, within 20 days of
disenrollment, shall be reenrolled retroactively to the first day of disenrollment
may not
reenroll prior to the first day of the month following the payment of an amount equal to
two months' premiums
.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 15.

Minnesota Statutes 2014, section 256L.121, subdivision 1, is amended to read:


Subdivision 1.

Competitive process.

The commissioner of human services shall
establish a competitive process for entering into contracts with participating entities for
the offering of standard health plans through MinnesotaCare. Coverage through standard
health plans must be available to enrollees beginning January 1, 2015. Each standard
health plan must cover the health services listed in and meet the requirements of section
256L.03. The competitive process must meet the requirements of section 1331 of the
Affordable Care Act and be designed to ensure enrollee access to high-quality health care
coverage options. The commissioner, to the extent feasible, shall seek to ensure that
enrollees have a choice of coverage from more than one participating entity within a
geographic area. In counties that were part of a county-based purchasing plan on January
1, 2013, the commissioner shall use the medical assistance competitive procurement
process under section 256B.69, subdivisions 1 to 32, under which selection of entities is
based on criteria related to provider network access, coordination of health care with other
local services, alignment with local public health goals, and other factors.

Sec. 16.

Minnesota Statutes 2014, section 270A.03, subdivision 5, is amended to read:


Subd. 5.

Debt.

(a) "Debt" means a legal obligation of a natural person to pay a fixed
and certain amount of money, which equals or exceeds $25 and which is due and payable
to a claimant agency. The term includes criminal fines imposed under section 609.10 or
609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision
4a
, and restitution. A debt may arise under a contractual or statutory obligation, a court
order, or other legal obligation, but need not have been reduced to judgment.

A debt includes any legal obligation of a current recipient of assistance which is
based on overpayment of an assistance grant where that payment is based on a client
waiver or an administrative or judicial finding of an intentional program violation;
or where the debt is owed to a program wherein the debtor is not a client at the time
notification is provided to initiate recovery under this chapter and the debtor is not a
current recipient of food support, transitional child care, or transitional medical assistance.

(b) A debt does not include any legal obligation to pay a claimant agency for medical
care, including hospitalization if the income of the debtor at the time when the medical
care was rendered does not exceed the following amount:

(1) for an unmarried debtor, an income of $8,800 or less;

(2) for a debtor with one dependent, an income of $11,270 or less;

(3) for a debtor with two dependents, an income of $13,330 or less;

(4) for a debtor with three dependents, an income of $15,120 or less;

(5) for a debtor with four dependents, an income of $15,950 or less; and

(6) for a debtor with five or more dependents, an income of $16,630 or less.

(c) The commissioner shall adjust the income amounts in paragraph (b) by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word
"1992." For 2001, the commissioner shall then determine the percent change from the 12
months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in
each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months
ending on August 31 of the year preceding the taxable year. The determination of the
commissioner pursuant to this subdivision shall not be considered a "rule" and shall not
be subject to the Administrative Procedure Act contained in chapter 14. The income
amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
$5, the amount is rounded up to the nearest $10 amount.

(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless
of the dollar amount of the premium authorized under Minnesota Statutes 2014, section
256L.15, subdivision 1a.

EFFECTIVE DATE.

This section is effective January 1, 2016.

Sec. 17.

Minnesota Statutes 2014, section 270B.14, subdivision 1, is amended to read:


Subdivision 1.

Disclosure to commissioner of human services.

(a) On the request
of the commissioner of human services, the commissioner shall disclose return information
regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to
the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).

(b) Data that may be disclosed are limited to data relating to the identity,
whereabouts, employment, income, and property of a person owing or alleged to be owing
an obligation of child support.

(c) The commissioner of human services may request data only for the purposes of
carrying out the child support enforcement program and to assist in the location of parents
who have, or appear to have, deserted their children. Data received may be used only
as set forth in section 256.978.

(d) The commissioner shall provide the records and information necessary to
administer the supplemental housing allowance to the commissioner of human services.

(e) At the request of the commissioner of human services, the commissioner of
revenue shall electronically match the Social Security numbers and names of participants
in the telephone assistance plan operated under sections 237.69 to 237.71, with those of
property tax refund filers, and determine whether each participant's household income is
within the eligibility standards for the telephone assistance plan.

(f) The commissioner may provide records and information collected under sections
295.50 to 295.59 to the commissioner of human services for purposes of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law
102-234. Upon the written agreement by the United States Department of Health and
Human Services to maintain the confidentiality of the data, the commissioner may provide
records and information collected under sections 295.50 to 295.59 to the Centers for
Medicare and Medicaid Services section of the United States Department of Health and
Human Services for purposes of meeting federal reporting requirements.

(g) The commissioner may provide records and information to the commissioner of
human services as necessary to administer the early refund of refundable tax credits.

(h) The commissioner may disclose information to the commissioner of human
services necessary to verify income for eligibility and premium payment under the
MinnesotaCare program, under section 256L.05, subdivision 2.

(i) (h) The commissioner may disclose information to the commissioner of human
services necessary to verify whether applicants or recipients for the Minnesota family
investment program, general assistance, food support, Minnesota supplemental aid
program, and child care assistance have claimed refundable tax credits under chapter 290
and the property tax refund under chapter 290A, and the amounts of the credits.

(j) (i) The commissioner may disclose information to the commissioner of human
services necessary to verify income for purposes of calculating parental contribution
amounts under section 252.27, subdivision 2a.

EFFECTIVE DATE.

This section is effective January 1, 2016.

Sec. 18.

[290.0661] STATE TAX CREDIT FOR MNSURE PREMIUM
PAYMENTS.

Subdivision 1.

Definitions.

(a) For purposes of this section, the following definitions
apply.

(b) "MNsure" means the insurance exchange established under chapter 62V.

(c) "Federal poverty guidelines" means the federal poverty guidelines published by
the United States Department of Health and Human Services that apply to calculate the
individual's premium support credit under section 36B of the Internal Revenue Code
for the taxable year.

(d) "Qualified individual" means a resident individual applying for, or enrolled in,
qualified health plan coverage through MNsure with:

(1) an income greater than 133 percent but not exceeding 200 percent of the federal
poverty guidelines; or

(2) an income equal to or less than 133 percent of the federal poverty guidelines, if
the applicant or enrollee would have been eligible for MinnesotaCare coverage under the
eligibility criteria specified in Minnesota Statutes 2014, chapter 256L.

Subd. 2.

Credit allowed; payment to health carrier.

(a) A qualified individual is
allowed a credit against the tax due under this chapter equal to the amount determined
under subdivision 3.

(b) For a part-year resident, the credit must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).

(c) A qualified individual receiving a premium advance under section 62V.05,
subdivision 5, paragraph (j), must pay to the health carrier the full amount of the premium
advance by April 15 of the year following the coverage year for which the premium
advance was provided.

Subd. 3.

Calculation of credit amount.

The commissioner, in consultation with the
commissioner of human services and the MNsure board, shall provide qualified individuals
with tax credits that reduce the cost of MNsure household premiums for qualified health
plans by specified dollar amounts. The dollar amount of the tax credit must equal the base
premium reduction amount, adjusted for household size. The commissioner shall establish
separate base premium reduction amounts, based on a sliding scale, for:

(1) households with incomes not exceeding 150 percent of the federal poverty
guidelines; and

(2) households with incomes greater than 150 percent but not exceeding 200 percent
of the federal poverty guidelines.

The commissioner, in developing the tax credit methodology and the base premium
reduction amounts, shall ensure that aggregate tax credits provided under this section do
not exceed $....... per taxable year.

Subd. 4.

Credit refundable; appropriation.

(a) If the credit allowed under this
section exceeds the individual's liability under this chapter, the commissioner shall refund
the excess to the taxpayer.

(b) An amount sufficient to pay the credits required by this section is appropriated
from the general fund to the commissioner.

Subd. 5.

Payment in advance.

The commissioner of human services shall seek
all federal approvals and waivers necessary to pay the tax credit established under this
section on a monthly basis, in advance, to the health carrier providing qualified health
plan coverage to the qualified individual without affecting the amount of the qualified
individual's federal premium support credit. If the necessary federal approvals and
waivers are obtained, the commissioner of human services shall submit to the legislature
any legislative changes necessary to implement advanced payment of tax credits, and
the MNsure board shall require health carriers to reduce premiums charged to qualified
individuals by the amount of the applicable tax credit.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 19.

Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision
6, is amended to read:


Subd. 6.

MinnesotaCare provider taxes.

Minnesota Statutes 2010, sections
13.4967, subdivision 3; 295.50, subdivisions 1, 1a, 2, 2a, 3, 4, 6, 6a, 7, 9b, 9c, 10a, 10b,
12b, 13, 14, and 15; 295.51, subdivisions 1 and 1a; 295.52, subdivisions 1, 1a, 2, 3, 4,
4a, 5, 6, and 7; 295.53, subdivisions 1, 2, 3, and 4a; 295.54; 295.55; 295.56; 295.57;
295.58; 295.581; 295.582; and 295.59, are repealed effective for gross revenues received
after December 31, 2019 2018.

Sec. 20. REVISOR INSTRUCTION.

In Minnesota Statutes and Minnesota Rules, the revisor of statutes shall strike
references to Minnesota Statutes, chapter 256L, and to statutory sections within that
chapter, and shall make all necessary grammatical and conforming changes.

EFFECTIVE DATE.

This section is effective January 1, 2016.

Sec. 21. REPEALER.

Subdivision 1.

MinnesotaCare program.

Minnesota Statutes 2014, sections
256L.01, subdivisions 1, 1a, 1b, 2, 3, 3a, 5, 6, and 7; 256L.02, subdivisions 1, 2, 3, 5, and
6; 256L.03, subdivisions 1, 1a, 1b, 2, 3, 3a, 3b, 4, 4a, 5, and 6; 256L.04, subdivisions 1,
1a, 1c, 2, 2a, 7, 7a, 7b, 8, 10, 12, 13, and 14; 256L.05, subdivisions 1, 1a, 1b, 1c, 2, 3, 3a,
3c, 4, 5, and 6; 256L.06, subdivision 3; 256L.07, subdivisions 1, 2, 3, and 4; 256L.09,
subdivisions 1, 2, 4, 5, 6, and 7; 256L.10; 256L.11, subdivisions 1, 2, 2a, 3, 4, and 7;
256L.12; 256L.121; 256L.15, subdivisions 1, 1a, 1b, and 2; 256L.18; 256L.22; 256L.24;
256L.26; and 256L.28,
are repealed.

Subd. 2.

Conforming repealers.

Minnesota Statutes 2014, sections 13.461,
subdivision 26; 16A.724, subdivision 3; and 62A.046, subdivision 5,
are repealed.

EFFECTIVE DATE.

This section is effective January 1, 2016.

ARTICLE 3

MNSURE

Section 1. EXPANDED ACCESS TO QUALIFIED HEALTH PLANS AND
SUBSIDIES.

The commissioner of commerce, in consultation with the Board of Directors of
MNsure and the MNsure Legislative Oversight Committee, shall develop a proposal to
allow individuals to purchase qualified health plans outside of MNsure directly from
health plan companies and to allow eligible individuals to receive advanced premium tax
credits and cost-sharing reductions when purchasing these health plans. The commissioner
shall seek all federal waivers and approvals necessary to implement this proposal.
The commissioner shall submit a draft proposal to the MNsure board and the MNsure
Legislative Oversight Committee at least 30 days before submitting a final proposal to the
federal government and shall notify the board and legislative oversight committee of any
federal decision or action related to the proposal.

Sec. 2.

Minnesota Statutes 2014, section 15A.0815, subdivision 3, is amended to read:


Subd. 3.

Group II salary limits.

The salary for a position listed in this subdivision
shall not exceed 120 percent of the salary of the governor. This limit must be adjusted
annually on January 1. The new limit must equal the limit for the prior year increased
by the percentage increase, if any, in the Consumer Price Index for all urban consumers
from October of the second prior year to October of the immediately prior year. The
commissioner of management and budget must publish the limit on the department's Web
site. This subdivision applies to the following positions:

Executive director of Gambling Control Board;

Commissioner, Iron Range Resources and Rehabilitation Board;

Commissioner, Bureau of Mediation Services;

Ombudsman for Mental Health and Developmental Disabilities;

Chair, Metropolitan Council;

Executive Director, MNsure;

School trust lands director;

Executive director of pari-mutuel racing; and

Commissioner, Public Utilities Commission.

Sec. 3.

Minnesota Statutes 2014, section 62A.02, subdivision 2, is amended to read:


Subd. 2.

Approval.

(a) The health plan form shall not be issued, nor shall any
application, rider, endorsement, or rate be used in connection with it, until the expiration
of 60 days after it has been filed unless the commissioner approves it before that time.

(b) Notwithstanding paragraph (a), a rate filed with respect to a policy of accident and
sickness insurance as defined in section 62A.01 by an insurer licensed under chapter 60A,
may be used on or after the date of filing with the commissioner. Rates that are not approved
or disapproved within the 60-day time period are deemed approved. This paragraph does
not apply to Medicare-related coverage as defined in section 62A.3099, subdivision 17.

(c) For coverage to begin on or after January 1, 2016, and each January 1 thereafter,
health plans in the individual and small group markets that are not grandfathered plans to
be offered outside MNsure and qualified health plans to be offered inside MNsure must
receive rate approval from the commissioner no later than 30 days prior to the beginning
of the annual open enrollment period for MNsure. Premium rates for all carriers in the
applicable market for the next calendar year must be made available to the public by the
commissioner only after all rates for the applicable market are final and approved. Final
and approved rates must be publicly released at a uniform time for all individual and small
group health plans that are not grandfathered plans to be offered outside MNsure and
qualified health plans to be offered inside MNsure, and no later than 30 days prior to the
beginning of the annual open enrollment period for MNsure.

Sec. 4.

Minnesota Statutes 2014, section 62V.02, is amended by adding a subdivision
to read:


Subd. 2a.

Consumer assistance partner.

"Consumer assistance partner" means
individuals and entities certified by MNsure to serve as a navigator, in-person assister, or
certified application counselor.

Sec. 5.

Minnesota Statutes 2014, section 62V.03, subdivision 2, is amended to read:


Subd. 2.

Application of other law.

(a) MNsure must be reviewed by the legislative
auditor under section 3.971. The legislative auditor shall audit the books, accounts, and
affairs of MNsure once each year or less frequently as the legislative auditor's funds and
personnel permit. Upon the audit of the financial accounts and affairs of MNsure, MNsure
is liable to the state for the total cost and expenses of the audit, including the salaries paid
to the examiners while actually engaged in making the examination. The legislative
auditor may bill MNsure either monthly or at the completion of the audit. All collections
received for the audits must be deposited in the general fund and are appropriated to
the legislative auditor. Pursuant to section 3.97, subdivision 3a, the Legislative Audit
Commission is requested to direct the legislative auditor to report by March 1, 2014, to
the legislature on any duplication of services that occurs within state government as a
result of the creation of MNsure. The legislative auditor may make recommendations on
consolidating or eliminating any services deemed duplicative. The board shall reimburse
the legislative auditor for any costs incurred in the creation of this report.

(b) Board members of MNsure are subject to sections 10A.07 and 10A.09. Board
members and the personnel of MNsure are subject to section 10A.071.

(c) All meetings of the board shall comply with the open meeting law in chapter
13D, except that: .

(1) meetings, or portions of meetings, regarding compensation negotiations with the
director or managerial staff may be closed in the same manner and according to the same
procedures identified in section 13D.03;

(2) meetings regarding contract negotiation strategy may be closed in the same
manner and according to the same procedures identified in section 13D.05, subdivision 3,
paragraph (c); and

(3) meetings, or portions of meetings, regarding not public data described in section
62V.06, subdivision 3, and regarding trade secret information as defined in section 13.37,
subdivision 1, paragraph (b), are closed to the public, but must otherwise comply with
the procedures identified in chapter 13D.

(d) MNsure and provisions specified under this chapter are exempt from:

(1) chapter 14, including section 14.386, except as specified in section 62V.05 ; and .

(2) chapters 16B and 16C, with the exception of sections 16C.08, subdivision 2,
paragraph (b), clauses (1) to (8); 16C.086; 16C.09, paragraph (a), clauses (1) and (3),
paragraph (b), and paragraph (c); and section 16C.16. However, MNsure, in consultation
with the commissioner of administration, shall implement policies and procedures to
establish an open and competitive procurement process for MNsure that, to the extent
practicable, conforms to the principles and procedures contained in chapters 16B and 16C.
In addition, MNsure may enter into an agreement with the commissioner of administration
for other services.

(e) The board and the Web site are exempt from chapter 60K. Any employee of
MNsure who sells, solicits, or negotiates insurance to individuals or small employers must
be licensed as an insurance producer under chapter 60K.

(f) Section 3.3005 applies to any federal funds received by MNsure.

(g) MNsure is exempt from the following sections in chapter 16E: 16E.01,
subdivision 3
, paragraph (b); 16E.03, subdivisions 3 and 4; 16E.04, subdivision 1,
subdivision 2, paragraph (c), and subdivision 3, paragraph (b); 16E.0465; 16E.055;
16E.145; 16E.15; 16E.16; 16E.17; 16E.18; and 16E.22.

(h) (g) A MNsure decision that requires a vote of the board, other than a decision
that applies only to hiring of employees or other internal management of MNsure, is an
"administrative action" under section 10A.01, subdivision 2.

Sec. 6.

Minnesota Statutes 2014, section 62V.04, subdivision 1, is amended to read:


Subdivision 1.

Board.

MNsure is governed by a board of directors with seven 11
members.

Sec. 7.

Minnesota Statutes 2014, section 62V.04, subdivision 2, is amended to read:


Subd. 2.

Appointment.

(a) Board membership of MNsure consists of the following:

(1) three six members appointed by the governor with the advice and consent of
both the senate and the house of representatives acting separately in accordance with
paragraph (d)
, with one member representing the interests of individual consumers eligible
for individual market coverage, one member representing individual consumers eligible
for public health care program coverage, and one member representing small employers,
one member who is an insurance producer, and two members who are county employees
involved in the administration of public health care programs
. Members are appointed to
serve four-year terms following the initial staggered-term lot determination;

(2) three members appointed by the governor with the advice and consent of both the
senate and the house of representatives acting separately in accordance with paragraph (d)
who have demonstrated expertise, leadership, and innovation in the following areas: one
member representing the areas of health administration, health care finance, health plan
purchasing, and health care delivery systems; one member representing the areas of public
health, health disparities, public health care programs, and the uninsured; and one member
representing health policy issues related to the small group and individual markets.
Members are appointed to serve four-year terms following the initial staggered-term lot
determination; and

(3) the commissioner of human services or a designee; and

(4) the chief information officer of MN.IT Services or a designee.

(b) Section 15.0597 shall apply to all appointments, except for the commissioner.

(c) The governor shall make appointments to the board that are consistent with
federal law and regulations regarding its composition and structure. All board members
appointed by the governor must be legal residents of Minnesota.

(d) Upon appointment by the governor, a board member shall exercise duties of
office immediately. If both the house of representatives and the senate vote not to confirm
an appointment, the appointment terminates on the day following the vote not to confirm
in the second body to vote.

(e) Initial appointments shall be made by April 30, 2013.

(f) (d) One of the six nine members appointed under paragraph (a), clause (1) or (2),
must have experience in representing the needs of vulnerable populations and persons
with disabilities.

(g) (e) Membership on the board must include representation from outside the
seven-county metropolitan area, as defined in section 473.121, subdivision 2.

Sec. 8.

Minnesota Statutes 2014, section 62V.04, subdivision 4, is amended to read:


Subd. 4.

Conflicts of interest.

(a) Within one year prior to or at any time during
their appointed term, board members appointed under subdivision 2, paragraph (a),
clauses (1) and (2), shall not be employed by, be a member of the board of directors of, or
otherwise be a representative of a health carrier, institutional health care provider or other
entity providing health care, navigator, insurance producer, or other entity in the business
of selling items or services of significant value to or through MNsure. For purposes of this
paragraph, "health care provider or entity" does not include an academic institution.

(b) Board members must recuse themselves from discussion of and voting on
an official matter if the board member has a conflict of interest. For board members
other than an insurance producer or a county employee,
a conflict of interest means an
association including a financial or personal association that has the potential to bias or
have the appearance of biasing a board member's decisions in matters related to MNsure
or the conduct of activities under this chapter. The board member who is an insurance
producer and the board members who are county employees are subject to section 10A.07.

(c) No board member shall have a spouse who is an executive of a health carrier.

(d) No member of the board may currently serve as a lobbyist, as defined under
section 10A.01, subdivision 21.

Sec. 9.

[62V.045] EXECUTIVE DIRECTOR.

The governor shall appoint the executive director of MNsure. The executive director
serves in the unclassified service at the pleasure of the governor.

Sec. 10.

Minnesota Statutes 2014, section 62V.05, subdivision 1, is amended to read:


Subdivision 1.

General.

(a) The board shall operate MNsure according to this
chapter and applicable state and federal law.

(b) The board has the power to:

(1) employ personnel, subject to the power of the governor to appoint the executive
director,
and delegate administrative, operational, and other responsibilities to the director
and other personnel as deemed appropriate by the board. This authority is subject to
chapters 43A and 179A. The director and managerial staff of MNsure shall serve in the
unclassified service and shall be governed by a compensation plan prepared by the board,
submitted to the commissioner of management and budget for review and comment within
14 days of its receipt, and approved by the Legislative Coordinating Commission and the
legislature under section 3.855, except that section 15A.0815, subdivision 5, paragraph
(e), shall not apply
. The director of MNsure shall not receive a salary increase on or
after July 1, 2015, unless the increase is approved under the process specified in section
15A.0815, subdivision 5
;

(2) establish the budget of MNsure;

(3) seek and accept money, grants, loans, donations, materials, services, or
advertising revenue from government agencies, philanthropic organizations, and public
and private sources to fund the operation of MNsure. No health carrier or insurance
producer shall advertise on MNsure;

(4) contract for the receipt and provision of goods and services;

(5) enter into information-sharing agreements with federal and state agencies and
other entities, provided the agreements include adequate protections with respect to
the confidentiality and integrity of the information to be shared, and comply with all
applicable state and federal laws, regulations, and rules, including the requirements of
section 62V.06; and

(6) exercise all powers reasonably necessary to implement and administer the
requirements of this chapter and the Affordable Care Act, Public Law 111-148.

(c) The board shall establish policies and procedures to gather public comment and
provide public notice in the State Register.

(d) Within 180 days of enactment, the board shall establish bylaws, policies, and
procedures governing the operations of MNsure in accordance with this chapter.

Sec. 11.

Minnesota Statutes 2014, section 62V.05, subdivision 5, is amended to read:


Subd. 5.

Health carrier and health plan requirements; MNsure participation.

(a) Beginning January 1, 2015, the board may establish certification requirements
for health carriers and health plans to be offered through MNsure that satisfy federal
requirements under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(b) Paragraph (a) does not apply if by June 1, 2013, the legislature enacts regulatory
requirements that:

(1) apply uniformly to all health carriers and health plans in the individual market;

(2) apply uniformly to all health carriers and health plans in the small group market;
and

(3) satisfy minimum federal certification requirements under section 1311(c)(1) of
the Affordable Care Act, Public Law 111-148.

(c) In accordance with section 1311(e) of the Affordable Care Act, Public Law
111-148, the board shall establish policies and procedures for certification and selection
of health plans to be offered as qualified health plans through MNsure. The board shall
certify and select a health plan as a qualified health plan to be offered through MNsure, if:

(1) the health plan meets the minimum certification requirements established in
paragraph (a) or the market regulatory requirements in paragraph (b);

(2) the board determines that making the health plan available through MNsure is in
the interest of qualified individuals and qualified employers;

(3) the health carrier applying to offer the health plan through MNsure also applies
to offer health plans at each actuarial value level and service area that the health carrier
currently offers in the individual and small group markets; and

(4) the health carrier does not apply to offer health plans in the individual and
small group markets through MNsure under a separate license of a parent organization
or holding company under section 60D.15, that is different from what the health carrier
offers in the individual and small group markets outside MNsure.

(d) In determining the interests of qualified individuals and employers under
paragraph (c), clause (2), the board may not exclude a health plan for any reason specified
under section 1311(e)(1)(B) of the Affordable Care Act, Public Law 111-148. The board
may consider:

(1) affordability;

(2) quality and value of health plans;

(3) promotion of prevention and wellness;

(4) promotion of initiatives to reduce health disparities;

(5) market stability and adverse selection;

(6) meaningful choices and access;

(7) alignment and coordination with state agency and private sector purchasing
strategies and payment reform efforts; and

(8) other criteria that the board determines appropriate.

(e) For qualified health plans offered through MNsure on or after January 1, 2015,
the board shall establish policies and procedures under paragraphs (c) and (d) for selection
of health plans to be offered as qualified health plans through MNsure by February 1
of each year, beginning February 1, 2014. The board shall consistently and uniformly
apply all policies and procedures and any requirements, standards, or criteria to all health
carriers and health plans. For any policies, procedures, requirements, standards, or criteria
that are defined as rules under section 14.02, subdivision 4, the board may use the process
described in subdivision 9.

(f) For 2014, the board shall not have the power to select health carriers and health
plans for participation in MNsure. The board shall permit all health plans that meet the
certification requirements under section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148, to be offered through MNsure.

(a) The board shall permit all health plans that meet the applicable certification
requirements to be offered through MNsure.

(g) (b) Under this subdivision, the board shall have the power to verify that health
carriers and health plans are properly certified to be eligible for participation in MNsure.

(h) (c) The board has the authority to decertify health carriers and health plans that
fail to maintain compliance with section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148.

(i) (d) For qualified health plans offered through MNsure beginning January 1,
2015, health carriers must use the most current addendum for Indian health care providers
approved by the Centers for Medicare and Medicaid Services and the tribes as part of their
contracts with Indian health care providers. MNsure shall comply with all future changes
in federal law with regard to health coverage for the tribes.

EFFECTIVE DATE.

This section is effective July 1, 2015.

Sec. 12.

Minnesota Statutes 2014, section 62V.05, subdivision 6, is amended to read:


Subd. 6.

Appeals.

(a) The board may conduct hearings, appoint hearing officers,
and recommend final orders related to appeals of any MNsure determinations, except for
those determinations identified in paragraph (d). An appeal by a health carrier regarding
a specific certification or selection determination made by MNsure under subdivision 5
must be conducted as a contested case proceeding under chapter 14, with the report or
order of the administrative law judge constituting the final decision in the case, subject to
judicial review under sections 14.63 to 14.69. For other appeals, the board shall establish
hearing processes which provide for a reasonable opportunity to be heard and timely
resolution of the appeal and which are consistent with the requirements of federal law and
guidance. An appealing party may be represented by legal counsel at these hearings, but
this is not a requirement.

(b) MNsure may establish service-level agreements with state agencies to conduct
hearings for appeals. Notwithstanding section 471.59, subdivision 1, a state agency is
authorized to enter into service-level agreements for this purpose with MNsure.

(c) For proceedings under this subdivision, MNsure may be represented by an
attorney who is an employee of MNsure.

(d) This subdivision does not apply to appeals of determinations where a state
agency hearing is available under section 256.045.

Sec. 13.

Minnesota Statutes 2014, section 62V.05, is amended by adding a subdivision
to read:


Subd. 11.

Health carrier notification.

MNsure shall provide a health carrier with
enrollment information for MNsure enrollees who have selected a qualified health plan
that is offered by that health carrier and who have been determined by MNsure to be
eligible for qualified health plan coverage. The enrollment information must be sufficient
for the health carrier to issue coverage and must be provided within 48 hours of the
determination of eligibility by MNsure.

Sec. 14.

Minnesota Statutes 2014, section 62V.05, is amended by adding a subdivision
to read:


Subd. 12.

Purchase of individual health coverage.

For coverage taking effect on
or after January 1, 2016, the MNsure board shall provide members of a household with the
option of purchasing individual health coverage through MNsure and shall apportion any
advanced premium tax credit available to a household choosing this option between the
separate health plans providing coverage to the household members.

Sec. 15.

Minnesota Statutes 2014, section 62V.05, is amended by adding a subdivision
to read:


Subd. 13.

Prohibition on other product lines.

MNsure is prohibited from
certifying, selecting, or offering products and policies of coverage that do not meet the
definition of health plan or dental plan as provided in section 62V.02.

Sec. 16.

Minnesota Statutes 2014, section 62V.11, subdivision 2, is amended to read:


Subd. 2.

Membership; meetings; compensation.

(a) The Legislative Oversight
Committee shall consist of five members of the senate, three members appointed by
the majority leader of the senate, and two members appointed by the minority leader of
the senate; and five members of the house of representatives, three members appointed
by the speaker of the house, and two members appointed by the minority leader of the
house of representatives.

(b) Appointed legislative members serve at the pleasure of the appointing authority
and shall continue to serve until their successors are appointed.

(c) The first meeting of the committee shall be convened by the chair of the
Legislative Coordinating Commission. Members shall elect a chair at the first meeting.
The chair must convene at least one meeting annually each quarter of the year, and may
convene other meetings as deemed necessary.

Sec. 17.

Minnesota Statutes 2014, section 62V.11, is amended by adding a subdivision
to read:


Subd. 5.

Reports to the committee.

(a) The board shall submit an enrollment report
to the Legislative Oversight Committee on a monthly basis. The report must include:

(1) total enrollment numbers;

(2) the number of commercial plans selected;

(3) the percentage of the commercial plans for which the first month's premium
has been paid; and

(4) the average number of days between a consumer's submission of an application
and transmittal to the health carrier chosen.

(b) At each of the committee's quarterly meetings, the board shall present the
following information:

(1) at the first quarterly meeting, a progress report on the most recent MNsure
open enrollment period and a progress report on technology upgrades and any proposed
schedule for future technology upgrades;

(2) at the second quarterly meeting, the annual budget for MNsure, as required by
subdivision 4;

(3) at the third quarterly meeting, a hearing in conjunction with the Department of
Human Services regarding any backlog created by qualifying life events for enrollees in
public or private health plans through MNsure; and

(4) at the fourth quarterly meeting, a hearing in conjunction with the Department of
Commerce on the release of premium rates and in conjunction with the Department of
Human Services on reimbursement of MNsure for public program enrollment.

Sec. 18.

Minnesota Statutes 2014, section 245C.03, is amended by adding a
subdivision to read:


Subd. 10.

MNsure consumer assistance partners.

Effective January 1, 2016, the
commissioner shall conduct background studies on any individual required under section
256.962, subdivision 9, to have a background study completed under this chapter.

Sec. 19.

Minnesota Statutes 2014, section 245C.10, is amended by adding a
subdivision to read:


Subd. 11.

MNsure consumer assistance partners.

The commissioner shall recover
the cost of background studies required under section 256.962, subdivision 9, through
a fee of no more than $20 per study. The fees collected under this subdivision are
appropriated to the commissioner for the purpose of conducting background studies.

Sec. 20.

Minnesota Statutes 2014, section 256.962, is amended by adding a subdivision
to read:


Subd. 9.

Background studies for consumer assistance partners.

Effective January
1, 2016, all consumer assistance partners, as defined in section 62V.02, subdivision 2a, are
required to undergo a background study according to the requirements of chapter 245C.

Sec. 21. TRANSITION.

(a) The commissioner of management and budget must assign the positions of
managerial employees of MNsure, other than the director, to salary ranges and salaries in
the managerial plan, effective the first payroll period beginning on or after July 1, 2015.

(b) Of the four additional members of the board appointed under the amendments
to Minnesota Statutes, section 62V.04, one shall have an initial term of two years, two
shall have an initial term of three years, and one shall have an initial term of four years,
determined by lot by the secretary of state.

(c) Board members must be appointed by the governor within 30 days of final
enactment of these sections.

Sec. 22. EXPANDED ACCESS TO THE SMALL BUSINESS HEALTH CARE
TAX CREDIT.

(a) The commissioner of human services, in consultation with the Board of Directors
of MNsure and the MNsure Legislative Oversight Committee, shall develop a proposal
to allow small employers the ability to receive the small business health care tax credit
when the small employer pays the premiums on behalf of employees enrolled in either a
qualified health plan offered through a small business health options program (SHOP)
marketplace or a small group health plan offered outside of the SHOP marketplace within
MNsure. To be eligible for the tax credit, the small employer must meet the requirements
under the Affordable Care Act, except that employees may be enrolled in a small group
health plan product offered outside of MNsure.

(b) The commissioner shall seek all federal waivers and approvals necessary to
implement the proposal in paragraph (a). The commissioner shall submit a draft proposal
to the MNsure board and the MNsure Legislative Oversight Committee at least 30 days
before submitting a final proposal to the federal government, and shall notify the board
and Legislative Oversight Committee of any federal decision or action received regarding
the proposal and submitted waiver.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 23. CONFIRMATION DEADLINE.

Members of the MNsure Board on the effective date of this section and new
members appointed as required by the amendments to Minnesota Statutes, section 62V.04,
are subject to confirmation by the senate. If any of these members is not confirmed by the
senate before adjournment sine die of the 2016 regular session, the appointment of that
member to the board terminates on the day following adjournment sine die.

Sec. 24.

ESTABLISHMENT OF FEDERALLY FACILITATED
MARKETPLACE.

Subdivision 1.

Establishment.

The commissioner of commerce, in cooperation
with the secretary of Health and Human Services, shall establish a federally facilitated
marketplace for Minnesota, for coverage beginning January 1, 2017. The federally
facilitated marketplace shall take the place of MNsure, established under Minnesota
Statutes, chapter 62V. In working with the secretary of Health and Human Services to
develop the federally facilitated marketplace, the commissioner of commerce shall:

(1) seek to incorporate, where appropriate and cost-effective, elements of the
MNsure eligibility determination system;

(2) regularly consult with stakeholder groups, including but not limited to
representatives of state agencies, health care providers, health plan companies, brokers,
and consumers; and

(3) seek all available federal grants and funds for state planning and development
costs.

Subd. 2.

Implementation plan; draft legislation.

The commissioner of commerce,
in consultation with the commissioner of human services, the chief information officer
of MN.IT, and the MNsure Board, shall develop and present to the 2016 legislature an
implementation plan for conversion to a federally facilitated marketplace. The plan must
include draft legislation for any changes in state law necessary to implement a federally
facilitated marketplace, including but not limited to necessary changes to Laws 2013,
chapter 84, and technical and conforming changes related to the repeal of Minnesota
Statutes, chapter 62V.

Subd. 3.

Vendor contract.

The commissioner of commerce, in consultation with
the commissioner of human services, the chief information officer of MN.IT, and the
MNsure Board, shall contract with a vendor to provide technical assistance in developing
and implementing the plan for conversion to a federally facilitated marketplace.

Subd. 4.

Contingent implementation.

The commissioner shall not implement
this section if the United States Supreme Court rules in King v. Burwell (No. 14-114)
that persons obtaining qualified health plan coverage through a federally facilitated
marketplace are not eligible for advanced premium tax credits.

Sec. 25. REQUIREMENTS FOR STATE MATCH FOR FEDERAL GRANTS.

(a) The legislature shall not appropriate or authorize the use of state funds, and the
MNsure Board and the commissioner of human services shall not allocate, authorize the
use of, or expend board or agency funds, as a state match to obtain federal grant funding
for MNsure, including, but not limited to, grants to support the development and operation
of the MNsure eligibility determination system, unless the following conditions are met:

(1) 20 percent of the state match and 20 percent of federal grant funds received are
deposited into a premium reimbursement account established by the MNsure Board, for
use as provided in paragraph (b);

(2) the commissioner of human services and the legislative auditor have verified
that all persons currently enrolled in medical assistance and MinnesotaCare, who were
enrolled in medical assistance or MinnesotaCare as of September 30, 2013, have had their
eligibility for the program redetermined at least once since September 30, 2013;

(3) the administrative costs of MNsure are less than five percent of MNsure's total
operating budget in each year; and

(4) verification from the Office of the Legislative Auditor that:

(i) all life events or changes in circumstances are being processed in a timely manner
by MNsure and the Department of Human Services; and

(ii) MNsure is transmitting electronic enrollment files in a format that conforms with
standards under the federal Health Insurance Portability and Accountability Act of 1996.

(b) Funds deposited into the premium reimbursement account shall be used only to
reimburse the first month's premium for health coverage for any individual who submitted
a complete application for qualified health plan coverage through MNsure, but did not
receive their policy card or other appropriate verification of coverage within 20 days of
submittal of the completed application to MNsure. The MNsure Board shall provide this
reimbursement on a first-come, first-served basis, subject to the limits of available funding.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 26. REPEALER.

(a) Minnesota Statutes 2014, sections 62V.01; 62V.02; 62V.03; 62V.04; 62V.05;
62V.06; 62V.07; 62V.08; 62V.09; 62V.10; and 62V.11,
are repealed, effective January 1,
2017. This repealer shall not take effect if the United States Supreme Court rules in King
v. Burwell (No. 14-114) that persons obtaining qualified health plan coverage through a
federally facilitated marketplace are not eligible for advanced premium tax credits.

(b) Minnesota Statutes 2014, section 13D.08, subdivision 5a, is repealed.

ARTICLE 4

CONTINUING CARE

Section 1.

Minnesota Statutes 2014, section 13.461, is amended by adding a
subdivision to read:


Subd. 32.

ABLE accounts and designated beneficiaries.

Data on ABLE accounts
and designated beneficiaries of ABLE accounts are classified under section 256Q.05,
subdivision 7.

Sec. 2.

Minnesota Statutes 2014, section 245A.06, is amended by adding a subdivision
to read:


Subd. 1a.

Correction orders and conditional licenses for programs licensed as
home and community-based services.

(a) For programs licensed under both this chapter
and chapter 245D, if the license holder operates more than one service site under a single
license governed by chapter 245D, the order issued under this section shall be specific to
the service site or sites at which the violations of applicable law or rules occurred. The
order shall not apply to other service sites governed by chapter 245D and operated by the
same license holder unless the commissioner has included in the order the articulable basis
for applying the order to another service site.

(b) If the commissioner has issued more than one license to the license holder under
this chapter, the conditions imposed under this section shall be specific to the license for
the program at which the violations of applicable law or rules occurred and shall not apply
to other licenses held by the same license holder if those programs are being operated in
substantial compliance with applicable law and rules.

Sec. 3.

[245A.081] SETTLEMENT AGREEMENT.

(a) A license holder who has made a timely appeal pursuant to section 245A.06,
subdivision 4, or 245A.07, subdivision 3, or the commissioner may initiate a discussion
about a possible settlement agreement related to the licensing sanction. For the purposes
of this section, the following conditions apply to a settlement agreement reached by the
parties:

(1) if the parties enter into a settlement agreement, the effect of the agreement shall
be that the appeal is withdrawn and the agreement shall constitute the full agreement
between the commissioner and the party who filed the appeal; and

(2) the settlement agreement must identify the agreed upon actions the license holder
has taken and will take in order to achieve and maintain compliance with the licensing
requirements that the commissioner determined the license holder had violated.

(b) Neither the license holder nor the commissioner is required to initiate a
settlement discussion under this section.

(c) If a settlement discussion is initiated by the license holder, the commissioner
shall respond to the license holder within 14 calendar days of receipt of the license
holder's submission.

(d) If the commissioner agrees to engage in settlement discussions, the commissioner
may decide at any time not to continue settlement discussions with a license holder.

Sec. 4.

Minnesota Statutes 2014, section 245A.155, subdivision 1, is amended to read:


Subdivision 1.

Licensed foster care and respite care.

This section applies to
foster care agencies and licensed foster care providers who place, supervise, or care for
individuals who rely on medical monitoring equipment to sustain life or monitor a medical
condition that could become life-threatening without proper use of the medical equipment
in respite care or foster care.

Sec. 5.

Minnesota Statutes 2014, section 245A.155, subdivision 2, is amended to read:


Subd. 2.

Foster care agency requirements.

In order for an agency to place an
individual who relies on medical equipment to sustain life or monitor a medical condition
that could become life-threatening without proper use of the medical equipment with a
foster care provider, the agency must ensure that the foster care provider has received the
training to operate such equipment as observed and confirmed by a qualified source,
and that the provider:

(1) is currently caring for an individual who is using the same equipment in the
foster home; or

(2) has written documentation that the foster care provider has cared for an
individual who relied on such equipment within the past six months; or

(3) has successfully completed training with the individual being placed with the
provider.

Sec. 6.

Minnesota Statutes 2014, section 245A.65, subdivision 2, is amended to read:


Subd. 2.

Abuse prevention plans.

All license holders shall establish and enforce
ongoing written program abuse prevention plans and individual abuse prevention plans as
required under section 626.557, subdivision 14.

(a) The scope of the program abuse prevention plan is limited to the population,
physical plant, and environment within the control of the license holder and the location
where licensed services are provided. In addition to the requirements in section 626.557,
subdivision 14
, the program abuse prevention plan shall meet the requirements in clauses
(1) to (5).

(1) The assessment of the population shall include an evaluation of the following
factors: age, gender, mental functioning, physical and emotional health or behavior of the
client; the need for specialized programs of care for clients; the need for training of staff to
meet identified individual needs; and the knowledge a license holder may have regarding
previous abuse that is relevant to minimizing risk of abuse for clients.

(2) The assessment of the physical plant where the licensed services are provided
shall include an evaluation of the following factors: the condition and design of the
building as it relates to the safety of the clients; and the existence of areas in the building
which are difficult to supervise.

(3) The assessment of the environment for each facility and for each site when living
arrangements are provided by the agency shall include an evaluation of the following
factors: the location of the program in a particular neighborhood or community; the type
of grounds and terrain surrounding the building; the type of internal programming; and
the program's staffing patterns.

(4) The license holder shall provide an orientation to the program abuse prevention
plan for clients receiving services. If applicable, the client's legal representative must be
notified of the orientation. The license holder shall provide this orientation for each new
person within 24 hours of admission, or for persons who would benefit more from a later
orientation, the orientation may take place within 72 hours.

(5) The license holder's governing body or the governing body's delegated
representative
shall review the plan at least annually using the assessment factors in the
plan and any substantiated maltreatment findings that occurred since the last review. The
governing body or the governing body's delegated representative shall revise the plan,
if necessary, to reflect the review results.

(6) A copy of the program abuse prevention plan shall be posted in a prominent
location in the program and be available upon request to mandated reporters, persons
receiving services, and legal representatives.

(b) In addition to the requirements in section 626.557, subdivision 14, the individual
abuse prevention plan shall meet the requirements in clauses (1) and (2).

(1) The plan shall include a statement of measures that will be taken to minimize the
risk of abuse to the vulnerable adult when the individual assessment required in section
626.557, subdivision 14, paragraph (b), indicates the need for measures in addition to the
specific measures identified in the program abuse prevention plan. The measures shall
include the specific actions the program will take to minimize the risk of abuse within
the scope of the licensed services, and will identify referrals made when the vulnerable
adult is susceptible to abuse outside the scope or control of the licensed services. When
the assessment indicates that the vulnerable adult does not need specific risk reduction
measures in addition to those identified in the program abuse prevention plan, the
individual abuse prevention plan shall document this determination.

(2) An individual abuse prevention plan shall be developed for each new person as
part of the initial individual program plan or service plan required under the applicable
licensing rule. The review and evaluation of the individual abuse prevention plan shall
be done as part of the review of the program plan or service plan. The person receiving
services shall participate in the development of the individual abuse prevention plan to the
full extent of the person's abilities. If applicable, the person's legal representative shall be
given the opportunity to participate with or for the person in the development of the plan.
The interdisciplinary team shall document the review of all abuse prevention plans at least
annually, using the individual assessment and any reports of abuse relating to the person.
The plan shall be revised to reflect the results of this review.

Sec. 7.

Minnesota Statutes 2014, section 245D.02, is amended by adding a subdivision
to read:


Subd. 37.

Working day.

"Working day" means Monday, Tuesday, Wednesday,
Thursday, or Friday, excluding any legal holiday.

Sec. 8.

Minnesota Statutes 2014, section 245D.05, subdivision 1, is amended to read:


Subdivision 1.

Health needs.

(a) The license holder is responsible for meeting
health service needs assigned in the coordinated service and support plan or the
coordinated service and support plan addendum, consistent with the person's health needs.
Unless directed otherwise in the coordinated service and support plan or the coordinated
service and support plan addendum,
the license holder is responsible for promptly
notifying the person's legal representative, if any, and the case manager of changes in a
person's physical and mental health needs affecting health service needs assigned to the
license holder in the coordinated service and support plan or the coordinated service
and support plan addendum, when discovered by the license holder, unless the license
holder has reason to know the change has already been reported. The license holder
must document when the notice is provided.

(b) If responsibility for meeting the person's health service needs has been assigned
to the license holder in the coordinated service and support plan or the coordinated service
and support plan addendum, the license holder must maintain documentation on how the
person's health needs will be met, including a description of the procedures the license
holder will follow in order to:

(1) provide medication setup, assistance, or administration according to this chapter.
Unlicensed staff responsible for medication setup or medication administration under this
section must complete training according to section 245D.09, subdivision 4a, paragraph (d);

(2) monitor health conditions according to written instructions from a licensed
health professional;

(3) assist with or coordinate medical, dental, and other health service appointments; or

(4) use medical equipment, devices, or adaptive aides or technology safely and
correctly according to written instructions from a licensed health professional.

Sec. 9.

Minnesota Statutes 2014, section 245D.05, subdivision 2, is amended to read:


Subd. 2.

Medication administration.

(a) For purposes of this subdivision,
"medication administration" means:

(1) checking the person's medication record;

(2) preparing the medication as necessary;

(3) administering the medication or treatment to the person;

(4) documenting the administration of the medication or treatment or the reason for
not administering the medication or treatment; and

(5) reporting to the prescriber or a nurse any concerns about the medication or
treatment, including side effects, effectiveness, or a pattern of the person refusing to
take the medication or treatment as prescribed. Adverse reactions must be immediately
reported to the prescriber or a nurse.

(b)(1) If responsibility for medication administration is assigned to the license holder
in the coordinated service and support plan or the coordinated service and support plan
addendum, the license holder must implement medication administration procedures to
ensure a person takes medications and treatments as prescribed. The license holder must
ensure that the requirements in clauses (2) and (3) have been met before administering
medication or treatment.

(2) The license holder must obtain written authorization from the person or the
person's legal representative to administer medication or treatment and must obtain
reauthorization annually as needed
. This authorization shall remain in effect unless it is
withdrawn in writing and may be withdrawn at any time. If the person or the person's
legal representative refuses to authorize the license holder to administer medication, the
medication must not be administered. The refusal to authorize medication administration
must be reported to the prescriber as expediently as possible.

(3) For a license holder providing intensive support services, the medication or
treatment must be administered according to the license holder's medication administration
policy and procedures as required under section 245D.11, subdivision 2, clause (3).

(c) The license holder must ensure the following information is documented in the
person's medication administration record:

(1) the information on the current prescription label or the prescriber's current
written or electronically recorded order or prescription that includes the person's name,
description of the medication or treatment to be provided, and the frequency and other
information needed to safely and correctly administer the medication or treatment to
ensure effectiveness;

(2) information on any risks or other side effects that are reasonable to expect, and
any contraindications to its use. This information must be readily available to all staff
administering the medication;

(3) the possible consequences if the medication or treatment is not taken or
administered as directed;

(4) instruction on when and to whom to report the following:

(i) if a dose of medication is not administered or treatment is not performed as
prescribed, whether by error by the staff or the person or by refusal by the person; and

(ii) the occurrence of possible adverse reactions to the medication or treatment;

(5) notation of any occurrence of a dose of medication not being administered or
treatment not performed as prescribed, whether by error by the staff or the person or by
refusal by the person, or of adverse reactions, and when and to whom the report was
made; and

(6) notation of when a medication or treatment is started, administered, changed, or
discontinued.

Sec. 10.

Minnesota Statutes 2014, section 245D.06, subdivision 1, is amended to read:


Subdivision 1.

Incident response and reporting.

(a) The license holder must
respond to incidents under section 245D.02, subdivision 11, that occur while providing
services to protect the health and safety of and minimize risk of harm to the person.

(b) The license holder must maintain information about and report incidents to the
person's legal representative or designated emergency contact and case manager within
24 hours of an incident occurring while services are being provided, within 24 hours of
discovery or receipt of information that an incident occurred, unless the license holder
has reason to know that the incident has already been reported, or as otherwise directed
in a person's coordinated service and support plan or coordinated service and support
plan addendum. An incident of suspected or alleged maltreatment must be reported as
required under paragraph (d), and an incident of serious injury or death must be reported
as required under paragraph (e).

(c) When the incident involves more than one person, the license holder must not
disclose personally identifiable information about any other person when making the report
to each person and case manager unless the license holder has the consent of the person.

(d) Within 24 hours of reporting maltreatment as required under section 626.556
or 626.557, the license holder must inform the case manager of the report unless there is
reason to believe that the case manager is involved in the suspected maltreatment. The
license holder must disclose the nature of the activity or occurrence reported and the
agency that received the report.

(e) The license holder must report the death or serious injury of the person as
required in paragraph (b) and to the Department of Human Services Licensing Division,
and the Office of Ombudsman for Mental Health and Developmental Disabilities as
required under section 245.94, subdivision 2a, within 24 hours of the death or serious
injury
, or receipt of information that the death or serious injury occurred, unless the license
holder has reason to know that the death or serious injury has already been reported.

(f) When a death or serious injury occurs in a facility certified as an intermediate
care facility for persons with developmental disabilities, the death or serious injury must
be reported to the Department of Health, Office of Health Facility Complaints, and the
Office of Ombudsman for Mental Health and Developmental Disabilities, as required
under sections 245.91 and 245.94, subdivision 2a, unless the license holder has reason to
know that the death or serious injury has already been reported.

(g) The license holder must conduct an internal review of incident reports of deaths
and serious injuries that occurred while services were being provided and that were not
reported by the program as alleged or suspected maltreatment, for identification of incident
patterns, and implementation of corrective action as necessary to reduce occurrences.
The review must include an evaluation of whether related policies and procedures were
followed, whether the policies and procedures were adequate, whether there is a need for
additional staff training, whether the reported event is similar to past events with the
persons or the services involved, and whether there is a need for corrective action by the
license holder to protect the health and safety of persons receiving services. Based on
the results of this review, the license holder must develop, document, and implement a
corrective action plan designed to correct current lapses and prevent future lapses in
performance by staff or the license holder, if any.

(h) The license holder must verbally report the emergency use of manual restraint
of a person as required in paragraph (b) within 24 hours of the occurrence. The license
holder must ensure the written report and internal review of all incident reports of the
emergency use of manual restraints are completed according to the requirements in section
245D.061 or successor provisions.

Sec. 11.

Minnesota Statutes 2014, section 245D.06, subdivision 2, is amended to read:


Subd. 2.

Environment and safety.

The license holder must:

(1) ensure the following when the license holder is the owner, lessor, or tenant
of the service site:

(i) the service site is a safe and hazard-free environment;

(ii) that toxic substances or dangerous items are inaccessible to persons served by
the program only to protect the safety of a person receiving services when a known safety
threat exists and not as a substitute for staff supervision or interactions with a person who
is receiving services. If toxic substances or dangerous items are made inaccessible, the
license holder must document an assessment of the physical plant, its environment, and its
population identifying the risk factors which require toxic substances or dangerous items
to be inaccessible and a statement of specific measures to be taken to minimize the safety
risk to persons receiving services and to restore accessibility to all persons receiving
services at the service site;

(iii) doors are locked from the inside to prevent a person from exiting only when
necessary to protect the safety of a person receiving services and not as a substitute for
staff supervision or interactions with the person. If doors are locked from the inside, the
license holder must document an assessment of the physical plant, the environment and
the population served, identifying the risk factors which require the use of locked doors,
and a statement of specific measures to be taken to minimize the safety risk to persons
receiving services at the service site; and

(iv) a staff person is available at the service site who is trained in basic first aid and,
when required in a person's coordinated service and support plan or coordinated service
and support plan addendum, cardiopulmonary resuscitation (CPR) whenever persons are
present and staff are required to be at the site to provide direct support service. The CPR
training must include in-person instruction, hands-on practice, and an observed skills
assessment under the direct supervision of a CPR instructor;

(2) maintain equipment, vehicles, supplies, and materials owned or leased by the
license holder in good condition when used to provide services;

(3) follow procedures to ensure safe transportation, handling, and transfers of the
person and any equipment used by the person, when the license holder is responsible for
transportation of a person or a person's equipment;

(4) be prepared for emergencies and follow emergency response procedures to
ensure the person's safety in an emergency; and

(5) follow universal precautions and sanitary practices, including hand washing, for
infection prevention and control, and to prevent communicable diseases.

Sec. 12.

Minnesota Statutes 2014, section 245D.06, subdivision 7, is amended to read:


Subd. 7.

Permitted actions and procedures.

(a) Use of the instructional techniques
and intervention procedures as identified in paragraphs (b) and (c) is permitted when used
on an intermittent or continuous basis. When used on a continuous basis, it must be
addressed in a person's coordinated service and support plan addendum as identified in
sections 245D.07 and 245D.071. For purposes of this chapter, the requirements of this
subdivision supersede the requirements identified in Minnesota Rules, part 9525.2720.

(b) Physical contact or instructional techniques must use the least restrictive
alternative possible to meet the needs of the person and may be used:

(1) to calm or comfort a person by holding that person with no resistance from
that person;

(2) to protect a person known to be at risk of injury due to frequent falls as a result
of a medical condition;

(3) to facilitate the person's completion of a task or response when the person does
not resist or the person's resistance is minimal in intensity and duration;

(4) to block or redirect a person's limbs or body without holding the person or
limiting the person's movement to interrupt the person's behavior that may result in injury
to self or others with less than 60 seconds of physical contact by staff; or

(5) to redirect a person's behavior when the behavior does not pose a serious threat
to the person or others and the behavior is effectively redirected with less than 60 seconds
of physical contact by staff.

(c) Restraint may be used as an intervention procedure to:

(1) allow a licensed health care professional to safely conduct a medical examination
or to provide medical treatment ordered by a licensed health care professional to a person
necessary to promote healing or recovery from an acute, meaning short-term, medical
condition
;

(2) assist in the safe evacuation or redirection of a person in the event of an
emergency and the person is at imminent risk of harm; or

(3) position a person with physical disabilities in a manner specified in the person's
coordinated service and support plan addendum.

Any use of manual restraint as allowed in this paragraph must comply with the restrictions
identified in subdivision 6, paragraph (b).

(d) Use of adaptive aids or equipment, orthotic devices, or other medical equipment
ordered by a licensed health professional to treat a diagnosed medical condition do not in
and of themselves constitute the use of mechanical restraint.

Sec. 13.

Minnesota Statutes 2014, section 245D.07, subdivision 2, is amended to read:


Subd. 2.

Service planning requirements for basic support services.

(a) License
holders providing basic support services must meet the requirements of this subdivision.

(b) Within 15 calendar days of service initiation the license holder must complete
a preliminary coordinated service and support plan addendum based on the coordinated
service and support plan.

(c) Within 60 calendar days of service initiation the license holder must review
and revise as needed the preliminary coordinated service and support plan addendum to
document the services that will be provided including how, when, and by whom services
will be provided, and the person responsible for overseeing the delivery and coordination
of services.

(d) The license holder must participate in service planning and support team
meetings for the person following stated timelines established in the person's coordinated
service and support plan or as requested by the person or the person's legal representative,
the support team or the expanded support team.

Sec. 14.

Minnesota Statutes 2014, section 245D.071, subdivision 5, is amended to read:


Subd. 5.

Service plan review and evaluation.

(a) The license holder must give the
person or the person's legal representative and case manager an opportunity to participate
in the ongoing review and development of the service plan and the methods used to support
the person and accomplish outcomes identified in subdivisions 3 and 4. The license holder,
in coordination with the person's support team or expanded support team, must meet
with the person, the person's legal representative, and the case manager, and participate
in service plan review meetings following stated timelines established in the person's
coordinated service and support plan or coordinated service and support plan addendum or
within 30 days of a written request by the person, the person's legal representative, or the
case manager, at a minimum of once per year. The purpose of the service plan review
is to determine whether changes are needed to the service plan based on the assessment
information, the license holder's evaluation of progress towards accomplishing outcomes,
or other information provided by the support team or expanded support team.

(b) The license holder must summarize the person's status and progress toward
achieving the identified outcomes and make recommendations and identify the rationale
for changing, continuing, or discontinuing implementation of supports and methods
identified in subdivision 4 in a written report sent to the person or the person's legal
representative and case manager five working days prior to the review meeting, unless the
person, the person's legal representative, or the case manager requests to receive the report
available at the time of the progress review meeting. The report must be sent at least
five working days prior to the progress review meeting if requested by the team in the
coordinated service and support plan or coordinated service and support plan addendum.

(c) The license holder must send the coordinated service and support plan addendum
to the person, the person's legal representative, and the case manager by mail within ten
working days of the progress review meeting.
Within ten working days of the progress
review meeting
mailing of the coordinated service and support plan addendum, the license
holder must obtain dated signatures from the person or the person's legal representative
and the case manager to document approval of any changes to the coordinated service and
support plan addendum.

(d) If, within ten working days of submitting changes to the coordinated service
and support plan and coordinated service and support plan addendum, the person or the
person's legal representative or case manager has not signed and returned to the license
holder the coordinated service and support plan or coordinated service and support plan
addendum or has not proposed written modifications to the license holder's submission, the
submission is deemed approved and the coordinated service and support plan addendum
becomes effective and remains in effect until the legal representative or case manager
submits a written request to revise the coordinated service and support plan addendum.

Sec. 15.

Minnesota Statutes 2014, section 245D.09, subdivision 3, is amended to read:


Subd. 3.

Staff qualifications.

(a) The license holder must ensure that staff providing
direct support, or staff who have responsibilities related to supervising or managing the
provision of direct support service, are competent as demonstrated through skills and
knowledge training, experience, and education relevant to the primary disability of the
person and to meet the person's needs and additional requirements as written in the
coordinated service and support plan or coordinated service and support plan addendum,
or when otherwise required by the case manager or the federal waiver plan. The license
holder must verify and maintain evidence of staff competency, including documentation of:

(1) education and experience qualifications relevant to the job responsibilities
assigned to the staff and to the primary disability of persons served by the program,
including a valid degree and transcript, or a current license, registration, or certification,
when a degree or licensure, registration, or certification is required by this chapter or in the
coordinated service and support plan or coordinated service and support plan addendum;

(2) demonstrated competency in the orientation and training areas required under
this chapter, and when applicable, completion of continuing education required to
maintain professional licensure, registration, or certification requirements. Competency in
these areas is determined by the license holder through knowledge testing or observed
skill assessment conducted by the trainer or instructor or by an individual who has been
previously deemed competent by the trainer or instructor in the area being assessed
; and

(3) except for a license holder who is the sole direct support staff, periodic
performance evaluations completed by the license holder of the direct support staff
person's ability to perform the job functions based on direct observation.

(b) Staff under 18 years of age may not perform overnight duties or administer
medication.

Sec. 16.

Minnesota Statutes 2014, section 245D.09, subdivision 5, is amended to read:


Subd. 5.

Annual training.

A license holder must provide annual training to direct
support staff on the topics identified in subdivision 4, clauses (3) to (10). If the direct
support staff has a first aid certification, annual training under subdivision 4, clause (9), is
not required as long as the certification remains current.
A license holder must provide a
minimum of 24 hours of annual training to direct service staff providing intensive services
and having fewer than five years of documented experience and 12 hours of annual
training to direct service staff providing intensive services and having five or more years
of documented experience in topics described in subdivisions 4 and 4a, paragraphs (a) to
(f). Training on relevant topics received from sources other than the license holder may
count toward training requirements. A license holder must provide a minimum of 12 hours
of annual training to direct service staff providing basic services and having fewer than
five years of documented experience and six hours of annual training to direct service staff
providing basic services and having five or more years of documented experience.

Sec. 17.

Minnesota Statutes 2014, section 245D.22, subdivision 4, is amended to read:


Subd. 4.

First aid must be available on site.

(a) A staff person trained in first
aid must be available on site and, when required in a person's coordinated service and
support plan or coordinated service and support plan addendum, be able to provide
cardiopulmonary resuscitation, whenever persons are present and staff are required to be
at the site to provide direct service. The CPR training must include in-person instruction,
hands-on practice, and an observed skills assessment under the direct supervision of a
CPR instructor.

(b) A facility must have first aid kits readily available for use by, and that meet
the needs of, persons receiving services and staff. At a minimum, the first aid kit must
be equipped with accessible first aid supplies including bandages, sterile compresses,
scissors, an ice bag or cold pack, an oral or surface thermometer, mild liquid soap,
adhesive tape, and first aid manual.

Sec. 18.

Minnesota Statutes 2014, section 245D.31, subdivision 3, is amended to read:


Subd. 3.

Staff ratio requirement for each person receiving services.

The case
manager, in consultation with the interdisciplinary team, must determine at least once each
year which of the ratios in subdivisions 4, 5, and 6 is appropriate for each person receiving
services on the basis of the characteristics described in subdivisions 4, 5, and 6. The ratio
assigned each person and the documentation of how the ratio was arrived at must be kept
in each person's individual service plan. Documentation must include an assessment of the
person with respect to the characteristics in subdivisions 4, 5, and 6 recorded on a standard
assessment form required by the commissioner
.

Sec. 19.

Minnesota Statutes 2014, section 245D.31, subdivision 4, is amended to read:


Subd. 4.

Person requiring staff ratio of one to four.

A person must be assigned a
staff ratio requirement of one to four if:

(1) on a daily basis the person requires total care and monitoring or constant
hand-over-hand physical guidance to successfully complete at least three of the following
activities: toileting, communicating basic needs, eating, or ambulating; or is not capable
of taking appropriate action for self-preservation under emergency conditions;
or

(2) the person engages in conduct that poses an imminent risk of physical harm to
self or others at a documented level of frequency, intensity, or duration requiring frequent
daily ongoing intervention and monitoring as established in the person's coordinated
service and support plan or coordinated service and support plan addendum.

Sec. 20.

Minnesota Statutes 2014, section 245D.31, subdivision 5, is amended to read:


Subd. 5.

Person requiring staff ratio of one to eight.

A person must be assigned a
staff ratio requirement of one to eight if:

(1) the person does not meet the requirements in subdivision 4; and

(2) on a daily basis the person requires verbal prompts or spot checks and minimal
or no physical assistance to successfully complete at least four three of the following
activities: toileting, communicating basic needs, eating, or ambulating, or taking
appropriate action for self-preservation under emergency conditions
.

Sec. 21.

Minnesota Statutes 2014, section 252.27, subdivision 2a, is amended to read:


Subd. 2a.

Contribution amount.

(a) The natural or adoptive parents of a minor
child, including a child determined eligible for medical assistance without consideration of
parental income, must contribute to the cost of services used by making monthly payments
on a sliding scale based on income, unless the child is married or has been married, parental
rights have been terminated, or the child's adoption is subsidized according to chapter
259A or through title IV-E of the Social Security Act. The parental contribution is a partial
or full payment for medical services provided for diagnostic, therapeutic, curing, treating,
mitigating, rehabilitation, maintenance, and personal care services as defined in United
States Code, title 26, section 213, needed by the child with a chronic illness or disability.

(b) For households with adjusted gross income equal to or greater than 275 percent
of federal poverty guidelines, the parental contribution shall be computed by applying the
following schedule of rates to the adjusted gross income of the natural or adoptive parents:

(1) if the adjusted gross income is equal to or greater than 275 percent of federal
poverty guidelines and less than or equal to 545 percent of federal poverty guidelines,
the parental contribution shall be determined using a sliding fee scale established by the
commissioner of human services which begins at 2.48 2.23 percent of adjusted gross
income at 275 percent of federal poverty guidelines and increases to 6.75 6.08 percent of
adjusted gross income for those with adjusted gross income up to 545 percent of federal
poverty guidelines;

(2) if the adjusted gross income is greater than 545 percent of federal poverty
guidelines and less than 675 percent of federal poverty guidelines, the parental
contribution shall be 6.75 6.08 percent of adjusted gross income;

(3) if the adjusted gross income is equal to or greater than 675 percent of federal
poverty guidelines and less than 975 percent of federal poverty guidelines, the parental
contribution shall be determined using a sliding fee scale established by the commissioner
of human services which begins at 6.75 6.08 percent of adjusted gross income at 675 percent
of federal poverty guidelines and increases to nine 8.1 percent of adjusted gross income
for those with adjusted gross income up to 975 percent of federal poverty guidelines; and

(4) if the adjusted gross income is equal to or greater than 975 percent of federal
poverty guidelines, the parental contribution shall be 11.25 10.13 percent of adjusted
gross income.

If the child lives with the parent, the annual adjusted gross income is reduced by
$2,400 prior to calculating the parental contribution. If the child resides in an institution
specified in section 256B.35, the parent is responsible for the personal needs allowance
specified under that section in addition to the parental contribution determined under this
section. The parental contribution is reduced by any amount required to be paid directly to
the child pursuant to a court order, but only if actually paid.

(c) The household size to be used in determining the amount of contribution under
paragraph (b) includes natural and adoptive parents and their dependents, including the
child receiving services. Adjustments in the contribution amount due to annual changes
in the federal poverty guidelines shall be implemented on the first day of July following
publication of the changes.

(d) For purposes of paragraph (b), "income" means the adjusted gross income of the
natural or adoptive parents determined according to the previous year's federal tax form,
except, effective retroactive to July 1, 2003, taxable capital gains to the extent the funds
have been used to purchase a home shall not be counted as income.

(e) The contribution shall be explained in writing to the parents at the time eligibility
for services is being determined. The contribution shall be made on a monthly basis
effective with the first month in which the child receives services. Annually upon
redetermination or at termination of eligibility, if the contribution exceeded the cost of
services provided, the local agency or the state shall reimburse that excess amount to
the parents, either by direct reimbursement if the parent is no longer required to pay a
contribution, or by a reduction in or waiver of parental fees until the excess amount is
exhausted. All reimbursements must include a notice that the amount reimbursed may be
taxable income if the parent paid for the parent's fees through an employer's health care
flexible spending account under the Internal Revenue Code, section 125, and that the
parent is responsible for paying the taxes owed on the amount reimbursed.

(f) The monthly contribution amount must be reviewed at least every 12 months;
when there is a change in household size; and when there is a loss of or gain in income
from one month to another in excess of ten percent. The local agency shall mail a written
notice 30 days in advance of the effective date of a change in the contribution amount.
A decrease in the contribution amount is effective in the month that the parent verifies a
reduction in income or change in household size.

(g) Parents of a minor child who do not live with each other shall each pay the
contribution required under paragraph (a). An amount equal to the annual court-ordered
child support payment actually paid on behalf of the child receiving services shall be
deducted from the adjusted gross income of the parent making the payment prior to
calculating the parental contribution under paragraph (b).

(h) The contribution under paragraph (b) shall be increased by an additional five
percent if the local agency determines that insurance coverage is available but not
obtained for the child. For purposes of this section, "available" means the insurance is a
benefit of employment for a family member at an annual cost of no more than five percent
of the family's annual income. For purposes of this section, "insurance" means health
and accident insurance coverage, enrollment in a nonprofit health service plan, health
maintenance organization, self-insured plan, or preferred provider organization.

Parents who have more than one child receiving services shall not be required
to pay more than the amount for the child with the highest expenditures. There shall
be no resource contribution from the parents. The parent shall not be required to pay
a contribution in excess of the cost of the services provided to the child, not counting
payments made to school districts for education-related services. Notice of an increase in
fee payment must be given at least 30 days before the increased fee is due.

(i) The contribution under paragraph (b) shall be reduced by $300 per fiscal year if,
in the 12 months prior to July 1:

(1) the parent applied for insurance for the child;

(2) the insurer denied insurance;

(3) the parents submitted a complaint or appeal, in writing to the insurer, submitted
a complaint or appeal, in writing, to the commissioner of health or the commissioner of
commerce, or litigated the complaint or appeal; and

(4) as a result of the dispute, the insurer reversed its decision and granted insurance.

For purposes of this section, "insurance" has the meaning given in paragraph (h).

A parent who has requested a reduction in the contribution amount under this
paragraph shall submit proof in the form and manner prescribed by the commissioner or
county agency, including, but not limited to, the insurer's denial of insurance, the written
letter or complaint of the parents, court documents, and the written response of the insurer
approving insurance. The determinations of the commissioner or county agency under this
paragraph are not rules subject to chapter 14.

Sec. 22.

Minnesota Statutes 2014, section 256.478, is amended to read:


256.478 HOME AND COMMUNITY-BASED SERVICES TRANSITIONS
GRANTS.

(a) The commissioner shall make available home and community-based services
transition grants to serve individuals who do not meet eligibility criteria for the medical
assistance program under section 256B.056 or 256B.057, but who otherwise meet the
criteria under section 256B.092, subdivision 13, or 256B.49, subdivision 24.

(b) For the purposes of this section, the commissioner has the authority to transfer
funds between the medical assistance account and the home and community-based
services transitions grants account.

Sec. 23.

Minnesota Statutes 2014, section 256.975, subdivision 2, is amended to read:


Subd. 2.

Duties.

The board Minnesota Board on Aging shall carry out the following
duties:

(1) to advise the governor and heads of state departments and agencies regarding
policy, programs, and services affecting the aging;

(2) to provide a mechanism for coordinating plans and activities of state departments
and citizens' groups as they pertain to aging;

(3) to create public awareness of the special needs and potentialities of older persons;

(4) to gather and disseminate information about research and action programs,
and to encourage state departments and other agencies to conduct needed research in
the field of aging;

(5) to stimulate, guide, and provide technical assistance in the organization of local
councils on aging;

(6) to provide continuous review of ongoing services, programs and proposed
legislation affecting the elderly in Minnesota;

(7) to administer and to make policy relating to all aspects of the Older Americans
Act of 1965, as amended, including implementation thereof; and

(8) to award grants, enter into contracts, and adopt rules the Minnesota Board on
Aging deems necessary to carry out the purposes of this section. ;

(9) develop the criteria and procedures to allocate the grants under subdivision 11,
evaluate all applications on a competitive basis and award the grants, and select qualified
providers to offer technical assistance to grant applicants and grantees. The selected
provider shall provide applicants and grantees assistance with project design, evaluation
methods, materials, and training; and

(10) submit by January 15, 2017, and on each January 15 thereafter, a progress
report on the dementia grants programs under subdivision 11 to the chairs and ranking
minority members of the senate and house of representatives committees and divisions
with jurisdiction over health finance and policy. The report shall include:

(i) information on each grant recipient;

(ii) a summary of all projects or initiatives undertaken with each grant;

(iii) the measurable outcomes established by each grantee, an explanation of the
evaluation process used to determine whether the outcomes were met, and the results of
the evaluation;

(iv) an accounting of how the grant funds were spent; and

(v) the overall impact of the projects and initiatives that were conducted.

Sec. 24.

Minnesota Statutes 2014, section 256.975, is amended by adding a subdivision
to read:


Subd. 11.

Regional and local dementia grants.

(a) The Minnesota Board on
Aging shall award competitive grants to eligible applicants for regional and local projects
and initiatives targeted to a designated community, which may consist of a specific
geographic area or population, to increase awareness of Alzheimer's disease and other
dementias, increase the rate of cognitive testing in the population at risk for dementias,
promote the benefits of early diagnosis of dementias, or connect caregivers of persons
with dementia to education and resources.

(b) The project areas for grants include:

(1) local or community-based initiatives to promote the benefits of physician
consultations for all individuals who suspect a memory or cognitive problem;

(2) local or community-based initiatives to promote the benefits of early diagnosis of
Alzheimer's disease and other dementias; and

(3) local or community-based initiatives to provide informational materials and
other resources to caregivers of persons with dementia.

(c) Eligible applicants for local and regional grants may include, but are not limited
to, community health boards, school districts, colleges and universities, community
clinics, tribal communities, nonprofit organizations, and other health care organizations.

(d) Applicants must submit proposals for available grants to the Minnesota Board on
Aging by September 1, 2015, and each September 1 thereafter. The application must:

(1) describe the proposed initiative, including the targeted community and how the
initiative meets the requirements of this subdivision; and

(2) identify the proposed outcomes of the initiative and the evaluation process to be
used to measure these outcomes.

(e) In awarding the regional and local dementia grants, the Minnesota Board on
Aging must give priority to applicants who demonstrate that the proposed project:

(1) is supported by and appropriately targeted to the community the applicant serves;

(2) is designed to coordinate with other community activities related to other health
initiatives, particularly those initiatives targeted at the elderly;

(3) is conducted by an applicant able to demonstrate expertise in the project areas;

(4) utilizes and enhances existing activities and resources or involves innovative
approaches to achieve success in the project areas; and

(5) strengthens community relationships and partnerships in order to achieve the
project areas.

(f) The board shall divide the state into specific geographic regions and allocate a
percentage of the money available for the local and regional dementia grants to projects or
initiatives aimed at each geographic region.

(g) The board shall award any available grants by October 1, 2015, and each
October 1 thereafter.

(h) Each grant recipient shall report to the board on the progress of the initiative at
least once during the grant period, and within two months of the end of the grant period
shall submit a final report to the board that includes the outcome results.

EFFECTIVE DATE.

This section is effective July 1, 2015.

Sec. 25.

Minnesota Statutes 2014, section 256B.057, subdivision 9, is amended to read:


Subd. 9.

Employed persons with disabilities.

(a) Medical assistance may be paid
for a person who is employed and who:

(1) but for excess earnings or assets, meets the definition of disabled under the
Supplemental Security Income program;

(2) meets the asset limits in paragraph (d); and

(3) pays a premium and other obligations under paragraph (e).

(b) For purposes of eligibility, there is a $65 earned income disregard. To be eligible
for medical assistance under this subdivision, a person must have more than $65 of earned
income. Earned income must have Medicare, Social Security, and applicable state and
federal taxes withheld. The person must document earned income tax withholding. Any
spousal income or assets shall be disregarded for purposes of eligibility and premium
determinations.

(c) After the month of enrollment, a person enrolled in medical assistance under
this subdivision who:

(1) is temporarily unable to work and without receipt of earned income due to a
medical condition, as verified by a physician; or

(2) loses employment for reasons not attributable to the enrollee, and is without
receipt of earned income may retain eligibility for up to four consecutive months after the
month of job loss. To receive a four-month extension, enrollees must verify the medical
condition or provide notification of job loss. All other eligibility requirements must be met
and the enrollee must pay all calculated premium costs for continued eligibility.

(d) For purposes of determining eligibility under this subdivision, a person's assets
must not exceed $20,000, excluding:

(1) all assets excluded under section 256B.056;

(2) retirement accounts, including individual accounts, 401(k) plans, 403(b) plans,
Keogh plans, and pension plans;

(3) medical expense accounts set up through the person's employer; and

(4) spousal assets, including spouse's share of jointly held assets.

(e) All enrollees must pay a premium to be eligible for medical assistance under this
subdivision, except as provided under clause (5).

(1) An enrollee must pay the greater of a $65 $35 premium or the premium calculated
based on the person's gross earned and unearned income and the applicable family size
using a sliding fee scale established by the commissioner, which begins at one percent of
income at 100 percent of the federal poverty guidelines and increases to 7.5 percent of
income for those with incomes at or above 300 percent of the federal poverty guidelines.

(2) Annual adjustments in the premium schedule based upon changes in the federal
poverty guidelines shall be effective for premiums due in July of each year.

(3) All enrollees who receive unearned income must pay five one-half of one percent
of unearned income in addition to the premium amount, except as provided under clause (5).

(4) Increases in benefits under title II of the Social Security Act shall not be counted
as income for purposes of this subdivision until July 1 of each year.

(5) Effective July 1, 2009, American Indians are exempt from paying premiums as
required by section 5006 of the American Recovery and Reinvestment Act of 2009, Public
Law 111-5. For purposes of this clause, an American Indian is any person who meets the
definition of Indian according to Code of Federal Regulations, title 42, section 447.50.

(f) A person's eligibility and premium shall be determined by the local county
agency. Premiums must be paid to the commissioner. All premiums are dedicated to
the commissioner.

(g) Any required premium shall be determined at application and redetermined at
the enrollee's six-month income review or when a change in income or household size is
reported. Enrollees must report any change in income or household size within ten days
of when the change occurs. A decreased premium resulting from a reported change in
income or household size shall be effective the first day of the next available billing month
after the change is reported. Except for changes occurring from annual cost-of-living
increases, a change resulting in an increased premium shall not affect the premium amount
until the next six-month review.

(h) Premium payment is due upon notification from the commissioner of the
premium amount required. Premiums may be paid in installments at the discretion of
the commissioner.

(i) Nonpayment of the premium shall result in denial or termination of medical
assistance unless the person demonstrates good cause for nonpayment. Good cause exists
if the requirements specified in Minnesota Rules, part 9506.0040, subpart 7, items B to
D, are met. Except when an installment agreement is accepted by the commissioner, all
persons disenrolled for nonpayment of a premium must pay any past due premiums as well
as current premiums due prior to being reenrolled. Nonpayment shall include payment with
a returned, refused, or dishonored instrument. The commissioner may require a guaranteed
form of payment as the only means to replace a returned, refused, or dishonored instrument.

(j) For enrollees whose income does not exceed 200 percent of the federal poverty
guidelines and who are also enrolled in Medicare, the commissioner shall reimburse
the enrollee for Medicare part B premiums under section 256B.0625, subdivision 15,
paragraph (a).

Sec. 26.

Minnesota Statutes 2014, section 256B.097, subdivision 3, is amended to read:


Subd. 3.

State Quality Council.

(a) There is hereby created a State Quality
Council which must define regional quality councils, and carry out a community-based,
person-directed quality review component, and a comprehensive system for effective
incident reporting, investigation, analysis, and follow-up.

(b) By August 1, 2011, the commissioner of human services shall appoint the
members of the initial State Quality Council. Members shall include representatives
from the following groups:

(1) disability service recipients and their family members;

(2) during the first four years of the State Quality Council, there must be at least
three members from the Region 10 stakeholders. As regional quality councils are formed
under subdivision 4, each regional quality council shall appoint one member;

(3) disability service providers;

(4) disability advocacy groups; and

(5) county human services agencies and staff from the Department of Human
Services and Ombudsman for Mental Health and Developmental Disabilities.

(c) Members of the council who do not receive a salary or wages from an employer
for time spent on council duties may receive a per diem payment when performing council
duties and functions.

(d) The State Quality Council shall:

(1) assist the Department of Human Services in fulfilling federally mandated
obligations by monitoring disability service quality and quality assurance and
improvement practices in Minnesota;

(2) establish state quality improvement priorities with methods for achieving results
and provide an annual report to the legislative committees with jurisdiction over policy
and funding of disability services on the outcomes, improvement priorities, and activities
undertaken by the commission during the previous state fiscal year;

(3) identify issues pertaining to financial and personal risk that impede Minnesotans
with disabilities from optimizing choice of community-based services; and

(4) recommend to the chairs and ranking minority members of the legislative
committees with jurisdiction over human services and civil law by January 15, 2014,
statutory and rule changes related to the findings under clause (3) that promote
individualized service and housing choices balanced with appropriate individualized
protection.

(e) The State Quality Council, in partnership with the commissioner, shall:

(1) approve and direct implementation of the community-based, person-directed
system established in this section;

(2) recommend an appropriate method of funding this system, and determine the
feasibility of the use of Medicaid, licensing fees, as well as other possible funding options;

(3) approve measurable outcomes in the areas of health and safety, consumer
evaluation, education and training, providers, and systems;

(4) establish variable licensure periods not to exceed three years based on outcomes
achieved; and

(5) in cooperation with the Quality Assurance Commission, design a transition plan
for licensed providers from Region 10 into the alternative licensing system by July 1, 2015.

(f) The State Quality Council shall notify the commissioner of human services that a
facility, program, or service has been reviewed by quality assurance team members under
subdivision 4, paragraph (b) (c), clause (13), and qualifies for a license.

(g) The State Quality Council, in partnership with the commissioner, shall establish
an ongoing review process for the system. The review shall take into account the
comprehensive nature of the system which is designed to evaluate the broad spectrum of
licensed and unlicensed entities that provide services to persons with disabilities. The
review shall address efficiencies and effectiveness of the system.

(h) The State Quality Council may recommend to the commissioner certain
variances from the standards governing licensure of programs for persons with disabilities
in order to improve the quality of services so long as the recommended variances do
not adversely affect the health or safety of persons being served or compromise the
qualifications of staff to provide services.

(i) The safety standards, rights, or procedural protections referenced under
subdivision 2 4, paragraph (c) (d), shall not be varied. The State Quality Council may
make recommendations to the commissioner or to the legislature in the report required
under paragraph (c) (d) regarding alternatives or modifications to the safety standards,
rights, or procedural protections referenced under subdivision 2 (4), paragraph (c) (d).

(j) The State Quality Council may hire staff to perform the duties assigned in this
subdivision.

Sec. 27.

Minnesota Statutes 2014, section 256B.097, subdivision 4, is amended to read:


Subd. 4.

Regional quality councils.

(a) By July 1, 2015, the commissioner shall
establish, as selected by the State Quality Council, or continue the operation of three
regional quality councils of key stakeholders, including as selected by the State Quality
Council. One regional quality council shall be established in the Twin Cities metropolitan
area, one shall be established in greater Minnesota, and one shall be the Quality Assurance
Commission established under section 256B.0951. By July 1, 2016, the commissioner
shall establish three additional regional quality councils, as selected by the State Quality
Council. The regional quality councils established under this paragraph shall include
regional representatives of:

(1) disability service recipients and their family members;

(2) disability service providers;

(3) disability advocacy groups; and

(4) county human services agencies and staff from the Department of Human
Services and Ombudsman for Mental Health and Developmental Disabilities.

(b) In establishing the regional quality councils, the commissioner shall:

(1) appoint the members from the groups identified in paragraph (a) by July 1, 2015;

(2) designate a chair for each council or prescribe a process for each council to
select a chair from among its members;

(3) set term limits for members of the regional quality councils;

(4) set the total number or maximum number of members of each regional council;

(5) set the number or proportion of members representing each of the groups
identified in paragraph (a);

(6) set deadlines and requirements for annual reports to the chair of the State
Quality Council and to the chairs of the legislative committees in the senate and house of
representatives with primary jurisdiction over human services on the status, outcomes,
improvement priorities, and activities in the regions; and

(7) convene a first meeting of each regional quality council by July 1, 2016, or
identify a person responsible for convening the first meeting of each regional quality
council and require that the person convene the first meeting by July 1, 2016.

(b) (c) Each regional quality council shall:

(1) direct and monitor the community-based, person-directed quality assurance
system in this section;

(2) approve a training program for quality assurance team members under clause (13);

(3) review summary reports from quality assurance team reviews and make
recommendations to the State Quality Council regarding program licensure;

(4) make recommendations to the State Quality Council regarding the system;

(5) resolve complaints between the quality assurance teams, counties, providers,
persons receiving services, their families, and legal representatives;

(6) analyze and review quality outcomes and critical incident data reporting
incidents of life safety concerns immediately to the Department of Human Services
licensing division;

(7) provide information and training programs for persons with disabilities and their
families and legal representatives on service options and quality expectations;

(8) disseminate information and resources developed to other regional quality
councils;

(9) respond to state-level priorities;

(10) establish regional priorities for quality improvement;

(11) submit an annual report to the State Quality Council on the status, outcomes,
improvement priorities, and activities in the region;

(12) choose a representative to participate on the State Quality Council and assume
other responsibilities consistent with the priorities of the State Quality Council; and

(13) recruit, train, and assign duties to members of quality assurance teams, taking
into account the size of the service provider, the number of services to be reviewed,
the skills necessary for the team members to complete the process, and ensure that no
team member has a financial, personal, or family relationship with the facility, program,
or service being reviewed or with anyone served at the facility, program, or service.
Quality assurance teams must be comprised of county staff, persons receiving services
or the person's families, legal representatives, members of advocacy organizations,
providers, and other involved community members. Team members must complete
the training program approved by the regional quality council and must demonstrate
performance-based competency. Team members may be paid a per diem and reimbursed
for expenses related to their participation in the quality assurance process.

(c) (d) The commissioner shall monitor the safety standards, rights, and procedural
protections for the monitoring of psychotropic medications and those identified under
sections 245.825; 245.91 to 245.97; 245A.09, subdivision 2, paragraph (c), clauses (2)
and (5); 245A.12; 245A.13; 252.41, subdivision 9; 256B.092, subdivision 1b, clause
(7); 626.556; and 626.557.

(d) (e) The regional quality councils may hire staff to perform the duties assigned
in this subdivision.

(e) (f) The regional quality councils may charge fees for their services.

(f) (g) The quality assurance process undertaken by a regional quality council consists
of an evaluation by a quality assurance team of the facility, program, or service. The
process must include an evaluation of a random sample of persons served. The sample must
be representative of each service provided. The sample size must be at least five percent but
not less than two persons served. All persons must be given the opportunity to be included
in the quality assurance process in addition to those chosen for the random sample.

(g) (h) A facility, program, or service may contest a licensing decision of the regional
quality council as permitted under chapter 245A.

Sec. 28.

Minnesota Statutes 2014, section 256B.4914, subdivision 6, is amended to read:


Subd. 6.

Payments for residential support services.

(a) Payments for residential
support services, as defined in sections 256B.092, subdivision 11, and 256B.49,
subdivision 22, must be calculated as follows:

(1) determine the number of shared staffing and individual direct staff hours to meet
a recipient's needs provided on site or through monitoring technology;

(2) personnel hourly wage rate must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision
5. This is defined as the direct-care rate;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of shared and individual direct staff hours provided on site
or through monitoring technology and nursing hours by the appropriate staff wages in
subdivision 5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of shared and individual direct staff hours provided on site
or through monitoring technology and nursing hours by the product of the supervision
span of control ratio in subdivision 5, paragraph (b), clause (1), and the appropriate
supervision wage in subdivision 5, paragraph (a), clause (16);

(6) combine the results of clauses (4) and (5), excluding any shared and individual
direct staff hours provided through monitoring technology, and multiply the result by one
plus the employee vacation, sick, and training allowance ratio in subdivision 5, paragraph
(b), clause (2). This is defined as the direct staffing cost;

(7) for employee-related expenses, multiply the direct staffing cost, excluding any
shared and individual direct staff hours provided through monitoring technology, by one
plus the employee-related cost ratio in subdivision 5, paragraph (b), clause (3);

(8) for client programming and supports, the commissioner shall add $2,179; and

(9) for transportation, if provided, the commissioner shall add $1,680, or $3,000 if
customized for adapted transport, based on the resident with the highest assessed need.

(b) The total rate must be calculated using the following steps:

(1) subtotal paragraph (a), clauses (7) to (9), and the direct staffing cost of any
shared and individual direct staff hours provided through monitoring technology that
was excluded in clause (7);

(2) sum the standard general and administrative rate, the program-related expense
ratio, and the absence and utilization ratio;

(3) divide the result of clause (1) by one minus the result of clause (2). This is
the total payment amount; and

(4) adjust the result of clause (3) by a factor to be determined by the commissioner
to adjust for regional differences in the cost of providing services.

(c) The payment methodology for customized living, 24-hour customized living, and
residential care services must be the customized living tool. Revisions to the customized
living tool must be made to reflect the services and activities unique to disability-related
recipient needs.

(d) The commissioner shall establish a Monitoring Technology Review Panel to
annually review and approve the plans, safeguards, and rates that include residential
direct care provided remotely through monitoring technology. Lead agencies shall submit
individual service plans that include supervision using monitoring technology to the
Monitoring Technology Review Panel for approval. Individual service plans that include
supervision using monitoring technology as of December 31, 2013, shall be submitted to
the Monitoring Technology Review Panel, but the plans are not subject to approval.

(e) (d) For individuals enrolled prior to January 1, 2014, the days of service
authorized must meet or exceed the days of service used to convert service agreements
in effect on December 1, 2013, and must not result in a reduction in spending or service
utilization due to conversion during the implementation period under section 256B.4913,
subdivision 4a
. If during the implementation period, an individual's historical rate,
including adjustments required under section 256B.4913, subdivision 4a, paragraph (c),
is equal to or greater than the rate determined in this subdivision, the number of days
authorized for the individual is 365.

(f) (e) The number of days authorized for all individuals enrolling after January 1,
2014, in residential services must include every day that services start and end.

Sec. 29.

[256B.4915] DISABILITY WAIVER REIMBURSEMENT RATE
ADJUSTMENTS.

Subdivision 1.

Historical rate.

The commissioner of human services shall adjust
the historical rates calculated in section 256B.4913, subdivision 4a, paragraph (b), in
effect during the banding period under section 256B.4913, subdivision 4a, paragraph (a),
for each reimbursement rate increase effective on or after July 1, 2015.

Subd. 2.

Residential support services.

The commissioner of human services shall
adjust the rates calculated in section 256B.4914, subdivision 6, paragraphs (b) and (c), for
each reimbursement rate increase effective on or after July 1, 2015.

Subd. 3.

Day programs.

The commissioner of human services shall adjust the rates
calculated in section 256B.4914, subdivision 7, for each reimbursement rate increase
effective on or after July 1, 2015.

Subd. 4.

Unit-based services with programming.

The commissioner of human
services shall adjust the rate calculated in section 256B.4914, subdivision 8, for each
reimbursement rate increase effective on or after July 1, 2015.

Subd. 5.

Unit-based services without programming.

The commissioner of human
services shall adjust the rate calculated in section 256B.4914, subdivision 9, for each
reimbursement rate increase effective on or after July 1, 2015.

Sec. 30.

Minnesota Statutes 2014, section 256B.492, is amended to read:


256B.492 HOME AND COMMUNITY-BASED SETTINGS FOR PEOPLE
WITH DISABILITIES.

(a) Individuals receiving services under a home and community-based waiver under
section 256B.092 or 256B.49 may receive services in the following settings:

(1) an individual's own home or family home and community-based settings that
comply with all requirements identified by the federal Centers for Medicare and Medicaid
Services in the Code of Federal Regulations, title 42, section 441.301(c), and with the
requirements of the federally approved transition plan and waiver plans for each home
and community-based services waiver
; and

(2) a licensed adult foster care or child foster care setting of up to five people or
community residential setting of up to five people; and
settings required by the Housing
Opportunities for Persons with AIDS Program.

(3) community living settings as defined in section 256B.49, subdivision 23, where
individuals with disabilities may reside in all of the units in a building of four or fewer units,
and who receive services under a home and community-based waiver occupy no more
than the greater of four or 25 percent of the units in a multifamily building of more than
four units, unless required by the Housing Opportunities for Persons with AIDS Program.

(b) The settings in paragraph (a) must not:

(1) be located in a building that is a publicly or privately operated facility that
provides institutional treatment or custodial care;

(2) be located in a building on the grounds of or adjacent to a public or private
institution;

(3) be a housing complex designed expressly around an individual's diagnosis or
disability, unless required by the Housing Opportunities for Persons with AIDS Program;

(4) be segregated based on a disability, either physically or because of setting
characteristics, from the larger community; and

(5) have the qualities of an institution which include, but are not limited to:
regimented meal and sleep times, limitations on visitors, and lack of privacy. Restrictions
agreed to and documented in the person's individual service plan shall not result in a
residence having the qualities of an institution as long as the restrictions for the person are
not imposed upon others in the same residence and are the least restrictive alternative,
imposed for the shortest possible time to meet the person's needs.

(c) The provisions of paragraphs (a) and (b) do not apply to any setting in which
individuals receive services under a home and community-based waiver as of July 1,
2012, and the setting does not meet the criteria of this section.

(d) Notwithstanding paragraph (c), a program in Hennepin County established as
part of a Hennepin County demonstration project is qualified for the exception allowed
under paragraph (c).

(e) Notwithstanding paragraphs (a) and (b), a program in Hennepin County, located
in the city of Golden Valley, within the city of Golden Valley's Highway 55 West
redevelopment area, that is not a provider-owned or controlled home and community-based
setting, and is scheduled to open by July 1, 2016, is exempt from the restrictions in
paragraphs (a) and (b). If the program fails to comply with the Centers for Medicare and
Medicaid Services rules for home and community-based settings, the exemption is void.

(f) The commissioner shall submit an amendment to the waiver plan no later than
December 31, 2012.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 31.

Minnesota Statutes 2014, section 256B.5012, is amended by adding a
subdivision to read:


Subd. 17.

ICF/DD rate increase effective July 1, 2016.

(a) For the rate period from
July 1, 2016, to June 30, 2017, the commissioner shall increase operating payments for
each facility reimbursed under this section equal to five percent of the operating payment
rates in effect on June 30, 2016.

(b) For each facility, the commissioner shall apply the rate increase based on
occupied beds, using the percentage specified in this subdivision multiplied by the total
payment rate, including the variable rate but excluding the property-related payment
rate in effect on the preceding date. The total rate increase shall include the adjustment
provided in section 256B.501, subdivision 12.

(c) Facilities that receive a rate increase under this subdivision shall use 90 percent
of the additional revenue to increase compensation-related costs for employees directly
employed by the facility on or after the effective date of the rate adjustment in paragraph
(a), except:

(1) persons employed in the central office of a corporation or entity that has an
ownership interest in the facility or exercises control over the facility; and

(2) persons paid by the facility under a management contract.

(d) Compensation-related costs include:

(1) wages and salaries;

(2) the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, and mileage reimbursement;

(3) the employer's share of health and dental insurance, life insurance, disability
insurance, long-term care insurance, uniform allowance, pensions, and contributions to
employee retirement accounts; and

(4) other benefits provided and workforce needs, including the recruiting and
training of employees as specified in the distribution plan required under paragraph (h).

(e) For public employees under a collective bargaining agreement, the increases for
wages and benefits for certain staff are available and pay rates must be increased only to
the extent that the increases comply with laws governing public employees' collective
bargaining. A provider that receives additional revenue for compensation-related cost
increases under paragraph (c), that is a public employer, and whose fiscal year ends on
June 30 of each year, must use the portion of the rate increase specified in paragraph (c)
only for compensation-related cost increases implemented between July 1, 2016, and
August 1, 2016. A provider that receives additional revenue for compensation-related cost
increases under paragraph (c), that is a public employer, and whose fiscal year ends on
December 31 of each year, must use the portion of the compensation-related cost increases
specified in paragraph (c) only for compensation-related cost increases implemented
during the contract period.

(f) For a facility that has employees that are represented by an exclusive bargaining
representative, the provider shall obtain a letter of acceptance of the distribution plan
required under paragraph (h), in regard to the members of the bargaining unit, signed by
the exclusive bargaining agent. Upon receipt of the letter of acceptance, the facility shall
be deemed to have met all the requirements of this subdivision in regard to the members
of the bargaining unit. Upon request, the facility shall produce the letter of acceptance for
the commissioner.

(g) The commissioner shall amend state grant contracts that include direct
personnel-related grant expenditures to include the allocation for the portion of the
contract related to employee compensation. Grant contracts for compensation-related
services must be amended to pass through the adjustment within 60 days of the effective
date of the increase and must be retroactive to the effective date of the rate adjustment.

(h) A facility that receives a rate adjustment under paragraph (a) that is subject to
paragraphs (c) and (d) shall prepare and, upon request, submit to the commissioner a
distribution plan that specifies the amount of money the facility expects to receive that is
subject to the requirements of paragraphs (c) and (d), including how that money will be
distributed to increase compensation for employees.

(i) Within six months of the effective date of the rate adjustment, the facility shall
post the distribution plan required under paragraph (h) for a period of at least six weeks in
an area of the facility's operation to which all eligible employees have access and shall
provide instructions for employees who do not believe they have received the wage and
other compensation-related increases specified in the distribution plan. The instructions
must include a mailing address, e-mail address, and telephone number that an employee
may use to contact the commissioner or the commissioner's representative.

Sec. 32.

[256Q.01] PLAN ESTABLISHED.

A savings plan known as the Minnesota ABLE plan is established. In establishing
this plan, the legislature seeks to encourage and assist individuals and families in saving
private funds for the purpose of supporting individuals with disabilities to maintain health,
independence, and quality of life, and to provide secure funding for disability-related
expenses on behalf of designated beneficiaries with disabilities that will supplement, but
not supplant, benefits provided through private insurance, the Medicaid program under
title XIX of the Social Security Act, the Supplemental Security Income program under
title XVI of the Social Security Act, the beneficiary's employment, and other sources.

Sec. 33.

[256Q.02] CITATION.

This chapter may be cited as the "Minnesota Achieving a Better Life Experience
Act" or "Minnesota ABLE Act."

Sec. 34.

[256Q.03] DEFINITIONS.

Subdivision 1.

Scope.

For the purposes of this chapter, the terms defined in this
section have the meanings given them.

Subd. 2.

ABLE account.

"ABLE account" has the meaning given in section
529A(e)(6) of the Internal Revenue Code.

Subd. 3.

ABLE account plan or plan.

"ABLE account plan" or "plan" means the
qualified ABLE program, as defined in section 529A(b) of the Internal Revenue Code,
provided for in this chapter.

Subd. 4.

Account.

"Account" means the formal record of transactions relating to an
ABLE plan beneficiary.

Subd. 5.

Account owner.

"Account owner" means the designated beneficiary
of the account.

Subd. 6.

Annual contribution limit.

"Annual contribution limit" has the meaning
given in section 529A(b)(2) of the Internal Revenue Code.

Subd. 7.

Application.

"Application" means the form executed by a prospective
account owner to enter into a participation agreement and open an account in the plan.
The application incorporates by reference the participation agreement.

Subd. 8.

Board.

"Board" mans the State Board of Investment.

Subd. 9.

Commissioner.

"Commissioner" means the commissioner of human
services.

Subd. 10.

Contribution.

"Contribution" means a payment directly allocated to
an account for the benefit of a beneficiary.

Subd. 11.

Department.

"Department" means the Department of Human Services.

Subd. 12.

Designated beneficiary or beneficiary.

"Designated beneficiary" or
"beneficiary" has the meaning given in section 529A(e)(3) of the Internal Revenue Code
and further defined through regulations issued under that section.

Subd. 13.

Earnings.

"Earnings" means the total account balance minus the
investment in the account.

Subd. 14.

Eligible individual.

"Eligible individual" has the meaning given in
section 529A(e)(1) of the Internal Revenue Code and further defined through regulations
issued under that section.

Subd. 15.

Executive director.

"Executive director" means the executive director of
the State Board of Investment.

Subd. 16.

Internal Revenue Code.

"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended.

Subd. 17.

Investment in the account.

"Investment in the account" means the sum
of all contributions made to an account by a particular date minus the aggregate amount
of contributions included in distributions or rollover distributions, if any, made from the
account as of that date.

Subd. 18.

Member of the family.

"Member of the family" has the meaning given in
section 529A(e)(4) of the Internal Revenue Code.

Subd. 19.

Participation agreement.

"Participation agreement" means an agreement
to participate in the Minnesota ABLE plan between an account owner and the state
through its agencies, the commissioner, and the board.

Subd. 20.

Person.

"Person" means an individual, trust, estate, partnership,
association, company, corporation, or the state.

Subd. 21.

Plan administrator.

"Plan administrator" means the person selected by
the commissioner and the board to administer the daily operations of the ABLE account
plan and provide record keeping, investment management, and other services for the plan.

Subd. 22.

Qualified disability expense.

"Qualified disability expense" has the
meaning given in section 529A(e)(5) of the Internal Revenue Code and further defined
through regulations issued under that section.

Subd. 23.

Qualified distribution.

"Qualified distribution" means a withdrawal from
an ABLE account to pay the qualified disability expenses of the beneficiary of the account.
A qualified withdrawal may be made by the beneficiary, by an agent of the beneficiary
who has the power of attorney, or by the beneficiary's legal guardian.

Subd. 24.

Rollover distribution.

"Rollover distribution" means a transfer of funds
made:

(1) from one account in another state's qualified ABLE program to an account for
the benefit of the same designated beneficiary or an eligible individual who is a family
member of the former designated beneficiary; or

(2) from one account to another account for the benefit of an eligible individual who
is a family member of the former designated beneficiary.

Subd. 25.

Total account balance.

"Total account balance" means the amount in an
account on a particular date or the fair market value of an account on a particular date.

Sec. 35.

[256Q.04] ABLE PLAN REQUIREMENTS.

Subdivision 1.

State residency requirement.

The designated beneficiary of an
ABLE account must be a resident of Minnesota, or the resident of a state that has entered
into a contract with Minnesota to provide its residents access to the Minnesota ABLE plan.

Subd. 2.

Single account requirement.

No more than one ABLE account shall be
established per beneficiary, except as permitted under section 529A(c)(4) of the Internal
Revenue Code.

Subd. 3.

Accounts-type plan.

The plan must be operated as an accounts-type
plan. A separate account must be maintained for each designated beneficiary for whom
contributions are made.

Subd. 4.

Contribution and account requirements.

Contributions to an ABLE
account are subject to the requirements of section 529A(b)(2) of the Internal Revenue
Code prohibiting noncash contributions and contributions in excess of the annual
contribution limit. The total account balance may not exceed the maximum account
balance limit imposed under section 136G.09, subdivision 8.

Subd. 5.

Limited investment direction.

Designated beneficiaries may not direct
the investment of assets in their accounts more than twice in any calendar year.

Subd. 6.

Security for loans.

An interest in an account must not be used as security
for a loan.

Sec. 36.

[256Q.05] ABLE PLAN ADMINISTRATION.

Subdivision 1.

Plan to comply with federal law.

The commissioner shall ensure
that the plan meets the requirements for an ABLE account under section 529A of the
Internal Revenue Code, including any regulations released after the effective date of this
section. The commissioner may request a private letter ruling or rulings from the Internal
Revenue Service or secretary of health and human services and must take any necessary
steps to ensure that the plan qualifies under relevant provisions of federal law.

Subd. 2.

Plan rules and procedures.

(a) The commissioner shall establish the
rules, terms, and conditions for the plan, subject to the requirements of this chapter and
section 529A of the Internal Revenue Code.

(b) The commissioner shall prescribe the application forms, procedures, and other
requirements that apply to the plan.

Subd. 3.

Consultation with other state agencies; annual fee.

In designing and
establishing the plan's requirements and in negotiating or entering into contracts with third
parties under subdivision 4, the commissioner shall consult with the executive director of
the board and the commissioner of the Office of Higher Education. The commissioner and
the executive director shall establish an annual fee, equal to a percentage of the average
daily net assets of the plan, to be imposed on account owners to recover the costs of
administration, record keeping, and investment management as provided in subdivision 5.

Subd. 4.

Administration.

The commissioner shall administer the plan, including
accepting and processing applications, verifying state residency, verifying eligibility,
maintaining account records, making payments, and undertaking any other necessary
tasks to administer the plan. Notwithstanding other requirements of this chapter, the
commissioner shall adopt rules for purposes of implementing and administering the plan.
The commissioner may contract with one or more third parties to carry out some or all of
these administrative duties, including providing incentives. The commissioner and the
board may jointly contract with third-party providers if the commissioner and board
determine that it is desirable to contract with the same entity or entities for administration
and investment management.

Subd. 5.

Authority to impose fees.

The commissioner, or the commissioner's
designee, may impose annual fees, as provided in subdivision 3, on account owners to
recover the costs of administration. The commissioner must keep the fees as low as
possible, consistent with efficient administration, so that the returns on savings invested in
the plan are as high as possible.

Subd. 6.

Federally mandated reporting.

(a) As required under section 529A(d) of
the Internal Revenue Code, the commissioner or the commissioner's designee shall submit
a notice to the secretary of the treasury upon the establishment of each ABLE account.
The notice must contain the name and state of residence of the designated beneficiary and
other information as the secretary may require.

(b) As required under section 529A(d) of the Internal Revenue Code, the
commissioner or the commissioner's designee shall submit electronically on a monthly
basis to the commissioner of Social Security, in a manner specified by the commissioner
of Social Security, statements on relevant distributions and account balances from all
ABLE accounts.

Subd. 7.

Data.

(a) Data on ABLE accounts and designated beneficiaries of ABLE
accounts are private data on individuals or nonpublic data as defined in section 13.02.

(b) The commissioner may share or disseminate data classified as private or
nonpublic in this subdivision as follows:

(1) with other state or federal agencies, only to the extent necessary to verify the
identity of, determine the eligibility of, or process applications for an eligible individual
participating in the Minnesota ABLE plan; and

(2) with a nongovernmental person, only to the extent necessary to carry out the
functions of the Minnesota ABLE plan, provided the commissioner has entered into
a data-sharing agreement with the person, as provided in section 13.05, subdivision 6,
prior to sharing data under this clause or a contract with that person that complies with
section 13.05, subdivision 11, as applicable.

Sec. 37.

[256Q.06] PLAN ACCOUNTS.

Subdivision 1.

Contributions to an account.

Any person may make contributions
to an ABLE account on behalf of a designated beneficiary. Contributions to an account
made by persons other than the account owner become the property of the account owner.
A person does not acquire an interest in an ABLE account by making contributions to
an account. Contributions to an account must be made in cash, by check, or by other
commercially acceptable means, as permitted by the Internal Revenue Service and
approved by the plan administrator in cooperation with the commissioner and the board.

Subd. 2.

Contribution and account limitations.

Contributions to an ABLE
account are subject to the requirements of section 529A(b) of the Internal Revenue Code.
The total account balance of an ABLE account may not exceed the maximum account
balance limit imposed under section 136G.09, subdivision 8. The plan administrator must
reject any portion of a contribution to an account that exceeds the annual contribution limit
or that would cause the total account balance to exceed the maximum account balance
limit imposed under section 136G.09, subdivision 8.

Subd. 3.

Authority of account owner.

An account owner is the only person
entitled to:

(1) request distributions;

(2) request rollover distributions; or

(3) change the beneficiary of an ABLE account to a member of the family of the
current beneficiary, but only if the beneficiary to whom the ABLE account is transferred
is an eligible individual.

Subd. 4.

Effect of plan changes on participation agreement.

Amendments to
this chapter automatically amend the participation agreement. Any amendments to the
operating procedures and policies of the plan automatically amend the participation
agreement after adoption by the commissioner or the board.

Subd. 5.

Special account to hold plan assets in trust.

All assets of the plan,
including contributions to accounts, are held in trust for the exclusive benefit of account
owners. Assets must be held in a separate account in the state treasury to be known as
the Minnesota ABLE plan account or in accounts with the third-party provider selected
pursuant to section 256Q.05, subdivision 4. Plan assets are not subject to claims by creditors
of the state, are not part of the general fund, and are not subject to appropriation by the
state. Payments from the Minnesota ABLE plan account shall be made under this chapter.

Sec. 38.

[256Q.07] INVESTMENT OF ABLE ACCOUNTS.

Subdivision 1.

State Board of Investment to invest.

The State Board of Investment
shall invest the money deposited in accounts in the plan.

Subd. 2.

Permitted investments.

The board may invest the accounts in any
permitted investment under section 11A.24, except that the accounts may be invested
without limit in investment options from open-ended investment companies registered
under the federal Investment Company Act of 1940, United States Code, title 15, sections
80a-1 to 80a-64.

Subd. 3.

Contracting authority.

The board may contract with one or more third
parties for investment management, record keeping, or other services in connection with
investing the accounts. The board and commissioner may jointly contract with third-party
providers if the commissioner and board determine that it is desirable to contract with the
same entity or entities for administration and investment management.

Sec. 39.

[256Q.08] ACCOUNT DISTRIBUTIONS.

Subdivision 1.

Qualified distribution methods.

(a) Qualified distributions may
be made:

(1) directly to participating providers of goods and services that are qualified
disability expenses, if purchased for a beneficiary;

(2) in the form of a check payable to both the beneficiary and provider of goods or
services that are qualified disability expenses; or

(3) directly to the beneficiary, if the beneficiary has already paid qualified disability
expenses.

(b) Qualified distributions must be withdrawn proportionally from contributions and
earnings in an account owner's account on the date of distribution as provided in section
529A of the Internal Revenue Code.

Subd. 2.

Distributions upon death of beneficiary.

Upon the death of a beneficiary,
the amount remaining in the beneficiary's account must be distributed pursuant to section
529A(f) of the Internal Revenue Code.

Subd. 3.

Nonqualified distribution.

An account owner may request a nonqualified
distribution from an account at any time. Nonqualified distributions are based on the total
account balances in an account owner's account and must be withdrawn proportionally
from contributions and earnings as provided in section 529A of the Internal Revenue
Code. The earnings portion of a nonqualified distribution is subject to a federal additional
tax pursuant to section 529A of the Internal Revenue Code. For purposes of this
subdivision, "earnings portion" means the ratio of the earnings in the account to the total
account balance, immediately prior to the distribution, multiplied by the distribution.

Sec. 40.

Laws 2012, chapter 247, article 4, section 47, as amended by Laws 2014,
chapter 312, article 27, section 72, is amended to read:


Sec. 47. COMMISSIONER TO SEEK AMENDMENT FOR EXCEPTION
TO CONSUMER-DIRECTED COMMUNITY SUPPORTS BUDGET
METHODOLOGY.

By July 1, 2014, if necessary, The commissioner shall request an amendment to
the home and community-based services waivers authorized under Minnesota Statutes,
sections 256B.092 and 256B.49, to
establish an exception to the consumer-directed
community supports budget methodology for the home and community-based services
waivers under Minnesota Statutes, sections 256B.092 and 256B.49,
to provide up to
20 percent more funds for those :

(1) consumer-directed community supports participants who have their 21st birthday
and graduate
graduated from high school between 2013 to 2015 and are authorized for to
receive
more services under consumer-directed community supports prior to graduation
than the amount they are eligible to receive under the current consumer-directed
community supports budget methodology; and

(2) those who are currently using licensed services for employment supports or
services during the day which cost more annually than the person would spend under a
consumer-directed community supports plan for individualized employment supports
or services during the day
. The exception is limited to those who can demonstrate
either that they will have to leave consumer-directed community supports and use other
waiver services because their need for day or employment supports cannot be met
within the consumer-directed community supports budget limits or they will move to
consumer-directed community supports and their services will cost less than services
currently being used
. The commissioner shall consult with the stakeholder group
authorized under Minnesota Statutes, section 256B.0657, subdivision 11, to implement
this provision.
The exception process shall be effective upon federal approval for persons
eligible through June 30, 2017 2019.

Sec. 41. PROVIDER RATE AND GRANT INCREASES EFFECTIVE JULY
1, 2016.

(a) The commissioner of human services shall increase reimbursement rates, grants,
allocations, individual limits, and rate limits, as applicable, by five percent for the rate
period from July 1, 2016, to June 30, 2017, for services rendered on or after those dates.
County or tribal contracts for services specified in this section must be amended to pass
through the rate increase within 60 days of the effective date of the increase.

(b) The rate changes described in this section must be provided to:

(1) home and community-based waivered services for persons with developmental
disabilities, including consumer-directed community supports, under Minnesota Statutes,
section 256B.092;

(2) waivered services under community alternatives for disabled individuals,
including consumer-directed community supports, under Minnesota Statutes, section
256B.49;

(3) community alternative care waivered services, including consumer-directed
community supports, under Minnesota Statutes, section 256B.49;

(4) brain injury waivered services, including consumer-directed community
supports, under Minnesota Statutes, section 256B.49;

(5) home and community-based waivered services for the elderly under Minnesota
Statutes, section 256B.0915;

(6) nursing services and home health services under Minnesota Statutes, section
256B.0625, subdivision 6a;

(7) personal care services and qualified professional supervision of personal care
services under Minnesota Statutes, section 256B.0625, subdivisions 6a and 19a;

(8) home care nursing services under Minnesota Statutes, section 256B.0625,
subdivision 7;

(9) community first services and supports under Minnesota Statutes, section 256B.85;

(10) essential community supports under Minnesota Statutes, section 256B.0922;

(11) day training and habilitation services for adults with developmental disabilities
under Minnesota Statutes, sections 252.41 to 252.46, including the additional cost to
counties of the rate adjustments on day training and habilitation services provided as a
social service;

(12) alternative care services under Minnesota Statutes, section 256B.0913;

(13) living skills training programs for persons with intractable epilepsy who need
assistance in the transition to independent living under Laws 1988, chapter 689;

(14) semi-independent living services (SILS) under Minnesota Statutes, section
252.275;

(15) consumer support grants under Minnesota Statutes, section 256.476;

(16) family support grants under Minnesota Statutes, section 252.32;

(17) housing access grants under Minnesota Statutes, section 256B.0658;

(18) self-advocacy grants under Laws 2009, chapter 101;

(19) technology grants under Laws 2009, chapter 79;

(20) aging grants under Minnesota Statutes, sections 256.975 to 256.977 and
256B.0917;

(21) deaf and hard-of-hearing grants, including community support services for deaf
and hard-of-hearing adults with mental illness who use or wish to use sign language as their
primary means of communication under Minnesota Statutes, section 256.01, subdivision 2;

(22) deaf and hard-of-hearing grants under Minnesota Statutes, sections 256C.233,
256C.25, and 256C.261;

(23) Disability Linkage Line grants under Minnesota Statutes, section 256.01,
subdivision 24
;

(24) transition initiative grants under Minnesota Statutes, section 256.478;

(25) employment support grants under Minnesota Statutes, section 256B.021,
subdivision 6
; and

(26) grants provided to people who are eligible for the Housing Opportunities for
Persons with AIDS program under Minnesota Statutes, section 256B.492.

(c) A managed care plan or county-based purchasing plan receiving state payments
for the services, grants, and programs in paragraph (b) must include the increase in their
payments to providers. For the purposes of this subdivision, entities that provide care
coordination are providers. To implement the rate increase in paragraph (a), capitation rates
paid by the commissioner to managed care plans and county-based purchasing plans under
Minnesota Statutes, section 256B.69, shall reflect a five percent increase for the services,
grants, and programs specified in paragraph (b) for the period beginning July 1, 2016.

(d) Counties shall increase the budget for each recipient of consumer-directed
community supports by the amounts in paragraph (a) on the effective date in paragraph (a).

(e) Providers that receive a rate increase under paragraph (a) shall use 90 percent
of the additional revenue to increase compensation-related costs for employees directly
employed by the program on or after the effective date of the rate adjustment in paragraph
(a), except:

(1) persons employed in the central office of a corporation or entity that has an
ownership interest in the provider or exercises control over the provider; and

(2) persons paid by the provider under a management contract.

(f) Compensation-related costs include:

(1) wages and salaries;

(2) the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, and mileage reimbursement;

(3) the employer's share of health and dental insurance, life insurance, disability
insurance, long-term care insurance, uniform allowance, pensions, and contributions to
employee retirement accounts; and

(4) other benefits provided and workforce needs, including the recruiting and
training of employees as specified in the distribution plan required under paragraph (k).

(g) For public employees under a collective bargaining agreement, the increases for
wages and benefits are available and pay rates must be increased only to the extent that the
increases comply with laws governing public employees' collective bargaining. A provider
that receives additional revenue for compensation-related cost increases under paragraph
(e), that is a public employer, and whose fiscal year ends on June 30 of each year, must use
the portion of the rate increase specified in paragraph (e) only for compensation-related
cost increases implemented between July 1, 2016, and August 1, 2016. A provider that
receives additional revenue for compensation-related cost increases under paragraph (e),
that is a public employer, and whose fiscal year ends on December 31 of each year, must
use the portion of the compensation-related cost increases specified in paragraph (e) only
for compensation-related cost increases implemented during the contract period.

(h) For a provider that has employees who are represented by an exclusive bargaining
representative, the provider shall obtain a letter of acceptance of the distribution plan
required under paragraph (k), in regard to the members of the bargaining unit, signed by
the exclusive bargaining agent. Upon receipt of the letter of acceptance, the provider shall
be deemed to have met all the requirements of this section in regard to the members of
the bargaining unit. Upon request, the provider shall produce the letter of acceptance for
the commissioner.

(i) The commissioner shall amend state grant contracts that include direct
personnel-related grant expenditures to include the allocation for the portion of the
contract related to employee compensation. Grant contracts for compensation-related
services must be amended to pass through these adjustments within 60 days of the
effective date of the increase under paragraph (a) and must be retroactive to the effective
date of the rate adjustment.

(j) The Board on Aging and its area agencies on aging shall amend their grants that
include direct personnel-related grant expenditures to include the rate adjustment for the
portion of the grant related to employee compensation. Grants for compensation-related
services must be amended to pass through these adjustments within 60 days of the
effective date of the increase under paragraph (a) and must be retroactive to the effective
date of the rate adjustment.

(k) A provider that receives a rate adjustment under paragraph (a) that is subject to
paragraph (e) shall prepare and, upon request, submit to the commissioner a distribution
plan that specifies the amount of money the provider expects to receive that is subject
to the requirements of paragraph (e), including how that money will be distributed to
increase compensation for employees.

(l) Within six months of the effective date of the rate adjustment, the provider shall
post the distribution plan required under paragraph (k) for a period of at least six weeks in
an area of the provider's operation to which all eligible employees have access and shall
provide instructions for employees who do not believe they have received the wage and
other compensation-related increases specified in the distribution plan. The instructions
must include a mailing address, e-mail address, and telephone number that the employee
may use to contact the commissioner or the commissioner's representative.

Sec. 42. DIRECTION TO COMMISSIONER; PEDIATRIC HOME CARE
STUDY.

The commissioner of human services shall review the status of delayed discharges of
pediatric patients and determine if an increase in the medical assistance payment rate for
intensive pediatric home care would reduce the number of delayed discharges of pediatric
patients. The commissioner shall report the results of the review to the chairs and ranking
minority members of the house of representatives and senate committees and divisions
with jurisdiction over health and human services policy and finance by January 15, 2016.

ARTICLE 5

NURSING FACILITY PAYMENT REFORM AND WORKFORCE
DEVELOPMENT

Section 1.

[144.1503] HOME AND COMMUNITY-BASED SERVICES
EMPLOYEE SCHOLARSHIP PROGRAM.

Subdivision 1.

Creation.

The home and community-based services employee
scholarship grant program is established for the purpose of assisting qualified provider
applicants to fund employee scholarships for education in nursing and other health care
fields.

Subd. 2.

Provision of grants.

The commissioner shall make grants available
to qualified providers of older adult services. Grants must be used by home and
community-based service providers to recruit and train staff through the establishment of
an employee scholarship fund.

Subd. 3.

Eligibility.

(a) Eligible providers must primarily provide services to
individuals who are 65 years of age and older in home and community-based settings,
including housing with services establishments as defined in section 144D.01, subdivision
4; adult day care as defined in section 245A.02, subdivision 2a; and home care services as
defined in section 144A.43, subdivision 3.

(b) Qualifying providers must establish a home and community-based services
employee scholarship program, as specified in subdivision 4. Providers that receive
funding under this section must use the funds to award scholarships to employees who
work an average of at least 16 hours per week for the provider.

Subd. 4.

Home and community-based services employee scholarship program.

Each qualifying provider under this section must propose a home and community-based
services employee scholarship program. Providers must establish criteria by which
funds are to be distributed among employees. At a minimum, the scholarship program
must cover employee costs related to a course of study that is expected to lead to career
advancement with the provider or in the field of long-term care, including home care,
care of persons with disabilities, or nursing.

Subd. 5.

Participating providers.

The commissioner shall publish a request for
proposals in the State Register, specifying provider eligibility requirements, criteria for
a qualifying employee scholarship program, provider selection criteria, documentation
required for program participation, maximum award amount, and methods of evaluation.
The commissioner must publish additional requests for proposals each year in which
funding is available for this purpose.

Subd. 6.

Application requirements.

Eligible providers seeking a grant shall submit
an application to the commissioner. Applications must contain a complete description of
the employee scholarship program being proposed by the applicant, including the need for
the organization to enhance the education of its workforce, the process for determining
which employees will be eligible for scholarships, any other sources of funding for
scholarships, the expected degrees or credentials eligible for scholarships, the amount of
funding sought for the scholarship program, a proposed budget detailing how funds will
be spent, and plans for retaining eligible employees after completion of their scholarship.

Subd. 7.

Selection process.

The commissioner shall determine a maximum
award for grants and make grant selections based on the information provided in the
grant application, including the demonstrated need for an applicant provider to enhance
the education of its workforce, the proposed employee scholarship selection process,
the applicant's proposed budget, and other criteria as determined by the commissioner.
Notwithstanding any law or rule to the contrary, funds awarded to grantees in a grant
agreement do not lapse until the grant agreement expires.

Subd. 8.

Reporting requirements.

Participating providers shall submit an invoice
for reimbursement and a report to the commissioner on a schedule determined by the
commissioner and on a form supplied by the commissioner. The report shall include
the amount spent on scholarships; the number of employees who received scholarships;
and, for each scholarship recipient, the name of the recipient, the current position of
the recipient, the amount awarded, the educational institution attended, the nature of
the educational program, and the expected or actual program completion date. During
the grant period, the commissioner may require and collect from grant recipients other
information necessary to evaluate the program.

Sec. 2.

Minnesota Statutes 2014, section 144A.071, subdivision 4a, is amended to read:


Subd. 4a.

Exceptions for replacement beds.

It is in the best interest of the state
to ensure that nursing homes and boarding care homes continue to meet the physical
plant licensing and certification requirements by permitting certain construction projects.
Facilities should be maintained in condition to satisfy the physical and emotional needs
of residents while allowing the state to maintain control over nursing home expenditure
growth.

The commissioner of health in coordination with the commissioner of human
services, may approve the renovation, replacement, upgrading, or relocation of a nursing
home or boarding care home, under the following conditions:

(a) to license or certify beds in a new facility constructed to replace a facility or to
make repairs in an existing facility that was destroyed or damaged after June 30, 1987, by
fire, lightning, or other hazard provided:

(i) destruction was not caused by the intentional act of or at the direction of a
controlling person of the facility;

(ii) at the time the facility was destroyed or damaged the controlling persons of the
facility maintained insurance coverage for the type of hazard that occurred in an amount
that a reasonable person would conclude was adequate;

(iii) the net proceeds from an insurance settlement for the damages caused by the
hazard are applied to the cost of the new facility or repairs;

(iv) the number of licensed and certified beds in the new facility does not exceed the
number of licensed and certified beds in the destroyed facility; and

(v) the commissioner determines that the replacement beds are needed to prevent an
inadequate supply of beds.

Project construction costs incurred for repairs authorized under this clause shall not be
considered in the dollar threshold amount defined in subdivision 2;

(b) to license or certify beds that are moved from one location to another within a
nursing home facility, provided the total costs of remodeling performed in conjunction
with the relocation of beds does not exceed $1,000,000;

(c) to license or certify beds in a project recommended for approval under section
144A.073;

(d) to license or certify beds that are moved from an existing state nursing home to
a different state facility, provided there is no net increase in the number of state nursing
home beds;

(e) to certify and license as nursing home beds boarding care beds in a certified
boarding care facility if the beds meet the standards for nursing home licensure, or in a
facility that was granted an exception to the moratorium under section 144A.073, and if
the cost of any remodeling of the facility does not exceed $1,000,000. If boarding care
beds are licensed as nursing home beds, the number of boarding care beds in the facility
must not increase beyond the number remaining at the time of the upgrade in licensure.
The provisions contained in section 144A.073 regarding the upgrading of the facilities
do not apply to facilities that satisfy these requirements;

(f) to license and certify up to 40 beds transferred from an existing facility owned and
operated by the Amherst H. Wilder Foundation in the city of St. Paul to a new unit at the
same location as the existing facility that will serve persons with Alzheimer's disease and
other related disorders. The transfer of beds may occur gradually or in stages, provided
the total number of beds transferred does not exceed 40. At the time of licensure and
certification of a bed or beds in the new unit, the commissioner of health shall delicense
and decertify the same number of beds in the existing facility. As a condition of receiving
a license or certification under this clause, the facility must make a written commitment
to the commissioner of human services that it will not seek to receive an increase in its
property-related payment rate as a result of the transfers allowed under this paragraph;

(g) to license and certify nursing home beds to replace currently licensed and certified
boarding care beds which may be located either in a remodeled or renovated boarding care
or nursing home facility or in a remodeled, renovated, newly constructed, or replacement
nursing home facility within the identifiable complex of health care facilities in which the
currently licensed boarding care beds are presently located, provided that the number of
boarding care beds in the facility or complex are decreased by the number to be licensed
as nursing home beds and further provided that, if the total costs of new construction,
replacement, remodeling, or renovation exceed ten percent of the appraised value of
the facility or $200,000, whichever is less, the facility makes a written commitment to
the commissioner of human services that it will not seek to receive an increase in its
property-related payment rate by reason of the new construction, replacement, remodeling,
or renovation. The provisions contained in section 144A.073 regarding the upgrading of
facilities do not apply to facilities that satisfy these requirements;

(h) to license as a nursing home and certify as a nursing facility a facility that is
licensed as a boarding care facility but not certified under the medical assistance program,
but only if the commissioner of human services certifies to the commissioner of health that
licensing the facility as a nursing home and certifying the facility as a nursing facility will
result in a net annual savings to the state general fund of $200,000 or more;

(i) to certify, after September 30, 1992, and prior to July 1, 1993, existing nursing
home beds in a facility that was licensed and in operation prior to January 1, 1992;

(j) to license and certify new nursing home beds to replace beds in a facility acquired
by the Minneapolis Community Development Agency as part of redevelopment activities
in a city of the first class, provided the new facility is located within three miles of the site
of the old facility. Operating and property costs for the new facility must be determined
and allowed under section 256B.431 or 256B.434;

(k) to license and certify up to 20 new nursing home beds in a community-operated
hospital and attached convalescent and nursing care facility with 40 beds on April 21,
1991, that suspended operation of the hospital in April 1986. The commissioner of human
services shall provide the facility with the same per diem property-related payment rate
for each additional licensed and certified bed as it will receive for its existing 40 beds;

(l) to license or certify beds in renovation, replacement, or upgrading projects as
defined in section 144A.073, subdivision 1, so long as the cumulative total costs of the
facility's remodeling projects do not exceed $1,000,000;

(m) to license and certify beds that are moved from one location to another for the
purposes of converting up to five four-bed wards to single or double occupancy rooms
in a nursing home that, as of January 1, 1993, was county-owned and had a licensed
capacity of 115 beds;

(n) to allow a facility that on April 16, 1993, was a 106-bed licensed and certified
nursing facility located in Minneapolis to layaway all of its licensed and certified nursing
home beds. These beds may be relicensed and recertified in a newly constructed teaching
nursing home facility affiliated with a teaching hospital upon approval by the legislature.
The proposal must be developed in consultation with the interagency committee on
long-term care planning. The beds on layaway status shall have the same status as
voluntarily delicensed and decertified beds, except that beds on layaway status remain
subject to the surcharge in section 256.9657. This layaway provision expires July 1, 1998;

(o) to allow a project which will be completed in conjunction with an approved
moratorium exception project for a nursing home in southern Cass County and which is
directly related to that portion of the facility that must be repaired, renovated, or replaced,
to correct an emergency plumbing problem for which a state correction order has been
issued and which must be corrected by August 31, 1993;

(p) to allow a facility that on April 16, 1993, was a 368-bed licensed and certified
nursing facility located in Minneapolis to layaway, upon 30 days prior written notice to
the commissioner, up to 30 of the facility's licensed and certified beds by converting
three-bed wards to single or double occupancy. Beds on layaway status shall have the
same status as voluntarily delicensed and decertified beds except that beds on layaway
status remain subject to the surcharge in section 256.9657, remain subject to the license
application and renewal fees under section 144A.07 and shall be subject to a $100 per bed
reactivation fee. In addition, at any time within three years of the effective date of the
layaway, the beds on layaway status may be:

(1) relicensed and recertified upon relocation and reactivation of some or all of
the beds to an existing licensed and certified facility or facilities located in Pine River,
Brainerd, or International Falls; provided that the total project construction costs related to
the relocation of beds from layaway status for any facility receiving relocated beds may
not exceed the dollar threshold provided in subdivision 2 unless the construction project
has been approved through the moratorium exception process under section 144A.073;

(2) relicensed and recertified, upon reactivation of some or all of the beds within the
facility which placed the beds in layaway status, if the commissioner has determined a
need for the reactivation of the beds on layaway status.

The property-related payment rate of a facility placing beds on layaway status
must be adjusted by the incremental change in its rental per diem after recalculating the
rental per diem as provided in section 256B.431, subdivision 3a, paragraph (c). The
property-related payment rate for a facility relicensing and recertifying beds from layaway
status must be adjusted by the incremental change in its rental per diem after recalculating
its rental per diem using the number of beds after the relicensing to establish the facility's
capacity day divisor, which shall be effective the first day of the month following the
month in which the relicensing and recertification became effective. Any beds remaining
on layaway status more than three years after the date the layaway status became effective
must be removed from layaway status and immediately delicensed and decertified;

(q) to license and certify beds in a renovation and remodeling project to convert 12
four-bed wards into 24 two-bed rooms, expand space, and add improvements in a nursing
home that, as of January 1, 1994, met the following conditions: the nursing home was
located in Ramsey County; had a licensed capacity of 154 beds; and had been ranked
among the top 15 applicants by the 1993 moratorium exceptions advisory review panel.
The total project construction cost estimate for this project must not exceed the cost
estimate submitted in connection with the 1993 moratorium exception process;

(r) to license and certify up to 117 beds that are relocated from a licensed and certified
138-bed nursing facility located in St. Paul to a hospital with 130 licensed hospital beds
located in South St. Paul, provided that the nursing facility and hospital are owned by the
same or a related organization and that prior to the date the relocation is completed the
hospital ceases operation of its inpatient hospital services at that hospital. After relocation,
the nursing facility's status shall be the same as it was prior to relocation. The nursing
facility's property-related payment rate resulting from the project authorized in this
paragraph shall become effective no earlier than April 1, 1996. For purposes of calculating
the incremental change in the facility's rental per diem resulting from this project, the
allowable appraised value of the nursing facility portion of the existing health care facility
physical plant prior to the renovation and relocation may not exceed $2,490,000;

(s) to license and certify two beds in a facility to replace beds that were voluntarily
delicensed and decertified on June 28, 1991;

(t) to allow 16 licensed and certified beds located on July 1, 1994, in a 142-bed
nursing home and 21-bed boarding care home facility in Minneapolis, notwithstanding
the licensure and certification after July 1, 1995, of the Minneapolis facility as a 147-bed
nursing home facility after completion of a construction project approved in 1993 under
section 144A.073, to be laid away upon 30 days' prior written notice to the commissioner.
Beds on layaway status shall have the same status as voluntarily delicensed or decertified
beds except that they shall remain subject to the surcharge in section 256.9657. The
16 beds on layaway status may be relicensed as nursing home beds and recertified at
any time within five years of the effective date of the layaway upon relocation of some
or all of the beds to a licensed and certified facility located in Watertown, provided that
the total project construction costs related to the relocation of beds from layaway status
for the Watertown facility may not exceed the dollar threshold provided in subdivision
2 unless the construction project has been approved through the moratorium exception
process under section 144A.073.

The property-related payment rate of the facility placing beds on layaway status must
be adjusted by the incremental change in its rental per diem after recalculating the rental per
diem as provided in section 256B.431, subdivision 3a, paragraph (c). The property-related
payment rate for the facility relicensing and recertifying beds from layaway status must be
adjusted by the incremental change in its rental per diem after recalculating its rental per
diem using the number of beds after the relicensing to establish the facility's capacity day
divisor, which shall be effective the first day of the month following the month in which
the relicensing and recertification became effective. Any beds remaining on layaway
status more than five years after the date the layaway status became effective must be
removed from layaway status and immediately delicensed and decertified;

(u) to license and certify beds that are moved within an existing area of a facility or
to a newly constructed addition which is built for the purpose of eliminating three- and
four-bed rooms and adding space for dining, lounge areas, bathing rooms, and ancillary
service areas in a nursing home that, as of January 1, 1995, was located in Fridley and had
a licensed capacity of 129 beds;

(v) to relocate 36 beds in Crow Wing County and four beds from Hennepin County
to a 160-bed facility in Crow Wing County, provided all the affected beds are under
common ownership;

(w) to license and certify a total replacement project of up to 49 beds located in
Norman County that are relocated from a nursing home destroyed by flood and whose
residents were relocated to other nursing homes. The operating cost payment rates for
the new nursing facility shall be determined based on the interim and settle-up payment
provisions of Minnesota Rules, part 9549.0057, and the reimbursement provisions of
section 256B.431. Property-related reimbursement rates shall be determined under section
256B.431, taking into account any federal or state flood-related loans or grants provided
to the facility;

(x) to license and certify a total to the licensee of a nursing home in Polk County
that was destroyed by flood in 1997
replacement project projects with a total of up to 129
beds, with at least 25 beds to be located in Polk County that are relocated from a nursing
home destroyed by flood and whose residents were relocated to other nursing homes.
and
up to 104 beds distributed among up to three other counties. These beds may only be
distributed to counties with fewer than the median number of age intensity adjusted beds
per thousand, as most recently published by the commissioner of human services. If the
licensee chooses to distribute beds outside of Polk County under this paragraph, prior to
distributing the beds, the commissioner of health must approve the location in which the
licensee plans to distribute the beds. The commissioner of health shall consult with the
commissioner of human services prior to approving the location of the proposed beds.
The licensee may combine these beds with beds relocated from other nursing facilities
as provided in section 144A.073, subdivision 3c.
The operating cost payment rates for
the new nursing facility facilities shall be determined based on the interim and settle-up
payment provisions of section 256B.431, 256B.434, or 256B.441 or Minnesota Rules, part
9549.0057, and the reimbursement provisions of section 256B.431, except that subdivision
26, paragraphs (a) and (b), shall not apply until the second rate year after the settle-up cost
report is filed. Property-related reimbursement rates shall be determined under section
256B.431, taking into account any federal or state flood-related loans or grants provided to
the facility;
parts 9549.0010 to 9549.0080. Property-related reimbursement rates shall
be determined under section 256B.431, 256B.434, or 256B.441. If the replacement beds
permitted under this paragraph are combined with beds from other nursing facilities, the
rates shall be calculated as the weighted average of rates determined as provided in this
paragraph and section 256B.441, subdivision 60;

(y) to license and certify beds in a renovation and remodeling project to convert 13
three-bed wards into 13 two-bed rooms and 13 single-bed rooms, expand space, and
add improvements in a nursing home that, as of January 1, 1994, met the following
conditions: the nursing home was located in Ramsey County, was not owned by a hospital
corporation, had a licensed capacity of 64 beds, and had been ranked among the top 15
applicants by the 1993 moratorium exceptions advisory review panel. The total project
construction cost estimate for this project must not exceed the cost estimate submitted in
connection with the 1993 moratorium exception process;

(z) to license and certify up to 150 nursing home beds to replace an existing 285
bed nursing facility located in St. Paul. The replacement project shall include both the
renovation of existing buildings and the construction of new facilities at the existing
site. The reduction in the licensed capacity of the existing facility shall occur during the
construction project as beds are taken out of service due to the construction process. Prior
to the start of the construction process, the facility shall provide written information to the
commissioner of health describing the process for bed reduction, plans for the relocation
of residents, and the estimated construction schedule. The relocation of residents shall be
in accordance with the provisions of law and rule;

(aa) to allow the commissioner of human services to license an additional 36 beds
to provide residential services for the physically disabled under Minnesota Rules, parts
9570.2000 to 9570.3400, in a 198-bed nursing home located in Red Wing, provided that
the total number of licensed and certified beds at the facility does not increase;

(bb) to license and certify a new facility in St. Louis County with 44 beds
constructed to replace an existing facility in St. Louis County with 31 beds, which has
resident rooms on two separate floors and an antiquated elevator that creates safety
concerns for residents and prevents nonambulatory residents from residing on the second
floor. The project shall include the elimination of three- and four-bed rooms;

(cc) to license and certify four beds in a 16-bed certified boarding care home in
Minneapolis to replace beds that were voluntarily delicensed and decertified on or
before March 31, 1992. The licensure and certification is conditional upon the facility
periodically assessing and adjusting its resident mix and other factors which may
contribute to a potential institution for mental disease declaration. The commissioner of
human services shall retain the authority to audit the facility at any time and shall require
the facility to comply with any requirements necessary to prevent an institution for mental
disease declaration, including delicensure and decertification of beds, if necessary;

(dd) to license and certify 72 beds in an existing facility in Mille Lacs County with
80 beds as part of a renovation project. The renovation must include construction of
an addition to accommodate ten residents with beginning and midstage dementia in a
self-contained living unit; creation of three resident households where dining, activities,
and support spaces are located near resident living quarters; designation of four beds
for rehabilitation in a self-contained area; designation of 30 private rooms; and other
improvements;

(ee) to license and certify beds in a facility that has undergone replacement or
remodeling as part of a planned closure under section 256B.437;

(ff) to license and certify a total replacement project of up to 124 beds located
in Wilkin County that are in need of relocation from a nursing home significantly
damaged by flood. The operating cost payment rates for the new nursing facility shall be
determined based on the interim and settle-up payment provisions of Minnesota Rules,
part 9549.0057, and the reimbursement provisions of section 256B.431. Property-related
reimbursement rates shall be determined under section 256B.431, taking into account any
federal or state flood-related loans or grants provided to the facility;

(gg) to allow the commissioner of human services to license an additional nine beds
to provide residential services for the physically disabled under Minnesota Rules, parts
9570.2000 to 9570.3400, in a 240-bed nursing home located in Duluth, provided that the
total number of licensed and certified beds at the facility does not increase;

(hh) to license and certify up to 120 new nursing facility beds to replace beds in a
facility in Anoka County, which was licensed for 98 beds as of July 1, 2000, provided the
new facility is located within four miles of the existing facility and is in Anoka County.
Operating and property rates shall be determined and allowed under section 256B.431 and
Minnesota Rules, parts 9549.0010 to 9549.0080, or section 256B.434 or 256B.441; or

(ii) to transfer up to 98 beds of a 129-licensed bed facility located in Anoka County
that, as of March 25, 2001, is in the active process of closing, to a 122-licensed bed nonprofit
nursing facility located in the city of Columbia Heights or its affiliate. The transfer is
effective when the receiving facility notifies the commissioner in writing of the number of
beds accepted. The commissioner shall place all transferred beds on layaway status held in
the name of the receiving facility. The layaway adjustment provisions of section 256B.431,
subdivision 30, do not apply to this layaway. The receiving facility may only remove the
beds from layaway for recertification and relicensure at the receiving facility's current
site, or at a newly constructed facility located in Anoka County. The receiving facility
must receive statutory authorization before removing these beds from layaway status, or
may remove these beds from layaway status if removal from layaway status is part of a
moratorium exception project approved by the commissioner under section 144A.073.

Sec. 3.

Minnesota Statutes 2014, section 256B.0913, subdivision 4, is amended to read:


Subd. 4.

Eligibility for funding for services for nonmedical assistance recipients.

(a) Funding for services under the alternative care program is available to persons who
meet the following criteria:

(1) the person has been determined by a community assessment under section
256B.0911 to be a person who would require the level of care provided in a nursing
facility, as determined under section 256B.0911, subdivision 4e, but for the provision of
services under the alternative care program;

(2) the person is age 65 or older;

(3) the person would be eligible for medical assistance within 135 days of admission
to a nursing facility;

(4) the person is not ineligible for the payment of long-term care services by the
medical assistance program due to an asset transfer penalty under section 256B.0595 or
equity interest in the home exceeding $500,000 as stated in section 256B.056;

(5) the person needs long-term care services that are not funded through other
state or federal funding, or other health insurance or other third-party insurance such as
long-term care insurance;

(6) except for individuals described in clause (7), the monthly cost of the alternative
care services funded by the program for this person does not exceed 75 percent of the
monthly limit described under section 256B.0915, subdivision 3a. This monthly limit
does not prohibit the alternative care client from payment for additional services, but in no
case may the cost of additional services purchased under this section exceed the difference
between the client's monthly service limit defined under section 256B.0915, subdivision
3
, and the alternative care program monthly service limit defined in this paragraph. If
care-related supplies and equipment or environmental modifications and adaptations are or
will be purchased for an alternative care services recipient, the costs may be prorated on a
monthly basis for up to 12 consecutive months beginning with the month of purchase.
If the monthly cost of a recipient's other alternative care services exceeds the monthly
limit established in this paragraph, the annual cost of the alternative care services shall be
determined. In this event, the annual cost of alternative care services shall not exceed 12
times the monthly limit described in this paragraph;

(7) for individuals assigned a case mix classification A as described under section
256B.0915, subdivision 3a, paragraph (a), with (i) no dependencies in activities of daily
living, or (ii) up to two dependencies in bathing, dressing, grooming, walking, and eating
when the dependency score in eating is three or greater as determined by an assessment
performed under section 256B.0911, the monthly cost of alternative care services funded
by the program cannot exceed $593 per month for all new participants enrolled in
the program on or after July 1, 2011. This monthly limit shall be applied to all other
participants who meet this criteria at reassessment. This monthly limit shall be increased
annually as described in section 256B.0915, subdivision 3a, paragraph paragraphs (a) and
(e)
. This monthly limit does not prohibit the alternative care client from payment for
additional services, but in no case may the cost of additional services purchased exceed the
difference between the client's monthly service limit defined in this clause and the limit
described in clause (6) for case mix classification A; and

(8) the person is making timely payments of the assessed monthly fee.

A person is ineligible if payment of the fee is over 60 days past due, unless the person
agrees to:

(i) the appointment of a representative payee;

(ii) automatic payment from a financial account;

(iii) the establishment of greater family involvement in the financial management of
payments; or

(iv) another method acceptable to the lead agency to ensure prompt fee payments.

The lead agency may extend the client's eligibility as necessary while making
arrangements to facilitate payment of past-due amounts and future premium payments.
Following disenrollment due to nonpayment of a monthly fee, eligibility shall not be
reinstated for a period of 30 days.

(b) Alternative care funding under this subdivision is not available for a person who
is a medical assistance recipient or who would be eligible for medical assistance without a
spenddown or waiver obligation. A person whose initial application for medical assistance
and the elderly waiver program is being processed may be served under the alternative care
program for a period up to 60 days. If the individual is found to be eligible for medical
assistance, medical assistance must be billed for services payable under the federally
approved elderly waiver plan and delivered from the date the individual was found eligible
for the federally approved elderly waiver plan. Notwithstanding this provision, alternative
care funds may not be used to pay for any service the cost of which: (i) is payable by
medical assistance; (ii) is used by a recipient to meet a waiver obligation; or (iii) is used to
pay a medical assistance income spenddown for a person who is eligible to participate in the
federally approved elderly waiver program under the special income standard provision.

(c) Alternative care funding is not available for a person who resides in a licensed
nursing home, certified boarding care home, hospital, or intermediate care facility, except
for case management services which are provided in support of the discharge planning
process for a nursing home resident or certified boarding care home resident to assist with
a relocation process to a community-based setting.

(d) Alternative care funding is not available for a person whose income is greater
than the maintenance needs allowance under section 256B.0915, subdivision 1d, but equal
to or less than 120 percent of the federal poverty guideline effective July 1 in the fiscal
year for which alternative care eligibility is determined, who would be eligible for the
elderly waiver with a waiver obligation.

Sec. 4.

Minnesota Statutes 2014, section 256B.0915, subdivision 3a, is amended to read:


Subd. 3a.

Elderly waiver cost limits.

(a) The monthly limit for the cost of
waivered services to an individual elderly waiver client except for individuals described
in paragraphs (b) and (d) shall be the weighted average monthly nursing facility rate of
the case mix resident class to which the elderly waiver client would be assigned under
Minnesota Rules, parts 9549.0050 to 9549.0059, less the recipient's maintenance needs
allowance as described in subdivision 1d, paragraph (a), until the first day of the state
fiscal year in which the resident assessment system as described in section 256B.438 for
nursing home rate determination is implemented.
Effective on the first day of the state
fiscal year in which the resident assessment system as described in section 256B.438 for
nursing home rate determination is implemented and the first day of each subsequent state
fiscal year, the monthly limit for the cost of waivered services to an individual elderly
waiver client shall be the rate monthly limit of the case mix resident class to which the
waiver client would be assigned under Minnesota Rules, parts 9549.0050 to 9549.0059, in
effect on the last day of the previous state fiscal year, adjusted by any legislatively adopted
home and community-based services percentage rate adjustment.

(b) The monthly limit for the cost of waivered services under paragraph (a) to an
individual elderly waiver client assigned to a case mix classification A under paragraph
(a)
with:

(1) no dependencies in activities of daily living; or

(2) up to two dependencies in bathing, dressing, grooming, walking, and eating
when the dependency score in eating is three or greater as determined by an assessment
performed under section 256B.0911 shall be $1,750 per month effective on July 1, 2011,
for all new participants enrolled in the program on or after July 1, 2011. This monthly
limit shall be applied to all other participants who meet this criteria at reassessment. This
monthly limit shall be increased annually as described in paragraph paragraphs (a) and (e).

(c) If extended medical supplies and equipment or environmental modifications are
or will be purchased for an elderly waiver client, the costs may be prorated for up to
12 consecutive months beginning with the month of purchase. If the monthly cost of a
recipient's waivered services exceeds the monthly limit established in paragraph (a) or ,
(b), (d), or (e), the annual cost of all waivered services shall be determined. In this event,
the annual cost of all waivered services shall not exceed 12 times the monthly limit of
waivered services as described in paragraph (a) or , (b), (d), or (e).

(d) Effective July 1, 2013, the monthly cost limit of waiver services, including
any necessary home care services described in section 256B.0651, subdivision 2, for
individuals who meet the criteria as ventilator-dependent given in section 256B.0651,
subdivision 1, paragraph (g), shall be the average of the monthly medical assistance
amount established for home care services as described in section 256B.0652, subdivision
7
, and the annual average contracted amount established by the commissioner for nursing
facility services for ventilator-dependent individuals. This monthly limit shall be increased
annually as described in paragraph paragraphs (a) and (e).

(e) Effective July 1, 2016, and each July 1 thereafter, the monthly cost limits for
elderly waiver services in effect on the previous June 30 shall be adjusted by the greater of
the difference between any legislatively adopted home and community-based provider
rate increase effective on July 1 and the average statewide percentage increase in nursing
facility operating payment rates under sections 256B.431, 256B.434, and 256B.441,
effective the previous January 1.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 5.

Minnesota Statutes 2014, section 256B.0915, subdivision 3e, is amended to read:


Subd. 3e.

Customized living service rate.

(a) Payment for customized living
services shall be a monthly rate authorized by the lead agency within the parameters
established by the commissioner. The payment agreement must delineate the amount of
each component service included in the recipient's customized living service plan. The
lead agency, with input from the provider of customized living services, shall ensure that
there is a documented need within the parameters established by the commissioner for all
component customized living services authorized.

(b) The payment rate must be based on the amount of component services to be
provided utilizing component rates established by the commissioner. Counties and tribes
shall use tools issued by the commissioner to develop and document customized living
service plans and rates.

(c) Component service rates must not exceed payment rates for comparable elderly
waiver or medical assistance services and must reflect economies of scale. Customized
living services must not include rent or raw food costs.

(d) With the exception of individuals described in subdivision 3a, paragraph (b), the
individualized monthly authorized payment for the customized living service plan shall not
exceed 50 percent of the greater of either the statewide or any of the geographic groups'
weighted average monthly nursing facility rate of the case mix resident class to which the
elderly waiver eligible client would be assigned under Minnesota Rules, parts 9549.0050 to
9549.0059, less the maintenance needs allowance as described in subdivision 1d, paragraph
(a), until the July 1 of the state fiscal year in which the resident assessment system as
described in section 256B.438 for nursing home rate determination is implemented
.
Effective on July 1 of the state fiscal year in which the resident assessment system as
described in section 256B.438 for nursing home rate determination is implemented and
July 1 of each subsequent state fiscal year, the individualized monthly authorized payment
for the services described in this clause shall not exceed the limit which was in effect on
June 30 of the previous state fiscal year updated annually based on legislatively adopted
changes to all service rate maximums for home and community-based service providers.

(e) Effective July 1, 2011, the individualized monthly payment for the customized
living service plan for individuals described in subdivision 3a, paragraph (b), must be the
monthly authorized payment limit for customized living for individuals classified as case
mix A, reduced by 25 percent. This rate limit must be applied to all new participants
enrolled in the program on or after July 1, 2011, who meet the criteria described in
subdivision 3a, paragraph (b). This monthly limit also applies to all other participants who
meet the criteria described in subdivision 3a, paragraph (b), at reassessment.

(f) Customized living services are delivered by a provider licensed by the
Department of Health as a class A or class F home care provider and provided in a
building that is registered as a housing with services establishment under chapter 144D.
Licensed home care providers are subject to section 256B.0651, subdivision 14.

(g) A provider may not bill or otherwise charge an elderly waiver participant or their
family for additional units of any allowable component service beyond those available
under the service rate limits described in paragraph (d), nor for additional units of any
allowable component service beyond those approved in the service plan by the lead agency.

(h) Effective July 1, 2016, and each July 1 thereafter, individualized service rate
limits for customized living services under this subdivision shall be adjusted by the greater
of the difference between any legislatively adopted home and community-based provider
rate increase effective on July 1 and the average statewide percentage increase in nursing
facility operating payment rates under sections 256B.431, 256B.434, and 256B.441,
effective the previous January 1.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 6.

Minnesota Statutes 2014, section 256B.0915, subdivision 3h, is amended to read:


Subd. 3h.

Service rate limits; 24-hour customized living services.

(a) The
payment rate for 24-hour customized living services is a monthly rate authorized by the
lead agency within the parameters established by the commissioner of human services.
The payment agreement must delineate the amount of each component service included
in each recipient's customized living service plan. The lead agency, with input from
the provider of customized living services, shall ensure that there is a documented need
within the parameters established by the commissioner for all component customized
living services authorized. The lead agency shall not authorize 24-hour customized living
services unless there is a documented need for 24-hour supervision.

(b) For purposes of this section, "24-hour supervision" means that the recipient
requires assistance due to needs related to one or more of the following:

(1) intermittent assistance with toileting, positioning, or transferring;

(2) cognitive or behavioral issues;

(3) a medical condition that requires clinical monitoring; or

(4) for all new participants enrolled in the program on or after July 1, 2011, and
all other participants at their first reassessment after July 1, 2011, dependency in at
least three of the following activities of daily living as determined by assessment under
section 256B.0911: bathing; dressing; grooming; walking; or eating when the dependency
score in eating is three or greater; and needs medication management and at least 50
hours of service per month. The lead agency shall ensure that the frequency and mode
of supervision of the recipient and the qualifications of staff providing supervision are
described and meet the needs of the recipient.

(c) The payment rate for 24-hour customized living services must be based on the
amount of component services to be provided utilizing component rates established by the
commissioner. Counties and tribes will use tools issued by the commissioner to develop
and document customized living plans and authorize rates.

(d) Component service rates must not exceed payment rates for comparable elderly
waiver or medical assistance services and must reflect economies of scale.

(e) The individually authorized 24-hour customized living payments, in combination
with the payment for other elderly waiver services, including case management, must not
exceed the recipient's community budget cap specified in subdivision 3a. Customized
living services must not include rent or raw food costs.

(f) The individually authorized 24-hour customized living payment rates shall not
exceed the 95 percentile of statewide monthly authorizations for 24-hour customized
living services in effect and in the Medicaid management information systems on March
31, 2009, for each case mix resident class under Minnesota Rules, parts 9549.0050
to 9549.0059, to which elderly waiver service clients are assigned. When there are
fewer than 50 authorizations in effect in the case mix resident class, the commissioner
shall multiply the calculated service payment rate maximum for the A classification by
the standard weight for that classification under Minnesota Rules, parts 9549.0050 to
9549.0059, to determine the applicable payment rate maximum. Service payment rate
maximums shall be updated annually based on legislatively adopted changes to all service
rates for home and community-based service providers.

(g) Notwithstanding the requirements of paragraphs (d) and (f), the commissioner
may establish alternative payment rate systems for 24-hour customized living services in
housing with services establishments which are freestanding buildings with a capacity of
16 or fewer, by applying a single hourly rate for covered component services provided
in either:

(1) licensed corporate adult foster homes; or

(2) specialized dementia care units which meet the requirements of section 144D.065
and in which:

(i) each resident is offered the option of having their own apartment; or

(ii) the units are licensed as board and lodge establishments with maximum capacity
of eight residents, and which meet the requirements of Minnesota Rules, part 9555.6205,
subparts 1, 2, 3, and 4, item A.

(h) Twenty-four-hour customized living services are delivered by a provider licensed
by the Department of Health as a class A or class F home care provider and provided in a
building that is registered as a housing with services establishment under chapter 144D.
Licensed home care providers are subject to section 256B.0651, subdivision 14.

(i) A provider may not bill or otherwise charge an elderly waiver participant or their
family for additional units of any allowable component service beyond those available
under the service rate limits described in paragraph (e), nor for additional units of any
allowable component service beyond those approved in the service plan by the lead agency.

(j) Effective July 1, 2016, and each July 1 thereafter, individualized service rate
limits for 24-hour customized living services under this subdivision shall be adjusted by
the greater of the difference between any legislatively adopted home and community-based
provider rate increase effective on July 1 and the average statewide percentage increase
in nursing facility operating payment rates under sections 256B.431, 256B.434, and
256B.441, effective the previous January 1.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 7.

Minnesota Statutes 2014, section 256B.431, subdivision 2b, is amended to read:


Subd. 2b.

Operating costs after July 1, 1985.

(a) For rate years beginning on or
after July 1, 1985, the commissioner shall establish procedures for determining per diem
reimbursement for operating costs.

(b) The commissioner shall contract with an econometric firm with recognized
expertise in and access to national economic change indices that can be applied to the
appropriate cost categories when determining the operating cost payment rate.

(c) The commissioner shall analyze and evaluate each nursing facility's cost report
of allowable operating costs incurred by the nursing facility during the reporting year
immediately preceding the rate year for which the payment rate becomes effective.

(d) The commissioner shall establish limits on actual allowable historical operating
cost per diems based on cost reports of allowable operating costs for the reporting year
that begins October 1, 1983, taking into consideration relevant factors including resident
needs, geographic location, and size of the nursing facility. In developing the geographic
groups for purposes of reimbursement under this section, the commissioner shall ensure
that nursing facilities in any county contiguous to the Minneapolis-St. Paul seven-county
metropolitan area are included in the same geographic group. The limits established by
the commissioner shall not be less, in the aggregate, than the 60th percentile of total
actual allowable historical operating cost per diems for each group of nursing facilities
established under subdivision 1 based on cost reports of allowable operating costs in the
previous reporting year. For rate years beginning on or after July 1, 1989, facilities located
in geographic group I as described in Minnesota Rules, part 9549.0052, on January 1,
1989, may choose to have the commissioner apply either the care related limits or the
other operating cost limits calculated for facilities located in geographic group II, or
both, if either of the limits calculated for the group II facilities is higher. The efficiency
incentive for geographic group I nursing facilities must be calculated based on geographic
group I limits. The phase-in must be established utilizing the chosen limits. For purposes
of these exceptions to the geographic grouping requirements, the definitions in Minnesota
Rules, parts 9549.0050 to 9549.0059 (Emergency), and 9549.0010 to 9549.0080, apply.
The limits established under this paragraph remain in effect until the commissioner
establishes a new base period. Until the new base period is established, the commissioner
shall adjust the limits annually using the appropriate economic change indices established
in paragraph (e). In determining allowable historical operating cost per diems for purposes
of setting limits and nursing facility payment rates, the commissioner shall divide the
allowable historical operating costs by the actual number of resident days, except that
where a nursing facility is occupied at less than 90 percent of licensed capacity days, the
commissioner may establish procedures to adjust the computation of the per diem to
an imputed occupancy level at or below 90 percent. The commissioner shall establish
efficiency incentives as appropriate. The commissioner may establish efficiency incentives
for different operating cost categories. The commissioner shall consider establishing
efficiency incentives in care related cost categories. The commissioner may combine one
or more operating cost categories and may use different methods for calculating payment
rates for each operating cost category or combination of operating cost categories. For the
rate year beginning on July 1, 1985, the commissioner shall:

(1) allow nursing facilities that have an average length of stay of 180 days or less in
their skilled nursing level of care, 125 percent of the care related limit and 105 percent
of the other operating cost limit established by rule; and

(2) exempt nursing facilities licensed on July 1, 1983, by the commissioner to
provide residential services for the physically disabled under Minnesota Rules, parts
9570.2000 to 9570.3600, from the care related limits and allow 105 percent of the other
operating cost limit established by rule.

For the purpose of calculating the other operating cost efficiency incentive for
nursing facilities referred to in clause (1) or (2), the commissioner shall use the other
operating cost limit established by rule before application of the 105 percent.

(e) The commissioner shall establish a composite index or indices by determining
the appropriate economic change indicators to be applied to specific operating cost
categories or combination of operating cost categories.

(f) Each nursing facility shall receive an operating cost payment rate equal to the sum
of the nursing facility's operating cost payment rates for each operating cost category. The
operating cost payment rate for an operating cost category shall be the lesser of the nursing
facility's historical operating cost in the category increased by the appropriate index
established in paragraph (e) for the operating cost category plus an efficiency incentive
established pursuant to paragraph (d) or the limit for the operating cost category increased
by the same index. If a nursing facility's actual historic operating costs are greater than the
prospective payment rate for that rate year, there shall be no retroactive cost settle up. In
establishing payment rates for one or more operating cost categories, the commissioner may
establish separate rates for different classes of residents based on their relative care needs.

(g) The commissioner shall include the reported actual real estate tax liability or
payments in lieu of real estate tax of each nursing facility as an operating cost of that
nursing facility. Allowable costs under this subdivision for payments made by a nonprofit
nursing facility that are in lieu of real estate taxes shall not exceed the amount which the
nursing facility would have paid to a city or township and county for fire, police, sanitation
services, and road maintenance costs had real estate taxes been levied on that property
for those purposes. For rate years beginning on or after July 1, 1987, the reported actual
real estate tax liability or payments in lieu of real estate tax of nursing facilities shall be
adjusted to include an amount equal to one-half of the dollar change in real estate taxes
from the prior year. The commissioner shall include a reported actual special assessment,
and reported actual license fees required by the Minnesota Department of Health, for each
nursing facility as an operating cost of that nursing facility. For rate years beginning
on or after July 1, 1989, the commissioner shall include a nursing facility's reported
Public Employee Retirement Act contribution for the reporting year as apportioned to the
care-related operating cost categories and other operating cost categories multiplied by
the appropriate composite index or indices established pursuant to paragraph (e) as costs
under this paragraph. Total adjusted real estate tax liability, payments in lieu of real
estate tax, actual special assessments paid, the indexed Public Employee Retirement Act
contribution, and license fees paid as required by the Minnesota Department of Health,
for each nursing facility (1) shall be divided by actual resident days in order to compute
the operating cost payment rate for this operating cost category, (2) shall not be used to
compute the care-related operating cost limits or other operating cost limits established
by the commissioner, and (3) shall not be increased by the composite index or indices
established pursuant to paragraph (e), unless otherwise indicated in this paragraph.

(h) For rate years beginning on or after July 1, 1987, the commissioner shall adjust
the rates of a nursing facility that meets the criteria for the special dietary needs of its
residents and the requirements in section 31.651. The adjustment for raw food cost shall
be the difference between the nursing facility's allowable historical raw food cost per
diem and 115 percent of the median historical allowable raw food cost per diem of the
corresponding geographic group.

The rate adjustment shall be reduced by the applicable phase-in percentage as
provided under subdivision 2h.

Sec. 8.

Minnesota Statutes 2014, section 256B.431, subdivision 36, is amended to read:


Subd. 36.

Employee scholarship costs and training in English as a second
language.

(a) For the period between July 1, 2001, and June 30, 2003, the commissioner
shall provide to each nursing facility reimbursed under this section, section 256B.434, or
any other section, a scholarship per diem of 25 cents to the total operating payment rate.
For the two rate years beginning on or after October 1, 2015, through September 30, 2017,
the commissioner shall allow a scholarship per diem of up to 25 cents for each nursing
facility with no scholarship per diem that is requesting a scholarship per diem to be added
to the external fixed payment rate
to be used:

(1) for employee scholarships that satisfy the following requirements:

(i) scholarships are available to all employees who work an average of at least 20
ten hours per week at the facility except the administrator, department supervisors, and
registered nurses
and to reimburse student loan expenses for newly hired and recently
graduated registered nurses and licensed practical nurses, and training expenses for
nursing assistants as defined in section 144A.61, subdivision 2, who are newly hired and
have graduated within the last 12 months
; and

(ii) the course of study is expected to lead to career advancement with the facility or
in long-term care, including medical care interpreter services and social work; and

(2) to provide job-related training in English as a second language.

(b) A facility receiving All facilities may annually request a rate adjustment under
this subdivision may submit by submitting information to the commissioner on a schedule
determined by the commissioner and on in a form supplied by the commissioner a
calculation of the scholarship per diem, including: the amount received from this rate
adjustment; the amount used for training in English as a second language; the number of
persons receiving the training; the name of the person or entity providing the training;
and for each scholarship recipient, the name of the recipient, the amount awarded, the
educational institution attended, the nature of the educational program, the program
completion date, and a determination of the per diem amount of these costs based on
actual resident days
. The commissioner shall allow a scholarship payment rate equal to
the reported and allowable costs divided by resident days.

(c) On July 1, 2003, the commissioner shall remove the 25 cent scholarship per diem
from the total operating payment rate of each facility.

(d) For rate years beginning after June 30, 2003, the commissioner shall provide to
each facility the scholarship per diem determined in paragraph (b).
In calculating the per
diem under paragraph (b), the commissioner shall allow only costs related to tuition and ,
direct educational expenses, and reasonable costs as defined by the commissioner for child
care costs and transportation expenses related to direct educational expenses
.

(d) The rate increase under this subdivision is an optional rate add-on that the facility
must request from the commissioner in a manner prescribed by the commissioner. The
rate increase must be used for scholarships as specified in this subdivision.

(e) Nursing facilities that close beds during a rate year may request to have their
scholarship adjustment under paragraph (b) recalculated by the commissioner for the
remainder of the rate year to reflect the reduction in resident days compared to the cost
report year.

Sec. 9.

Minnesota Statutes 2014, section 256B.434, subdivision 4, is amended to read:


Subd. 4.

Alternate rates for nursing facilities.

(a) For nursing facilities which
have their payment rates determined under this section rather than section 256B.431, the
commissioner shall establish a rate under this subdivision. The nursing facility must enter
into a written contract with the commissioner.

(b) A nursing facility's case mix payment rate for the first rate year of a facility's
contract under this section is the payment rate the facility would have received under
section 256B.431.

(c) A nursing facility's case mix payment rates for the second and subsequent years
of a facility's contract under this section are the previous rate year's contract payment rates
plus an inflation adjustment and, for facilities reimbursed under this section or section
256B.431, an adjustment to include the cost of any increase in Health Department licensing
fees for the facility taking effect on or after July 1, 2001. The index for the inflation
adjustment must be based on the change in the Consumer Price Index-All Items (United
States City average) (CPI-U) forecasted by the commissioner of management and budget's
national economic consultant, as forecasted in the fourth quarter of the calendar year
preceding the rate year. The inflation adjustment must be based on the 12-month period
from the midpoint of the previous rate year to the midpoint of the rate year for which the
rate is being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July
1, 2001, July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007,
July 1, 2008, October 1, 2009, and October 1, 2010, this paragraph shall apply only to the
property-related payment rate. For the rate years beginning on October 1, 2011, October 1,
2012, October 1, 2013, October 1, 2014, October 1, 2015, and October January 1, 2016, and
January 1, 2017,
the rate adjustment under this paragraph shall be suspended. Beginning
in 2005, adjustment to the property payment rate under this section and section 256B.431
shall be effective on October 1. In determining the amount of the property-related payment
rate adjustment under this paragraph, the commissioner shall determine the proportion of
the facility's rates that are property-related based on the facility's most recent cost report.

(d) The commissioner shall develop additional incentive-based payments of up to
five percent above a facility's operating payment rate for achieving outcomes specified
in a contract. The commissioner may solicit contract amendments and implement those
which, on a competitive basis, best meet the state's policy objectives. The commissioner
shall limit the amount of any incentive payment and the number of contract amendments
under this paragraph to operate the incentive payments within funds appropriated for this
purpose. The contract amendments may specify various levels of payment for various
levels of performance. Incentive payments to facilities under this paragraph may be in the
form of time-limited rate adjustments or onetime supplemental payments. In establishing
the specified outcomes and related criteria, the commissioner shall consider the following
state policy objectives:

(1) successful diversion or discharge of residents to the residents' prior home or other
community-based alternatives;

(2) adoption of new technology to improve quality or efficiency;

(3) improved quality as measured in the Nursing Home Report Card;

(4) reduced acute care costs; and

(5) any additional outcomes proposed by a nursing facility that the commissioner
finds desirable.

(e) Notwithstanding the threshold in section 256B.431, subdivision 16, facilities that
take action to come into compliance with existing or pending requirements of the life
safety code provisions or federal regulations governing sprinkler systems must receive
reimbursement for the costs associated with compliance if all of the following conditions
are met:

(1) the expenses associated with compliance occurred on or after January 1, 2005,
and before December 31, 2008;

(2) the costs were not otherwise reimbursed under subdivision 4f or section
144A.071 or 144A.073; and

(3) the total allowable costs reported under this paragraph are less than the minimum
threshold established under section 256B.431, subdivision 15, paragraph (e), and
subdivision 16.

The commissioner shall use money appropriated for this purpose to provide to qualifying
nursing facilities a rate adjustment beginning October 1, 2007, and ending September 30,
2008. Nursing facilities that have spent money or anticipate the need to spend money
to satisfy the most recent life safety code requirements by (1) installing a sprinkler
system or (2) replacing all or portions of an existing sprinkler system may submit to the
commissioner by June 30, 2007, on a form provided by the commissioner the actual
costs of a completed project or the estimated costs, based on a project bid, of a planned
project. The commissioner shall calculate a rate adjustment equal to the allowable
costs of the project divided by the resident days reported for the report year ending
September 30, 2006. If the costs from all projects exceed the appropriation for this
purpose, the commissioner shall allocate the money appropriated on a pro rata basis to the
qualifying facilities by reducing the rate adjustment determined for each facility by an
equal percentage. Facilities that used estimated costs when requesting the rate adjustment
shall report to the commissioner by January 31, 2009, on the use of this money on a
form provided by the commissioner. If the nursing facility fails to provide the report, the
commissioner shall recoup the money paid to the facility for this purpose. If the facility
reports expenditures allowable under this subdivision that are less than the amount received
in the facility's annualized rate adjustment, the commissioner shall recoup the difference.

Sec. 10.

Minnesota Statutes 2014, section 256B.434, is amended by adding a
subdivision to read:


Subd. 4i.

Construction project rate adjustments for certain nursing facilities.

(a) This subdivision applies to nursing facilities with at least 120 active beds as of January
1, 2015, that have projects approved in 2015 under the nursing facility moratorium
exception process in section 144A.073. When each facility's moratorium exception
construction project is completed, the facility must receive the rate adjustment allowed
under subdivision 4f. In addition to that rate adjustment, facilities with at least 120
active beds, but not more than 149 active beds, as of January 1, 2015, must have their
construction project rate adjustment increased by an additional $4; and facilities with at
least 150 active beds, but not more than 160 active beds, as of January 1, 2015, must have
their construction project rate adjustment increased by an additional $12.50.

(b) Notwithstanding any other law to the contrary, money available under section
144A.073, subdivision 11, after the completion of the moratorium exception approval
process in 2015 under section 144A.073, subdivision 3, shall be used to reduce the fiscal
impact to the medical assistance budget for the increases allowed in this subdivision.

Sec. 11.

Minnesota Statutes 2014, section 256B.441, subdivision 1, is amended to read:


Subdivision 1.

Rebasing Calculation of nursing facility operating payment
rates.

(a) The commissioner shall rebase nursing facility operating payment rates to align
payments to facilities with the cost of providing care. The rebased
calculate operating
payment rates shall be calculated using the statistical and cost report filed by each nursing
facility for the report period ending one year prior to the rate year.

(b) The new operating payment rates based on this section shall take effect beginning