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SF 281

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to human services; allowing contracts with nursing facilities for the
provision of additional specialized services; modifying reimbursement for
short-stay residents; increasing nursing facility operating payment rates;
implementing new case mix indices and providing interim rate adjustments;
rebasing nursing facility rates; providing additional nursing facility quality
add-ons; amending Minnesota Statutes 2006, sections 256B.431, subdivisions
2e, 32; 256B.434, by adding a subdivision; 256B.438, by adding a subdivision;
256B.441, subdivisions 1, 46.

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

Section 1.

Minnesota Statutes 2006, section 256B.431, subdivision 2e, is amended to
read:


Subd. 2e.

Contracts for services for ventilator-dependent personsnew text begin and
persons requiring other specialized services
new text end.

The commissioner may negotiate with a
nursing facility eligible to receive medical assistance payments to provide services to a
ventilator-dependent personnew text begin; a person requiring wound vacuum and wound stimulation
equipment and care; a person requiring bariatric care, services, and equipment due to
obesity; a person requiring skilled nursing services and equipment for tracheotomy
care; and a person requiring other complex clinical care,
new text end identified by the commissioner
according to criteria developed by the commissioner, including:

(1) nursing facility care has been recommended for the person by a preadmission
screening team;

(2) the person has been hospitalized and no longer requires inpatient acute care
hospital services; and

(3) the commissioner has determined that necessary services for the person cannot
be provided under existing nursing facility rates.

The commissioner may negotiate an adjustment to the operating cost payment
rate for a nursing facility with a resident who is ventilator-dependent, for that resident.
new text begin The commissioner may also negotiate an adjustment to the operating cost payment
rate for a resident who requires wound vacuum and wound stimulation equipment and
care; bariatric care, services, and equipment due to obesity; skilled nursing services
and equipment for tracheotomy care; or other complex clinical care.
new text endThe negotiated
adjustment must reflect only the actual additional cost of meeting the specialized care
needs of deleted text begina ventilator-dependent persondeleted text endnew text begin the residentnew text end identified by the commissioner for
whom necessary services cannot be provided under existing nursing facility rates and
which are not otherwise covered under Minnesota Rules, parts 9549.0010 to 9549.0080 or
9505.0170 to 9505.0475. For persons who are initially admitted to a nursing facility before
July 1, 2001, and have their payment rate under this subdivision negotiated after July 1,
2001, the negotiated payment rate must not exceed 200 percent of the highest multiple
bedroom payment rate for the facility, as initially established by the commissioner for the
rate year for case mix classification K; or, upon implementation of the RUG's-based case
mix system, 200 percent of the highest RUG's rate. For persons initially admitted to a
nursing facility on or after July 1, 2001, the negotiated payment rate must not exceed 300
percent of the facility's multiple bedroom payment rate for case mix classification K; or,
upon implementation of the RUG's-based case mix system, 300 percent of the highest
RUG's rate. The negotiated adjustment shall not affect the payment rate charged to private
paying residents under the provisions of section 256B.48, subdivision 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 256B.431, subdivision 32, is amended to read:


Subd. 32.

Payment during first 90 days.

(a) For rate years beginning on or after
July 1, 2001, the total payment rate for a facility reimbursed under this section, section
256B.434, or any other section for the first 90 paid days after admission shall be:

(1) for the first 30 paid days, the rate shall be 120 percent of the facility's medical
assistance rate for each case mix class;

(2) for the next 60 paid days after the first 30 paid days, the rate shall be 110 percent
of the facility's medical assistance rate for each case mix class;

(3) beginning with the 91st paid day after admission, the payment rate shall be the
rate otherwise determined under this section, section 256B.434, or any other section; and

(4) payments under this paragraph apply to admissions occurring on or after July 1,
2001, and before July 1, 2003, and to resident days occurring before July 30, 2003.

(b) For rate years beginning on or after July 1, 2003, the total payment rate for a
facility reimbursed under this section, section 256B.434, or any other section shall be:

(1) for the first 30 calendar days after admission, the rate shall be 120 percent of
the facility's medical assistance rate for each RUG class;

(2) beginning with the 31st calendar day after admission, the payment rate shall be
the rate otherwise determined under this section, section 256B.434, or any other section;
and

(3) payments under this paragraph apply to admissions occurring on or after July
1, 2003.

(c) Effective January 1, 2004, the enhanced rates under this subdivision shall not be
allowed if a resident has resided during the previous 30 calendar days in:

(1) the same nursing facility;

(2) a nursing facility owned or operated by a related party; or

(3) a nursing facility or part of a facility that closed or was in the process of closing.

new text begin (d) For rate years beginning on or after October 1, 2007, the total payment rate for a
facility reimbursed under this section, section 256B.434, or any other section shall be:
new text end

new text begin (1) for the first 60 calendar days after admission, the rate shall be 120 percent of
the facility's medical assistance rate for each RUG class;
new text end

new text begin (2) beginning with the 61st calendar day after admission, the payment rate shall be
the rate otherwise determined under this section, section 256B.434, or any other section.
new text end

new text begin (e) Payments under paragraph (d) apply to admissions occurring on or after October
1, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:


new text begin Subd. 4i. new text end

new text begin Rate increases effective October 1, 2007. new text end

new text begin (a) For the rate year
beginning October 1, 2007, the commissioner shall make available to each nursing facility
reimbursed under this section an adjustment to the total operating payment rate of seven
percent. Operating payment rate increases under this subdivision shall be applied to each
facility's operating payment rate as of the last day prior to the beginning of the rate year.
new text end

new text begin (b) For the rate year beginning on October 1, 2008, the commissioner shall make
available to each nursing facility reimbursed under this section an adjustment to the total
operating payment rate of six percent. Operating payment rate increases under this
subdivision shall be applied to each facility's operating payment rate as of the last day
prior to the beginning of the rate year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 256B.438, is amended by adding a
subdivision to read:


new text begin Subd. 8. new text end

new text begin New case mix indices. new text end

new text begin (a) Effective with rates for the rate year beginning
October 1, 2007, the commissioner shall implement the case mix indices recommended
by the time study conducted under Laws 2001, First Special Session chapter 9, article 5,
section 35, paragraph (e). The commissioner shall implement the new case mix indices
as follows:
new text end

new text begin (1) The September 30, 2006, case mix component of the nursing facility operating
payment rate shall be multiplied by the new case mix indices to create 36 case mix
adjusted rates.
new text end

new text begin (2) The 36 case mix adjusted rates determined in clause (1), plus the noncase mix
component, shall be the 36 nursing facility operating payment rates.
new text end

new text begin (3) The rate increases authorized by sections 256B.431, subdivision 41, and
256B.441, subdivision 46, shall be applied to the rates determined under clause (2).
new text end

new text begin (b) The commissioner shall adjust the October 1, 2007, operating rates in paragraph
(a) for nursing facilities estimated to receive a decrease in operating revenue. The rate
interim adjustment is established as follows:
new text end

new text begin (1) The commissioner shall use the minimum data set to classify private and medical
assistance patient days by RUG classification for the year ending June 30, 2007, according
to both the case mix indices and resident assessment schedule to be used on September 30,
2007, and the case mix indices and resident assessment schedule to be used on October
1, 2007.
new text end

new text begin (2) The commissioner shall use the resident days in clause (1) and the nursing
facility's October 1, 2007, unadjusted operating payment rate to estimate operating
revenue according to both the case mix indices and resident assessment schedule to be
used on September 30, 2007, and the case mix indices and resident assessment schedule
to be used on October 1, 2007.
new text end

new text begin (3) The estimated operating revenue determined with the case mix indices and
resident assessment schedule to be used on September 30, 2007, minus the operating
revenue determined with the case mix indices and resident assessment schedule to be
used on October 1, 2007, shall equal the decrease in medical assistance and private pay
operating revenue.
new text end

new text begin (4) Facilities with an estimated decrease in clause (3) shall receive an interim rate
adjustment equal to the value determined in clause (3) divided by the medical assistance
and private pay resident days in clause (1).
new text end

new text begin (5) The interim rate adjustment shall be in effect from October 1, 2007, through
June 30, 2008, and shall not be part of a facility's operating payment rate after June 30,
2008. The interim rate adjustment shall be applied to the case mix portion of the facility
operating rate.
new text end

new text begin (6) The commissioner, by August 15, 2007, shall provide nursing facilities that the
commissioner has estimated will experience a decrease in operating revenue with written
notice that specifies the amount of the estimated decrease in operating revenue and the
amount of the interim rate adjustment. Nursing facilities shall have 30 days to decline the
interim rate adjustment.
new text end

new text begin (c) The commissioner shall adjust the July 1, 2008, operating rates of facilities
receiving the interim rate adjustments in paragraph (b) and facilities that demonstrate a
decrease in operating revenue from the implementation of the new case mix indices.
The adjustment is calculated as follows:
new text end

new text begin (1) Facilities that received the interim rate adjustment in paragraph (b) shall report
to the commissioner the number of medical assistance and private pay resident days
by RUG classification for the six-month period October 1, 2007, through March 31,
2008, according to both the case mix indices and resident assessment schedule used on
September 30, 2007, and the case mix indices and resident assessment schedule used
on October 1, 2007. A facility not receiving the rate adjustment in paragraph (b) that
had a decrease in operating revenue resulting from implementation of the new case mix
indices may report to the commissioner the number of medical assistance and private pay
resident days by RUG classification for the six-month period October 1, 2007, through
March 31, 2008, according to both the case mix indices and resident assessment schedule
used on September 30, 2007, and the case mix indices and resident assessment schedule
used on October 1, 2007. Nursing facilities shall submit the required information to the
commissioner by May 15, 2008, in the manner specified by the commissioner.
new text end

new text begin (2) The commissioner shall use the resident days reported in clause (1) and the
nursing facility's October 1, 2007, unadjusted operating payment rate to determine
operating revenue under both the case mix indices and resident assessment schedule
used on September 30, 2007, and the case mix indices and resident assessment schedule
used on October 1, 2007.
new text end

new text begin (3) The operating revenue determined using the case mix indices and resident
assessment schedule used on September 30, 2007, minus the operating revenue determined
using the case mix indices and resident assessment schedule used on October 1, 2007,
shall equal the decrease in operating revenue.
new text end

new text begin (4) The July 1, 2008, operating payment rate adjustment shall be the decrease in
operating revenue determined in clause (3) divided by the total medical assistance and
private pay days reported in clause (1) for the six-month period October 1, 2007, through
March 31, 2008. The operating payment rate adjustment shall be applied to the case
mix portion of the facility operating rate.
new text end

new text begin (5) If the amount determined in clause (4) is greater than the amount determined
under paragraph (b), clause (4), the commissioner shall retroactively pay to nursing
facilities the difference between the two amounts, for all paid medical assistance days
from October 1, 2007, through June 30, 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 256B.441, subdivision 1, is amended to read:


Subdivision 1.

Rate deleted text begindeterminationdeleted text endnew text begin rebasingnew text end.

deleted text begin(a)deleted text end The commissioner shall deleted text beginestablish
a value-based nursing facility reimbursement system which will provide facility-specific,
prospective rates for nursing facilities participating in the medical assistance program.
The rates shall be determined using an annual statistical and cost report filed by each
nursing facility. The total payment rate shall be composed of four rate components: direct
care services, support services, external fixed, and property-related rate components.
The payment rate shall be derived from statistical measures of actual costs incurred in
facility operation of nursing facilities. From this cost basis, the components of the total
payment rate shall be adjusted for quality of services provided, recognition of staffing
levels, geographic variation in labor costs, and resident acuity
deleted text endnew text begin rebase nursing facility rates
for the rate year beginning October 1, 2008, and shall collect all data necessary to rebase
rates. Nursing facilities shall submit this data in the form and manner specified by the
commissioner. The rebasing methodology shall recognize increased expenses incurred
by facilities that are not reflected in current payments and shall not be constrained by a
state budget neutrality factor or method
new text end.

deleted text begin (b) Rates shall be rebased annually. Each cost reporting year shall begin on October
1 and end on the following September 30. Beginning in 2006, a statistical and cost report
shall be filed by each nursing facility by January 15. Notice of rates shall be distributed by
August 15 and the rates shall go into effect on October 1 for one year.
deleted text end

deleted text begin (c) The commissioner shall begin to phase in the new reimbursement system
beginning October 1, 2007. Full phase-in shall be completed by October 1, 2011.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 6.

Minnesota Statutes 2006, section 256B.441, subdivision 46, is amended to read:


Subd. 46.

Calculation of quality add-on.

The payment rate for the quality add-on
shall be a variable amount based on each facility's quality score.

(a) For the rate year beginning October 1, 2006, the maximum quality add-on percent
shall be 2.4 percent and this add-on shall not be subject to a phase-in. The determination
of the quality score to be used in calculating the quality add-on for October 1, 2006,
shall be based on a report which must be filed with the commissioner, according to the
requirements in subdivision 43, for a six-month period ending January 31, 2006. This
report shall be filed with the commissioner by February 28, 2006. The commissioner shall
prorate the six months of data to a full year. When new quality measures are incorporated
into the quality score methodology and when existing quality measures are updated or
improved, the commissioner may increase the maximum quality add-on percent.

(b) For each facility, determine the operating payment rate.

(c) For each facility determine a ratio of the quality score of the facility determined
in subdivision 44, less 40 and then divided by 60. If this value is less than zero, use
the value zero.

(d) For each facility, the quality add-on shall be the value determined in paragraph
(b) times the value determined in paragraph (c) times the maximum quality add-on percent.

new text begin (e) For rate years beginning on or after October 1, 2007, the maximum quality
add-on percent shall be four percent, and the average add-on shall be two percent. The
commissioner shall determine the quality add-on using the methodology described in
paragraphs (b) to (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2007.
new text end