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SF 654

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/16/2017 09:06am

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A bill for an act
relating to human services; making policy and technical changes to the nursing
facility payment system; requiring a report;amending Minnesota Statutes 2016,
sections 144.0724, subdivision 6; 256B.431, subdivision 30, by adding a
subdivision; 256B.434, subdivision 4; 256B.50, subdivision 1b; 256R.02,
subdivisions 4, 17, 18, 19, 22, 42, 52, by adding subdivisions; 256R.07, by adding
a subdivision; 256R.10, by adding a subdivision; 256R.12, by adding a subdivision;
256R.37; 256R.40, subdivisions 1, 5; 256R.41; 256R.47; 256R.49; proposing
coding for new law in Minnesota Statutes, chapter 256R.

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

Section 1.

Minnesota Statutes 2016, section 144.0724, subdivision 6, is amended to read:


Subd. 6.

Penalties for late or nonsubmission.

(a) A facility that fails to complete or
submit an assessment according to subdivisions 4 and 5 for a RUG-IV classification within
seven days of the time requirements listed in the Long-Term Care Facility Resident
Assessment Instrument User's Manual is subject to a reduced rate for that resident. The
reduced rate shall be the lowest rate for that facility. The reduced rate is effective on the
day of admission for new admission assessments, on the ARD for significant change in
status assessments, or on the day that the assessment was due for all other assessments and
continues in effect until the first day of the month following the date of submission and
acceptance of the resident's assessment.

(b) If loss of revenue due to penalties incurred by a facility for any period of 92 days
are equal to or greater than 1.0 0.1 percent of the total operating costs on the facility's most
recent annual statistical and cost report, a facility may apply to the commissioner of human
services for a reduction in the total penalty amount. The commissioner of human services,
in consultation with the commissioner of health, may, at the sole discretion of the
commissioner of human services, limit the penalty for residents covered by medical assistance
to 15 ten days.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2016, section 256B.431, subdivision 30, is amended to read:


Subd. 30.

Bed layaway and delicensure.

(a) For rate years beginning on or after July
1, 2000, a nursing facility reimbursed under this section which has placed beds on layaway
shall, for purposes of application of the downsizing incentive in subdivision 3a, paragraph
(c), and calculation of the rental per diem, have those beds given the same effect as if the
beds had been delicensed so long as the beds remain on layaway. At the time of a layaway,
a facility may change its single bed election for use in calculating capacity days under
Minnesota Rules, part 9549.0060, subpart 11. The property payment rate increase shall be
effective the first day of the month of January or July, whichever occurs first following the
month date in which the layaway of the beds becomes effective under section 144A.071,
subdivision 4b
.

(b) For rate years beginning on or after July 1, 2000, notwithstanding any provision to
the contrary under section 256B.434, a nursing facility reimbursed under that section which
has placed beds on layaway shall, for so long as the beds remain on layaway, be allowed
to:

(1) aggregate the applicable investment per bed limits based on the number of beds
licensed immediately prior to entering the alternative payment system;

(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and

(3) establish capacity days based on the number of beds immediately prior to the layaway
and the number of beds after the layaway.

The commissioner shall increase the facility's property payment rate by the incremental
increase in the rental per diem resulting from the recalculation of the facility's rental per
diem applying only the changes resulting from the layaway of beds and clauses (1), (2), and
(3). If a facility reimbursed under section 256B.434 completes a moratorium exception
project after its base year, the base year property rate shall be the moratorium project property
rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4,
paragraph (c). The property payment rate increase shall be effective the first day of the
month of January or July, whichever occurs first following the month date in which the
layaway of the beds becomes effective.

(c) If a nursing facility removes a bed from layaway status in accordance with section
144A.071, subdivision 4b, the commissioner shall establish capacity days based on the
number of licensed and certified beds in the facility not on layaway and shall reduce the
nursing facility's property payment rate in accordance with paragraph (b).

(d) For the rate years beginning on or after July 1, 2000, notwithstanding any provision
to the contrary under section 256B.434, a nursing facility reimbursed under that section,
which has delicensed beds after July 1, 2000, by giving notice of the delicensure to the
commissioner of health according to the notice requirements in section 144A.071, subdivision
4b
, shall be allowed to:

(1) aggregate the applicable investment per bed limits based on the number of beds
licensed immediately prior to entering the alternative payment system;

(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and

(3) establish capacity days based on the number of beds immediately prior to the
delicensure and the number of beds after the delicensure.

The commissioner shall increase the facility's property payment rate by the incremental
increase in the rental per diem resulting from the recalculation of the facility's rental per
diem applying only the changes resulting from the delicensure of beds and clauses (1), (2),
and (3). If a facility reimbursed under section 256B.434 completes a moratorium exception
project after its base year, the base year property rate shall be the moratorium project property
rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4,
paragraph (c). The property payment rate increase shall be effective the first day of the
month of January or July, whichever occurs first following the month date in which the
delicensure of the beds becomes effective.

(e) For nursing facilities reimbursed under this section or section 256B.434, any beds
placed on layaway shall not be included in calculating facility occupancy as it pertains to
leave days defined in Minnesota Rules, part 9505.0415.

(f) For nursing facilities reimbursed under this section or section 256B.434, the rental
rate calculated after placing beds on layaway may not be less than the rental rate prior to
placing beds on layaway.

(g) A nursing facility receiving a rate adjustment as a result of this section shall comply
with section 256B.47 256R.06, subdivision 2 5.

(h) A facility that does not utilize the space made available as a result of bed layaway
or delicensure under this subdivision to reduce the number of beds per room or provide
more common space for nursing facility uses or perform other activities related to the
operation of the nursing facility shall have its property rate increase calculated under this
subdivision reduced by the ratio of the square footage made available that is not used for
these purposes to the total square footage made available as a result of bed layaway or
delicensure.

Sec. 3.

Minnesota Statutes 2016, section 256B.431, is amended by adding a subdivision
to read:


Subd. 46.

Single-bed election.

A nursing facility may change its single-bed election for
use in calculating capacity days under Minnesota Rules, part 9549.0060, subpart 11, for
rates established on January 1 if the commissioner receives written notification from the
nursing facility by August 15 of the preceding year.

Sec. 4.

Minnesota Statutes 2016, section 256B.434, subdivision 4, is amended to read:


Subd. 4.

Alternate rates for nursing facilities.

Effective for the rate years beginning
on and after January 1, 2018,
a nursing facility's case mix property payment rates rate for
the second and subsequent years of a facility's contract under this section are the previous
rate year's contract property payment rates rate plus an inflation adjustment and, for facilities
reimbursed under this section or section 256B.431, an adjustment to include the cost of any
increase in Health Department licensing fees for the facility taking effect on or after July
1, 2001
. The index for the inflation adjustment must be based on the change in the Consumer
Price Index-All Items (United States City average) (CPI-U) forecasted by the commissioner
of management and budget's national economic consultant Reports and Forecasts Division
of the Department of Human Services
, as forecasted in the fourth quarter of the calendar
year preceding the rate year. The inflation adjustment must be based on the 12-month period
from the midpoint of the previous rate year to the midpoint of the rate year for which the
rate is being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1,
2001, July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, July
1, 2008, October 1, 2009, and October 1, 2010, this paragraph shall apply only to the
property-related payment rate. For the rate years beginning on October 1, 2011, October 1,
2012, October 1, 2013, October 1, 2014, October 1, 2015, January 1, 2016, and January 1,
2017, the rate adjustment under this paragraph shall be suspended. Beginning in 2005,
adjustment to the property payment rate under this section and section 256B.431 shall be
effective on October 1. In determining the amount of the property-related payment rate
adjustment under this paragraph, the commissioner shall determine the proportion of the
facility's rates that are property-related based on the facility's most recent cost report.

Sec. 5.

Minnesota Statutes 2016, section 256B.50, subdivision 1b, is amended to read:


Subd. 1b.

Filing an appeal.

To appeal, the provider shall file with the commissioner a
written notice of appeal; the appeal must be postmarked or received by the commissioner
within 60 days of the publication date the determination of the payment rate was mailed or
personally received by a provider, whichever is earlier
printed on the rate notice. The notice
of appeal must specify each disputed item; the reason for the dispute; the total dollar amount
in dispute for each separate disallowance, allocation, or adjustment of each cost item or part
of a cost item; the computation that the provider believes is correct; the authority in statute
or rule upon which the provider relies for each disputed item; the name and address of the
person or firm with whom contacts may be made regarding the appeal; and other information
required by the commissioner.

Sec. 6.

Minnesota Statutes 2016, section 256R.02, subdivision 4, is amended to read:


Subd. 4.

Administrative costs.

"Administrative costs" means the identifiable costs for
administering the overall activities of the nursing home. These costs include salaries and
wages of the administrator, assistant administrator, business office employees, security
guards, and associated fringe benefits and payroll taxes, fees, contracts, or purchases related
to business office functions, licenses, and permits except as provided in the external fixed
costs category, employee recognition, travel including meals and lodging, all training except
as specified in subdivision 17, voice and data communication or transmission, office supplies,
property and liability insurance and other forms of insurance not designated to other areas
except insurance that is a fringe benefit under subdivision 22
, personnel recruitment, legal
services, accounting services, management or business consultants, data processing,
information technology, Web site, central or home office costs, business meetings and
seminars, postage, fees for professional organizations, subscriptions, security services,
advertising, board of directors fees, working capital interest expense, and bad debts, and
bad debt collection fees.

Sec. 7.

Minnesota Statutes 2016, section 256R.02, subdivision 17, is amended to read:


Subd. 17.

Direct care costs.

"Direct care costs" means costs for the wages of nursing
administration, direct care registered nurses, licensed practical nurses, certified nursing
assistants, trained medication aides, employees conducting training in resident care topics
and associated fringe benefits and payroll taxes; services from a supplemental nursing
services agency; supplies that are stocked at nursing stations or on the floor and distributed
or used individually, including, but not limited to: alcohol, applicators, cotton balls,
incontinence pads, disposable ice bags, dressings, bandages, water pitchers, tongue
depressors, disposable gloves, enemas, enema equipment, soap, medication cups, diapers,
plastic waste bags, sanitary products, thermometers, hypodermic needles and syringes,
clinical reagents or similar diagnostic agents, drugs that are not paid on a separate fee
schedule by the medical assistance program or any other payer, and; technology related to
the provision of nursing care to residents, such as electronic charting systems; costs of
materials used for resident care training, and training courses outside of the facility attended
by direct care staff on resident care topics; and nurse consultants, pharmacy consultants,
and medical directors
.

Sec. 8.

Minnesota Statutes 2016, section 256R.02, subdivision 18, is amended to read:


Subd. 18.

Employer health insurance costs.

"Employer health insurance costs" means
premium expenses for group coverage and reinsurance, actual expenses incurred for
self-insured plans including reinsurance, costs associated with administrating
employer-provided health insurance
, and employer contributions to employee health
reimbursement and health savings accounts. Premium and expense costs and contributions
are allowable for (1) all employees and (2) the spouse and dependents of those employees
who meet the definition of full-time employees under the federal Affordable Care Act,
Public Law 111-148
are employed on average at least 30 hours of service per week, or 130
hours of service per month
.

Sec. 9.

Minnesota Statutes 2016, section 256R.02, subdivision 19, is amended to read:


Subd. 19.

External fixed costs.

"External fixed costs" means costs related to the nursing
home surcharge under section 256.9657, subdivision 1; licensure fees under section 144.122;
family advisory council fee under section 144A.33; scholarships under section 256R.37;
planned closure rate adjustments under section 256R.40; consolidation rate adjustments
under section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d;
single-bed room incentives under section 256R.41; property real estate taxes, special
assessments, and payments in lieu of taxes; employer health insurance costs; quality
improvement incentive payment rate adjustments under section 256R.39; performance-based
incentive payments under section 256R.38; special dietary needs under section 256R.51;
rate adjustments for compensation-related costs for minimum wage changes under section
256R.49 provided on or after January 1, 2018;
and Public Employees Retirement Association
employer costs
.

Sec. 10.

Minnesota Statutes 2016, section 256R.02, subdivision 22, is amended to read:


Subd. 22.

Fringe benefit costs.

"Fringe benefit costs" means the costs for group life,
dental, workers' compensation, and other employee insurances and short and long-term
disability, long-term care insurance, accident insurance, supplemental insurance, legal
assistance insurance, profit sharing, health insurance costs not covered under subdivision
18 such as health insurance costs associated with part-time employee family members or
retirees, and
pension and retirement plan contributions, except for the Public Employees
Retirement Association and employer health insurance costs; profit sharing; and retirement
plans for which the employer pays all or a portion of the
costs.

Sec. 11.

Minnesota Statutes 2016, section 256R.02, subdivision 42, is amended to read:


Subd. 42.

Raw food costs.

"Raw food costs" means the cost of food provided to nursing
facility residents and the allocation of dietary credits. Also included are special dietary
supplements used for tube feeding or oral feeding, such as elemental high nitrogen diet.

Sec. 12.

Minnesota Statutes 2016, section 256R.02, is amended by adding a subdivision
to read:


Subd. 42a.

Real estate taxes.

"Real estate taxes" means the real estate tax liability shown
on the annual property tax statement of the nursing facility for the reporting period. The
term does not include personnel costs or fees for late payment.

Sec. 13.

Minnesota Statutes 2016, section 256R.02, is amended by adding a subdivision
to read:


Subd. 48a.

Special assessments.

"Special assessments" means the actual special
assessments and related interest paid during the reporting period. The term does not include
personnel costs or fees for late payment.

Sec. 14.

Minnesota Statutes 2016, section 256R.02, subdivision 52, is amended to read:


Subd. 52.

Therapy costs.

"Therapy costs" means any costs related to medical assistance
therapy services provided to residents that are not billed separately billable from the daily
operating rate.

Sec. 15.

Minnesota Statutes 2016, section 256R.07, is amended by adding a subdivision
to read:


Subd. 6.

Electronic signature.

For documentation requiring a signature under this
chapter or section 256B.431 or 256B.434, use of an electronic signature as defined under
section 325L.02, paragraph (h), is allowed.

Sec. 16.

Minnesota Statutes 2016, section 256R.10, is amended by adding a subdivision
to read:


Subd. 7.

Bad debts.

Bad debts of Medicaid and private pay recipients are allowable
only when:

(1) the debt is related to covered services;

(2) the debt arises from the recipient's required contribution toward the cost of care, not
including Medicare coinsurance for Medicaid recipients as defined in section 256B.0625,
subdivision 57a;

(3) the provider can establish reasonable collection efforts were made. Reasonable
collection efforts consist of at least three documented attempts by the contractor to obtain
payment demonstrating that the effort devoted to collecting the bad debts of a Medicaid
recipient is the same as the effort devoted to collecting the bad debts of a private pay
recipient;

(4) the debt was actually uncollectible when claimed as worthless; and

(5) sound business judgment established there was no likelihood of recovery at any time
in the future.

Sec. 17.

Minnesota Statutes 2016, section 256R.12, is amended by adding a subdivision
to read:


Subd. 11.

Allocation of nurse consultant costs.

Salaries and payroll taxes for nurse
consultants who work out of a central office must be allocated proportionately by total
resident days or by direct identification to the nursing facilities served by those consultants.

Sec. 18.

[256R.18] BIENNIAL REPORT.

The commissioner shall provide to the legislative committees with jurisdiction over
nursing facility payment rates a biennial report including:

(1) the impact of using cost report data to set rates without updating the cost report data
by the change in the Consumer Price Index for all urban consumers from the mid-point of
the cost report to the mid-point of the rate year;

(2) the impact of the quality adjusted care limits;

(3) the ability of nursing facilities to retain employees, including whether rate increases
are passed through to employees;

(4) the efficacy of the critical access nursing facility program under section 256R.47;
and

(5) the impact of payment rate limit reduction under section 256R.23, subdivision 6.

EFFECTIVE DATE.

This section is effective January 1, 2019.

Sec. 19.

Minnesota Statutes 2016, section 256R.37, is amended to read:


256R.37 SCHOLARSHIPS.

(a) For the 27-month period beginning October 1, 2015, through December 31, 2017,
the commissioner shall allow a scholarship per diem of up to 25 cents for each nursing
facility with no scholarship per diem that is requesting a scholarship per diem to be added
to the external fixed payment rate to be used:

(1) for employee scholarships that satisfy the following requirements:

(i) scholarships are available to all employees who work an average of at least ten hours
per week at the facility except the administrator, and to reimburse student loan expenses
for newly hired and recently graduated registered nurses and licensed practical nurses, and
training expenses for nursing assistants as specified in section 144A.611, subdivisions 2
and 4, who are newly hired and have graduated within the last 12 months; and

(ii) the course of study is expected to lead to career advancement with the facility or in
long-term care, including medical care interpreter services and social work; and

(2) to provide job-related training in English as a second language.

(b) All facilities may annually request a rate adjustment under this section by submitting
information to the commissioner on a schedule and in a form supplied by the commissioner.
The commissioner shall allow a scholarship payment rate equal to the reported and allowable
costs divided by resident days.

(c) In calculating the per diem under paragraph (b), the commissioner shall allow costs
related to tuition, direct educational expenses, and reasonable costs as defined by the
commissioner for child care costs and transportation expenses related to direct educational
expenses.

(d) The rate increase under this section is an optional rate add-on that the facility must
request from the commissioner in a manner prescribed by the commissioner. The rate
increase must be used for scholarships as specified in this section.

(e) For instances in which a rate adjustment will be 15 cents or greater, nursing facilities
that close beds during a rate year may request to have their scholarship adjustment under
paragraph (b) recalculated by the commissioner for the remainder of the rate year to reflect
the reduction in resident days compared to the cost report year.

Sec. 20.

Minnesota Statutes 2016, section 256R.40, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

(b) "Closure" means the cessation of operations of a nursing facility and delicensure and
decertification of all beds within the facility.

(c) "Closure plan" means a plan to close a nursing facility and reallocate a portion of
the resulting savings to provide planned closure rate adjustments at other facilities.

(d) "Commencement of closure" means the date on which residents and designated
representatives are notified of a planned closure as provided in section 144A.161, subdivision
5a, as part of an approved closure plan.

(e) "Completion of closure" means the date on which the final resident of the nursing
facility designated for closure in an approved closure plan is discharged from the facility
or the date that beds from a partial closure are delicensed and decertified
.

(f) "Partial closure" means the delicensure and decertification of a portion of the beds
within the facility.

(g) "Planned closure rate adjustment" means an increase in a nursing facility's operating
rates resulting from a planned closure or a planned partial closure of another facility.

Sec. 21.

Minnesota Statutes 2016, section 256R.40, subdivision 5, is amended to read:


Subd. 5.

Planned closure rate adjustment.

(a) The commissioner shall calculate the
amount of the planned closure rate adjustment available under subdivision 6 according to
clauses (1) to (4):

(1) the amount available is the net reduction of nursing facility beds multiplied by $2,080;

(2) the total number of beds in the nursing facility or facilities receiving the planned
closure rate adjustment must be identified;

(3) capacity days are determined by multiplying the number determined under clause
(2) by 365; and

(4) the planned closure rate adjustment is the amount available in clause (1), divided by
capacity days determined under clause (3).

(b) A planned closure rate adjustment under this section is effective on the first day of
the month of January or July, whichever occurs first following completion of closure of the
facility designated for closure in the application and becomes part of the nursing facility's
external fixed payment rate.

(c) Upon the request of a closing facility, the commissioner must allow the facility a
closure rate adjustment as provided under section 144A.161, subdivision 10.

(d) A facility that has received a planned closure rate adjustment may reassign it to
another facility that is under the same ownership at any time within three years of its effective
date. The amount of the adjustment is computed according to paragraph (a).

(e) If the per bed dollar amount specified in paragraph (a), clause (1), is increased, the
commissioner shall recalculate planned closure rate adjustments for facilities that delicense
beds under this section on or after July 1, 2001, to reflect the increase in the per bed dollar
amount. The recalculated planned closure rate adjustment is effective from the date the per
bed dollar amount is increased.

(f) For a nursing facility that is ceasing operations through delicensure and decertification
of all beds within the facility, the planned closure rate adjustment under this section is
effective on the first day of the month following completion of closure of the facility
designated for closure in the application and becomes part of any assigned nursing facility's
external fixed payment rate.

Sec. 22.

Minnesota Statutes 2016, section 256R.41, is amended to read:


256R.41 SINGLE-BED ROOM INCENTIVE.

(a) Beginning July 1, 2005, the operating payment rate for nursing facilities reimbursed
under this chapter shall be increased by 20 percent multiplied by the ratio of the number of
new single-bed rooms created divided by the number of active beds on July 1, 2005, for
each bed closure that results in the creation of a single-bed room after July 1, 2005. The
commissioner may implement rate adjustments for up to 3,000 new single-bed rooms each
year. For eligible bed closures for which the commissioner receives a notice from a facility
during a calendar quarter that a bed has been delicensed and a new single-bed room has
been established, the rate adjustment in this paragraph shall be effective on either the first
day of the second month of January or July, whichever occurs first following that calendar
quarter
the date of the bed delicensure.

(b) A nursing facility is prohibited from discharging residents for purposes of establishing
single-bed rooms. A nursing facility must submit documentation to the commissioner in a
form prescribed by the commissioner, certifying the occupancy status of beds closed to
create single-bed rooms. In the event that the commissioner determines that a facility has
discharged a resident for purposes of establishing a single-bed room, the commissioner shall
not provide a rate adjustment under paragraph (a).

Sec. 23.

Minnesota Statutes 2016, section 256R.47, is amended to read:


256R.47 RATE ADJUSTMENT FOR CRITICAL ACCESS NURSING
FACILITIES.

(a) The commissioner, in consultation with the commissioner of health, may designate
certain nursing facilities as critical access nursing facilities. The designation shall be granted
on a competitive basis, within the limits of funds appropriated for this purpose.

(b) The commissioner shall request proposals from nursing facilities every two years.
Proposals must be submitted in the form and according to the timelines established by the
commissioner. In selecting applicants to designate, the commissioner, in consultation with
the commissioner of health, and with input from stakeholders, shall develop criteria designed
to preserve access to nursing facility services in isolated areas, rebalance long-term care,
and improve quality. To the extent practicable, the commissioner shall ensure an even
distribution of designations across the state.

(c) The commissioner shall allow the benefits in clauses (1) to (5) for nursing facilities
designated as critical access nursing facilities:

(1) partial rebasing, with the commissioner allowing a designated facility operating
payment rates being the sum of up to 60 percent of the operating payment rate determined
in accordance with section 256R.21, subdivision 3, and at least 40 percent, with the sum of
the two portions being equal to 100 percent, of the operating payment rate that would have
been allowed had the facility not been designated. The commissioner may adjust these
percentages by up to 20 percent and may approve a request for less than the amount allowed;

(2) enhanced payments for leave days. Notwithstanding section 256R.43, upon
designation as a critical access nursing facility, the commissioner shall limit payment for
leave days to 60 percent of that nursing facility's total payment rate for the involved resident,
and shall allow this payment only when the occupancy of the nursing facility, inclusive of
bed hold days, is equal to or greater than 90 percent;

(3) two designated critical access nursing facilities, with up to 100 beds in active service,
may jointly apply to the commissioner of health for a waiver of Minnesota Rules, part
4658.0500, subpart 2, in order to jointly employ a director of nursing. The commissioner
of health shall consider each waiver request independently based on the criteria under
Minnesota Rules, part 4658.0040;

(4) the minimum threshold under section 256B.431, subdivision 15, paragraph (e), shall
be 40 percent of the amount that would otherwise apply; and

(5) the quality-based rate limits under section 256R.23, subdivisions 5 to 7, apply to
designated critical access nursing facilities.

(d) Designation of a critical access nursing facility is for a period of two years, after
which the benefits allowed under paragraph (c) shall be removed. Designated facilities may
apply for continued designation.

(e) This section is suspended and no state or federal funding shall be appropriated or
allocated for the purposes of this section from January 1, 2016, to December 31, 2017 2019.

Sec. 24.

Minnesota Statutes 2016, section 256R.49, is amended to read:


256R.49 RATE ADJUSTMENTS FOR COMPENSATION-RELATED COSTS
FOR MINIMUM WAGE CHANGES.

Subdivision 1.

Rate adjustments for compensation-related costs.

(a) Operating
Payment rates of all nursing facilities that are reimbursed under this chapter shall be increased
effective for rate years beginning on and after October 1, 2014, to address changes in
compensation costs for nursing facility employees paid less than $14 per hour in accordance
with this section. Rate increases provided under this section before October 1, 2016, expire
effective January 1, 2018. Rate increases provided on or after October 1, 2016, expire two
years after the effective date of the rate increases.

(b) Nursing facilities that receive approval of the applications in subdivision 2 must
receive rate adjustments according to subdivision 4. The rate adjustments must be used to
pay compensation costs for nursing facility employees paid less than $14 per hour.

Subd. 2.

Application process.

To receive a rate adjustment, nursing facilities must
submit applications to the commissioner in a form and manner determined by the
commissioner. The applications for the rate adjustments shall include specified data, and
spending plans that describe how the funds from the rate adjustments will be allocated for
compensation to employees paid less than $14 per hour. The applications must be submitted
within three months of the effective date of any operating payment rate adjustment under
this section. The commissioner may request any additional information needed to determine
the rate adjustment within three weeks of receiving a complete application. The nursing
facility must provide any additional information requested by the commissioner within six
months of the effective date of any operating payment rate adjustment under this section.
The commissioner may waive the deadlines in this section under extraordinary circumstances.

Subd. 3.

Additional application requirements for facilities with employees
represented by an exclusive bargaining representative.

For nursing facilities in which
employees are represented by an exclusive bargaining representative, the commissioner
shall approve the applications submitted under subdivision 2 only upon receipt of a letter
or letters of acceptance of the spending plans in regard to members of the bargaining unit,
signed by the exclusive bargaining agent and dated after May 31, 2014. Upon receipt of the
letter or letters of acceptance, the commissioner shall deem all requirements of this section
as having been met in regard to the members of the bargaining unit.

Subd. 4.

Determination of the rate adjustments for compensation-related costs.

Based on the application in subdivision 2, the commissioner shall calculate the allowable
annualized compensation costs by adding the totals of clauses (1), and (2), and (3). The
result must be divided by the standardized or sum of the facility's resident days from the
most recently available cost report to determine per day amounts, which must be included
in the operating portion external fixed costs payment rate of the total payment rate and
allocated to direct care or other operating as determined by
the commissioner:

(1) the sum of the difference between $9.50 and any hourly wage rate less than $9.50
for October 1, 2016; and between the indexed value of the minimum wage, as defined in
section 177.24, subdivision 1, paragraph (f), or any other minimum wage implemented in
statute or by any local ordinance,
and any hourly wage less than that indexed value for rate
years beginning on and after October 1, 2017 January 1, 2018; multiplied by the number
of compensated hours at that wage rate; and

(2) using wages and hours in effect during the first three months of calendar year 2014,
beginning with the first pay period beginning on or after January 1, 2014; 22.2 percent of
the sum of items (i) to (viii) for October 1, 2016;

(i) for all compensated hours from $8 to $8.49 per hour, the number of compensated
hours is multiplied by $0.13;

(ii) for all compensated hours from $8.50 to $8.99 per hour, the number of compensated
hours is multiplied by $0.25;

(iii) for all compensated hours from $9 to $9.49 per hour, the number of compensated
hours is multiplied by $0.38;

(iv) for all compensated hours from $9.50 to $10.49 per hour, the number of compensated
hours is multiplied by $0.50;

(v) for all compensated hours from $10.50 to $10.99 per hour, the number of compensated
hours is multiplied by $0.40;

(vi) for all compensated hours from $11 to $11.49 per hour, the number of compensated
hours is multiplied by $0.30;

(vii) for all compensated hours from $11.50 to $11.99 per hour, the number of
compensated hours is multiplied by $0.20; and

(viii) for all compensated hours from $12 to $13 per hour, the number of compensated
hours is multiplied by $0.10; and

(3) (2) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, pensions, and contributions to employee
retirement accounts attributable to the amounts in clauses clause (1) and (2).

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 2.1 2.2
2.3
2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 4.1 4.2 4.3 4.4 4.5 4.6 4.7
4.8 4.9 4.10 4.11 4.12 4.13
4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 5.1 5.2
5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13
5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28
5.29 5.30 5.31 5.32 5.33 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11
6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21
6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34
7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9
7.10 7.11 7.12 7.13
7.14 7.15 7.16 7.17 7.18
7.19 7.20 7.21 7.22 7.23
7.24 7.25 7.26 7.27
8.1 8.2 8.3 8.4 8.5
8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20 8.21
8.22 8.23 8.24 8.25 8.26
8.27 8.28 8.29 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9
9.10
9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9
10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25
10.26 10.27 10.28 10.29 10.30 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25
11.26 11.27 11.28 11.29 11.30 11.31 11.32 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11
12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19
13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27 13.28 13.29 13.30 13.31 13.32 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 14.31 14.32 14.33 14.34 14.35 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569