SF 1062

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 08/31/2015 03:52pm

A bill for an act
relating to human services; modifying the disability waiver rate system;
modifying provisions governing allocation of funds for waiver services; requiring
reports; amending Minnesota Statutes 2014, sections 256B.0916, subdivisions 2,
4, 11, by adding subdivisions; 256B.49, subdivision 26, by adding subdivisions;
256B.4913, subdivisions 4a, 5; 256B.4914, subdivisions 2, 7, 8, 10, 14, 15, 16;
proposing coding for new law in Minnesota Statutes, chapter 256B.

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

Section 1.

Minnesota Statutes 2014, section 256B.0916, subdivision 2, is amended to
read:

Subd. 2.

Distribution of funds; partnerships.

(a) Beginning with fiscal year 2000,
the commissioner shall distribute all funding available for home and community-based
waiver services for persons with developmental disabilities to individual counties or to
groups of counties that form partnerships to jointly plan, administer, and authorize funding
for eligible individuals. The commissioner shall encourage counties to form partnerships
that have a sufficient number of recipients and funding to adequately manage the risk
and maximize use of available resources.

(b) Counties must submit a request for funds and a plan for administering the
program as required by the commissioner. The plan must identify the number of clients to
be served, their ages, and their priority listing based on:

(1) requirements in Minnesota Rules, part 9525.1880; and

(2) statewide priorities identified in section 256B.092, subdivision 12.

The plan must also identify changes made to improve services to eligible persons and to
improve program management.

(c) In allocating resources to counties, priority must be given to groups of counties
that form partnerships to jointly plan, administer, and authorize funding for eligible
individuals and to counties determined by the commissioner to have sufficient waiver
capacity to maximize resource use.

(d) Within 30 days after receiving the county request for funds and plans, the
commissioner shall provide a written response to the plan that includes the level of
resources available to serve additional persons.

(e) Counties are eligible to receive medical assistance administrative reimbursement
for administrative costs under criteria established by the commissioner.

new text begin (f) The commissioner shall manage waiver allocations in such a manner as to fully
use available waiver funding.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 256B.0916, subdivision 4, is amended to read:

Subd. 4.

Allowed reserve.

Counties or groups of counties participating in
partnerships that have submitted a plan under this section may develop an allowed reserve
amount to meet crises and other unmet needs of current home and community-based
waiver recipients. The amount of the allowed reserve shall be a county specific amount
based upon documented past experience and projected need for the coming year described
in an allowed reserve plan submitted for approval to the commissioner with the allocation
request for the fiscal year. new text begin At the end of the fiscal year, any available waiver funding shall
be contributed to the reserve account under section 256B.4911.
new text end

new text begin This section expires June 30, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 256B.0916, is amended by adding a
subdivision to read:

new text begin Subd. 7a. new text end

new text begin Annual report by commissioner. new text end

new text begin Beginning November 1, 2015, and
each November 1 thereafter, the commissioner shall issue an annual report on county and
state use of available resources for the home and community-based waiver for persons
with developmental disabilities under section 256B.092. For each county or county
partnership, the report shall include:
new text end

new text begin (1) the amount of funds allocated but not used;
new text end

new text begin (2) the percentage of funds allocated but not used;
new text end

new text begin (3) the capacity for additional enrollment within each lead agency and statewide
based on existing funds that are allocated but not used;
new text end

new text begin (4) the county or county partnership-specific allowed reserve amount approved and
used, if applicable, or county or county partnership contributions to and distributions from
the home and community-based services waiver reserve account under section 256B.4911;
new text end

new text begin (5) the number, ages, and living situations of individuals screened and waiting for
services;
new text end

new text begin (6) the urgency of need for services to begin within one, two, or more than two
years for each individual;
new text end

new text begin (7) the services needed;
new text end

new text begin (8) the number of additional persons served by approval of increased capacity within
existing allocations;
new text end

new text begin (9) a list of counties with approved corrective action plans that are in violation
of their corrective action plans, that have had their responsibility to authorize services
assumed or reassigned by the commissioner, or that are subject to recoupment;
new text end

new text begin (10) results of action by the commissioner to streamline administrative requirements
and improve county resource management; and
new text end

new text begin (11) additional action that would decrease the number of those eligible and waiting
for waivered services.
new text end

new text begin The commissioner shall specify intended outcomes for the program and the degree
to which these specified outcomes are attained.
new text end

Sec. 4.

Minnesota Statutes 2014, section 256B.0916, subdivision 11, is amended to read:

Subd. 11.

Excess spending.

new text begin (a) new text end County and tribal agencies are responsible for
spending in excess of the allocation made by the commissioner. In the event a county or
tribal agency spends in excess of the allocation made by the commissioner for a given
allocation period, they must submit a corrective action plan to the commissioner new text begin for
approval new text end . The plan must state the actions the agency will take to correct their overspending
for the deleted text begin year deleted text end new text begin two years new text end following the period when the overspending occurred. deleted text begin Failure to
correct overspending shall result in recoupment of spending in excess of the allocation.
deleted text end new text begin When evaluating a corrective action plan, the commissioner must consider whether the
plan will likely lead to exiguous spending that violates the requirements of subdivision 12.
If an agency fails to abide by its approved corrective action plan, the commissioner may
perform one or both of the following actions:
new text end

new text begin (1) assume or reassign the agency's responsibility to spend part or all of future
allocations made by the commissioner; or
new text end

new text begin (2) recoup spending in excess of the allocations.
new text end

new text begin (b) The commissioner must not recoup spending in excess of an allocation unless
the total statewide aggregate spending on home and community-based waiver services
in a fiscal year exceeds the total medical assistance appropriation dedicated to home and
community-based waiver services during the same fiscal year.
new text end

new text begin (c) new text end Nothing in this subdivision shall be construed as reducing the county's
responsibility to offer and make available feasible home and community-based options
to eligible waiver recipients within the resources allocated to them for that purpose. new text begin A
reduction of services to an eligible waiver recipient served must only be based on a change
in that recipient's need or the recipient's choice.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2014, section 256B.0916, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Exiguous spending. new text end

new text begin (a) County and tribal agencies are responsible for
spending the allocation made by the commissioner. A county or tribal agency that fails to
spend 99 percent of the allocation for a given allocation period while maintaining a list of
persons waiting for waiver services, must demonstrate to the commissioner in writing that
any resulting underspending resulted directly from the choices or reduced needs of current
waiver recipients served by the agency. To the maximum extent feasible, agencies must
reallocate to eligible applicants on waiting lists for waiver services money made available
as a result of the choices or reduced needs of persons currently served.
new text end

new text begin (b) In the event a county or tribal agency spends less than 97 percent of its allocation
while maintaining a list of persons waiting for waiver services, the county or tribal
agency must submit a corrective action plan to the commissioner for approval. The plan
must state the actions the agency will take during the two years following the period
when the underspending occurred to ensure reasonable and timely access to home and
community-based waiver services for persons waiting for services. When evaluating a
corrective action plan, the commissioner must consider whether the plan is likely to lead
to excessive spending that violates the requirements of subdivision 11. If an agency
fails to abide by its approved corrective action plan, the commissioner may assume or
reassign the agency's responsibility to authorize part or all of future allocations made by
the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2014, section 256B.49, subdivision 26, is amended to read:

Subd. 26.

Excess deleted text begin allocations deleted text end new text begin authorizations new text end .

new text begin (a) new text end County and tribal agencies will
be responsible for authorizations in excess of the allocation made by the commissioner.
In the event a county or tribal agency authorizes in excess of the allocation made by the
commissioner for a given allocation period, the county or tribal agency must submit a
corrective action plan to the commissioner new text begin for approval new text end . The plan must state the actions
the agency will take to correct deleted text begin their overspending deleted text end new text begin its excessive authorizations new text end for the deleted text begin year
deleted text end new text begin two years new text end following the period when the deleted text begin overspending deleted text end new text begin excessive authorizations new text end occurred.
deleted text begin Failure to correct overauthorizations shall result in recoupment of authorizations in excess
of the allocation. deleted text end new text begin When evaluating a corrective action plan for approval, the commissioner
must consider whether the plan is likely to lead to exiguous authorizations that violate
the requirements of subdivision 27. If an agency fails to abide by its approved corrective
action plan, the commissioner may perform one or both of the following actions: new text end

new text begin (1) assume or reassign the agency's responsibility to authorize part or all of future
allocations made by the commissioner; or
new text end

new text begin (2) recoup authorizations in excess of the allocations.
new text end

new text begin (b) The commissioner may not recoup authorizations in excess of an allocation
unless the total statewide aggregate spending on home and community-based waiver
services in a fiscal year exceeds the total medical assistance appropriation dedicated to
home and community-based waiver services.
new text end

new text begin (c) new text end Nothing in this subdivision shall be construed as reducing the county's
responsibility to offer and make available feasible home and community-based options
to eligible waiver recipients within the resources allocated to them for that purpose. new text begin A
reduction of services to an eligible waiver recipient served must only be based on a change
in that recipient's need or that recipient's choices.
new text end

Sec. 7.

Minnesota Statutes 2014, section 256B.49, is amended by adding a subdivision
to read:

new text begin Subd. 27. new text end

new text begin Exiguous authorizations. new text end

new text begin (a) County and tribal agencies are responsible
for authorizing the allocation made by the commissioner. A county or tribal agency
that fails to authorize 99 percent of its allocation for a given allocation period must
demonstrate to the commissioner in writing that any resulting underauthorization resulted
directly from a decrease in the needs or choices of current waiver recipients served by the
agency. Agencies must allocate to eligible applicants for services on waiting lists money
made available as a result of a decrease in authorizations.
new text end

new text begin (b) In the event a county or tribal agency authorizes less than 97 percent of its
allocation while maintaining a list of persons waiting for waiver services, the county or
tribal agency must submit a corrective action plan to the commissioner for approval. The
plan must state the actions the agency will take during the next two years following the
period when the underauthorization occurred to assure reasonable and timely access to
home and community-based waiver services for persons waiting for services. When
evaluating a corrective action plan for approval, the commissioner must consider whether
the plan is likely to lead to excessive authorizations that violate the requirements of
subdivision 26. If an agency fails to abide by its approved corrective action plan, the
commissioner may assume or reassign the agency's responsibility to authorize part or all
of future allocations made by the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2014, section 256B.49, is amended by adding a subdivision
to read:

new text begin Subd. 28. new text end

new text begin Annual report by commissioner. new text end

new text begin Beginning November 1, 2015, and
each November 1 thereafter, the commissioner shall issue an annual report on county and
state use of available resources for the home and community-based waiver services for
persons with disabilities under section 256B.49. For each county or county partnership,
the report shall include:
new text end

new text begin (1) the amount of funds allocated but not used;
new text end

new text begin (2) the percentage of funds allocated but not used;
new text end

new text begin (3) the capacity for additional enrollment within each lead agency and statewide
based on existing funds that are allocated but not used;
new text end

new text begin (4) if applicable, county or county partnership-specific contributions to and
distributions from the home and community-based services waiver reserve account under
section 256B.4911;
new text end

new text begin (5) the number, ages, and living situations of individuals screened and waiting for
services;
new text end

new text begin (6) the urgency of need for services to begin within one, two, or more than two
years for each individual;
new text end

new text begin (7) the services needed;
new text end

new text begin (8) the number of additional persons served by approval of increased capacity within
existing allocations;
new text end

new text begin (9) a list of counties with approved corrective action plans that are in violation
of their corrective action plans, that have had their responsibility to authorize services
assumed or reassigned by the commissioner, or that are subject to recoupment;
new text end

new text begin (10) results of action by the commissioner to streamline administrative requirements
and improve county resource management; and
new text end

new text begin (11) additional action that would decrease the number of those eligible and waiting
for waivered services.
new text end

new text begin The commissioner shall specify intended outcomes for the program and the degree
to which these specified outcomes are attained.
new text end

Sec. 9.

new text begin [256B.4911] HOME AND COMMUNITY-BASED WAIVER SERVICES
RESERVE ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment and purpose. new text end

new text begin In order to provide county and tribal
agencies with the resources required to adequately manage their financial risk when
administering disability waiver services and to ensure that all of the medical assistance
appropriation dedicated to waiver services is spent, the home and community-based waiver
services reserve account is created in the general fund. Funds in the reserve account may
be used only in the manner permitted under this section. Funds in the account may not
be used to offset other medical assistance spending, nor may they be used to prevent a
deficiency in the medical assistance appropriation, except as provided for in this section.
new text end

new text begin Subd. 2. new text end

new text begin Contributions to the account. new text end

new text begin (a) In fiscal year 2015, the unexpended
appropriation designated for waiver services under sections 256B.092 and 256B.49 shall
be deposited in the reserve fund. The commissioner shall determine the unexpended
amount by comparing the amount in the enacted budget in 2014 designated for waiver
services under sections 256B.092 and 256B.49 to the actual spending for these same
services at the close of fiscal year 2015. The amount of the difference must be deposited
in the reserve account.
new text end

new text begin (b) Beginning with the 2016-2017 biennium and each biennium thereafter, the
unexpended amount designated for waiver services under sections 256B.092 and
256B.49 shall be deposited in the reserve account. The commissioner shall determine
the unexpended amount by comparing the amount in the enacted budget in each
odd-numbered year designated for waiver services under sections 256B.092 and 256B.49
to the actual spending on these same services at the end of each biennium.
new text end

new text begin (c) At the end of each biennium, the commissioner shall determine what proportion
of aggregate underspending of the appropriation designated for waiver services is
contributed to the account by each county agency, county partnership, or tribal agency.
The commissioner will determine this proportion by:
new text end

new text begin (1) determining what proportion of total aggregate unspent and unauthorized
allocations are attributable to each county agency, county partnership, or tribal agency; and
new text end

new text begin (2) attributing to each county agency, county partnership, and tribal agency a
proportion of the statewide unspent appropriation that is equal to their respective
proportions determined in clause (1).
new text end

new text begin (d) Any county or tribal agency that contributes to the account is subject to any
applicable corrective action plan provisions under section 256B.0916, subdivision 12, or
section 256B.49, subdivision 27.
new text end

new text begin Subd. 3. new text end

new text begin Distributions. new text end

new text begin (a) If a county, county partnership, or tribal agency
has actual spending in excess of the allocation made by the commissioner for a given
allocation period, the commissioner may, at any time, make to the agency a distribution
from any available funds in the reserve account. The amount of the distribution may not
exceed the amount of the excess spending.
new text end

new text begin (b) A county or tribal agency may receive a distribution from the home and
community-based waiver services reserve account to cover all or part of the cost of the
agency's excess spending. In order to be eligible for a distribution from the reserve
account, the agency must demonstrate to the commissioner that its excess spending was
necessary to meet a crisis or unmet need of a current home and community-based waiver
recipient. A distribution from the account does not absolve the agency of its duties and
responsibilities under section 256B.0916, subdivision 11, paragraphs (a) and (c); or
section 256B.49, subdivision 26, paragraphs (a) and (c).
new text end

new text begin (c) Any county or tribal agency to which a distribution is made is subject to the
applicable corrective action plan provisions under section 256B.0916, subdivision 11, or
section 256B.49, subdivision 26.
new text end

new text begin Subd. 4. new text end

new text begin Reporting by county. new text end

new text begin By November 1 of each year, the commissioner
must provide to the legislature a report of distributions from and contributions to the
account by county, county partnership, and tribal agency.
new text end

new text begin Subd. 5. new text end

new text begin Money does not cancel. new text end

new text begin Money in the fund does not cancel but remains
available for transfers and distributions as permitted under this section.
new text end

new text begin Subd. 6. new text end

new text begin Transfers. new text end

new text begin (a) If at the end of any biennium the appropriation designated
for waiver services is overspent and the balance in the reserve account exceeds five
percent of the appropriation designated for waiver services in the subsequent biennium,
a transfer out of the reserve account must be made. Any money transferred out of the
reserve account under these circumstances must be used only to offset any statewide
aggregate overspending of the appropriation designated for waiver services. The amount
of the transfer must not exceed an amount that would result in the remaining balance in the
reserve account being less than five percent of the subsequent biennium's appropriation.
new text end

new text begin (b) If at the end of any biennium the appropriation designated for waiver services
is not overspent and the balance in the reserve account exceeds five percent of the
appropriation designated for waiver services in the subsequent biennium, a transfer out
of the reserve account must be made. Any money transferred out of the reserve account
under these circumstances must be added to the subsequent biennium's appropriation
designated for waiver services. The amount of the transfer must be equal to the amount
that will result in the remaining balance in the reserve account being equal to five percent
of the appropriation designated for waiver services plus the transfer.
new text end

Sec. 10.

Minnesota Statutes 2014, section 256B.4913, subdivision 4a, is amended to
read:

Subd. 4a.

Rate stabilization adjustment.

(a) For purposes of this subdivision,
"implementation period" means the period beginning January 1, 2014, and ending on
the last day of the month in which the rate management system is populated with the
data necessary to calculate rates for substantially all individuals receiving home and
community-based waiver services under sections 256B.092 and 256B.49. "Banding period"
means the time period beginning on January 1, 2014, and ending upon the expiration of
the 12-month period defined in paragraph (c), clause (5). new text begin "Rate adjustment moratorium
period" means the 12-month period beginning immediately after the banding period.
new text end

(b) For purposes of this subdivision, the historical rate for all service recipients means
the individual reimbursement rate for a recipient in effect on December 1, 2013, except that:

(1) for a day service recipient who was not authorized to receive these waiver
services prior to January 1, 2014; added a new service or services on or after January 1,
2014; or changed providers on or after January 1, 2014, the historical rate must be the
authorized rate for the provider in the county of service, effective December 1, 2013; or

(2) for a unit-based service with programming or a unit-based service without
programming recipient who was not authorized to receive these waiver services prior to
January 1, 2014; added a new service or services on or after January 1, 2014; or changed
providers on or after January 1, 2014, the historical rate must be the weighted average
authorized rate for each provider number in the county of service, effective December 1,
2013; or

(3) for residential service recipients who change providers on or after January 1,
2014, the historical rate must be set by each lead agency within their county aggregate
budget using their respective methodology for residential services effective December 1,
2013, for determining the provider rate for a similarly situated recipient being served by
that provider.

(c) The commissioner shall adjust individual reimbursement rates determined under
this section so that the unit rate is no higher or lower than:

(1) 0.5 percent from the historical rate for the implementation period;

(2) 0.5 percent from the rate in effect in clause (1), for the 12-month period
immediately following the time period of clause (1);

(3) deleted text begin 1.0 deleted text end new text begin 0.5 new text end percent from the rate in effect in clause (2), for the 12-month period
immediately following the time period of clause (2);

(4) 1.0 percent from the rate in effect in clause (3), for the 12-month period
immediately following the time period of clause (3); deleted text begin and
deleted text end

(5) 1.0 percent from the rate in effect in clause (4), for the 12-month period
immediately following the time period of clause (4) deleted text begin . deleted text end new text begin ; and
new text end

new text begin (6) no adjustment to the rate in effect in clause (5) for the 12-month rate adjustment
moratorium period immediately following the time period of clause (5). During the rate
adjustment moratorium period, the commissioner shall not enforce any rate decrease or
increase that would otherwise result from the end of the banding period.
new text end

(d) The commissioner shall review all changes to rates that were in effect on
December 1, 2013, to verify that the rates in effect produce the equivalent level of spending
and service unit utilization on an annual basis as those in effect on October 31, 2013.

(e) By December 31, 2014, the commissioner shall complete the review in paragraph
(d), adjust rates to provide equivalent annual spending, and make appropriate adjustments.

(f) During the banding period, the Medicaid Management Information System
(MMIS) service agreement rate must be adjusted to account for change in an individual's
need. The commissioner shall adjust the Medicaid Management Information System
(MMIS) service agreement rate by:

(1) calculating a service rate under section 256B.4914, subdivision 6, 7, 8, or 9, for
the individual with variables reflecting the level of service in effect on December 1, 2013;

(2) calculating a service rate under section 256B.4914, subdivision 6, 7, 8, or
9, for the individual with variables reflecting the updated level of service at the time
of application; and

(3) adding to or subtracting from the Medicaid Management Information System
(MMIS) service agreement rate, the difference between the values in clauses (1) and (2).

(g) This subdivision must not apply to rates for recipients served by providers new
to a given county after January 1, 2014. Providers of personal supports services who also
acted as fiscal support entities must be treated as new providers as of January 1, 2014.

Sec. 11.

Minnesota Statutes 2014, section 256B.4913, subdivision 5, is amended to read:

Subd. 5.

Stakeholder consultation new text begin and county training new text end .

new text begin (a) new text end The commissioner
shall continue consultation on regular intervals with the existing stakeholder group
established as part of the rate-setting methodology process and others, to gather input,
concerns, and data, to assist in the full implementation of the new rate payment system and
to make pertinent information available to the public through the department's Web site.

new text begin (b) The commissioner shall train county personnel responsible for administering the
rate-setting framework in a manner consistent with this section and section 256B.4914.
Trainees shall not set the rates of any waiver recipients until they have demonstrated their
proficiency to the satisfaction of the commissioner.
new text end

new text begin (c) The commissioner shall maintain an interactive online instruction manual
explaining the rate-setting framework. The manual shall be consistent with this section
and section 256B.4914, and shall be accessible to all stakeholders including recipients,
representatives of recipients, counties, tribal agencies, and license holders.
new text end

new text begin (d) The commissioner shall not defer to the county or tribal agency on matters of
technical application of the rate-setting framework, and a county or tribal agency shall not
set rates in a manner that conflicts with this section or section 256B.4914.
new text end

Sec. 12.

Minnesota Statutes 2014, section 256B.4914, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) For purposes of this section, the following terms have the
meanings given them, unless the context clearly indicates otherwise.

(b) "Commissioner" means the commissioner of human services.

(c) "Component value" means underlying factors that are part of the cost of providing
services that are built into the waiver rates methodology to calculate service rates.

(d) "Customized living tool" means a methodology for setting service rates that
delineates and documents the amount of each component service included in a recipient's
customized living service plan.

(e) "Disability waiver rates system" means a statewide system that establishes rates
that are based on uniform processes and captures the individualized nature of waiver
services and recipient needs.

(f) "Individual staffing" means the time spent as a one-to-one interaction specific to
an individual recipient by staff brought in deleted text begin solely deleted text end to provide direct support and assistance
with activities of daily living, instrumental activities of daily living, and training to
participants, and is based on the requirements in each individual's coordinated service and
support plan under section 245D.02, subdivision 4b; any coordinated service and support
plan addendum under section 245D.02, subdivision 4c; an assessment tool; and provider
observation of an individual's needs.

(g) "Lead agency" means a county, partnership of counties, or tribal agency charged
with administering waivered services under sections 256B.092 and 256B.49.

(h) "Median" means the amount that divides distribution into two equal groups,
one-half above the median and one-half below the median.

(i) "Payment or rate" means reimbursement to an eligible provider for services
provided to a qualified individual based on an approved service authorization.

new text begin (j) "Person-centered staffing environments" has the meaning described in subdivision
10, paragraph (i).
new text end

deleted text begin (j) deleted text end new text begin (k) new text end "Rates management system" means a Web-based software application that
uses a framework and component values, as determined by the commissioner, to establish
service rates.

deleted text begin (k) deleted text end new text begin (l) new text end "Recipient" means a person receiving home and community-based services
funded under any of the disability waivers.

deleted text begin (l) "Shared staffing" means time spent by employees, not defined under paragraph
(f), providing or available to provide more than one individual with direct support and
assistance with activities of daily living as defined under section 256B.0659, subdivision 1,
paragraph (b); instrumental activities of daily living as defined under section 256B.0659,
subdivision 1, paragraph (i); ancillary activities needed to support individual services; and
training to participants, and is based on the requirements in each individual's coordinated
service and support plan under section 245D.02, subdivision 4b; any coordinated service
and support plan addendum under section 245D.02, subdivision 4c; an assessment tool; and
provider observation of an individual's service need. Total shared staffing hours are divided
proportionally by the number of individuals who receive the shared service provisions.
deleted text end

(m) "Staffing ratio" means the number of recipients a service provider employee
supports during a unit of service based on a uniform assessment tool, provider observation,
case history, and the recipient's services of choice, and not based on the staffing ratios
under section 245D.31.

(n) "Unit of service" means the following:

(1) for residential support services under subdivision 6, a unit of service is a day.
Any portion of any calendar day, within allowable Medicaid rules, where an individual
spends time in a residential setting is billable as a day;

(2) for day services under subdivision 7:

(i) for day training and habilitation services, a unit of service is either:

(A) a day unit of service is defined as six or more hours of time spent providing
direct services and transportation; or

(B) a partial day unit of service is defined as fewer than six hours of time spent
providing direct services and transportation; and

(C) for new day service recipients after January 1, 2014, 15 minute units of
service must be used for fewer than six hours of time spent providing direct services
and transportation;

(ii) for adult day and structured day services, a unit of service is a day or 15 minutes.
A day unit of service is six or more hours of time spent providing direct services;

(iii) for prevocational services, a unit of service is a day or an hour. A day unit of
service is six or more hours of time spent providing direct service;

(3) for unit-based services with programming under subdivision 8:

(i) for supported living services, a unit of service is a day or 15 minutes. When a
day rate is authorized, any portion of a calendar day where an individual receives services
is billable as a day; and

(ii) for all other services, a unit of service is 15 minutes; and

(4) for unit-based services without programming under subdivision 9:

(i) for respite services, a unit of service is a day or 15 minutes. When a day rate is
authorized, any portion of a calendar day when an individual receives services is billable
as a day; and

(ii) for all other services, a unit of service is 15 minutes.

Sec. 13.

Minnesota Statutes 2014, section 256B.4914, subdivision 7, is amended to read:

Subd. 7.

Payments for day programs.

Payments for services with day programs
including adult day care, day treatment and habilitation, prevocational services, and
structured day services must be calculated as follows:

(1) determine the number of units of service and staffing ratio to meet a recipient's
needs:

(i) the staffing ratios for the units of service provided to a recipient in a typical week
must be averaged to determine an individual's staffing ratio; and

(ii) the commissioner, in consultation with service providers, shall develop a uniform
staffing ratio worksheet to be used to determine staffing ratios under this subdivision;

(2) personnel hourly wage rates must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision 5;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of day program direct staff hours and nursing hours by the
appropriate staff wage in subdivision 5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of day direct staff hours by the product of the supervision
span of control ratio in subdivision 5, paragraph (d), clause (1), and the appropriate
supervision wage in subdivision 5, paragraph (a), clause (16);

(6) combine the results of clauses (4) and (5), and multiply the result by one plus
the employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (d),
clause (2). This is defined as the direct staffing rate;

(7) for program plan support, multiply the result of clause (6) by one plus the
program plan support ratio in subdivision 5, paragraph (d), clause (4);

(8) for employee-related expenses, multiply the result of clause (7) by one plus the
employee-related cost ratio in subdivision 5, paragraph (d), clause (3);

(9) for client programming and supports, multiply the result of clause (8) by one plus
the client programming and support ratio in subdivision 5, paragraph (d), clause (5);

(10) for program facility costs, add deleted text begin $19.30 deleted text end new text begin $25.41 new text end per week with consideration of
staffing ratios to meet individual needs;

(11) for adult day bath services, add $7.01 per 15 minute unit;

(12) this is the subtotal rate;

(13) sum the standard general and administrative rate, the program-related expense
ratio, and the absence and utilization factor ratio new text begin of ten percent for day services new text end ;

(14) divide the result of clause (12) by one minus the result of clause (13). This is
the total payment amount;

(15) adjust the result of clause (14) by a factor to be determined by the commissioner
to adjust for regional differences in the cost of providing services;

(16) for transportation provided as part of day training and habilitation for an
individual who does not require a lift, add:

(i) $10.50 for a new text begin one-way new text end trip between zero and ten miles for a nonshared ride in a
vehicle without a lift, $8.83 for a shared ride in a vehicle without a lift, and $9.25 for a
shared ride in a vehicle with a lift;

(ii) $15.75 for a new text begin one-way new text end trip between 11 and 20 miles for a nonshared ride in a
vehicle without a lift, $10.58 for a shared ride in a vehicle without a lift, and $11.88
for a shared ride in a vehicle with a lift;

(iii) $25.75 for a new text begin one-way new text end trip between 21 and 50 miles for a nonshared ride in a
vehicle without a lift, $13.92 for a shared ride in a vehicle without a lift, and $16.88
for a shared ride in a vehicle with a lift; or

(iv) $33.50 for a new text begin one-way new text end trip of 51 miles or more for a nonshared ride in a vehicle
without a lift, $16.50 for a shared ride in a vehicle without a lift, and $20.75 for a shared
ride in a vehicle with a lift;

(17) for transportation provided as part of day training and habilitation for an
individual who does require a lift, add:

(i) $19.05 for a new text begin one-way new text end trip between zero and ten miles for a nonshared ride in a
vehicle with a lift, and $15.05 for a shared ride in a vehicle with a lift;

(ii) $32.16 for a new text begin one-way new text end trip between 11 and 20 miles for a nonshared ride in a
vehicle with a lift, and $28.16 for a shared ride in a vehicle with a lift;

(iii) $58.76 for a new text begin one-way new text end trip between 21 and 50 miles for a nonshared ride in a
vehicle with a lift, and $58.76 for a shared ride in a vehicle with a lift; or

(iv) $80.93 for a new text begin one-way new text end trip of 51 miles or more for a nonshared ride in a vehicle
with a lift, and $80.93 for a shared ride in a vehicle with a lift.

Sec. 14.

Minnesota Statutes 2014, section 256B.4914, subdivision 8, is amended to read:

Subd. 8.

Payments for unit-based services with programming.

Payments for
unit-based deleted text begin with program deleted text end services new text begin with programming new text end , including behavior programming,
housing access coordination, in-home family support, independent living skills training,
hourly supported living services, and supported employment provided to an individual
outside of any day or residential service plan must be calculated as follows, unless the
services are authorized separately under subdivision 6 or 7:

(1) determine the number of units of service to meet a recipient's needs;

(2) personnel hourly wage rate must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision 5;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of direct staff hours by the appropriate staff wage in
subdivision 5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of direct staff hours by the product of the supervision span
of control ratio in subdivision 5, paragraph (e), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16);

(6) combine the results of clauses (4) and (5), and multiply the result by one plus
the employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (e),
clause (2). This is defined as the direct staffing rate;

(7) for program plan support, multiply the result of clause (6) by one plus the
program plan supports ratio in subdivision 5, paragraph (e), clause (4);

(8) for employee-related expenses, multiply the result of clause (7) by one plus the
employee-related cost ratio in subdivision 5, paragraph (e), clause (3);

(9) for client programming and supports, multiply the result of clause (8) by one plus
the client programming and supports ratio in subdivision 5, paragraph (e), clause (5);

new text begin (10) divide the number of miles provided to the client during services provided
per year by the number of units authorized for the year, and add the result to the result
of clause (9);
new text end

deleted text begin (10) deleted text end new text begin (11) new text end this is the subtotal rate;

deleted text begin (11) deleted text end new text begin (12) new text end sum the standard general and administrative rate, the program-related
expense ratio, and the absence and utilization factor ratio;

deleted text begin (12) deleted text end new text begin (13) new text end divide the result of clause deleted text begin (10) deleted text end new text begin (11) new text end by one minus the result of clause deleted text begin (11)
deleted text end new text begin (12) new text end . This is the total payment amount;

deleted text begin (13) deleted text end new text begin (14) new text end for supported employment provided in a shared manner, divide the total
payment amount in clause deleted text begin (12) deleted text end new text begin (13) new text end by the number of service recipients, not to exceed three.
For independent living skills training provided in a shared manner, divide the total payment
amount in clause deleted text begin (12) deleted text end new text begin (13) new text end by the number of service recipients, not to exceed two; and

deleted text begin (14) deleted text end new text begin (15) new text end adjust the result of clause deleted text begin (13) deleted text end new text begin (14) new text end by a factor to be determined by the
commissioner to adjust for regional differences in the cost of providing services.

Sec. 15.

Minnesota Statutes 2014, section 256B.4914, subdivision 10, is amended to
read:

Subd. 10.

Updating payment values and additional information.

(a) From
January 1, 2014, through December 31, 2017, the commissioner shall develop and
implement uniform procedures to refine terms and adjust values used to calculate payment
rates in this section.

(b) No later than July 1, 2014, the commissioner shall, within available resources,
begin to conduct research and gather data and information from existing state systems or
other outside sources on the following items:

(1) differences in the underlying cost to provide services and care across the state; and

(2) mileage, vehicle type, lift requirements, incidents of individual and shared rides,
and units of transportation for all day services, which must be collected from providers
using the rate management worksheet and entered into the rates management system; and

(3) the distinct underlying costs for services provided by a license holder new text begin under
sections 245D.05, 245D.06, 245D.07, 245D.071, 245D.081, and 245D.09, and for services
provided by a license holder new text end certified under section 245D.33.

(c) Using a statistically valid set of rates management system data, the commissioner,
in consultation with stakeholders, shall analyze for each service the average difference
in the rate on December 31, 2013, and the framework rate at the individual, provider,
lead agency, and state levels. The commissioner shall issue semiannual reports to the
stakeholders on the difference in rates by service and by county during the banding period
under section 256B.4913, subdivision 4a. The commissioner shall issue the first report
by October 1, 2014.

(d) No later than July 1, 2014, the commissioner, in consultation with stakeholders,
shall begin the review and evaluation of the following values already in subdivisions 6 to
9, or issues that impact all services, including, but not limited to:

(1) values for transportation rates for day services;

(2) values for transportation rates in residential services;

(3) values for services where monitoring technology replaces staff time;

(4) values for indirect services;

(5) values for nursing;

(6) component values for independent living skills;

(7) component values for family foster care that reflect licensing requirements;

(8) adjustments to other components to replace the budget neutrality factor;

(9) remote monitoring technology for nonresidential services;

(10) values for basic and intensive services in residential services;

(11) deleted text begin values for the facility use rate in day services deleted text end new text begin the weightings used in the day
service ratios and adjustments to those weightings new text end ;

(12) values for workers' compensation as part of employee-related expenses;

(13) values for unemployment insurance as part of employee-related expenses;

(14) a component value to reflect costs for individuals with rates previously adjusted
for the inclusion of group residential housing rate 3 costs, only for any individual enrolled
as of December 31, 2013; and

(15) any changes in state or federal law with an impact on the underlying cost of
providing home and community-based services.

(e) The commissioner shall report to the chairs and the ranking minority members of
the legislative committees and divisions with jurisdiction over health and human services
policy and finance with the information and data gathered under paragraphs (b) to (d)
on the following dates:

(1) January 15, 2015, with preliminary results and data;

(2) January 15, 2016, with a status implementation update, and additional data
and summary information;

(3) January 15, 2017, with the full report; and

(4) January 15, 2019, with another full report, and a full report once every four
years thereafter.

(f) Based on the commissioner's evaluation of the information and data collected in
paragraphs (b) to (d), the commissioner shall make recommendations to the legislature by
January 15, 2015, to address any issues identified during the first year of implementation.
After January 15, 2015, the commissioner may make recommendations to the legislature
to address potential issues.

(g) The commissioner shall implement a regional adjustment factor to all rate
calculations in subdivisions 6 to 9, effective no later than January 1, 2015. Prior to
implementation, the commissioner shall consult with stakeholders on the methodology to
calculate the adjustment.

(h) The commissioner shall provide a public notice via LISTSERV in October of
each year beginning October 1, 2014, containing information detailing legislatively
approved changes in:

(1) calculation values including derived wage rates and related employee and
administrative factors;

(2) service utilization;

(3) county and tribal allocation changes; and

(4) information on adjustments made to calculation values and the timing of those
adjustments.

The information in this notice must be effective January 1 of the following year.

new text begin (i) By January 1, 2016, the commissioner shall develop, after consulting with
stakeholders, person-centered staffing environments that provide staffing ratios sufficient to
meet the needs of current residents and provide prospective residents with an understanding
of the environments from which they can choose an adult foster care setting. In developing
the staffing environments, the commissioner shall take into consideration individual needs,
including but not limited to community integration, nutritional, physical, behavioral,
on-site medical, and off-site medical needs. The commissioner must assure environments
are adaptable to current and new resident changes in needs and desired outcomes.
new text end

Sec. 16.

Minnesota Statutes 2014, section 256B.4914, subdivision 14, is amended to
read:

Subd. 14.

Exceptions.

(a) new text begin Notwithstanding rate stabilization under section
256B.4913, subdivision 4a, the exception request process provided in this section shall be
available to all individuals receiving waivered services without limitation and without
regard to whether the rate in effect at the time of the exception request is banded. new text end In a format
prescribed by the commissioner, lead agencies must identify individuals with exceptional
needs that cannot be met under the disability waiver rate system. The commissioner shall
use that information to evaluate and, if necessary, approve an alternative payment rate for
those individuals. new text begin Whether granted, denied, or modified, the commissioner shall respond
to all exception requests in writing. The commissioner shall include in the written response
the basis for the action and provide notification of the right to appeal under paragraph (h).
new text end

(b) Lead agencies must new text begin act on an exception request within 30 days and notify the
initiator of the request of their recommendation in writing. A lead agency shall new text end submit new text begin all
new text end exception requests new text begin along with its recommendation new text end to the deleted text begin state deleted text end new text begin commissioner for review
and approval within ten days after the lead agency issues its recommendation. If the
lead agency fails or refuses to submit the exception request and its recommendation to
the commissioner, then the individual or provider serving the individual may directly
submit the request to the commissioner. The commissioner may affirm, reject, or modify
the request and the lead agency's recommendation, if any new text end .

(c) An application for a rate exception may be submitted for the following criteria:

(1) an individual has service needs that cannot be met through additional units
of service; deleted text begin or
deleted text end

(2) an individual's rate determined under subdivisions 6, 7, 8, and 9 deleted text begin results deleted text end new text begin is so
insufficient that it has resulted new text end in an individual deleted text begin being discharged deleted text end deleted text begin . deleted text end new text begin receiving a notice of
discharge from the individual's provider;
new text end

new text begin (3) an individual whose current rate is subject to banding and for whom, based
on current needs, the projected final rate that will apply once banding is lifted will be
insufficient to meet the individual's expected needs; or
new text end

new text begin (4) an individual's service needs, including behavioral changes, require a level of
service which necessitates a change in provider or which requires the current provider to
propose service changes beyond those currently authorized.
new text end

(d) Exception requests must include the following information:

(1) the service needs required by each individual that are not accounted for in
subdivisions 6, 7, 8, and 9;

(2) the service rate requested and the difference from the rate determined in
subdivisions 6, 7, 8, and 9;

(3) a basis for the underlying costs used for the rate exception and any accompanying
documentation;

(4) deleted text begin the duration of the rate exception deleted text end new text begin except in cases under paragraph (c), clause
(3), the rate exception shall be retroactive to the date of the recipient's service change and
shall remain in effect until the recipient no longer requires the excepted rate due to the
recipient's change of need new text end ; deleted text begin and
deleted text end

new text begin (5) for cases under paragraph (c), clause (3), where the prospective, unbanded rate
will not be sufficient to meet the individual's expected service needs, the rate exception
shall be effective at the time that banding is lifted for that individual's service from that
provider; and
new text end

deleted text begin (5) deleted text end new text begin (6) new text end any contingencies for approval.

(e) Approved rate exceptions shall be managed within lead agency allocations under
sections 256B.092 and 256B.49.

(f) Individual disability waiver recipients new text begin or the license holder that would receive the
rate exception increase new text end may request that a lead agency submit an exception request. A
lead agency that denies such a request shall notify the individual waiver recipient new text begin or the
license holder new text end of its decision and the reasons for denying the request in writing no later
than 30 days after the deleted text begin individual's deleted text end request has been made new text begin and shall submit its denial to
the commissioner in accordance with paragraph (b). The reasons for the denial must be
based on the failure to meet the criteria in paragraph (c) new text end .

(g) The commissioner shall determine whether to approve or deny an exception
request no more than 30 days after receiving the request. If the commissioner denies the
request, the commissioner shall notify the lead agency deleted text begin and deleted text end new text begin , new text end the individual disability waiver
recipient new text begin , and the license holder new text end in writing of the reasons for the denial. new text begin If the commissioner
fails to act on the exception request within 30 days, the exception is granted as submitted
if the lead agency did not respond to the initial request according to the timelines in
paragraph (b). If the lead agency recommended a rate increase, but the commissioner fails
to act within 30 days, the lead agency's recommendation is deemed granted.
new text end

(h) The individual disability waiver recipient new text begin or the license holder new text end may appeal any
denial of an exception request by either the lead agency or the commissioner, pursuant to
sections 256.045 and 256.0451. When the denial of an exception request results in the
proposed demission of a waiver recipient from a residential or day habilitation program,
the commissioner shall issue a temporary stay of demission, when requested by the
disability waiver recipient, consistent with the provisions of section 256.045, subdivisions
4a and 6, paragraph (c). The temporary stay shall remain in effect until the lead agency can
provide an informed choice of appropriate, alternative services to the disability waiver new text begin ,
but in no event shall the temporary stay exceed more than 30 days new text end .

(i) Providers may petition lead agencies to update values that were entered
incorrectly or erroneously into the rate management system, based on past service level
discussions and determination in subdivision 4, without applying for a rate exception.

new text begin (j) The commissioner shall track all exception requests received and their
dispositions. The commissioner shall issue quarterly public exceptions statistical reports
categorized by lead agency, including the number of exception requests received and the
numbers granted, denied, and pending. The report shall include the average amount of
time required to process exceptions by each lead agency and by the commissioner.
new text end

Sec. 17.

Minnesota Statutes 2014, section 256B.4914, subdivision 15, is amended to
read:

Subd. 15.

County or tribal allocations.

(a) Upon implementation of the disability
waiver rates management system on January 1, 2014, the commissioner shall establish
a method of tracking and reporting the fiscal impact of the disability waiver rates
management system on individual lead agencies.

(b) Beginning January 1, 2014, the commissioner shall make annual adjustments to
lead agencies' home and community-based waivered service budget allocations to adjust
for rate differences and the resulting impact on county allocations upon implementation of
the disability waiver rates system.

(c) deleted text begin During the first two years of implementation under section 256B.4913, deleted text end Lead
agencies deleted text begin exceeding their allocations under sections 256B.092 and 256B.49 shall only be
held liable for spending in excess of their allocations after a reallocation of resources by
the commissioner under paragraph (b). The commissioner shall reallocate resources under
sections 256B.092, subdivision 12, and 256B.49, subdivision 11a. The commissioner shall
notify lead agencies of this process by July 1, 2014 deleted text end new text begin are subject to all the provisions under
section 256B.0916, subdivisions 11 and 12, and section 256B.49, subdivisions 26 and 27 new text end .

Sec. 18.

Minnesota Statutes 2014, section 256B.4914, subdivision 16, is amended to
read:

Subd. 16.

Budget neutrality adjustments.

(a) The commissioner shall use the
following adjustments to the rate generated by the framework to assure budget neutrality
until the rate information is available to implement paragraph (b). The rate generated by
the framework shall be multiplied by the appropriate factor, as designated below:

(1) for residential services: 1.003;

(2) for day services: 1.000;

(3) for unit-based services with programming: deleted text begin 0.941 deleted text end new text begin 1.113 new text end ; and

(4) for unit-based services without programming: 0.796.

(b) deleted text begin Within 12 months of January 1, 2014 deleted text end new text begin Annually during the banding period new text end , the
commissioner shall compare estimated spending for all home and community-based
waiver services under the new payment rates defined in subdivisions 6 to 9 with estimated
spending for the same recipients and services under the rates in effect on July 1, 2013.
This comparison must distinguish spending under each of subdivisions 6, 7, 8, and 9.
The comparison must be based on actual recipients and services for one or more service
months after the new rates have gone into effect. The commissioner shall consult with
the commissioner of management and budget on this analysis to ensure budget neutrality.
If estimated spending under the new rates for services under one or more subdivisions new text begin ,
notwithstanding adjustments for the rate stabilization provisions of section 256B.4913,
subdivision 4a, paragraph (c), clauses (1) to (6), new text end differs in this comparison by 0.3 percent
or more, the commissioner shall assure aggregate budget neutrality across all service areas
by adjusting the budget neutrality factor in paragraph (a) in each subdivision so that total
estimated spending for each subdivision under the new rates matches estimated spending
under the rates in effect on July 1, 2013.

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a), clause (3), is effective
July 1, 2015.
new text end