as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 01/26/1998 |
1.1 A bill for an act 1.2 relating to nursing homes; changing staffing ratios; 1.3 modifying exceptions for beds; changing nursing 1.4 facility salary adjustment per diem; prohibiting costs 1.5 for unionization for use in setting payment rates; 1.6 changing nursing facility reimbursement; amending 1.7 Minnesota Statutes 1996, sections 144A.04, subdivision 1.8 7; 256B.431, subdivision 2i, and by adding a 1.9 subdivision; Minnesota Statutes 1997 Supplement, 1.10 sections 144A.071, subdivision 4a; and 256B.431, 1.11 subdivisions 25 and 26. 1.12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.13 Section 1. Minnesota Statutes 1996, section 144A.04, 1.14 subdivision 7, is amended to read: 1.15 Subd. 7. [MINIMUM NURSING STAFF REQUIREMENT.] 1.16 Notwithstanding the provisions of Minnesota Rules, part 1.17 4655.5600, the minimum staffing standard for nursing personnel 1.18 in certified nursing homes is as follows: 1.19 (a)The minimum number of hours of nursing personnel to be1.20provided in a nursing home is the greater of two hours per1.21resident per 24 hours or 0.95 hours per standardized resident1.22day.A nursing home shall maintain a ratio of residents to 1.23 nonlicensed nursing personnel of no more than: 1.24 (1) 8:1 during a morning shift; 1.25 (2) 10:1 during a day shift; and 1.26 (3) 15:1 during an evening shift. 1.27 (b)For purposes of this subdivision, "hours of nursing1.28personnel" means the paid, on-duty, productive nursing hours of2.1all nurses and nursing assistants, calculated on the basis of2.2any given 24-hour period. "Productive nursing hours" means all2.3on-duty hours during which nurses and nursing assistants are2.4engaged in nursing duties. Examples of nursing duties may be2.5found in Minnesota Rules, parts 4655.5900, 4655.6100, and2.64655.6400. Not included are vacations, holidays, sick leave,2.7in-service classroom training, or lunches. Also not included2.8are the nonproductive nursing hours of the in-service training2.9director. In homes with more than 60 licensed beds, the hours2.10of the director of nursing are excluded. "Standardized resident2.11day" means the sum of the number of residents in each case mix2.12class multiplied by the case mix weight for that resident class,2.13as found in Minnesota Rules, part 9549.0059, subpart 2,2.14calculated on the basis of a facility's census for any given2.15day. For the purpose of determining a facility's census, the2.16commissioner of health shall exclude the resident days claimed2.17by the facility for resident therapeutic leave or bed hold days.2.18 A person employed to provide services such as food preparation, 2.19 housekeeping, laundry, or maintenance services shall not provide 2.20 nursing care to residents and shall not be counted in 2.21 determining the ratios in paragraph (a). 2.22 (c)Calculation of nursing hours per standardized resident2.23day is performed by dividing total hours of nursing personnel2.24for a given period by the total of standardized resident days2.25for that same period.A nursing home shall post for each wing 2.26 and floor of the facility and for each shift the current number 2.27 of licensed and nonlicensed nursing staff directly responsible 2.28 for resident care and the current ratios of residents to staff, 2.29 which show separately the number of residents to licensed 2.30 nursing staff and the number of residents to nonlicensed nursing 2.31 staff. In addition, such information shall be posted for the 2.32 most recently concluded cost reporting period in the form of 2.33 average daily staffing ratios for the period. This information 2.34 must be posted in a manner which is visible and accessible to 2.35 all residents, their families, caregivers, and potential 2.36 consumers in each facility. 3.1 (d) A nursing home that is issued a notice of noncompliance 3.2 under section 144A.10, subdivision 5, for a violation of this 3.3 subdivision, shall be assessed a civil fine of $300 for each day 3.4 of noncompliance, subject to section 144A.10, subdivisions 7 and 3.5 8. 3.6 Sec. 2. Minnesota Statutes 1997 Supplement, section 3.7 144A.071, subdivision 4a, is amended to read: 3.8 Subd. 4a. [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 3.9 best interest of the state to ensure that nursing homes and 3.10 boarding care homes continue to meet the physical plant 3.11 licensing and certification requirements by permitting certain 3.12 construction projects. Facilities should be maintained in 3.13 condition to satisfy the physical and emotional needs of 3.14 residents while allowing the state to maintain control over 3.15 nursing home expenditure growth. 3.16 The commissioner of health in coordination with the 3.17 commissioner of human services, may approve the renovation, 3.18 replacement, upgrading, or relocation of a nursing home or 3.19 boarding care home, under the following conditions: 3.20 (a) to license or certify beds in a new facility 3.21 constructed to replace a facility or to make repairs in an 3.22 existing facility that was destroyed or damaged after June 30, 3.23 1987, by fire, lightning, or other hazard provided: 3.24 (i) destruction was not caused by the intentional act of or 3.25 at the direction of a controlling person of the facility; 3.26 (ii) at the time the facility was destroyed or damaged the 3.27 controlling persons of the facility maintained insurance 3.28 coverage for the type of hazard that occurred in an amount that 3.29 a reasonable person would conclude was adequate; 3.30 (iii) the net proceeds from an insurance settlement for the 3.31 damages caused by the hazard are applied to the cost of the new 3.32 facility or repairs; 3.33 (iv) the new facility is constructed on the same site as 3.34 the destroyed facility or on another site subject to the 3.35 restrictions in section 144A.073, subdivision 5; 3.36 (v) the number of licensed and certified beds in the new 4.1 facility does not exceed the number of licensed and certified 4.2 beds in the destroyed facility; and 4.3 (vi) the commissioner determines that the replacement beds 4.4 are needed to prevent an inadequate supply of beds. 4.5 Project construction costs incurred for repairs authorized under 4.6 this clause shall not be considered in the dollar threshold 4.7 amount defined in subdivision 2; 4.8 (b) to license or certify beds that are moved from one 4.9 location to another within a nursing home facility, provided the 4.10 total costs of remodeling performed in conjunction with the 4.11 relocation of beds does not exceed $750,000; 4.12 (c) to license or certify beds in a project recommended for 4.13 approval under section 144A.073; 4.14 (d) to license or certify beds that are moved from an 4.15 existing state nursing home to a different state facility, 4.16 provided there is no net increase in the number of state nursing 4.17 home beds; 4.18 (e) to certify and license as nursing home beds boarding 4.19 care beds in a certified boarding care facility if the beds meet 4.20 the standards for nursing home licensure, or in a facility that 4.21 was granted an exception to the moratorium under section 4.22 144A.073, and if the cost of any remodeling of the facility does 4.23 not exceed $750,000. If boarding care beds are licensed as 4.24 nursing home beds, the number of boarding care beds in the 4.25 facility must not increase beyond the number remaining at the 4.26 time of the upgrade in licensure. The provisions contained in 4.27 section 144A.073 regarding the upgrading of the facilities do 4.28 not apply to facilities that satisfy these requirements; 4.29 (f) to license and certify up to 40 beds transferred from 4.30 an existing facility owned and operated by the Amherst H. Wilder 4.31 Foundation in the city of St. Paul to a new unit at the same 4.32 location as the existing facility that will serve persons with 4.33 Alzheimer's disease and other related disorders. The transfer 4.34 of beds may occur gradually or in stages, provided the total 4.35 number of beds transferred does not exceed 40. At the time of 4.36 licensure and certification of a bed or beds in the new unit, 5.1 the commissioner of health shall delicense and decertify the 5.2 same number of beds in the existing facility. As a condition of 5.3 receiving a license or certification under this clause, the 5.4 facility must make a written commitment to the commissioner of 5.5 human services that it will not seek to receive an increase in 5.6 its property-related payment rate as a result of the transfers 5.7 allowed under this paragraph; 5.8 (g) to license and certify nursing home beds to replace 5.9 currently licensed and certified boarding care beds which may be 5.10 located either in a remodeled or renovated boarding care or 5.11 nursing home facility or in a remodeled, renovated, newly 5.12 constructed, or replacement nursing home facility within the 5.13 identifiable complex of health care facilities in which the 5.14 currently licensed boarding care beds are presently located, 5.15 provided that the number of boarding care beds in the facility 5.16 or complex are decreased by the number to be licensed as nursing 5.17 home beds and further provided that, if the total costs of new 5.18 construction, replacement, remodeling, or renovation exceed ten 5.19 percent of the appraised value of the facility or $200,000, 5.20 whichever is less, the facility makes a written commitment to 5.21 the commissioner of human services that it will not seek to 5.22 receive an increase in its property-related payment rate by 5.23 reason of the new construction, replacement, remodeling, or 5.24 renovation. The provisions contained in section 144A.073 5.25 regarding the upgrading of facilities do not apply to facilities 5.26 that satisfy these requirements; 5.27 (h) to license as a nursing home and certify as a nursing 5.28 facility a facility that is licensed as a boarding care facility 5.29 but not certified under the medical assistance program, but only 5.30 if the commissioner of human services certifies to the 5.31 commissioner of health that licensing the facility as a nursing 5.32 home and certifying the facility as a nursing facility will 5.33 result in a net annual savings to the state general fund of 5.34 $200,000 or more; 5.35 (i) to certify, after September 30, 1992, and prior to July 5.36 1, 1993, existing nursing home beds in a facility that was 6.1 licensed and in operation prior to January 1, 1992; 6.2 (j) to license and certify new nursing home beds to replace 6.3 beds in a facility condemned as part of an economic 6.4 redevelopment plan in a city of the first class, provided the 6.5 new facility is located within one mile of the site of the old 6.6 facility. Operating and property costs for the new facility 6.7 must be determined and allowed under existing reimbursement 6.8 rules; 6.9 (k) to license and certify up to 20 new nursing home beds 6.10 in a community-operated hospital and attached convalescent and 6.11 nursing care facility with 40 beds on April 21, 1991, that 6.12 suspended operation of the hospital in April 1986. The 6.13 commissioner of human services shall provide the facility with 6.14 the same per diem property-related payment rate for each 6.15 additional licensed and certified bed as it will receive for its 6.16 existing 40 beds; 6.17 (l) to license or certify beds in renovation, replacement, 6.18 or upgrading projects as defined in section 144A.073, 6.19 subdivision 1, so long as the cumulative total costs of the 6.20 facility's remodeling projects do not exceed $750,000; 6.21 (m) to license and certify beds that are moved from one 6.22 location to another for the purposes of converting up to five 6.23 four-bed wards to single or double occupancy rooms in a nursing 6.24 home that, as of January 1, 1993, was county-owned and had a 6.25 licensed capacity of 115 beds; 6.26 (n) to allow a facility that on April 16, 1993, was a 6.27 106-bed licensed and certified nursing facility located in 6.28 Minneapolis to layaway all of its licensed and certified nursing 6.29 home beds. These beds may be relicensed and recertified in a 6.30 newly-constructed teaching nursing home facility affiliated with 6.31 a teaching hospital upon approval by the legislature. The 6.32 proposal must be developed in consultation with the interagency 6.33 committee on long-term care planning. The beds on layaway 6.34 status shall have the same status as voluntarily delicensed and 6.35 decertified beds, except that beds on layaway status remain 6.36 subject to the surcharge in section 256.9657. This layaway 7.1 provision expires July 1, 1998; 7.2 (o) to allow a project which will be completed in 7.3 conjunction with an approved moratorium exception project for a 7.4 nursing home in southern Cass county and which is directly 7.5 related to that portion of the facility that must be repaired, 7.6 renovated, or replaced, to correct an emergency plumbing problem 7.7 for which a state correction order has been issued and which 7.8 must be corrected by August 31, 1993; 7.9 (p) to allow a facility that on April 16, 1993, was a 7.10 368-bed licensed and certified nursing facility located in 7.11 Minneapolis to layaway, upon 30 days prior written notice to the 7.12 commissioner, up to 30 of the facility's licensed and certified 7.13 beds by converting three-bed wards to single or double 7.14 occupancy. Beds on layaway status shall have the same status as 7.15 voluntarily delicensed and decertified beds except that beds on 7.16 layaway status remain subject to the surcharge in section 7.17 256.9657, remain subject to the license application and renewal 7.18 fees under section 144A.07 and shall be subject to a $100 per 7.19 bed reactivation fee. In addition, at any time within three 7.20 years of the effective date of the layaway, the beds on layaway 7.21 status may be: 7.22 (1) relicensed and recertified upon relocation and 7.23 reactivation of some or all of the beds to an existing licensed 7.24 and certified facility or facilities located in Pine River, 7.25 Brainerd, or International Falls; provided that the total 7.26 project construction costs related to the relocation of beds 7.27 from layaway status for any facility receiving relocated beds 7.28 may not exceed the dollar threshold provided in subdivision 2 7.29 unless the construction project has been approved through the 7.30 moratorium exception process under section 144A.073; 7.31 (2) relicensed and recertified, upon reactivation of some 7.32 or all of the beds within the facility which placed the beds in 7.33 layaway status, if the commissioner has determined a need for 7.34 the reactivation of the beds on layaway status. 7.35 The property-related payment rate of a facility placing 7.36 beds on layaway status must be adjusted by the incremental 8.1 change in its rental per diem after recalculating the rental per 8.2 diem as provided in section 256B.431, subdivision 3a, paragraph 8.3 (d). The property-related payment rate for a facility 8.4 relicensing and recertifying beds from layaway status must be 8.5 adjusted by the incremental change in its rental per diem after 8.6 recalculating its rental per diem using the number of beds after 8.7 the relicensing to establish the facility's capacity day 8.8 divisor, which shall be effective the first day of the month 8.9 following the month in which the relicensing and recertification 8.10 became effective. Any beds remaining on layaway status more 8.11 than three years after the date the layaway status became 8.12 effective must be removed from layaway status and immediately 8.13 delicensed and decertified; 8.14 (q) to license and certify beds in a renovation and 8.15 remodeling project to convert 12 four-bed wards into 24 two-bed 8.16 rooms, expand space, and add improvements in a nursing home 8.17 that, as of January 1, 1994, met the following conditions: the 8.18 nursing home was located in Ramsey county; had a licensed 8.19 capacity of 154 beds; and had been ranked among the top 15 8.20 applicants by the 1993 moratorium exceptions advisory review 8.21 panel. The total project construction cost estimate for this 8.22 project must not exceed the cost estimate submitted in 8.23 connection with the 1993 moratorium exception process; 8.24 (r) to license and certify up to 117 beds that are 8.25 relocated from a licensed and certified 138-bed nursing facility 8.26 located in St. Paul to a hospital with 130 licensed hospital 8.27 beds located in South St. Paul, provided that the nursing 8.28 facility and hospital are owned by the same or a related 8.29 organization and that prior to the date the relocation is 8.30 completed the hospital ceases operation of its inpatient 8.31 hospital services at that hospital. After relocation, the 8.32 nursing facility's status under section 256B.431, subdivision 8.33 2j, shall be the same as it was prior to relocation. The 8.34 nursing facility's property-related payment rate resulting from 8.35 the project authorized in this paragraph shall become effective 8.36 no earlier than April 1, 1996. For purposes of calculating the 9.1 incremental change in the facility's rental per diem resulting 9.2 from this project, the allowable appraised value of the nursing 9.3 facility portion of the existing health care facility physical 9.4 plant prior to the renovation and relocation may not exceed 9.5 $2,490,000; 9.6 (s) to license and certify two beds in a facility to 9.7 replace beds that were voluntarily delicensed and decertified on 9.8 June 28, 1991; 9.9 (t) to allow 16 licensed and certified beds located on July 9.10 1, 1994, in a 142-bed nursing home and 21-bed boarding care home 9.11 facility in Minneapolis, notwithstanding the licensure and 9.12 certification after July 1, 1995, of the Minneapolis facility as 9.13 a 147-bed nursing home facility after completion of a 9.14 construction project approved in 1993 under section 144A.073, to 9.15 be laid away upon 30 days' prior written notice to the 9.16 commissioner. Beds on layaway status shall have the same status 9.17 as voluntarily delicensed or decertified beds except that they 9.18 shall remain subject to the surcharge in section 256.9657. The 9.19 16 beds on layaway status may be relicensed as nursing home beds 9.20 and recertified at any time within five years of the effective 9.21 date of the layaway upon relocation of some or all of the beds 9.22 to a licensed and certified facility located in Watertown, 9.23 provided that the total project construction costs related to 9.24 the relocation of beds from layaway status for the Watertown 9.25 facility may not exceed the dollar threshold provided in 9.26 subdivision 2 unless the construction project has been approved 9.27 through the moratorium exception process under section 144A.073. 9.28 The property-related payment rate of the facility placing 9.29 beds on layaway status must be adjusted by the incremental 9.30 change in its rental per diem after recalculating the rental per 9.31 diem as provided in section 256B.431, subdivision 3a, paragraph 9.32 (d). The property-related payment rate for the facility 9.33 relicensing and recertifying beds from layaway status must be 9.34 adjusted by the incremental change in its rental per diem after 9.35 recalculating its rental per diem using the number of beds after 9.36 the relicensing to establish the facility's capacity day 10.1 divisor, which shall be effective the first day of the month 10.2 following the month in which the relicensing and recertification 10.3 became effective. Any beds remaining on layaway status more 10.4 than five years after the date the layaway status became 10.5 effective must be removed from layaway status and immediately 10.6 delicensed and decertified; 10.7 (u) to license and certify beds that are moved within an 10.8 existing area of a facility or to a newly constructed addition 10.9 which is built for the purpose of eliminating three- and 10.10 four-bed rooms and adding space for dining, lounge areas, 10.11 bathing rooms, and ancillary service areas in a nursing home 10.12 that, as of January 1, 1995, was located in Fridley and had a 10.13 licensed capacity of 129 beds; 10.14 (v) to relocate 36 beds in Crow Wing county and four beds 10.15 from Hennepin county to a 160-bed facility in Crow Wing county, 10.16 provided all the affected beds are under common ownership; 10.17 (w) to license and certify a total replacement project of 10.18 up to 49 beds located in Norman county that are relocated from a 10.19 nursing home destroyed by flood and whose residents were 10.20 relocated to other nursing homes. The operating cost payment 10.21 rates for the new nursing facility shall be determined based on 10.22 the interim and settle-up payment provisions of Minnesota Rules, 10.23 part 9549.0057, and the reimbursement provisions of section 10.24 256B.431, except that subdivision 26, paragraphs (a) and (b),10.25shall not apply until the second rate year after the settle-up10.26cost report is filed. Property-related reimbursement rates 10.27 shall be determined under section 256B.431, taking into account 10.28 any federal or state flood-related loans or grants provided to 10.29 the facility; 10.30 (x) to license and certify a total replacement project of 10.31 up to 129 beds located in Polk county that are relocated from a 10.32 nursing home destroyed by flood and whose residents were 10.33 relocated to other nursing homes. The operating cost payment 10.34 rates for the new nursing facility shall be determined based on 10.35 the interim and settle-up payment provisions of Minnesota Rules, 10.36 part 9549.0057, and the reimbursement provisions of section 11.1 256B.431, except that subdivision 26, paragraphs (a) and (b),11.2shall not apply until the second rate year after the settle-up11.3cost report is filed. Property-related reimbursement rates 11.4 shall be determined under section 256B.431, taking into account 11.5 any federal or state flood-related loans or grants provided to 11.6 the facility; or 11.7 (y) to license and certify beds in a renovation and 11.8 remodeling project to convert 13 three-bed wards into 13 two-bed 11.9 rooms and 13 single-bed rooms, expand space, and add 11.10 improvements in a nursing home that, as of January 1, 1994, met 11.11 the following conditions: the nursing home was located in 11.12 Ramsey county, was not owned by a hospital corporation, had a 11.13 licensed capacity of 64 beds, and had been ranked among the top 11.14 15 applicants by the 1993 moratorium exceptions advisory review 11.15 panel. The total project construction cost estimate for this 11.16 project must not exceed the cost estimate submitted in 11.17 connection with the 1993 moratorium exception process. 11.18 Sec. 3. Minnesota Statutes 1996, section 256B.431, 11.19 subdivision 2i, is amended to read: 11.20 Subd. 2i. [OPERATING COSTS AFTER JULY 1, 1988.] (a) 11.21 [OTHER OPERATING COST LIMITS.] For the rate year beginning July 11.22 1, 1988, the commissioner shall increase the other operating 11.23 cost limits established in Minnesota Rules, part 9549.0055, 11.24 subpart 2, item E, to 110 percent of the median of the array of 11.25 allowable historical other operating cost per diems and index 11.26 these limits as in Minnesota Rules, part 9549.0056, subparts 3 11.27 and 4. The limits must be established in accordance with 11.28 subdivision 2b, paragraph (d). For rate years beginning on or 11.29 after July 1, 1989, the adjusted other operating cost limits 11.30 must be indexed as in Minnesota Rules, part 9549.0056, subparts 11.31 3 and 4. For the rate period beginning October 1, 1992, and for 11.32 rate years beginning after June 30, 1993, the amount of the 11.33 surcharge under section 256.9657, subdivision 1, shall be 11.34 included in the plant operations and maintenance operating cost 11.35 category. The surcharge shall be an allowable cost for the 11.36 purpose of establishing the payment rate. 12.1 (b) [CARE-RELATED OPERATING COST LIMITS.] For the rate 12.2 year beginning July 1, 1988, the commissioner shall increase the 12.3 care-related operating cost limits established in Minnesota 12.4 Rules, part 9549.0055, subpart 2, items A and B, to 125 percent 12.5 of the median of the array of the allowable historical case mix 12.6 operating cost standardized per diems and the allowable 12.7 historical other care-related operating cost per diems and index 12.8 those limits as in Minnesota Rules, part 9549.0056, subparts 1 12.9 and 2. The limits must be established in accordance with 12.10 subdivision 2b, paragraph (d). For rate years beginning on or 12.11 after July 1, 1989, the adjusted care-related limits must be 12.12 indexed as in Minnesota Rules, part 9549.0056, subparts 1 and 2. 12.13 (c) [SALARY ADJUSTMENT PER DIEM.]For the rate period12.14 Effective October 1,19881998,to June 30, 1990,the 12.15 commissioner shalladd the appropriatemake available the salary 12.16 adjustment per diem calculated in clause (1) or (2) to the total 12.17 operating cost payment rate of each nursing facility. The 12.18 salary adjustment per diem for each nursing facility must be 12.19 determined as follows: 12.20 (1) for each nursing facility that reports salaries for 12.21 registered nurses, licensed practical nurses, and aides, 12.22 orderlies and attendants separately, the commissioner shall 12.23 determine the salary adjustment per diem by multiplying the 12.24 total salaries, payroll taxes, and fringe benefits allowed in 12.25 each operating cost category, except management fees and 12.26 administrator and central office salaries and the related 12.27 payroll taxes and fringe benefits, by3.55 percent and then 12.28 dividing the resulting amount by the nursing facility's actual 12.29 resident days; and 12.30 (2) for each nursing facility that does not report salaries 12.31 for registered nurses, licensed practical nurses, aides, 12.32 orderlies, and attendants separately, the salary adjustment per 12.33 diem is the weighted average salary adjustment per diem increase 12.34 determined under clause (1). 12.35 (3) A nursing facility may apply for the salary adjustment 12.36 per diem calculated under clauses (1) and (2). The application 13.1 must be made to the department of human services and contain a 13.2 plan by which the nursing facility will distribute the salary 13.3 adjustment to employees of the nursing facility. For nursing 13.4 facilities in which the employees are represented by an 13.5 exclusive bargaining representative, an agreement negotiated and 13.6 agreed to by the employer and the exclusive bargaining 13.7 representative, after July 1, 1998, may constitute the plan for 13.8 the salary distribution. The department shall review the plan 13.9 to ensure that the salary adjustment per diem is used solely to 13.10 increase the compensation of nursing home facility employees. 13.11Each nursing facility that receives a salary adjustment per13.12diem pursuant to this subdivision shall adjust nursing facility13.13employee salaries by a minimum of the amount determined in13.14clause (1) or (2). The commissioner shall review allowable13.15salary costs, including payroll taxes and fringe benefits, for13.16the reporting year ending September 30, 1989, to determine13.17whether or not each nursing facility complied with this13.18requirement. The commissioner shall report the extent to which13.19each nursing facility complied with the legislative commission13.20on long-term care by August 1, 1990.13.21 (d) [NEW BASE YEAR.] The commissioner shall establish new 13.22 base years for both the reporting year ending September 30, 13.23 1989, and the reporting year ending September 30, 1990. In 13.24 establishing new base years, the commissioner must take into 13.25 account: 13.26 (1) statutory changes made in geographic groups; 13.27 (2) redefinitions of cost categories; and 13.28 (3) reclassification, pass-through, or exemption of certain 13.29 costs such as public employee retirement act contributions. 13.30 (e) [NEW BASE YEAR.] The commissioner shall establish a 13.31 new base year for the reporting years ending September 30, 1991, 13.32 and September 30, 1992. In establishing a new base year, the 13.33 commissioner must take into account: 13.34 (1) statutory changes made in geographic groups; 13.35 (2) redefinitions of cost categories; and 13.36 (3) reclassification, pass-through, or exemption of certain 14.1 costs. 14.2 Sec. 4. Minnesota Statutes 1996, section 256B.431, is 14.3 amended by adding a subdivision to read: 14.4 Subd. 2s. [NONALLOWABLE COST.] Costs incurred for 14.5 activities directly related to influencing employees with 14.6 respect to unionization shall not be allowable for purposes of 14.7 setting payment rates. 14.8 Sec. 5. Minnesota Statutes 1997 Supplement, section 14.9 256B.431, subdivision 25, is amended to read: 14.10 Subd. 25. [CHANGES TO NURSING FACILITY REIMBURSEMENT 14.11 BEGINNING JULY 1, 1995.] The nursing facility reimbursement 14.12 changes in paragraphs (a) to(g)(d) shall apply in the sequence 14.13 specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 14.14 this section, beginning July 1, 1995. 14.15 (a) The eight-cent adjustment to care-related rates in 14.16 subdivision 22, paragraph (e), shall no longer apply. 14.17(b) For rate years beginning on or after July 1, 1995, the14.18commissioner shall limit a nursing facility's allowable14.19operating per diem for each case mix category for each rate year14.20as in clauses (1) to (3).14.21(1) For the rate year beginning July 1, 1995, the14.22commissioner shall group nursing facilities into two groups,14.23freestanding and nonfreestanding, within each geographic group,14.24using their operating cost per diem for the case mix A14.25classification. A nonfreestanding nursing facility is a nursing14.26facility whose other operating cost per diem is subject to the14.27hospital attached, short length of stay, or the rule 80 limits.14.28All other nursing facilities shall be considered freestanding14.29nursing facilities. The commissioner shall then array all14.30nursing facilities in each grouping by their allowable case mix14.31A operating cost per diem. In calculating a nursing facility's14.32operating cost per diem for this purpose, the commissioner shall14.33exclude the raw food cost per diem related to providing special14.34diets that are based on religious beliefs, as determined in14.35subdivision 2b, paragraph (h). For those nursing facilities in14.36each grouping whose case mix A operating cost per diem:15.1(i) is at or below the median minus 1.0 standard deviation15.2of the array, the commissioner shall limit the nursing15.3facility's allowable operating cost per diem for each case mix15.4category to the lesser of the prior reporting year's allowable15.5operating cost per diems plus the inflation factor as15.6established in paragraph (f), clause (2), increased by six15.7percentage points, or the current reporting year's corresponding15.8allowable operating cost per diem;15.9(ii) is between minus .5 standard deviation and minus 1.015.10standard deviation below the median of the array, the15.11commissioner shall limit the nursing facility's allowable15.12operating cost per diem for each case mix category to the lesser15.13of the prior reporting year's allowable operating cost per diems15.14plus the inflation factor as established in paragraph (f),15.15clause (2), increased by four percentage points, or the current15.16reporting year's corresponding allowable operating cost per15.17diem; or15.18(iii) is equal to or above minus .5 standard deviation15.19below the median of the array, the commissioner shall limit the15.20nursing facility's allowable operating cost per diem for each15.21case mix category to the lesser of the prior reporting year's15.22allowable operating cost per diems plus the inflation factor as15.23established in paragraph (f), clause (2), increased by three15.24percentage points, or the current reporting year's corresponding15.25allowable operating cost per diem.15.26(2) For the rate year beginning on July 1, 1996, the15.27commissioner shall limit the nursing facility's allowable15.28operating cost per diem for each case mix category to the lesser15.29of the prior reporting year's allowable operating cost per diems15.30plus the inflation factor as established in paragraph (f),15.31clause (2), increased by one percentage point or the current15.32reporting year's corresponding allowable operating cost per15.33diems; and15.34(3) For rate years beginning on or after July 1, 1997, the15.35commissioner shall limit the nursing facility's allowable15.36operating cost per diem for each case mix category to the lesser16.1of the reporting year prior to the current reporting year's16.2allowable operating cost per diems plus the inflation factor as16.3established in paragraph (f), clause (2), or the current16.4reporting year's corresponding allowable operating cost per16.5diems.16.6(c) For rate years beginning on July 1, 1995, the16.7commissioner shall limit the allowable operating cost per diems16.8for high cost nursing facilities. After application of the16.9limits in paragraph (b) to each nursing facility's operating16.10cost per diems, the commissioner shall group nursing facilities16.11into two groups, freestanding or nonfreestanding, within each16.12geographic group. A nonfreestanding nursing facility is a16.13nursing facility whose other operating cost per diems are16.14subject to hospital attached, short length of stay, or rule 8016.15limits. All other nursing facilities shall be considered16.16freestanding nursing facilities. The commissioner shall then16.17array all nursing facilities within each grouping by their16.18allowable case mix A operating cost per diems. In calculating a16.19nursing facility's operating cost per diem for this purpose, the16.20commissioner shall exclude the raw food cost per diem related to16.21providing special diets that are based on religious beliefs, as16.22determined in subdivision 2b, paragraph (h). For those nursing16.23facilities in each grouping whose case mix A operating cost per16.24diem exceeds 1.0 standard deviation above the median, the16.25commissioner shall reduce their allowable operating cost per16.26diems by two percent. For those nursing facilities in each16.27grouping whose case mix A operating cost per diem exceeds 0.516.28standard deviation above the median but is less than or equal to16.291.0 standard deviation above the median, the commissioner shall16.30reduce their allowable operating cost per diems by one percent.16.31(d) For rate years beginning on or after July 1, 1996, the16.32commissioner shall limit the allowable operating cost per diems16.33for high cost nursing facilities. After application of the16.34limits in paragraph (b) to each nursing facility's operating16.35cost per diems, the commissioner shall group nursing facilities16.36into two groups, freestanding or nonfreestanding, within each17.1geographic group. A nonfreestanding nursing facility is a17.2nursing facility whose other operating cost per diems are17.3subject to hospital attached, short length of stay, or rule 8017.4limits. All other nursing facilities shall be considered17.5freestanding nursing facilities. The commissioner shall then17.6array all nursing facilities within each grouping by their17.7allowable case mix A operating cost per diems. In calculating a17.8nursing facility's operating cost per diem for this purpose, the17.9commissioner shall exclude the raw food cost per diem related to17.10providing special diets that are based on religious beliefs, as17.11determined in subdivision 2b, paragraph (h). In those nursing17.12facilities in each grouping whose case mix A operating cost per17.13diem exceeds 1.0 standard deviation above the median, the17.14commissioner shall reduce their allowable operating cost per17.15diems by three percent. For those nursing facilities in each17.16grouping whose case mix A operating cost per diem exceeds 0.517.17standard deviation above the median but is less than or equal to17.181.0 standard deviation above the median, the commissioner shall17.19reduce their allowable operating cost per diems by two percent.17.20(e)(b) For rate years beginning on or after July 1, 1995, 17.21 the commissioner shall determine a nursing facility's efficiency 17.22 incentive by first computing the allowable difference, which is 17.23 the lesser of $4.50 or the amount by which the facility's other 17.24 operating cost limit exceeds its nonadjusted other operating 17.25 cost per diem for that rate year. The commissioner shall 17.26 compute the efficiency incentive by: 17.27 (1) subtracting the allowable difference from $4.50 and 17.28 dividing the result by $4.50; 17.29 (2) multiplying 0.20 by the ratio resulting from clause 17.30 (1), and then; 17.31 (3) adding 0.50 to the result from clause (2); and 17.32 (4) multiplying the result from clause (3) times the 17.33 allowable difference. 17.34 The nursing facility's efficiency incentive payment shall 17.35 be the lesser of $2.25 or the product obtained in clause (4). 17.36(f)(c) For rate years beginning on or after July 1, 1995, 18.1 the forecasted price index for a nursing facility's allowable 18.2 operating cost per diems shall be determined under clauses (1) 18.3 to (3) using the change in the Consumer Price Index-All Items 18.4 (United States city average) (CPI-U) or the change in the 18.5 Nursing Home Market Basket, both as forecasted by Data Resources 18.6 Inc., whichever is applicable. The commissioner shall use the 18.7 indices as forecasted in the fourth quarter of the calendar year 18.8 preceding the rate year, subject to subdivision 2l, paragraph 18.9 (c). If, as a result of federal legislative or administrative 18.10 action, the methodology used to calculate the Consumer Price 18.11 Index-All Items (United States city average) (CPI-U) changes, 18.12 the commissioner shall develop a conversion factor or other 18.13 methodology to convert the CPI-U index factor that results from 18.14 the new methodology to an index factor that approximates, as 18.15 closely as possible, the index factor that would have resulted 18.16 from application of the original CPI-U methodology prior to any 18.17 changes in methodology. The commissioner shall use the 18.18 conversion factor or other methodology to calculate an adjusted 18.19 inflation index. The adjusted inflation index must be used to 18.20 calculate payment rates under this section instead of the CPI-U 18.21 index specified in paragraph (d). If the commissioner is 18.22 required to develop an adjusted inflation index, the 18.23 commissioner shall report to the legislature as part of the next 18.24 budget submission the fiscal impact of applying this index. 18.25 (1) The CPI-U forecasted index for allowable operating cost 18.26 per diems shall be based on the 21-month period from the 18.27 midpoint of the nursing facility's reporting year to the 18.28 midpoint of the rate year following the reporting year. 18.29 (2) The Nursing Home Market Basket forecasted index for 18.30 allowable operating costs and per diem limits shall be based on 18.31 the 12-month period between the midpoints of the two reporting 18.32 years preceding the rate year. 18.33 (3) For rate years beginning on or after July 1, 1996, the 18.34 forecasted index for operating cost limits referred to in 18.35 subdivision 21, paragraph (b), shall be based on the CPI-U for 18.36 the 12-month period between the midpoints of the two reporting 19.1 years preceding the rate year. 19.2(g)(d) After applying these provisions for the respective 19.3 rate years, the commissioner shall index these allowable 19.4 operating costs per diems by the inflation factor provided for 19.5 in paragraph(f)(c), clause (1), and add the nursing facility's 19.6 efficiency incentive as computed in paragraph(e)(b). 19.7(h)(1) A nursing facility licensed for 302 beds on19.8September 30, 1993, that was approved under the moratorium19.9exception process in section 144A.073 for a partial replacement,19.10and completed the replacement project in December 1994, is19.11exempt from paragraphs (b) to (d) for rate years beginning on or19.12after July 1, 1995.19.13(2) For the rate year beginning July 1, 1997, after19.14computing this nursing facility's payment rate according to19.15section 256B.434, the commissioner shall make a one-year rate19.16adjustment of $8.62 to the facility's contract payment rate for19.17the rate effect of operating cost changes associated with the19.18facility's 1994 downsizing project.19.19(3) For rate years beginning on or after July 1, 1997, the19.20commissioner shall add 35 cents to the facility's base property19.21related payment rate for the rate effect of reducing its19.22licensed capacity to 290 beds from 302 beds and shall add 8319.23cents to the facility's real estate tax and special assessment19.24payment rate for payments in lieu of real estate taxes. The19.25adjustments in this clause shall remain in effect for the19.26duration of the facility's contract under section 256B.434.19.27(i) Notwithstanding Laws 1996, chapter 451, article 3,19.28section 11, paragraph (h), for the rate years beginning on July19.291, 1996, July 1, 1997, and July 1, 1998, a nursing facility19.30licensed for 40 beds effective May 1, 1992, with a subsequent19.31increase of 20 Medicare/Medicaid certified beds, effective19.32January 26, 1993, in accordance with an increase in licensure is19.33exempt from paragraphs (b) to (d).19.34 Sec. 6. Minnesota Statutes 1997 Supplement, section 19.35 256B.431, subdivision 26, is amended to read: 19.36 Subd. 26. [CHANGES TO NURSING FACILITY REIMBURSEMENT 20.1 BEGINNING JULY 1, 1997.] The nursing facility reimbursement 20.2 changes in paragraphs (a) to(f)(d) shall apply in the sequence 20.3 specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and 20.4 this section, beginning July 1, 1997. 20.5(a) For rate years beginning on or after July 1, 1997, the20.6commissioner shall limit a nursing facility's allowable20.7operating per diem for each case mix category for each rate year.20.8The commissioner shall group nursing facilities into two groups,20.9freestanding and nonfreestanding, within each geographic group,20.10using their operating cost per diem for the case mix A20.11classification. A nonfreestanding nursing facility is a nursing20.12facility whose other operating cost per diem is subject to the20.13hospital attached, short length of stay, or the rule 80 limits.20.14All other nursing facilities shall be considered freestanding20.15nursing facilities. The commissioner shall then array all20.16nursing facilities in each grouping by their allowable case mix20.17A operating cost per diem. In calculating a nursing facility's20.18operating cost per diem for this purpose, the commissioner shall20.19exclude the raw food cost per diem related to providing special20.20diets that are based on religious beliefs, as determined in20.21subdivision 2b, paragraph (h). For those nursing facilities in20.22each grouping whose case mix A operating cost per diem:20.23(1) is at or below the median of the array, the20.24commissioner shall limit the nursing facility's allowable20.25operating cost per diem for each case mix category to the lesser20.26of the prior reporting year's allowable operating cost per diem20.27as specified in Laws 1996, chapter 451, article 3, section 11,20.28paragraph (h), plus the inflation factor as established in20.29paragraph (d), clause (2), increased by two percentage points,20.30or the current reporting year's corresponding allowable20.31operating cost per diem; or20.32(2) is above the median of the array, the commissioner20.33shall limit the nursing facility's allowable operating cost per20.34diem for each case mix category to the lesser of the prior20.35reporting year's allowable operating cost per diem as specified20.36in Laws 1996, chapter 451, article 3, section 11, paragraph (h),21.1plus the inflation factor as established in paragraph (d),21.2clause (2), increased by one percentage point, or the current21.3reporting year's corresponding allowable operating cost per diem.21.4(b) For rate years beginning on or after July 1, 1997, the21.5commissioner shall limit the allowable operating cost per diem21.6for high cost nursing facilities. After application of the21.7limits in paragraph (a) to each nursing facility's operating21.8cost per diem, the commissioner shall group nursing facilities21.9into two groups, freestanding or nonfreestanding, within each21.10geographic group. A nonfreestanding nursing facility is a21.11nursing facility whose other operating cost per diem are subject21.12to hospital attached, short length of stay, or rule 80 limits.21.13All other nursing facilities shall be considered freestanding21.14nursing facilities. The commissioner shall then array all21.15nursing facilities within each grouping by their allowable case21.16mix A operating cost per diem. In calculating a nursing21.17facility's operating cost per diem for this purpose, the21.18commissioner shall exclude the raw food cost per diem related to21.19providing special diets that are based on religious beliefs, as21.20determined in subdivision 2b, paragraph (h). For those nursing21.21facilities in each grouping whose case mix A operating cost per21.22diem exceeds 1.0 standard deviation above the median, the21.23commissioner shall reduce their allowable operating cost per21.24diem by three percent. For those nursing facilities in each21.25grouping whose case mix A operating cost per diem exceeds 0.521.26standard deviation above the median but is less than or equal to21.271.0 standard deviation above the median, the commissioner shall21.28reduce their allowable operating cost per diem by two percent.21.29However, in no case shall a nursing facility's operating cost21.30per diem be reduced below its grouping's limit established at21.310.5 standard deviations above the median.21.32(c)(a) For rate years beginning on or after July 1, 1997, 21.33 the commissioner shall determine a nursing facility's efficiency 21.34 incentive by first computing the allowable difference, which is 21.35 the lesser of $4.50 or the amount by which the facility's other 21.36 operating cost limit exceeds its nonadjusted other operating 22.1 cost per diem for that rate year. The commissioner shall 22.2 compute the efficiency incentive by: 22.3 (1) subtracting the allowable difference from $4.50 and 22.4 dividing the result by $4.50; 22.5 (2) multiplying 0.20 by the ratio resulting from clause 22.6 (1), and then; 22.7 (3) adding 0.50 to the result from clause (2); and 22.8 (4) multiplying the result from clause (3) times the 22.9 allowable difference. 22.10 The nursing facility's efficiency incentive payment shall 22.11 be the lesser of $2.25 or the product obtained in clause (4). 22.12(d)(b) For rate years beginning on or after July 1, 1997, 22.13 the forecasted price index for a nursing facility's allowable 22.14 operating cost per diem shall be determined under clauses (1) 22.15 and (2) using the change in the Consumer Price Index-All Items 22.16 (United States city average) (CPI-U) as forecasted by Data 22.17 Resources, Inc. The commissioner shall use the indices as 22.18 forecasted in the fourth quarter of the calendar year preceding 22.19 the rate year, subject to subdivision 2l, paragraph (c). 22.20 (1) The CPI-U forecasted index for allowable operating cost 22.21 per diem shall be based on the 21-month period from the midpoint 22.22 of the nursing facility's reporting year to the midpoint of the 22.23 rate year following the reporting year. 22.24 (2) For rate years beginning on or after July 1, 1997, the 22.25 forecasted index for operating cost limits referred to in 22.26 subdivision 21, paragraph (b), shall be based on the CPI-U for 22.27 the 12-month period between the midpoints of the two reporting 22.28 years preceding the rate year. 22.29(e)(c) After applying these provisions for the respective 22.30 rate years, the commissioner shall index these allowable 22.31 operating cost per diem by the inflation factor provided for in 22.32 paragraph(d)(b), clause (1), and add the nursing facility's 22.33 efficiency incentive as computed in paragraph(c)(a). 22.34(f) For rate years beginning on or after July 1, 1997, the22.35total operating cost payment rates for a nursing facility shall22.36be the greater of the total operating cost payment rates23.1determined under this section or the total operating cost23.2payment rates in effect on June 30, 1997, subject to rate23.3adjustments due to field audit or rate appeal resolution. This23.4provision shall not apply to subsequent field audit adjustments23.5of the nursing facility's operating cost rates for rate years23.6beginning on or after July 1, 1997.23.7(g) For the rate years beginning on July 1, 1997, and July23.81, 1998, a nursing facility licensed for 40 beds effective May23.91, 1992, with a subsequent increase of 20 Medicare/Medicaid23.10certified beds, effective January 26, 1993, in accordance with23.11an increase in licensure is exempt from paragraphs (a) and (b).23.12(h)(d) For a nursing facility whose construction project 23.13 was authorized according to section 144A.073, subdivision 5, 23.14 paragraph (g), the operating cost payment rates for the third 23.15 location shall be determined based on Minnesota Rules, part 23.16 9549.0057.Paragraphs (a) and (b) shall not apply until the23.17second rate year after the settle-up cost report is filed.23.18 Notwithstanding subdivision 2b, paragraph (g), real estate taxes 23.19 and special assessments payable by the third location, a 23.20 501(c)(3) nonprofit corporation, shall be included in the 23.21 payment rates determined under this subdivision for all 23.22 subsequent rate years. 23.23(i) For the rate year beginning July 1, 1997, the23.24commissioner shall compute the payment rate for a nursing23.25facility licensed for 94 beds on September 30, 1996, that23.26applied in October 1993 for approval of a total replacement23.27under the moratorium exception process in section 144A.073, and23.28completed the approved replacement in June 1995, with other23.29operating cost spend-up limit under paragraph (a), increased by23.30$3.98, and after computing the facility's payment rate according23.31to this section, the commissioner shall make a one-year positive23.32rate adjustment of $3.19 for operating costs related to the23.33newly constructed total replacement, without application of23.34paragraphs (a) and (b). The facility's per diem, before the23.35$3.19 adjustment, shall be used as the prior reporting year's23.36allowable operating cost per diem for payment rate calculation24.1for the rate year beginning July 1, 1998. A facility described24.2in this paragraph is exempt from paragraph (b) for the rate24.3years beginning July 1, 1997, and July 1, 1998.24.4(j) For the purpose of applying the limit stated in24.5paragraph (a), a nursing facility in Kandiyohi county licensed24.6for 86 beds that was granted hospital-attached status on24.7December 1, 1994, shall have the prior year's allowable24.8care-related per diem increased by $3.207 and the prior year's24.9other operating cost per diem increased by $4.777 before adding24.10the inflation in paragraph (d), clause (2), for the rate year24.11beginning on July 1, 1997.24.12(k) For the purpose of applying the limit stated in24.13paragraph (a), a 117 bed nursing facility located in Pine county24.14shall have the prior year's allowable other operating cost per24.15diem increased by $1.50 before adding the inflation in paragraph24.16(d), clause (2), for the rate year beginning on July 1, 1997.24.17(l) For the purpose of applying the limit under paragraph24.18(a), a nursing facility in Hibbing licensed for 192 beds shall24.19have the prior year's allowable other operating cost per diem24.20increased by $2.67 before adding the inflation in paragraph (d),24.21clause (2), for the rate year beginning July 1, 1997.