1.1 A bill for an act
1.2 relating to human services; modifying provisions in
1.3 long-term care; amending Minnesota Statutes 1998,
1.4 sections 256B.411, subdivision 2; and 256B.431,
1.5 subdivisions 1, 3a, 10, 16, 18, 21, 22, and 25;
1.6 Minnesota Statutes 1999 Supplement, sections
1.7 256B.0913, subdivision 5; 256B.431, subdivisions 17
1.8 and 26; and 256B.434, subdivisions 3 and 4; repealing
1.9 Minnesota Statutes 1998, sections 256B.03, subdivision
1.10 2; 256B.431, subdivisions 2, 2a, 2f, 2h, 2m, 2p, 2q,
1.11 3, 3b, 3d, 3h, 3j, 4, 5, 7, 8, 9, 9a, 12, and 24;
1.12 256B.48, subdivision 9; 256B.50, subdivision 3; and
1.13 256B.74, subdivision 3.
1.14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 1999 Supplement, section
1.16 256B.0913, subdivision 5, is amended to read:
1.17 Subd. 5. [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a)
1.18 Alternative care funding may be used for payment of costs of:
1.19 (1) adult foster care;
1.20 (2) adult day care;
1.21 (3) home health aide;
1.22 (4) homemaker services;
1.23 (5) personal care;
1.24 (6) case management;
1.25 (7) respite care;
1.26 (8) assisted living;
1.27 (9) residential care services;
1.28 (10) care-related supplies and equipment;
1.29 (11) meals delivered to the home;
2.1 (12) transportation;
2.2 (13) skilled nursing;
2.3 (14) chore services;
2.4 (15) companion services;
2.5 (16) nutrition services;
2.6 (17) training for direct informal caregivers;
2.7 (18) telemedicine devices to monitor recipients in their
2.8 own homes as an alternative to hospital care, nursing home care,
2.9 or home visits; and
2.10 (19) other services including direct cash payments to
2.11 clients, approved by the county agency, subject to the
2.12 provisions of paragraph (m). Total annual payments for other
2.13 services for all clients within a county may not exceed either
2.14 ten percent of that county's annual alternative care program
2.15 base allocation or $5,000, whichever is greater. In no case
2.16 shall this amount exceed the county's total annual alternative
2.17 care program base allocation.
2.18 (b) The county agency must ensure that the funds are used
2.19 only to supplement and not supplant services available through
2.20 other public assistance or services programs.
2.21 (c) Unless specified in statute, the service standards for
2.22 alternative care services shall be the same as the service
2.23 standards defined in the elderly waiver. Except for the county
2.24 agencies' approval of direct cash payments to clients, persons
2.25 or agencies must be employed by or under a contract with the
2.26 county agency or the public health nursing agency of the local
2.27 board of health in order to receive funding under the
2.28 alternative care program.
2.29 (d) The adult foster care rate shall be considered a
2.30 difficulty of care payment and shall not include room and
2.31 board. The adult foster care daily rate shall be negotiated
2.32 between the county agency and the foster care provider. The
2.33 rate established under this section shall not exceed 75 percent
2.34 of the state average monthly nursing home payment for the case
2.35 mix classification to which the individual receiving foster care
2.36 is assigned, and it must allow for other alternative care
3.1 services to be authorized by the case manager.
3.2 (e) Personal care services may be provided by a personal
3.3 care provider organization. A county agency may contract with a
3.4 relative of the client to provide personal care services, but
3.5 must ensure nursing supervision. Covered personal care services
3.6 defined in section 256B.0627, subdivision 4, must meet
3.7 applicable standards in Minnesota Rules, part 9505.0335.
3.8 (f) A county may use alternative care funds to purchase
3.9 medical supplies and equipment without prior approval from the
3.10 commissioner when: (1) there is no other funding source; (2)
3.11 the supplies and equipment are specified in the individual's
3.12 care plan as medically necessary to enable the individual to
3.13 remain in the community according to the criteria in Minnesota
3.14 Rules, part 9505.0210, item A; and (3) the supplies and
3.15 equipment represent an effective and appropriate use of
3.16 alternative care funds. A county may use alternative care funds
3.17 to purchase supplies and equipment from a non-Medicaid certified
3.18 vendor if the cost for the items is less than that of a Medicaid
3.19 vendor. A county is not required to contract with a provider of
3.20 supplies and equipment if the monthly cost of the supplies and
3.21 equipment is less than $250.
3.22 (g) For purposes of this section, residential care services
3.23 are services which are provided to individuals living in
3.24 residential care homes. Residential care homes are currently
3.25 licensed as board and lodging establishments and are registered
3.26 with the department of health as providing special services.
3.27 Residential care services are defined as "supportive services"
3.28 and "health-related services." "Supportive services" means the
3.29 provision of up to 24-hour supervision and oversight.
3.30 Supportive services includes: (1) transportation, when provided
3.31 by the residential care center only; (2) socialization, when
3.32 socialization is part of the plan of care, has specific goals
3.33 and outcomes established, and is not diversional or recreational
3.34 in nature; (3) assisting clients in setting up meetings and
3.35 appointments; (4) assisting clients in setting up medical and
3.36 social services; (5) providing assistance with personal laundry,
4.1 such as carrying the client's laundry to the laundry room.
4.2 Assistance with personal laundry does not include any laundry,
4.3 such as bed linen, that is included in the room and board rate.
4.4 Health-related services are limited to minimal assistance with
4.5 dressing, grooming, and bathing and providing reminders to
4.6 residents to take medications that are self-administered or
4.7 providing storage for medications, if requested. Individuals
4.8 receiving residential care services cannot receive both personal
4.9 care services and residential care homemaking services.
4.10 (h) For the purposes of this section, "assisted living"
4.11 refers to supportive services provided by a single vendor to
4.12 clients who reside in the same apartment building of three or
4.13 more units which are not subject to registration under chapter
4.14 144D. Assisted living services are defined as up to 24-hour
4.15 supervision, and oversight, supportive services as defined in
4.16 clause (1), individualized home care aide tasks as defined in
4.17 clause (2), and individualized home management tasks as defined
4.18 in clause (3) provided to residents of a residential center
4.19 living in their units or apartments with a full kitchen and
4.20 bathroom. A full kitchen includes a stove, oven, refrigerator,
4.21 food preparation counter space, and a kitchen utensil storage
4.22 compartment. Assisted living services must be provided by the
4.23 management of the residential center or by providers under
4.24 contract with the management or with the county.
4.25 (1) Supportive services include:
4.26 (i) socialization, when socialization is part of the plan
4.27 of care, has specific goals and outcomes established, and is not
4.28 diversional or recreational in nature;
4.29 (ii) assisting clients in setting up meetings and
4.30 appointments; and
4.31 (iii) providing transportation, when provided by the
4.32 residential center only.
4.33 Individuals receiving assisted living services will not
4.34 receive both assisted living services and homemaking or personal
4.35 care services. Individualized means services are chosen and
4.36 designed specifically for each resident's needs, rather than
5.1 provided or offered to all residents regardless of their
5.2 illnesses, disabilities, or physical conditions.
5.3 (2) Home care aide tasks means:
5.4 (i) preparing modified diets, such as diabetic or low
5.5 sodium diets;
5.6 (ii) reminding residents to take regularly scheduled
5.7 medications or to perform exercises;
5.8 (iii) household chores in the presence of technically
5.9 sophisticated medical equipment or episodes of acute illness or
5.10 infectious disease;
5.11 (iv) household chores when the resident's care requires the
5.12 prevention of exposure to infectious disease or containment of
5.13 infectious disease; and
5.14 (v) assisting with dressing, oral hygiene, hair care,
5.15 grooming, and bathing, if the resident is ambulatory, and if the
5.16 resident has no serious acute illness or infectious disease.
5.17 Oral hygiene means care of teeth, gums, and oral prosthetic
5.18 devices.
5.19 (3) Home management tasks means:
5.20 (i) housekeeping;
5.21 (ii) laundry;
5.22 (iii) preparation of regular snacks and meals; and
5.23 (iv) shopping.
5.24 Assisted living services as defined in this section shall
5.25 not be authorized in boarding and lodging establishments
5.26 licensed according to sections 157.011 and 157.15 to 157.22.
5.27 (i) For establishments registered under chapter 144D,
5.28 assisted living services under this section means the services
5.29 described and licensed under section 144A.4605.
5.30 (j) For the purposes of this section, reimbursement for
5.31 assisted living services and residential care services shall be
5.32 a monthly rate negotiated and authorized by the county agency
5.33 based on an individualized service plan for each resident. The
5.34 rate shall not exceed the nonfederal share of the greater of
5.35 either the statewide or any of the geographic groups' weighted
5.36 average monthly medical assistance nursing facility payment rate
6.1 of the case mix resident class to which the 180-day eligible
6.2 client would be assigned under Minnesota Rules, parts 9549.0050
6.3 to 9549.0059, unless the services are provided by a home care
6.4 provider licensed by the department of health and are provided
6.5 in a building that is registered as a housing with services
6.6 establishment under chapter 144D and that provides 24-hour
6.7 supervision.
6.8 (k) For purposes of this section, companion services are
6.9 defined as nonmedical care, supervision and oversight, provided
6.10 to a functionally impaired adult. Companions may assist the
6.11 individual with such tasks as meal preparation, laundry and
6.12 shopping, but do not perform these activities as discrete
6.13 services. The provision of companion services does not entail
6.14 hands-on medical care. Providers may also perform light
6.15 housekeeping tasks which are incidental to the care and
6.16 supervision of the recipient. This service must be approved by
6.17 the case manager as part of the care plan. Companion services
6.18 must be provided by individuals or organizations who are under
6.19 contract with the local agency to provide the service. Any
6.20 person related to the waiver recipient by blood, marriage or
6.21 adoption cannot be reimbursed under this service. Persons
6.22 providing companion services will be monitored by the case
6.23 manager.
6.24 (l) For purposes of this section, training for direct
6.25 informal caregivers is defined as a classroom or home course of
6.26 instruction which may include: transfer and lifting skills,
6.27 nutrition, personal and physical cares, home safety in a home
6.28 environment, stress reduction and management, behavioral
6.29 management, long-term care decision making, care coordination
6.30 and family dynamics. The training is provided to an informal
6.31 unpaid caregiver of a 180-day eligible client which enables the
6.32 caregiver to deliver care in a home setting with high levels of
6.33 quality. The training must be approved by the case manager as
6.34 part of the individual care plan. Individuals, agencies, and
6.35 educational facilities which provide caregiver training and
6.36 education will be monitored by the case manager.
7.1 (m) A county agency may make payment from their alternative
7.2 care program allocation for other services provided to an
7.3 alternative care program recipient if those services prevent,
7.4 shorten, or delay institutionalization. These services may
7.5 include direct cash payments to the recipient for the purpose of
7.6 purchasing the recipient's services. The following provisions
7.7 apply to payments under this paragraph:
7.8 (1) a cash payment to a client under this provision cannot
7.9 exceed 80 percent of the monthly payment limit for that client
7.10 as specified in subdivision 4, paragraph (a), clause (7);
7.11 (2) a county may not approve any cash payment for a client
7.12 who has been assessed as having a dependency in orientation,
7.13 unless the client has an authorized representative under section
7.14 256.476, subdivision 2, paragraph (g), or for a client who is
7.15 concurrently receiving adult foster care, residential care, or
7.16 assisted living services;
7.17 (3) any service approved under this section must be a
7.18 service which meets the purpose and goals of the program as
7.19 listed in subdivision 1;
7.20 (4) cash payments must also meet the criteria of and are
7.21 governed by the procedures and liability protection established
7.22 in section 256.476, subdivision 4, paragraph
7.23 paragraphs (b) through (h), and recipients of cash grants must
7.24 meet the requirements in section 256.476, subdivision 10; and
7.25 (5) the county shall report client outcomes, services, and
7.26 costs under this paragraph in a manner prescribed by the
7.27 commissioner.
7.28 Upon implementation of direct cash payments to clients under
7.29 this section, any person determined eligible for the alternative
7.30 care program who chooses a cash payment approved by the county
7.31 agency shall receive the cash payment under this section and not
7.32 under section 256.476 unless the person was receiving a consumer
7.33 support grant under section 256.476 before implementation of
7.34 direct cash payments under this section.
7.35 Sec. 2. Minnesota Statutes 1998, section 256B.411,
7.36 subdivision 2, is amended to read:
8.1 Subd. 2. [REQUIREMENTS.] No medical assistance payments
8.2 shall be made to any nursing facility unless the nursing
8.3 facility is certified to participate in the medical assistance
8.4 program under title XIX of the federal Social Security Act and
8.5 has in effect a provider agreement with the commissioner meeting
8.6 the requirements of state and federal statutes and rules. No
8.7 medical assistance payments shall be made to any nursing
8.8 facility unless the nursing facility complies with all
8.9 requirements of Minnesota Statutes including, but not limited
8.10 to, this chapter and rules adopted under it that govern
8.11 participation in the program. This section applies whether the
8.12 nursing facility participates fully in the medical assistance
8.13 program or is withdrawing from the medical assistance program.
8.14 No future payments may be made to any nursing facility which has
8.15 withdrawn or is withdrawing from the medical assistance program
8.16 except as provided in section 256B.48, subdivision 1a; provided,
8.17 however, that, or federal law. Payments may also be made under
8.18 a court order entered on or before June 7, 1985, unless the
8.19 court order is reversed on appeal.
8.20 Sec. 3. Minnesota Statutes 1998, section 256B.431,
8.21 subdivision 1, is amended to read:
8.22 Subdivision 1. [IN GENERAL.] The commissioner shall
8.23 determine prospective payment rates for resident care costs. In
8.24 determining the rates, the commissioner shall group nursing
8.25 facilities according to different levels of care and geographic
8.26 location until July 1, 1985. For rates established on or after
8.27 July 1, 1985, the commissioner shall develop procedures for
8.28 determining operating cost payment rates that take into account
8.29 the mix of resident needs, geographic location, and other
8.30 factors as determined by the commissioner. The commissioner
8.31 shall consider whether the fact that a facility is attached to a
8.32 hospital or has an average length of stay of 180 days or less
8.33 should be taken into account in determining rates. The
8.34 commissioner shall consider the use of the standard metropolitan
8.35 statistical areas when developing groups by geographic
8.36 location. Until the commissioner establishes procedures for
9.1 determining operating cost payment rates, the commissioner shall
9.2 group all convalescent and nursing care units attached to
9.3 hospitals into one group for purposes of determining
9.4 reimbursement for operating costs. On or before June 15, 1983,
9.5 the commissioner shall mail notices to each nursing facility of
9.6 the rates to be effective from July 1 of that year to June 30 of
9.7 the following year. In subsequent years, The commissioner shall
9.8 provide notice to each nursing facility on or before May 1 of
9.9 the rates effective for the following rate year. If a statute
9.10 enacted after May 1 affects the rates, the commissioner shall
9.11 provide a revised notice to each nursing facility as soon as
9.12 possible except that if legislation is pending on May 1 that may
9.13 affect rates for nursing facilities, the commissioner shall set
9.14 the rates after the legislation is enacted and provide notice to
9.15 each facility as soon as possible.
9.16 The commissioner shall establish, by rule, limitations on
9.17 compensation recognized in the historical base for top
9.18 management personnel. For rate years beginning July 1, 1985,
9.19 the commissioner shall not provide, by rule, limitations on top
9.20 management personnel. Compensation for top management personnel
9.21 shall continue to be categorized as a general and administrative
9.22 cost and is subject to any limits imposed on that cost
9.23 category. The commissioner shall also establish, by rule,
9.24 limitations on allowable nursing hours for each level of care
9.25 for the rate years beginning July 1, 1983 and July 1, 1984. For
9.26 the rate year beginning July 1, 1984, nursing facilities in
9.27 which the nursing hours exceeded 2.9 hours per day for skilled
9.28 nursing care or 2.3 hours per day for intermediate care for the
9.29 reporting year ending on September 30, 1983, shall be limited to
9.30 a maximum of 3.2 hours per day for skilled nursing care and 2.6
9.31 hours per day for intermediate care.
9.32 Sec. 4. Minnesota Statutes 1998, section 256B.431,
9.33 subdivision 3a, is amended to read:
9.34 Subd. 3a. [PROPERTY-RELATED COSTS AFTER JULY 1, 1985.] (a)
9.35 For rate years beginning on or after July 1, 1985, the
9.36 commissioner, by permanent rule, shall reimburse nursing
10.1 facility providers that are vendors in the medical assistance
10.2 program for the rental use of real estate and depreciable
10.3 equipment. "Real estate" means land improvements, buildings,
10.4 and attached fixtures used directly for resident care.
10.5 "Depreciable equipment" means the standard movable resident care
10.6 equipment and support service equipment generally used in
10.7 long-term care facilities.
10.8 (b) In developing the method for determining payment rates
10.9 for the rental use of nursing facilities, the commissioner shall
10.10 consider factors designed to:
10.11 (1) simplify the administrative procedures for determining
10.12 payment rates for property-related costs;
10.13 (2) minimize discretionary or appealable decisions;
10.14 (3) eliminate any incentives to sell nursing facilities;
10.15 (4) recognize legitimate costs of preserving and replacing
10.16 property;
10.17 (5) recognize the existing costs of outstanding
10.18 indebtedness allowable under the statutes and rules in effect on
10.19 May 1, 1983;
10.20 (6) address the current value of, if used directly for
10.21 patient care, land improvements, buildings, attached fixtures,
10.22 and equipment;
10.23 (7) establish an investment per bed limitation;
10.24 (8) reward efficient management of capital assets;
10.25 (9) provide equitable treatment of facilities;
10.26 (10) consider a variable rate; and
10.27 (11) phase-in implementation of the rental reimbursement
10.28 method.
10.29 (c) No later than January 1, 1984, the commissioner shall
10.30 report to the legislature on any further action necessary or
10.31 desirable in order to implement the purposes and provisions of
10.32 this subdivision.
10.33 (d) (c) For rate years beginning on or after July 1, 1987,
10.34 a nursing facility which has reduced licensed bed capacity after
10.35 January 1, 1986, shall be allowed to:
10.36 (1) aggregate the applicable investment per bed limits
11.1 based on the number of beds licensed prior to the reduction; and
11.2 (2) establish capacity days for each rate year following
11.3 the licensure reduction based on the number of beds licensed on
11.4 the previous April 1 if the commissioner is notified of the
11.5 change by April 4. The notification must include a copy of the
11.6 delicensure request that has been submitted to the commissioner
11.7 of health.
11.8 (e) Until the rental reimbursement method is fully phased
11.9 in, a nursing facility whose final property-related payment rate
11.10 is the rental rate shall continue to have its property-related
11.11 payment rates established based on the rental reimbursement
11.12 method.
11.13 (f) (d) For rate years beginning on or after July 1, 1989,
11.14 the interest expense that results from a refinancing of a
11.15 nursing facility's demand call loan, when the loan that must be
11.16 refinanced was incurred before May 22, 1983, is an allowable
11.17 interest expense if:
11.18 (1) the demand call loan or any part of it was in the form
11.19 of a loan that was callable at the demand of the lender;
11.20 (2) the demand call loan or any part of it was called by
11.21 the lender through no fault of the nursing facility;
11.22 (3) the demand call loan or any part of it was made by a
11.23 government agency operating under a statutory or regulatory loan
11.24 program;
11.25 (4) the refinanced debt does not exceed the sum of the
11.26 allowable remaining balance of the demand call loan at the time
11.27 of payment on the demand call loan and refinancing costs;
11.28 (5) the term of the refinanced debt does not exceed the
11.29 remaining term of the demand call loan, had the debt not been
11.30 subject to an on-call payment demand; and
11.31 (6) the refinanced debt is not a debt between related
11.32 organizations as defined in Minnesota Rules, part 9549.0020,
11.33 subpart 38.
11.34 Sec. 5. Minnesota Statutes 1998, section 256B.431,
11.35 subdivision 10, is amended to read:
11.36 Subd. 10. [PROPERTY RATE ADJUSTMENTS AND CONSTRUCTION
12.1 PROJECTS.] A nursing facility's request for a property-related
12.2 payment rate adjustment and the related supporting documentation
12.3 of project construction cost information must be submitted to
12.4 the commissioner within 60 days after the construction project's
12.5 completion date to be considered eligible for a property-related
12.6 payment rate adjustment. Construction projects with completion
12.7 dates within one year of the completion date associated with the
12.8 property rate adjustment request and phased projects with
12.9 project completion dates within three years of the last phase of
12.10 the phased project must be aggregated for purposes of the
12.11 minimum thresholds in subdivisions 16 and 17, and the maximum
12.12 threshold in section 144A.071, subdivision 2. "Construction
12.13 project," and "project construction costs," and "phased project"
12.14 have the meanings given them in Minnesota Rules, part 4655.1110
12.15 (Emergency) Statutes, section 144A.071, subdivision 1a.
12.16 Sec. 6. Minnesota Statutes 1998, section 256B.431,
12.17 subdivision 16, is amended to read:
12.18 Subd. 16. [MAJOR ADDITIONS AND REPLACEMENTS; EQUITY
12.19 INCENTIVE.] For rate years beginning after June 30, 1993, if a
12.20 nursing facility acquires capital assets in connection with a
12.21 project approved under the moratorium exception process in
12.22 section 144A.073 or in connection with an addition to or
12.23 replacement of buildings, attached fixtures, or land
12.24 improvements for which the total historical cost of those
12.25 capital asset additions exceeds the lesser of $150,000 or ten
12.26 percent of the most recent appraised value, the nursing facility
12.27 shall be eligible for an equity incentive payment rate as in
12.28 paragraphs (a) to (d). This computation is separate from the
12.29 determination of the nursing facility's rental rate. An equity
12.30 incentive payment rate as computed under this subdivision is
12.31 limited to one in a 12-month period.
12.32 (a) An eligible nursing facility shall receive an equity
12.33 incentive payment rate equal to the allowable historical cost of
12.34 the capital asset acquired, minus the allowable debt directly
12.35 identified to that capital asset, multiplied by the equity
12.36 incentive factor as described in paragraphs (b) and (c), and
13.1 divided by the nursing facility's occupancy factor under
13.2 subdivision 3f, paragraph (c). This amount shall be added to
13.3 the nursing facility's total payment rate and shall be effective
13.4 the same day as the incremental increase in paragraph (d) or
13.5 subdivision 17. The allowable historical cost of the capital
13.6 assets and the allowable debt shall be determined as provided in
13.7 Minnesota Rules, parts 9549.0010 to 9549.0080, and this section.
13.8 (b) The equity incentive factor shall be determined under
13.9 clauses (1) to (4):
13.10 (1) divide the initial allowable debt in paragraph (a) by
13.11 the initial historical cost of the capital asset additions
13.12 referred to in paragraph (a), then cube the quotient,
13.13 (2) subtract the amount calculated in clause (1) from the
13.14 number one,
13.15 (3) determine the difference between the rental factor and
13.16 the lesser of two percentage points above the posted yield for
13.17 standard conventional fixed rate mortgages of the Federal Home
13.18 Loan Mortgage Corporation as published in the Wall Street
13.19 Journal and in effect on the first day of the month the debt or
13.20 cost is incurred, or 16 percent,
13.21 (4) multiply the amount calculated in clause (2) by the
13.22 amount calculated in clause (3).
13.23 (c) The equity incentive payment rate shall be limited to
13.24 the term of the allowable debt in paragraph (a), not greater
13.25 than 20 years nor less than ten years. If no debt is incurred
13.26 in acquiring the capital asset, the equity incentive payment
13.27 rate shall be paid for ten years. The sale of a nursing
13.28 facility under subdivision 14 shall terminate application of the
13.29 equity incentive payment rate effective on the date provided in
13.30 subdivision 4 14, paragraph (f), for the sale.
13.31 (d) A nursing facility with an addition to or a renovation
13.32 of its buildings, attached fixtures, or land improvements
13.33 meeting the criteria in this subdivision and not receiving the
13.34 property-related payment rate adjustment in subdivision 17,
13.35 shall receive the incremental increase in the nursing facility's
13.36 rental rate as determined under Minnesota Rules, parts 9549.0010
14.1 to 9549.0080, and this section. The incremental increase shall
14.2 be added to the nursing facility's property-related payment rate.
14.3 The effective date of this incremental increase shall be the
14.4 first day of the month following the month in which the addition
14.5 or replacement is completed.
14.6 Sec. 7. Minnesota Statutes 1999 Supplement, section
14.7 256B.431, subdivision 17, is amended to read:
14.8 Subd. 17. [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.]
14.9 (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3,
14.10 for rate periods beginning on October 1, 1992, and for rate
14.11 years beginning after June 30, 1993, a nursing facility that (1)
14.12 has completed a construction project approved under section
14.13 144A.071, subdivision 4a, clause (m); (2) has completed a
14.14 construction project approved under section 144A.071,
14.15 subdivision 4a, and effective after June 30, 1995; or (3) has
14.16 completed a renovation, replacement, or upgrading project
14.17 approved under the moratorium exception process in section
14.18 144A.073 shall be reimbursed for costs directly identified to
14.19 that project as provided in subdivision 16 and this subdivision.
14.20 (b) Notwithstanding Minnesota Rules, part 9549.0060,
14.21 subparts 5, item A, subitems (1) and (3), and 7, item D,
14.22 allowable interest expense on debt shall include:
14.23 (1) interest expense on debt related to the cost of
14.24 purchasing or replacing depreciable equipment, excluding
14.25 vehicles, not to exceed six percent of the total historical cost
14.26 of the project; and
14.27 (2) interest expense on debt related to financing or
14.28 refinancing costs, including costs related to points, loan
14.29 origination fees, financing charges, legal fees, and title
14.30 searches; and issuance costs including bond discounts, bond
14.31 counsel, underwriter's counsel, corporate counsel, printing, and
14.32 financial forecasts. Allowable debt related to items in this
14.33 clause shall not exceed seven percent of the total historical
14.34 cost of the project. To the extent these costs are financed,
14.35 the straight-line amortization of the costs in this clause is
14.36 not an allowable cost; and
15.1 (3) interest on debt incurred for the establishment of a
15.2 debt reserve fund, net of the interest earned on the debt
15.3 reserve fund.
15.4 (c) Debt incurred for costs under paragraph (b) is not
15.5 subject to Minnesota Rules, part 9549.0060, subpart 5, item A,
15.6 subitem (5) or (6).
15.7 (d) The incremental increase in a nursing facility's rental
15.8 rate, determined under Minnesota Rules, parts 9549.0010 to
15.9 9549.0080, and this section, resulting from the acquisition of
15.10 allowable capital assets, and allowable debt and interest
15.11 expense under this subdivision shall be added to its
15.12 property-related payment rate and shall be effective on the
15.13 first day of the month following the month in which the
15.14 moratorium project was completed.
15.15 (e) Notwithstanding subdivision 3f, paragraph (a), for rate
15.16 periods beginning on October 1, 1992, and for rate years
15.17 beginning after June 30, 1993, the replacement-costs-new per bed
15.18 limit to be used in Minnesota Rules, part 9549.0060, subpart 4,
15.19 item B, for a nursing facility that has completed a renovation,
15.20 replacement, or upgrading project that has been approved under
15.21 the moratorium exception process in section 144A.073, or that
15.22 has completed an addition to or replacement of buildings,
15.23 attached fixtures, or land improvements for which the total
15.24 historical cost exceeds the lesser of $150,000 or ten percent of
15.25 the most recent appraised value, must be $47,500 per licensed
15.26 bed in multiple-bed rooms and $71,250 per licensed bed in a
15.27 single-bed room. These amounts must be adjusted annually as
15.28 specified in subdivision 3f, paragraph (a), beginning January 1,
15.29 1993.
15.30 (f) A nursing facility that completes a project identified
15.31 in this subdivision and, as of April 17, 1992, has not been
15.32 mailed a rate notice with a special appraisal for a completed
15.33 project, or completes a project after April 17, 1992, but before
15.34 September 1, 1992, may elect either to request a special
15.35 reappraisal with the corresponding adjustment to the
15.36 property-related payment rate under the laws in effect on June
16.1 30, 1992, or to submit their capital asset and debt information
16.2 after that date and obtain the property-related payment rate
16.3 adjustment under this section, but not both.
16.4 (g) (f) For purposes of this paragraph, a total replacement
16.5 means the complete replacement of the nursing facility's
16.6 physical plant through the construction of a new physical plant
16.7 or the transfer of the nursing facility's license from one
16.8 physical plant location to another. For total replacement
16.9 projects completed on or after July 1, 1992, the commissioner
16.10 shall compute the incremental change in the nursing facility's
16.11 rental per diem, for rate years beginning on or after July 1,
16.12 1995, by replacing its appraised value, including the historical
16.13 capital asset costs, and the capital debt and interest costs
16.14 with the new nursing facility's allowable capital asset costs
16.15 and the related allowable capital debt and interest costs. If
16.16 the new nursing facility has decreased its licensed capacity,
16.17 the aggregate investment per bed limit in subdivision 3a,
16.18 paragraph (d) (c), shall apply. If the new nursing facility has
16.19 retained a portion of the original physical plant for nursing
16.20 facility usage, then a portion of the appraised value prior to
16.21 the replacement must be retained and included in the calculation
16.22 of the incremental change in the nursing facility's rental per
16.23 diem. For purposes of this part, the original nursing facility
16.24 means the nursing facility prior to the total replacement
16.25 project. The portion of the appraised value to be retained
16.26 shall be calculated according to clauses (1) to (3):
16.27 (1) The numerator of the allocation ratio shall be the
16.28 square footage of the area in the original physical plant which
16.29 is being retained for nursing facility usage.
16.30 (2) The denominator of the allocation ratio shall be the
16.31 total square footage of the original nursing facility physical
16.32 plant.
16.33 (3) Each component of the nursing facility's allowable
16.34 appraised value prior to the total replacement project shall be
16.35 multiplied by the allocation ratio developed by dividing clause
16.36 (1) by clause (2).
17.1 In the case of either type of total replacement as
17.2 authorized under section 144A.071 or 144A.073, the provisions of
17.3 this subdivision shall also apply. For purposes of the
17.4 moratorium exception authorized under section 144A.071,
17.5 subdivision 4a, paragraph (s), if the total replacement involves
17.6 the renovation and use of an existing health care facility
17.7 physical plant, the new allowable capital asset costs and
17.8 related debt and interest costs shall include first the
17.9 allowable capital asset costs and related debt and interest
17.10 costs of the renovation, to which shall be added the allowable
17.11 capital asset costs of the existing physical plant prior to the
17.12 renovation, and if reported by the facility, the related
17.13 allowable capital debt and interest costs.
17.14 (h) (g) Notwithstanding Minnesota Rules, part 9549.0060,
17.15 subpart 11, item C, subitem (2), for a total replacement, as
17.16 defined in paragraph (g) (f), authorized under section 144A.071
17.17 or 144A.073 after July 1, 1999, the replacement-costs-new per
17.18 bed limit shall be $74,280 per licensed bed in multiple-bed
17.19 rooms, $92,850 per licensed bed in semiprivate rooms with a
17.20 fixed partition separating the resident beds, and $111,420 per
17.21 licensed bed in single rooms. Minnesota Rules, part 9549.0060,
17.22 subpart 11, item C, subitem (2), does not apply. These amounts
17.23 must be adjusted annually as specified in subdivision 3f,
17.24 paragraph (a), beginning January 1, 2000.
17.25 (i) (h) For a total replacement, as defined in paragraph
17.26 (g) (f), authorized under section 144A.073 for a 96-bed nursing
17.27 home in Carlton county, the replacement-costs-new per bed limit
17.28 shall be $74,280 per licensed bed in multiple-bed rooms, $92,850
17.29 per licensed bed in semiprivate rooms with a fixed partition
17.30 separating the resident's beds, and $111,420 per licensed bed in
17.31 a single room. Minnesota Rules, part 9549.0060, subpart 11,
17.32 item C, subitem (2), does not apply. The resulting maximum
17.33 allowable replacement-costs-new multiplied by 1.25 shall
17.34 constitute the project's dollar threshold for purposes of
17.35 application of the limit set forth in section 144A.071,
17.36 subdivision 2. The commissioner of health may waive the
18.1 requirements of section 144A.073, subdivision 3b, paragraph (b),
18.2 clause (2), on the condition that the other requirements of that
18.3 paragraph are met.
18.4 Sec. 8. Minnesota Statutes 1998, section 256B.431,
18.5 subdivision 18, is amended to read:
18.6 Subd. 18. [APPRAISALS; UPDATING APPRAISALS, ADDITIONS, AND
18.7 REPLACEMENTS.] (a) Notwithstanding Minnesota Rules, part
18.8 9549.0060, subparts 1 to 3, the appraised value, routine
18.9 updating of the appraised value, and special reappraisals are
18.10 subject to this subdivision.
18.11 (1) For rate years beginning after June 30, 1993, the
18.12 commissioner shall permit a nursing facility to appeal its
18.13 appraisal. Any reappraisals conducted in connection with that
18.14 appeal must utilize the comparative-unit method as described in
18.15 the Marshall Valuation Service published by Marshall-Swift in
18.16 establishing the nursing facility's depreciated replacement cost.
18.17 Nursing facilities electing to appeal their appraised value
18.18 shall file written notice of appeal with the commissioner of
18.19 human services before December 30, 1992. The cost of the
18.20 reappraisal, if any, shall be considered an allowable cost under
18.21 Minnesota Rules, parts 9549.0040, subpart 9, and 9549.0061.
18.22 (2) The redetermination of a nursing facility's appraised
18.23 value under this paragraph shall have no impact on the rental
18.24 payment rate determined under subdivision 13 but shall only be
18.25 used for calculating the nursing facility's rental rate under
18.26 Minnesota Rules, parts 9549.0010 to 9549.0080, and this section
18.27 for rate years beginning after June 30, 1993.
18.28 (3) For all rate years after June 30, 1993, the
18.29 commissioner shall no longer conduct any appraisals under
18.30 Minnesota Rules, part 9549.0060, for the purpose of determining
18.31 property-related payment rates.
18.32 (b) Notwithstanding Minnesota Rules, part 9549.0060,
18.33 subpart 2, for rate years beginning after June 30, 1993, the
18.34 commissioner shall routinely update the appraised value of each
18.35 nursing facility by adding the cost of capital asset
18.36 acquisitions to its allowable appraised value.
19.1 The commissioner shall also annually index each nursing
19.2 facility's allowable appraised value by the inflation index
19.3 referenced in subdivision 3f, paragraph (a), for the purpose of
19.4 computing the nursing facility's annual rental rate. In
19.5 annually adjusting the nursing facility's appraised value, the
19.6 commissioner must not include the historical cost of capital
19.7 assets acquired during the reporting year in the nursing
19.8 facility's appraised value.
19.9 In addition, the nursing facility's appraised value must be
19.10 reduced by the historical cost of capital asset disposals or
19.11 applicable credits such as public grants and insurance
19.12 proceeds. Capital asset additions and disposals must be
19.13 reported on the nursing facility's annual cost report in the
19.14 reporting year of acquisition or disposal. The incremental
19.15 increase in the nursing facility's rental rate resulting from
19.16 this annual adjustment as determined under Minnesota Rules,
19.17 parts 9549.0010 to 9549.0080, and this section shall be added to
19.18 the nursing facility's property-related payment rate for the
19.19 rate year following the reporting year.
19.20 Sec. 9. Minnesota Statutes 1998, section 256B.431,
19.21 subdivision 21, is amended to read:
19.22 Subd. 21. [INDEXING THRESHOLDS.] Beginning January 1,
19.23 1993, and each January 1 thereafter, the commissioner shall
19.24 annually update the dollar thresholds in subdivisions 15,
19.25 paragraph (d) (e), 16, and 17, and in section 144A.071,
19.26 subdivisions 2 and 4a, clauses (b) and (e), by the inflation
19.27 index referenced in subdivision 3f, paragraph (a).
19.28 Sec. 10. Minnesota Statutes 1998, section 256B.431,
19.29 subdivision 22, is amended to read:
19.30 Subd. 22. [CHANGES TO NURSING FACILITY REIMBURSEMENT.] The
19.31 nursing facility reimbursement changes in paragraphs (a)
19.32 to (e) (d) apply to Minnesota Rules, parts 9549.0010 to
19.33 9549.0080, and this section, and are effective for rate years
19.34 beginning on or after July 1, 1993, unless otherwise indicated.
19.35 (a) In addition to the approved pension or profit sharing
19.36 plans allowed by the reimbursement rule, the commissioner shall
20.1 allow those plans specified in Internal Revenue Code, sections
20.2 403(b) and 408(k).
20.3 (b) The commissioner shall allow as workers' compensation
20.4 insurance costs under section 256B.421, subdivision 14, the
20.5 costs of workers' compensation coverage obtained under the
20.6 following conditions:
20.7 (1) a plan approved by the commissioner of commerce as a
20.8 Minnesota group or individual self-insurance plan as provided in
20.9 section 79A.03;
20.10 (2) a plan in which:
20.11 (i) the nursing facility, directly or indirectly, purchases
20.12 workers' compensation coverage in compliance with section
20.13 176.181, subdivision 2, from an authorized insurance carrier;
20.14 (ii) a related organization to the nursing facility
20.15 reinsures the workers' compensation coverage purchased, directly
20.16 or indirectly, by the nursing facility; and
20.17 (iii) all of the conditions in clause (4) are met;
20.18 (3) a plan in which:
20.19 (i) the nursing facility, directly or indirectly, purchases
20.20 workers' compensation coverage in compliance with section
20.21 176.181, subdivision 2, from an authorized insurance carrier;
20.22 (ii) the insurance premium is calculated retrospectively,
20.23 including a maximum premium limit, and paid using the paid loss
20.24 retro method; and
20.25 (iii) all of the conditions in clause (4) are met;
20.26 (4) additional conditions are:
20.27 (i) the costs of the plan are allowable under the federal
20.28 Medicare program;
20.29 (ii) the reserves for the plan are maintained in an account
20.30 controlled and administered by a person which is not a related
20.31 organization to the nursing facility;
20.32 (iii) the reserves for the plan cannot be used, directly or
20.33 indirectly, as collateral for debts incurred or other
20.34 obligations of the nursing facility or related organizations to
20.35 the nursing facility;
20.36 (iv) if the plan provides workers' compensation coverage
21.1 for non-Minnesota nursing facilities, the plan's cost
21.2 methodology must be consistent among all nursing facilities
21.3 covered by the plan, and if reasonable, is allowed
21.4 notwithstanding any reimbursement laws regarding cost allocation
21.5 to the contrary;
21.6 (v) central, affiliated, corporate, or nursing facility
21.7 costs related to their administration of the plan are costs
21.8 which must remain in the nursing facility's administrative cost
21.9 category and must not be allocated to other cost categories;
21.10 (vi) required security deposits, whether in the form of
21.11 cash, investments, securities, assets, letters of credit, or in
21.12 any other form are not allowable costs for purposes of
21.13 establishing the facilities payment rate; and
21.14 (vii) for the rate year beginning on July 1, 1998, a group
21.15 of nursing facilities related by common ownership that
21.16 self-insures workers' compensation may allocate its directly
21.17 identified costs of self-insuring its Minnesota nursing facility
21.18 workers among those nursing facilities in the group that are
21.19 reimbursed under this section or section 256B.434. The method
21.20 of cost allocation shall be based on the ratio of each nursing
21.21 facility's total allowable salaries and wages to that of the
21.22 nursing facility group's total allowable salaries and wages,
21.23 then similarly allocated within each nursing facility's
21.24 operating cost categories. The costs associated with the
21.25 administration of the group's self-insurance plan must remain
21.26 classified in the nursing facility's administrative cost
21.27 category. A written request of the nursing facility group's
21.28 election to use this alternate method of allocation of
21.29 self-insurance costs must be received by the commissioner no
21.30 later than May 1, 1998, to take effect July 1, 1998, or such
21.31 costs shall continue to be allocated under the existing cost
21.32 allocation methods. Once a nursing facility group elects this
21.33 method of cost allocation for its workers' compensation
21.34 self-insurance costs, it shall remain in effect until such time
21.35 as the group no longer self-insures these costs;
21.36 (5) any costs allowed pursuant to clauses (1) to (3) are
22.1 subject to the following requirements:
22.2 (i) if the nursing facility is sold or otherwise ceases
22.3 operations, the plan's reserves must be subject to an
22.4 actuarially based settle-up after 36 months from the date of
22.5 sale or the date on which operations ceased. The facility's
22.6 medical assistance portion of the total excess plan reserves
22.7 must be paid to the state within 30 days following the date on
22.8 which excess plan reserves are determined;
22.9 (ii) any distribution of excess plan reserves made to or
22.10 withdrawals made by the nursing facility or a related
22.11 organization are applicable credits and must be used to reduce
22.12 the nursing facility's workers' compensation insurance costs in
22.13 the reporting period in which a distribution or withdrawal is
22.14 received;
22.15 (iii) if reimbursement for the plan is sought under the
22.16 federal Medicare program, and is audited pursuant to the
22.17 Medicare program, the nursing facility must provide a copy of
22.18 Medicare's final audit report, including attachments and
22.19 exhibits, to the commissioner within 30 days of receipt by the
22.20 nursing facility or any related organization. The commissioner
22.21 shall implement the audit findings associated with the plan upon
22.22 receipt of Medicare's final audit report. The department's
22.23 authority to implement the audit findings is independent of its
22.24 authority to conduct a field audit.
22.25 (c) In the determination of incremental increases in the
22.26 nursing facility's rental rate as required in subdivisions 14 to
22.27 21, except for a refinancing permitted under subdivision 19, the
22.28 commissioner must adjust the nursing facility's property-related
22.29 payment rate for both incremental increases and decreases in
22.30 recomputations of its rental rate;
22.31 (d) A nursing facility's administrative cost limitation
22.32 must be modified as follows:
22.33 (1) if the nursing facility's licensed beds exceed 195
22.34 licensed beds, the general and administrative cost category
22.35 limitation shall be 13 percent;
22.36 (2) if the nursing facility's licensed beds are more than
23.1 150 licensed beds, but less than 196 licensed beds, the general
23.2 and administrative cost category limitation shall be 14 percent;
23.3 or
23.4 (3) if the nursing facility's licensed beds is less than
23.5 151 licensed beds, the general and administrative cost category
23.6 limitation shall remain at 15 percent.
23.7 (e) The care related operating rate shall be increased by
23.8 eight cents to reimburse facilities for unfunded federal
23.9 mandates, including costs related to hepatitis B vaccinations.
23.10 (f) For the rate year beginning on July 1, 1998, a group of
23.11 nursing facilities related by common ownership that self-insures
23.12 group health, dental, or life insurance may allocate its
23.13 directly identified costs of self-insuring its Minnesota nursing
23.14 facility workers among those nursing facilities in the group
23.15 that are reimbursed under this section or section 256B.434. The
23.16 method of cost allocation shall be based on the ratio of each
23.17 nursing facility's total allowable salaries and wages to that of
23.18 the nursing facility group's total allowable salaries and wages,
23.19 then similarly allocated within each nursing facility's
23.20 operating cost categories. The costs associated with the
23.21 administration of the group's self-insurance plan must remain
23.22 classified in the nursing facility's administrative cost
23.23 category. A written request of the nursing facility group's
23.24 election to use this alternate method of allocation of
23.25 self-insurance costs must be received by the commissioner no
23.26 later than May 1, 1998, to take effect July 1, 1998, or those
23.27 self-insurance costs shall continue to be allocated under the
23.28 existing cost allocation methods. Once a nursing facility group
23.29 elects this method of cost allocation for its group health,
23.30 dental, or life insurance self-insurance costs, it shall remain
23.31 in effect until such time as the group no longer self-insures
23.32 these costs.
23.33 Sec. 11. Minnesota Statutes 1998, section 256B.431,
23.34 subdivision 25, is amended to read:
23.35 Subd. 25. [CHANGES TO NURSING FACILITY REIMBURSEMENT
23.36 BEGINNING JULY 1, 1995.] The nursing facility reimbursement
24.1 changes in paragraphs (a) to (g) shall apply in the sequence
24.2 specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and
24.3 this section, beginning July 1, 1995.
24.4 (a) The eight-cent adjustment to care-related rates in
24.5 subdivision 22, paragraph (e), shall no longer apply.
24.6 (b) For rate years beginning on or after July 1, 1995, the
24.7 commissioner shall limit a nursing facility's allowable
24.8 operating per diem for each case mix category for each rate year
24.9 as in clauses (1) to (3).
24.10 (1) For the rate year beginning July 1, 1995, the
24.11 commissioner shall group nursing facilities into two groups,
24.12 freestanding and nonfreestanding, within each geographic group,
24.13 using their operating cost per diem for the case mix A
24.14 classification. A nonfreestanding nursing facility is a nursing
24.15 facility whose other operating cost per diem is subject to the
24.16 hospital attached, short length of stay, or the rule 80 limits.
24.17 All other nursing facilities shall be considered freestanding
24.18 nursing facilities. The commissioner shall then array all
24.19 nursing facilities in each grouping by their allowable case mix
24.20 A operating cost per diem. In calculating a nursing facility's
24.21 operating cost per diem for this purpose, the commissioner shall
24.22 exclude the raw food cost per diem related to providing special
24.23 diets that are based on religious beliefs, as determined in
24.24 subdivision 2b, paragraph (h). For those nursing facilities in
24.25 each grouping whose case mix A operating cost per diem:
24.26 (i) is at or below the median minus 1.0 standard deviation
24.27 of the array, the commissioner shall limit the nursing
24.28 facility's allowable operating cost per diem for each case mix
24.29 category to the lesser of the prior reporting year's allowable
24.30 operating cost per diems plus the inflation factor as
24.31 established in paragraph (f), clause (2), increased by six
24.32 percentage points, or the current reporting year's corresponding
24.33 allowable operating cost per diem;
24.34 (ii) is between minus .5 standard deviation and minus 1.0
24.35 standard deviation below the median of the array, the
24.36 commissioner shall limit the nursing facility's allowable
25.1 operating cost per diem for each case mix category to the lesser
25.2 of the prior reporting year's allowable operating cost per diems
25.3 plus the inflation factor as established in paragraph (f),
25.4 clause (2), increased by four percentage points, or the current
25.5 reporting year's corresponding allowable operating cost per
25.6 diem; or
25.7 (iii) is equal to or above minus .5 standard deviation
25.8 below the median of the array, the commissioner shall limit the
25.9 nursing facility's allowable operating cost per diem for each
25.10 case mix category to the lesser of the prior reporting year's
25.11 allowable operating cost per diems plus the inflation factor as
25.12 established in paragraph (f), clause (2), increased by three
25.13 percentage points, or the current reporting year's corresponding
25.14 allowable operating cost per diem.
25.15 (2) For the rate year beginning on July 1, 1996, the
25.16 commissioner shall limit the nursing facility's allowable
25.17 operating cost per diem for each case mix category to the lesser
25.18 of the prior reporting year's allowable operating cost per diems
25.19 plus the inflation factor as established in paragraph (f),
25.20 clause (2), increased by one percentage point or the current
25.21 reporting year's corresponding allowable operating cost per
25.22 diems; and
25.23 (3) For rate years beginning on or after July 1, 1997, the
25.24 commissioner shall limit the nursing facility's allowable
25.25 operating cost per diem for each case mix category to the lesser
25.26 of the reporting year prior to the current reporting year's
25.27 allowable operating cost per diems plus the inflation factor as
25.28 established in paragraph (f), clause (2), or the current
25.29 reporting year's corresponding allowable operating cost per
25.30 diems.
25.31 (c) For rate years beginning on July 1, 1995, the
25.32 commissioner shall limit the allowable operating cost per diems
25.33 for high cost nursing facilities. After application of the
25.34 limits in paragraph (b) to each nursing facility's operating
25.35 cost per diems, the commissioner shall group nursing facilities
25.36 into two groups, freestanding or nonfreestanding, within each
26.1 geographic group. A nonfreestanding nursing facility is a
26.2 nursing facility whose other operating cost per diems are
26.3 subject to hospital attached, short length of stay, or rule 80
26.4 limits. All other nursing facilities shall be considered
26.5 freestanding nursing facilities. The commissioner shall then
26.6 array all nursing facilities within each grouping by their
26.7 allowable case mix A operating cost per diems. In calculating a
26.8 nursing facility's operating cost per diem for this purpose, the
26.9 commissioner shall exclude the raw food cost per diem related to
26.10 providing special diets that are based on religious beliefs, as
26.11 determined in subdivision 2b, paragraph (h). For those nursing
26.12 facilities in each grouping whose case mix A operating cost per
26.13 diem exceeds 1.0 standard deviation above the median, the
26.14 commissioner shall reduce their allowable operating cost per
26.15 diems by two percent. For those nursing facilities in each
26.16 grouping whose case mix A operating cost per diem exceeds 0.5
26.17 standard deviation above the median but is less than or equal to
26.18 1.0 standard deviation above the median, the commissioner shall
26.19 reduce their allowable operating cost per diems by one percent.
26.20 (d) For rate years beginning on or after July 1, 1996, the
26.21 commissioner shall limit the allowable operating cost per diems
26.22 for high cost nursing facilities. After application of the
26.23 limits in paragraph (b) to each nursing facility's operating
26.24 cost per diems, the commissioner shall group nursing facilities
26.25 into two groups, freestanding or nonfreestanding, within each
26.26 geographic group. A nonfreestanding nursing facility is a
26.27 nursing facility whose other operating cost per diems are
26.28 subject to hospital attached, short length of stay, or rule 80
26.29 limits. All other nursing facilities shall be considered
26.30 freestanding nursing facilities. The commissioner shall then
26.31 array all nursing facilities within each grouping by their
26.32 allowable case mix A operating cost per diems. In calculating a
26.33 nursing facility's operating cost per diem for this purpose, the
26.34 commissioner shall exclude the raw food cost per diem related to
26.35 providing special diets that are based on religious beliefs, as
26.36 determined in subdivision 2b, paragraph (h). In those nursing
27.1 facilities in each grouping whose case mix A operating cost per
27.2 diem exceeds 1.0 standard deviation above the median, the
27.3 commissioner shall reduce their allowable operating cost per
27.4 diems by three percent. For those nursing facilities in each
27.5 grouping whose case mix A operating cost per diem exceeds 0.5
27.6 standard deviation above the median but is less than or equal to
27.7 1.0 standard deviation above the median, the commissioner shall
27.8 reduce their allowable operating cost per diems by two percent.
27.9 (e) For rate years beginning on or after July 1, 1995, the
27.10 commissioner shall determine a nursing facility's efficiency
27.11 incentive by first computing the allowable difference, which is
27.12 the lesser of $4.50 or the amount by which the facility's other
27.13 operating cost limit exceeds its nonadjusted other operating
27.14 cost per diem for that rate year. The commissioner shall
27.15 compute the efficiency incentive by:
27.16 (1) subtracting the allowable difference from $4.50 and
27.17 dividing the result by $4.50;
27.18 (2) multiplying 0.20 by the ratio resulting from clause
27.19 (1), and then;
27.20 (3) adding 0.50 to the result from clause (2); and
27.21 (4) multiplying the result from clause (3) times the
27.22 allowable difference.
27.23 The nursing facility's efficiency incentive payment shall
27.24 be the lesser of $2.25 or the product obtained in clause (4).
27.25 (f) For rate years beginning on or after July 1, 1995, the
27.26 forecasted price index for a nursing facility's allowable
27.27 operating cost per diems shall be determined under clauses (1)
27.28 to (3) using the change in the Consumer Price Index-All Items
27.29 (United States city average) (CPI-U) or the change in the
27.30 Nursing Home Market Basket, both as forecasted by Data Resources
27.31 Inc., whichever is applicable. The commissioner shall use the
27.32 indices as forecasted in the fourth quarter of the calendar year
27.33 preceding the rate year, subject to subdivision 2l, paragraph
27.34 (c). If, as a result of federal legislative or administrative
27.35 action, the methodology used to calculate the Consumer Price
27.36 Index-All Items (United States city average) (CPI-U) changes,
28.1 the commissioner shall develop a conversion factor or other
28.2 methodology to convert the CPI-U index factor that results from
28.3 the new methodology to an index factor that approximates, as
28.4 closely as possible, the index factor that would have resulted
28.5 from application of the original CPI-U methodology prior to any
28.6 changes in methodology. The commissioner shall use the
28.7 conversion factor or other methodology to calculate an adjusted
28.8 inflation index. The adjusted inflation index must be used to
28.9 calculate payment rates under this section instead of the CPI-U
28.10 index specified in paragraph (d). If the commissioner is
28.11 required to develop an adjusted inflation index, the
28.12 commissioner shall report to the legislature as part of the next
28.13 budget submission the fiscal impact of applying this index.
28.14 (1) The CPI-U forecasted index for allowable operating cost
28.15 per diems shall be based on the 21-month period from the
28.16 midpoint of the nursing facility's reporting year to the
28.17 midpoint of the rate year following the reporting year.
28.18 (2) The Nursing Home Market Basket forecasted index for
28.19 allowable operating costs and per diem limits shall be based on
28.20 the 12-month period between the midpoints of the two reporting
28.21 years preceding the rate year.
28.22 (3) For rate years beginning on or after July 1, 1996, the
28.23 forecasted index for operating cost limits referred to in
28.24 subdivision 21, paragraph (b), shall be based on the CPI-U for
28.25 the 12-month period between the midpoints of the two reporting
28.26 years preceding the rate year.
28.27 (g) After applying these provisions for the respective rate
28.28 years, the commissioner shall index these allowable operating
28.29 costs per diems by the inflation factor provided for in
28.30 paragraph (f), clause (1), and add the nursing facility's
28.31 efficiency incentive as computed in paragraph (e).
28.32 (h)(1) A nursing facility licensed for 302 beds on
28.33 September 30, 1993, that was approved under the moratorium
28.34 exception process in section 144A.073 for a partial replacement,
28.35 and completed the replacement project in December 1994, is
28.36 exempt from Minnesota Statutes 1998, section 256B.431,
29.1 subdivision 25, paragraphs (b) to (d) for rate years beginning
29.2 on or after July 1, 1995.
29.3 (2) For the rate year beginning July 1, 1997, after
29.4 computing this nursing facility's payment rate according to
29.5 section 256B.434, the commissioner shall make a one-year rate
29.6 adjustment of $8.62 to the facility's contract payment rate for
29.7 the rate effect of operating cost changes associated with the
29.8 facility's 1994 downsizing project.
29.9 (3) For rate years beginning on or after July 1, 1997, the
29.10 commissioner shall add 35 cents to the facility's base property
29.11 related payment rate for the rate effect of reducing its
29.12 licensed capacity to 290 beds from 302 beds and shall add 83
29.13 cents to the facility's real estate tax and special assessment
29.14 payment rate for payments in lieu of real estate taxes. The
29.15 adjustments in this clause shall remain in effect for the
29.16 duration of the facility's contract under section 256B.434.
29.17 (i) Notwithstanding Laws 1996, chapter 451, article 3,
29.18 section 11, paragraph (h), for the rate years beginning on July
29.19 1, 1996, July 1, 1997, and July 1, 1998, a nursing facility
29.20 licensed for 40 beds effective May 1, 1992, with a subsequent
29.21 increase of 20 Medicare/Medicaid certified beds, effective
29.22 January 26, 1993, in accordance with an increase in licensure is
29.23 exempt from paragraphs (b) to (d).
29.24 Sec. 12. Minnesota Statutes 1999 Supplement, section
29.25 256B.431, subdivision 26, is amended to read:
29.26 Subd. 26. [CHANGES TO NURSING FACILITY REIMBURSEMENT
29.27 BEGINNING JULY 1, 1997.] The nursing facility reimbursement
29.28 changes in paragraphs (a) to (f) (e) shall apply in the sequence
29.29 specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and
29.30 this section, beginning July 1, 1997.
29.31 (a) For rate years beginning on or after July 1, 1997, the
29.32 commissioner shall limit a nursing facility's allowable
29.33 operating per diem for each case mix category for each rate year.
29.34 The commissioner shall group nursing facilities into two groups,
29.35 freestanding and nonfreestanding, within each geographic group,
29.36 using their operating cost per diem for the case mix A
30.1 classification. A nonfreestanding nursing facility is a nursing
30.2 facility whose other operating cost per diem is subject to the
30.3 hospital attached, short length of stay, or the rule 80 limits.
30.4 All other nursing facilities shall be considered freestanding
30.5 nursing facilities. The commissioner shall then array all
30.6 nursing facilities in each grouping by their allowable case mix
30.7 A operating cost per diem. In calculating a nursing facility's
30.8 operating cost per diem for this purpose, the commissioner shall
30.9 exclude the raw food cost per diem related to providing special
30.10 diets that are based on religious beliefs, as determined in
30.11 subdivision 2b, paragraph (h). For those nursing facilities in
30.12 each grouping whose case mix A operating cost per diem:
30.13 (1) is at or below the median of the array, the
30.14 commissioner shall limit the nursing facility's allowable
30.15 operating cost per diem for each case mix category to the lesser
30.16 of the prior reporting year's allowable operating cost per diem
30.17 as specified in Laws 1996, chapter 451, article 3, section 11,
30.18 paragraph (h), plus the inflation factor as established in
30.19 paragraph (d), clause (2), increased by two percentage points,
30.20 or the current reporting year's corresponding allowable
30.21 operating cost per diem; or
30.22 (2) is above the median of the array, the commissioner
30.23 shall limit the nursing facility's allowable operating cost per
30.24 diem for each case mix category to the lesser of the prior
30.25 reporting year's allowable operating cost per diem as specified
30.26 in Laws 1996, chapter 451, article 3, section 11, paragraph (h),
30.27 plus the inflation factor as established in paragraph (d),
30.28 clause (2), increased by one percentage point, or the current
30.29 reporting year's corresponding allowable operating cost per diem.
30.30 For purposes of paragraph (a), if a nursing facility
30.31 reports on its cost report a reduction in cost due to a refund
30.32 or credit for a rate year beginning on or after July 1, 1998,
30.33 the commissioner shall increase that facility's spend-up limit
30.34 for the rate year following the current rate year by the amount
30.35 of the cost reduction divided by its resident days for the
30.36 reporting year preceding the rate year in which the adjustment
31.1 is to be made.
31.2 (b) For rate years beginning on or after July 1, 1997, the
31.3 commissioner shall limit the allowable operating cost per diem
31.4 for high cost nursing facilities. After application of the
31.5 limits in paragraph (a) to each nursing facility's operating
31.6 cost per diem, the commissioner shall group nursing facilities
31.7 into two groups, freestanding or nonfreestanding, within each
31.8 geographic group. A nonfreestanding nursing facility is a
31.9 nursing facility whose other operating cost per diem are subject
31.10 to hospital attached, short length of stay, or rule 80 limits.
31.11 All other nursing facilities shall be considered freestanding
31.12 nursing facilities. The commissioner shall then array all
31.13 nursing facilities within each grouping by their allowable case
31.14 mix A operating cost per diem. In calculating a nursing
31.15 facility's operating cost per diem for this purpose, the
31.16 commissioner shall exclude the raw food cost per diem related to
31.17 providing special diets that are based on religious beliefs, as
31.18 determined in subdivision 2b, paragraph (h). For those nursing
31.19 facilities in each grouping whose case mix A operating cost per
31.20 diem exceeds 1.0 standard deviation above the median, the
31.21 commissioner shall reduce their allowable operating cost per
31.22 diem by three percent. For those nursing facilities in each
31.23 grouping whose case mix A operating cost per diem exceeds 0.5
31.24 standard deviation above the median but is less than or equal to
31.25 1.0 standard deviation above the median, the commissioner shall
31.26 reduce their allowable operating cost per diem by two percent.
31.27 However, in no case shall a nursing facility's operating cost
31.28 per diem be reduced below its grouping's limit established at
31.29 0.5 standard deviations above the median.
31.30 (c) For rate years beginning on or after July 1, 1997, the
31.31 commissioner shall determine a nursing facility's efficiency
31.32 incentive by first computing the allowable difference, which is
31.33 the lesser of $4.50 or the amount by which the facility's other
31.34 operating cost limit exceeds its nonadjusted other operating
31.35 cost per diem for that rate year. The commissioner shall
31.36 compute the efficiency incentive by:
32.1 (1) subtracting the allowable difference from $4.50 and
32.2 dividing the result by $4.50;
32.3 (2) multiplying 0.20 by the ratio resulting from clause
32.4 (1), and then;
32.5 (3) adding 0.50 to the result from clause (2); and
32.6 (4) multiplying the result from clause (3) times the
32.7 allowable difference.
32.8 The nursing facility's efficiency incentive payment shall
32.9 be the lesser of $2.25 or the product obtained in clause (4).
32.10 (d) For rate years beginning on or after July 1, 1997, the
32.11 forecasted price index for a nursing facility's allowable
32.12 operating cost per diem shall be determined under clauses (1)
32.13 and (2) using the change in the Consumer Price Index-All Items
32.14 (United States city average) (CPI-U) as forecasted by Data
32.15 Resources, Inc. The commissioner shall use the indices as
32.16 forecasted in the fourth quarter of the calendar year preceding
32.17 the rate year, subject to subdivision 2l, paragraph (c).
32.18 (1) The CPI-U forecasted index for allowable operating cost
32.19 per diem shall be based on the 21-month period from the midpoint
32.20 of the nursing facility's reporting year to the midpoint of the
32.21 rate year following the reporting year.
32.22 (2) For rate years beginning on or after July 1, 1997, the
32.23 forecasted index for operating cost limits referred to in
32.24 subdivision 21, paragraph (b), shall be based on the CPI-U for
32.25 the 12-month period between the midpoints of the two reporting
32.26 years preceding the rate year.
32.27 (e) After applying these provisions for the respective rate
32.28 years, the commissioner shall index these allowable operating
32.29 cost per diem by the inflation factor provided for in paragraph
32.30 (d), clause (1), and add the nursing facility's efficiency
32.31 incentive as computed in paragraph (c).
32.32 (f) For rate years beginning on or after July 1, 1997, the
32.33 total operating cost payment rates for a nursing facility shall
32.34 be the greater of the total operating cost payment rates
32.35 determined under this section or the total operating cost
32.36 payment rates in effect on June 30, 1997, subject to rate
33.1 adjustments due to field audit or rate appeal resolution. This
33.2 provision shall not apply to subsequent field audit adjustments
33.3 of the nursing facility's operating cost rates for rate years
33.4 beginning on or after July 1, 1997.
33.5 (g) (f) For the rate years beginning on July 1, 1997, July
33.6 1, 1998, and July 1, 1999, a nursing facility licensed for 40
33.7 beds effective May 1, 1992, with a subsequent increase of 20
33.8 Medicare/Medicaid certified beds, effective January 26, 1993, in
33.9 accordance with an increase in licensure is exempt from
33.10 paragraphs (a) and (b).
33.11 (h) (g) For a nursing facility whose construction project
33.12 was authorized according to section 144A.073, subdivision 5,
33.13 paragraph (g), the operating cost payment rates for the new
33.14 location shall be determined based on Minnesota Rules, part
33.15 9549.0057. The relocation allowed under section 144A.073,
33.16 subdivision 5, paragraph (g), and the rate determination allowed
33.17 under this paragraph must meet the cost neutrality requirements
33.18 of section 144A.073, subdivision 3c. Paragraphs (a) and (b)
33.19 shall not apply until the second rate year after the settle-up
33.20 cost report is filed. Notwithstanding subdivision 2b, paragraph
33.21 (g), real estate taxes and special assessments payable by the
33.22 new location, a 501(c)(3) nonprofit corporation, shall be
33.23 included in the payment rates determined under this subdivision
33.24 for all subsequent rate years.
33.25 (i) (h) For the rate year beginning July 1, 1997, the
33.26 commissioner shall compute the payment rate for a nursing
33.27 facility licensed for 94 beds on September 30, 1996, that
33.28 applied in October 1993 for approval of a total replacement
33.29 under the moratorium exception process in section 144A.073, and
33.30 completed the approved replacement in June 1995, with other
33.31 operating cost spend-up limit under paragraph (a), increased by
33.32 $3.98, and after computing the facility's payment rate according
33.33 to this section, the commissioner shall make a one-year positive
33.34 rate adjustment of $3.19 for operating costs related to the
33.35 newly constructed total replacement, without application of
33.36 paragraphs (a) and (b). The facility's per diem, before the
34.1 $3.19 adjustment, shall be used as the prior reporting year's
34.2 allowable operating cost per diem for payment rate calculation
34.3 for the rate year beginning July 1, 1998. A facility described
34.4 in this paragraph is exempt from paragraph (b) for the rate
34.5 years beginning July 1, 1997, and July 1, 1998.
34.6 (j) (i) For the purpose of applying the limit stated in
34.7 paragraph (a), a nursing facility in Kandiyohi county licensed
34.8 for 86 beds that was granted hospital-attached status on
34.9 December 1, 1994, shall have the prior year's allowable
34.10 care-related per diem increased by $3.207 and the prior year's
34.11 other operating cost per diem increased by $4.777 before adding
34.12 the inflation in paragraph (d), clause (2), for the rate year
34.13 beginning on July 1, 1997.
34.14 (k) (j) For the purpose of applying the limit stated in
34.15 paragraph (a), a 117 bed nursing facility located in Pine county
34.16 shall have the prior year's allowable other operating cost per
34.17 diem increased by $1.50 before adding the inflation in paragraph
34.18 (d), clause (2), for the rate year beginning on July 1, 1997.
34.19 (l) (k) For the purpose of applying the limit under
34.20 paragraph (a), a nursing facility in Hibbing licensed for 192
34.21 beds shall have the prior year's allowable other operating cost
34.22 per diem increased by $2.67 before adding the inflation in
34.23 paragraph (d), clause (2), for the rate year beginning July 1,
34.24 1997.
34.25 Sec. 13. Minnesota Statutes 1999 Supplement, section
34.26 256B.434, subdivision 3, is amended to read:
34.27 Subd. 3. [DURATION AND TERMINATION OF CONTRACTS.] (a)
34.28 Subject to available resources, the commissioner may begin to
34.29 execute contracts with nursing facilities November 1, 1995.
34.30 (b) All contracts entered into under this section are for a
34.31 term of one year. Either party may terminate a contract at any
34.32 time without cause by providing 90 calendar days advance written
34.33 notice to the other party. The decision to terminate a contract
34.34 is not appealable. Notwithstanding section 16C.05, subdivision
34.35 2, paragraph (a), clause (5), the contract shall be renegotiated
34.36 for additional one-year terms, unless either party provides
35.1 written notice of termination. The provisions of the contract
35.2 shall be renegotiated annually by the parties prior to the
35.3 expiration date of the contract. The parties may voluntarily
35.4 renegotiate the terms of the contract at any time by mutual
35.5 agreement.
35.6 (c) If a nursing facility fails to comply with the terms of
35.7 a contract, the commissioner shall provide reasonable notice
35.8 regarding the breach of contract and a reasonable opportunity
35.9 for the facility to come into compliance. If the facility fails
35.10 to come into compliance or to remain in compliance, the
35.11 commissioner may terminate the contract. If a contract is
35.12 terminated, the contract payment remains in effect for the
35.13 remainder of the rate year in which the contract was terminated,
35.14 but in all other respects the provisions of this section do not
35.15 apply to that facility effective the date the contract is
35.16 terminated. The contract shall contain a provision governing
35.17 the transition back to the cost-based reimbursement system
35.18 established under section 256B.431, subdivision 25, and
35.19 Minnesota Rules, parts 9549.0010 to 9549.0080. A contract
35.20 entered into under this section may be amended by mutual
35.21 agreement of the parties.
35.22 Sec. 14. Minnesota Statutes 1999 Supplement, section
35.23 256B.434, subdivision 4, is amended to read:
35.24 Subd. 4. [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For
35.25 nursing facilities which have their payment rates determined
35.26 under this section rather than section 256B.431, subdivision 25,
35.27 the commissioner shall establish a rate under this subdivision.
35.28 The nursing facility must enter into a written contract with the
35.29 commissioner.
35.30 (b) A nursing facility's case mix payment rate for the
35.31 first rate year of a facility's contract under this section is
35.32 the payment rate the facility would have received under section
35.33 256B.431, subdivision 25.
35.34 (c) A nursing facility's case mix payment rates for the
35.35 second and subsequent years of a facility's contract under this
35.36 section are the previous rate year's contract payment rates plus
36.1 an inflation adjustment. The index for the inflation adjustment
36.2 must be based on the change in the Consumer Price Index-All
36.3 Items (United States City average) (CPI-U) forecasted by Data
36.4 Resources, Inc., as forecasted in the fourth quarter of the
36.5 calendar year preceding the rate year. The inflation adjustment
36.6 must be based on the 12-month period from the midpoint of the
36.7 previous rate year to the midpoint of the rate year for which
36.8 the rate is being determined. For the rate years beginning on
36.9 July 1, 1999, and July 1, 2000, this paragraph shall apply only
36.10 to the property-related payment rate. In determining the amount
36.11 of the property-related payment rate adjustment under this
36.12 paragraph, the commissioner shall determine the proportion of
36.13 the facility's rates that are property-related based on the
36.14 facility's most recent cost report.
36.15 (d) The commissioner shall develop additional
36.16 incentive-based payments of up to five percent above the
36.17 standard contract rate for achieving outcomes specified in each
36.18 contract. The specified facility-specific outcomes must be
36.19 measurable and approved by the commissioner. The commissioner
36.20 may establish, for each contract, various levels of achievement
36.21 within an outcome. After the outcomes have been specified the
36.22 commissioner shall assign various levels of payment associated
36.23 with achieving the outcome. Any incentive-based payment cancels
36.24 if there is a termination of the contract. In establishing the
36.25 specified outcomes and related criteria the commissioner shall
36.26 consider the following state policy objectives:
36.27 (1) improved cost effectiveness and quality of life as
36.28 measured by improved clinical outcomes;
36.29 (2) successful diversion or discharge to community
36.30 alternatives;
36.31 (3) decreased acute care costs;
36.32 (4) improved consumer satisfaction;
36.33 (5) the achievement of quality; or
36.34 (6) any additional outcomes proposed by a nursing facility
36.35 that the commissioner finds desirable.
36.36 Sec. 15. [REPEALER.]
37.1 Minnesota Statutes 1998, sections 256B.03, subdivision 2;
37.2 256B.431, subdivisions 2, 2a, 2f, 2h, 2m, 2p, 2q, 3, 3b, 3d, 3h,
37.3 3j, 4, 5, 7, 8, 9, 9a, 12, and 24; 256B.48, subdivision 9;
37.4 256B.50, subdivision 3; and 256B.74, subdivision 3, are repealed
37.5 effective July 1, 2000.
37.6 Sec. 16. [REVISOR INSTRUCTIONS.]
37.7 In the next and subsequent editions of Minnesota Statutes
37.8 and Minnesota Rules, the revisor of statutes shall make any
37.9 necessary statutory cross-reference changes required as a result
37.10 of the provisions in this bill.
37.11 Sec. 17. [EFFECTIVE DATE.]
37.12 The amendment in section 1 to Minnesota Statutes, section
37.13 256B.0913, subdivision 5, paragraph (g), is effective July 1,
37.14 2000, or upon federal approval of amendments to Minnesota's home
37.15 and community-based waiver for elderly persons at risk of
37.16 nursing home level of care, health care financing administration
37.17 control number 0025.91.R3, whichever occurs later. The
37.18 remainder of section 1, and sections 2 to 15 are effective July
37.19 1, 2000.