SF 1313

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to operation of state government; modifying
license fees for waivered services programs serving
persons with developmental disabilities; changing
provisions for state-operated services; health care;
nursing facility reimbursement; making changes to
programs for children and families; modifying certain
fees; modifying license provisions for exploratory
borings; modifying health professional education loan
forgiveness program; modifying Vital Statistics Act;
modifying environmental laboratory certification
provisions; providing for positive abortion
alternatives; modifying funding for suicide
prevention; modifying provisions for food, beverage,
and lodging establishments; requiring rulemaking;
repealing regulation of complementary and alternative
health care practices; appropriating money; amending
Minnesota Statutes 2004, sections 16A.724; 103I.101,
subdivision 6; 103I.208, subdivisions 1, 2; 103I.235,
subdivision 1; 103I.601, subdivision 2; 119B.13,
subdivision 1; 144.122; 144.1501, subdivisions 1, 2,
3, 4; 144.226, subdivisions 1, 4, by adding
subdivisions; 144.3831, subdivision 1; 144.98,
subdivision 3; 145.56, subdivisions 2, 5; 147A.08;
157.15, by adding a subdivision; 157.16, subdivisions
2, 3, by adding subdivisions; 157.20, subdivisions 2,
2a; 214.01, subdivision 2; 245.4661, subdivisions 2,
6; 245A.10, subdivision 5; 245C.10, subdivisions 2, 3;
245C.32, subdivision 2; 246.0136, subdivision 1;
253.20; 256.01, subdivision 2, by adding subdivisions;
256.019, subdivision 1; 256.045, subdivision 3;
256.046, subdivision 1; 256.741, subdivision 4;
256.9657, by adding a subdivision; 256.969,
subdivision 3a; 256B.04, by adding a subdivision;
256B.0575; 256B.0595, subdivision 2; 256B.0625,
subdivisions 13, 13a, 13c, 13e, 13f, by adding
subdivisions; 256B.32, subdivision 1; 256B.431,
subdivisions 28, 29, 30, 35, by adding a subdivision;
256B.432, subdivisions 1, 2, 5, by adding
subdivisions; 256B.434, subdivisions 3, 4, 4a, 4b, 4c,
4d, by adding a subdivision; 256B.438, subdivision 3;
256B.47, subdivision 2; 256B.69, by adding a
subdivision; 256B.75; 256D.03, subdivisions 3, 4, by
adding a subdivision; 256D.06, subdivisions 5, 7, by
adding a subdivision; 256J.12, subdivision 1, by
adding a subdivision; 256J.95, by adding subdivisions;
256L.03, subdivisions 1, 3; 256L.04, subdivisions 1,
8; 256L.05, subdivision 5; 256L.07, subdivisions 1, 3;
256L.09, subdivision 2; 256L.11, subdivision 6;
256L.12, subdivision 6, by adding a subdivision;
326.42, subdivision 2; proposing coding for new law in
Minnesota Statutes, chapters 145; 256B; 256K; 501B;
repealing Minnesota Statutes 2004, sections 13.383,
subdivision 3; 13.411, subdivision 3; 119B.074;
144.1502; 146A.01; 146A.02; 146A.025; 146A.03;
146A.04; 146A.05; 146A.06; 146A.07; 146A.08; 146A.09;
146A.10; 146A.11; 157.215; 256.955; 256D.54,
subdivision 3; 256L.035; 256L.04, subdivision 7;
256L.09, subdivisions 1, 4, 5, 6, 7; 295.581; Laws
2003, First Special Session chapter 14, article 9,
section 34; Minnesota Rules, parts 9500.1254;
9500.1256.

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

ARTICLE 1

LICENSING

Section 1.

Minnesota Statutes 2004, section 245A.10,
subdivision 5, is amended to read:

Subd. 5.

Annual license or certification fee for programs
without a licensed capacity.

(a) Except as provided
in deleted text begin paragraph deleted text end new text begin paragraphs new text end (b) new text begin and (c) new text end , a program without a stated
licensed capacity shall pay a license or certification fee of
$400.

(b) A mental health center or mental health clinic
requesting certification for purposes of insurance and
subscriber contract reimbursement under Minnesota Rules, parts
9520.0750 to 9520.0870, shall pay a certification fee of $1,000
per year. If the mental health center or mental health clinic
provides services at a primary location with satellite
facilities, the satellite facilities shall be certified with the
primary location without an additional charge.

new text begin (c) A program licensed to provide residential-based
habilitation services under the home and community-based waiver
for persons with developmental disabilities shall pay an annual
license fee that includes a base rate of $250 plus $38 times the
number of clients served on the first day of August of the
current license year. State-operated programs are exempt from
the license fee under this paragraph.
new text end

Sec. 2.

Minnesota Statutes 2004, section 245C.10,
subdivision 2, is amended to read:

Subd. 2.

Supplemental nursing services agencies.

The
commissioner shall recover the cost of the background studies
initiated by supplemental nursing services agencies registered
under section 144A.71, subdivision 1, through a fee of no more
than deleted text begin $8 deleted text end new text begin $20 new text end per study charged to the agency. The fees collected
under this subdivision are appropriated to the commissioner for
the purpose of conducting background studies.

Sec. 3.

Minnesota Statutes 2004, section 245C.10,
subdivision 3, is amended to read:

Subd. 3.

Personal care provider organizations.

The
commissioner shall recover the cost of background studies
initiated by a personal care provider organization under section
256B.0627 through a fee of no more than deleted text begin $12 deleted text end new text begin $20 new text end per study
charged to the organization responsible for submitting the
background study form. The fees collected under this
subdivision are appropriated to the commissioner for the purpose
of conducting background studies.

Sec. 4.

Minnesota Statutes 2004, section 245C.32,
subdivision 2, is amended to read:

Subd. 2.

Use.

(a) The commissioner may also use these
systems and records to obtain and provide criminal history data
from the Bureau of Criminal Apprehension, criminal history data
held by the commissioner, and data about substantiated
maltreatment under section 626.556 or 626.557, for other
purposes, provided that:

(1) the background study is specifically authorized in
statute; or

(2) the request is made with the informed consent of the
subject of the study as provided in section 13.05, subdivision 4.

(b) An individual making a request under paragraph (a),
clause (2), must agree in writing not to disclose the data to
any other individual without the consent of the subject of the
data.

(c) The commissioner may recover the cost of obtaining and
providing background study data by charging the individual or
entity requesting the study a fee of no more than deleted text begin $12 deleted text end new text begin $20 new text end per
study. The fees collected under this paragraph are appropriated
to the commissioner for the purpose of conducting background
studies.

ARTICLE 2

STATE-OPERATED SERVICES

Section 1.

Minnesota Statutes 2004, section 245.4661,
subdivision 2, is amended to read:

Subd. 2.

Program design and implementation.

(a) The
pilot projects shall be established to design, plan, and improve
the mental health service delivery system for adults with
serious and persistent mental illness that would:

(1) provide an expanded array of services from which
clients can choose services appropriate to their needs;

(2) be based on purchasing strategies that improve access
and coordinate services without cost shifting;

(3) incorporate existing state facilities and resources
into the community mental health infrastructure through creative
partnerships with local vendors; and

(4) utilize existing categorical funding streams and
reimbursement sources in combined and creative ways, except
appropriations to regional treatment centers and all funds that
are attributable to the operation of state-operated services are
excluded unless appropriated specifically by the legislature for
a purpose consistent with this section new text begin or section 246.0136,
subdivision 1 new text end .

(b) All projects funded by January 1, 1997, must complete
the planning phase and be operational by June 30, 1997; all
projects funded by January 1, 1998, must be operational by June
30, 1998.

Sec. 2.

Minnesota Statutes 2004, section 245.4661,
subdivision 6, is amended to read:

Subd. 6.

Duties of commissioner.

(a) For purposes of the
pilot projects, the commissioner shall facilitate integration of
funds or other resources as needed and requested by each
project. These resources may include:

(1) residential services funds administered under Minnesota
Rules, parts 9535.2000 to 9535.3000, in an amount to be
determined by mutual agreement between the project's managing
entity and the commissioner of human services after an
examination of the county's historical utilization of facilities
located both within and outside of the county and licensed under
Minnesota Rules, parts 9520.0500 to 9520.0690;

(2) community support services funds administered under
Minnesota Rules, parts 9535.1700 to 9535.1760;

(3) other mental health special project funds;

(4) medical assistance, general assistance medical care,
MinnesotaCare and group residential housing if requested by the
project's managing entity, and if the commissioner determines
this would be consistent with the state's overall health care
reform efforts; and

(5) regional treatment center deleted text begin nonfiscal deleted text end resources deleted text begin to the
extent agreed to by the project's managing entity and the
regional treatment center deleted text end new text begin consistent with section 246.0136,
subdivision 3 new text end .

(b) The commissioner shall consider the following criteria
in awarding start-up and implementation grants for the pilot
projects:

(1) the ability of the proposed projects to accomplish the
objectives described in subdivision 2;

(2) the size of the target population to be served; and

(3) geographical distribution.

(c) The commissioner shall review overall status of the
projects initiatives at least every two years and recommend any
legislative changes needed by January 15 of each odd-numbered
year.

(d) The commissioner may waive administrative rule
requirements which are incompatible with the implementation of
the pilot project.

(e) The commissioner may exempt the participating counties
from fiscal sanctions for noncompliance with requirements in
laws and rules which are incompatible with the implementation of
the pilot project.

(f) The commissioner may award grants to an entity
designated by a county board or group of county boards to pay
for start-up and implementation costs of the pilot project.

Sec. 3.

Minnesota Statutes 2004, section 246.0136,
subdivision 1, is amended to read:

Subdivision 1.

Planning for enterprise activities.

The
commissioner of human services is directed to study and make
recommendations to the legislature on establishing enterprise
activities within state-operated services. Before implementing
an enterprise activity, the commissioner must obtain statutory
authorization for its implementation, except that the
commissioner has authority to implement enterprise activities
for new text begin adult mental health, new text end adolescent services new text begin , new text end and to establish a
public group practice without statutory authorization.
Enterprise activities are defined as the range of services,
which are delivered by state employees, needed by people with
disabilities and are fully funded by public or private
third-party health insurance or other revenue sources available
to clients that provide reimbursement for the services
provided. Enterprise activities within state-operated services
shall specialize in caring for vulnerable people for whom no
other providers are available or for whom state-operated
services may be the provider selected by the payer. In
subsequent biennia after an enterprise activity is established
within a state-operated service, the base state appropriation
for that state-operated service shall be reduced proportionate
to the size of the enterprise activity.

Sec. 4.

Minnesota Statutes 2004, section 253.20, is
amended to read:

253.20 MINNESOTA SECURITY HOSPITAL.

The commissioner of human services shall erect, equip, and
maintain in St. Peter deleted text begin a deleted text end new text begin and other geographic locations under the
control of the commissioner of human services new text end suitable
deleted text begin building deleted text end new text begin buildings new text end to be known as the Minnesota Security
Hospital, for the purpose of providing a secure treatment
facility as defined in section 253B.02, subdivision 18a, for
persons who may be committed there by courts, or otherwise, or
transferred there by the commissioner of human services, and for
persons who are found to be mentally ill while confined in any
correctional facility, or who may be found to be mentally ill
and dangerous, and the commissioner shall supervise and manage
the same as in the case of other state hospitals.

Sec. 5. new text begin AUTHORIZATION TO CLOSE AND VACATE REGIONAL
TREATMENT CENTER AND STATE-OPERATED NURSING HOME CAMPUSES.
new text end

new text begin Effective the day following final enactment, the
commissioner of human services is authorized to vacate and close
the regional treatment center programs and campuses and
state-operated nursing home programs and campuses, upon
notification of the chairs of the house and senate committees
having jurisdiction over human services, once the commissioner
has determined that the criteria established under Laws 2003,
First Special Session chapter 14, article 6, section 64, have
been met.
new text end

ARTICLE 3

HEALTH CARE

Section 1.

Minnesota Statutes 2004, section 16A.724, is
amended to read:

16A.724 HEALTH CARE ACCESS FUND.

new text begin Subdivision 1. new text end

new text begin Creation of fund. new text end

new text begin (a) new text end A health care
access fund is created in the state treasury. The fund is a
direct appropriated special revenue fund. The commissioner
shall deposit to the credit of the fund money made available to
the fund. Notwithstanding section 11A.20, after June 30, 1997,
all investment income and all investment losses attributable to
the investment of the health care access fund not currently
needed shall be credited to the health care access fund.

new text begin (b) Effective July 1, 2006, the commissioner of finance
shall deposit revenues collected from section 256.9657,
subdivisions 2 and 3, into the health care access fund.
new text end

new text begin Subd. 2. new text end

new text begin Transfers. new text end

new text begin To the extent available resources in
the health care access fund exceed expenditures in that fund,
starting in fiscal year 2005, the commissioner of finance shall
transfer the excess funds from the health care access fund to
the general fund on June 30 of each year.
new text end

new text begin (a) In fiscal year 2005, transfers may not exceed
$192,442,000. For fiscal year 2008 and thereafter, the transfer
may not exceed $50,000,000.
new text end

new text begin (b) For fiscal years 2005 to 2007, MinnesotaCare shall be a
forecasted program and, if necessary, the commissioner shall
reduce transfers to meet expenditures and shall transfer
sufficient funds from the general fund to the health care access
fund to meet annual expenditures.
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 2004, section 256.01, is
amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Authorization for test sites for health care
programs. new text end

new text begin In coordination with the development and
implementation of HealthMatch, an automated eligibility system
for medical assistance, general assistance medical care, and
MinnesotaCare, the commissioner, in cooperation with county
agencies, is authorized to test and compare a variety of
administrative models to demonstrate and evaluate outcomes of
integrating health care program business processes and points of
access. The models will be evaluated for ease of enrollment for
health care program applicants and recipients and administrative
efficiencies. Test sites will combine the administration of all
three programs and will include both local county and
centralized statewide customer assistance. The duration of each
approved test site shall be no more than one year. Based on the
evaluation, the commissioner shall recommend the most efficient
and effective administrative model for statewide implementation.
new text end

Sec. 3.

Minnesota Statutes 2004, section 256.019,
subdivision 1, is amended to read:

Subdivision 1.

Retention rates.

When an assistance
recovery amount is collected and posted by a county agency under
the provisions governing public assistance programs including
general assistance medical care, general assistance, and
Minnesota supplemental aid, the county may keep one-half of the
recovery made by the county agency using any method other than
recoupment. For medical assistance, if the recovery is made by
a county agency using any method other than recoupment, the
county may keep one-half of the nonfederal share of the recovery.
new text begin For MinnesotaCare, if the recovery is collected and posted by
the county agency, the county may keep one-half of the
nonfederal share of the recovery.
new text end

This does not apply to recoveries from medical providers or
to recoveries begun by the Department of Human Services'
Surveillance and Utilization Review Division, State Hospital
Collections Unit, and the Benefit Recoveries Division or, by the
attorney general's office, or child support collections. In the
food stamp or food support program, the nonfederal share of
recoveries in the federal tax offset program only will be
divided equally between the state agency and the involved county
agency.

Sec. 4.

Minnesota Statutes 2004, section 256.045,
subdivision 3, is amended to read:

Subd. 3.

State agency hearings.

(a) State agency
hearings are available for the following: (1) any person
applying for, receiving or having received public assistance,
medical care, or a program of social services granted by the
state agency or a county agency or the federal Food Stamp Act
whose application for assistance is denied, not acted upon with
reasonable promptness, or whose assistance is suspended,
reduced, terminated, or claimed to have been incorrectly paid;
(2) any patient or relative aggrieved by an order of the
commissioner under section 252.27; (3) a party aggrieved by a
ruling of a prepaid health plan; (4) except as provided under
chapter 245C, any individual or facility determined by a lead
agency to have maltreated a vulnerable adult under section
626.557 after they have exercised their right to administrative
reconsideration under section 626.557; (5) any person whose
claim for foster care payment according to a placement of the
child resulting from a child protection assessment under section
626.556 is denied or not acted upon with reasonable promptness,
regardless of funding source; (6) any person to whom a right of
appeal according to this section is given by other provision of
law; (7) an applicant aggrieved by an adverse decision to an
application for a hardship waiver under section 256B.15; (8) new text begin an
applicant aggrieved by an adverse decision to an application or
redetermination for a Medicare Part D prescription drug subsidy
under section 256B.04, subdivision 4a; (9) new text end except as provided
under chapter 245A, an individual or facility determined to have
maltreated a minor under section 626.556, after the individual
or facility has exercised the right to administrative
reconsideration under section 626.556; or deleted text begin (9) deleted text end new text begin (10) new text end except as
provided under chapter 245C, an individual disqualified under
sections 245C.14 and 245C.15, on the basis of serious or
recurring maltreatment; a preponderance of the evidence that the
individual has committed an act or acts that meet the definition
of any of the crimes listed in section 245C.15, subdivisions 1
to 4; or for failing to make reports required under section
626.556, subdivision 3, or 626.557, subdivision 3. Hearings
regarding a maltreatment determination under clause (4)
or deleted text begin (8) deleted text end new text begin (9) new text end and a disqualification under this clause in which the
basis for a disqualification is serious or recurring
maltreatment, which has not been set aside under sections
245C.22 and 245C.23, shall be consolidated into a single fair
hearing. In such cases, the scope of review by the human
services referee shall include both the maltreatment
determination and the disqualification. The failure to exercise
the right to an administrative reconsideration shall not be a
bar to a hearing under this section if federal law provides an
individual the right to a hearing to dispute a finding of
maltreatment. Individuals and organizations specified in this
section may contest the specified action, decision, or final
disposition before the state agency by submitting a written
request for a hearing to the state agency within 30 days after
receiving written notice of the action, decision, or final
disposition, or within 90 days of such written notice if the
applicant, recipient, patient, or relative shows good cause why
the request was not submitted within the 30-day time limit.

The hearing for an individual or facility under clause (4),
deleted text begin (8) deleted text end new text begin (9) new text end , or deleted text begin (9) deleted text end new text begin (10) new text end is the only administrative appeal to the
final agency determination specifically, including a challenge
to the accuracy and completeness of data under section 13.04.
Hearings requested under clause (4) apply only to incidents of
maltreatment that occur on or after October 1, 1995. Hearings
requested by nursing assistants in nursing homes alleged to have
maltreated a resident prior to October 1, 1995, shall be held as
a contested case proceeding under the provisions of chapter 14.
Hearings requested under clause deleted text begin (8) deleted text end new text begin (9) new text end apply only to incidents
of maltreatment that occur on or after July 1, 1997. A hearing
for an individual or facility under clause deleted text begin (8) deleted text end new text begin (9) new text end is only
available when there is no juvenile court or adult criminal
action pending. If such action is filed in either court while
an administrative review is pending, the administrative review
must be suspended until the judicial actions are completed. If
the juvenile court action or criminal charge is dismissed or the
criminal action overturned, the matter may be considered in an
administrative hearing.

For purposes of this section, bargaining unit grievance
procedures are not an administrative appeal.

The scope of hearings involving claims to foster care
payments under clause (5) shall be limited to the issue of
whether the county is legally responsible for a child's
placement under court order or voluntary placement agreement
and, if so, the correct amount of foster care payment to be made
on the child's behalf and shall not include review of the
propriety of the county's child protection determination or
child placement decision.

(b) A vendor of medical care as defined in section 256B.02,
subdivision 7, or a vendor under contract with a county agency
to provide social services is not a party and may not request a
hearing under this section, except if assisting a recipient as
provided in subdivision 4.

(c) An applicant or recipient is not entitled to receive
social services beyond the services included in the amended
community social services plan.

(d) The commissioner may summarily affirm the county or
state agency's proposed action without a hearing when the sole
issue is an automatic change due to a change in state or federal
law.

Sec. 5.

Minnesota Statutes 2004, section 256.046,
subdivision 1, is amended to read:

Subdivision 1.

Hearing authority.

A local agency must
initiate an administrative fraud disqualification hearing for
individuals, including child care providers caring for children
receiving child care assistance, accused of wrongfully obtaining
assistance or intentional program violations, in lieu of a
criminal action when it has not been pursued, in the aid to
families with dependent children program formerly codified in
sections 256.72 to 256.87, MFIP, the diversionary work program,
child care assistance programs, general assistance, family
general assistance program formerly codified in section 256D.05,
subdivision 1, clause (15), Minnesota supplemental aid, food
stamp programs, general assistance medical care, MinnesotaCare
for adults without children, and upon federal approval, all
categories of medical assistance and remaining categories of
MinnesotaCare except for children through age 18. new text begin The
Department of Human Services, in lieu of a local agency, may
initiate an administrative fraud disqualification hearing when
the state agency is directly responsible for administration of
the health care program for which benefits were wrongfully
obtained. new text end The hearing is subject to the requirements of section
256.045 and the requirements in Code of Federal Regulations,
title 7, section 273.16, for the food stamp program and title
45, section 235.112, as of September 30, 1995, for the cash
grant, medical care programs, and child care assistance under
chapter 119B.

Sec. 6.

Minnesota Statutes 2004, section 256.9657, is
amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Withholding. new text end

new text begin If any provider obligated to pay
an annual surcharge under this section is more than two months
delinquent in the timely payment of a monthly surcharge
installment payment, the provisions in paragraphs (a) to (f)
apply.
new text end

new text begin (a) The department may withhold some or all of the amount
of the delinquent surcharge, together with any interest and
penalties due and owing on those amounts, from any money the
department owes to the provider. The department may, at its
discretion, also withhold future surcharge installment payments
from any money the department owes the provider as those
installments become due and owing. The department may continue
this withholding until the department determines there in no
longer any need to do so.
new text end

new text begin (b) The department shall give prior notice of the
department's intention to withhold by mailing a written notice
to the provider at the address to which remittance advices are
mailed or faxing a copy of the notice to the provider at least
ten business days before the date of the first payment period
for which the withholding begins. The notice may be sent by
ordinary or certified mail, or facsimile, and shall be deemed
received as of the date of mailing or receipt of the facsimile.
The notice shall:
new text end

new text begin (i) state the amount of the delinquent surcharge;
new text end

new text begin (ii) state the amount of the withholding per payment
period;
new text end

new text begin (iii) state the date on which the withholding is to begin;
new text end

new text begin (iv) state whether the department intends to withhold
future installments of the provider's surcharge payments;
new text end

new text begin (v) inform the provider of their rights to informally
object to the proposed withholding and to appeal the withholding
as provided for in this subdivision;
new text end

new text begin (vi) state that the provider may prevent the withholding
during the pendancy of their appeal by posting a bond; and
new text end

new text begin (vii) state other contents as the department deems
appropriate.
new text end

new text begin (c) The provider may informally object to the withholding
in writing anytime before the withholding begins. An informal
objection shall not stay or delay the commencement of the
withholding. The department may postpone the commencement of
the withholding as deemed appropriate and shall not be required
to give another notice at the end of the postponement and before
commencing the withholding. The provider shall have the right
to appeal any withholding from remittances under section 256.045
by filing a written appeal with the department within 30 days of
the date of the written notice of the withholding. Notice shall
be given and the hearing of the appeal shall be scheduled no
later than 45 days after the department receives the appeal. In
a hearing under section 256.045, the department's action shall
be sustained if the department proves the amount of the
delinquent surcharges or overpayment the provider owes, plus any
accrued interest and penalties, has not been repaid. The
department may continue withholding for delinquent and current
surcharge installment payments during the pendancy of an appeal
unless the provider posts a bond from a surety company licensed
to do business in Minnesota in favor of the department in an
amount equal to two times the provider's total annual surcharge
payment for the fiscal year in which the appeal is filed with
the department.
new text end

new text begin (d) The department shall refund any amounts due to the
provider under any final administrative or judicial order or
decree which fully and finally resolves the appeal together with
interest on those amounts at the rate of three percent per annum
simple interest computed from the date of each withholding, as
soon as practical after entry of the order or decree.
new text end

new text begin (e) The commissioner, or the commissioner's designee, may
enter into written settlement agreements with a provider to
resolve disputes and other matters involving unpaid surcharge
installment payments or future surcharge installment payments.
new text end

new text begin (f) Notwithstanding any law to the contrary, all unpaid
surcharges, plus any accrued interest and penalties, shall be
overpayments for purposes of section 256B.0641.
new text end

Sec. 7.

Minnesota Statutes 2004, section 256.969,
subdivision 3a, is amended to read:

Subd. 3a.

Payments.

(a) Acute care hospital billings
under the medical assistance program must not be submitted until
the recipient is discharged. However, the commissioner shall
establish monthly interim payments for inpatient hospitals that
have individual patient lengths of stay over 30 days regardless
of diagnostic category. Except as provided in section 256.9693,
medical assistance reimbursement for treatment of mental illness
shall be reimbursed based on diagnostic classifications.
Individual hospital payments established under this section and
sections 256.9685, 256.9686, and 256.9695, in addition to third
party and recipient liability, for discharges occurring during
the rate year shall not exceed, in aggregate, the charges for
the medical assistance covered inpatient services paid for the
same period of time to the hospital. This payment limitation
shall be calculated separately for medical assistance and
general assistance medical care services. The limitation on
general assistance medical care shall be effective for
admissions occurring on or after July 1, 1991. Services that
have rates established under subdivision 11 or 12, must be
limited separately from other services. After consulting with
the affected hospitals, the commissioner may consider related
hospitals one entity and may merge the payment rates while
maintaining separate provider numbers. The operating and
property base rates per admission or per day shall be derived
from the best Medicare and claims data available when rates are
established. The commissioner shall determine the best Medicare
and claims data, taking into consideration variables of recency
of the data, audit disposition, settlement status, and the
ability to set rates in a timely manner. The commissioner shall
notify hospitals of payment rates by December 1 of the year
preceding the rate year. The rate setting data must reflect the
admissions data used to establish relative values. Base year
changes from 1981 to the base year established for the rate year
beginning January 1, 1991, and for subsequent rate years, shall
not be limited to the limits ending June 30, 1987, on the
maximum rate of increase under subdivision 1. The commissioner
may adjust base year cost, relative value, and case mix index
data to exclude the costs of services that have been
discontinued by the October 1 of the year preceding the rate
year or that are paid separately from inpatient services.
Inpatient stays that encompass portions of two or more rate
years shall have payments established based on payment rates in
effect at the time of admission unless the date of admission
preceded the rate year in effect by six months or more. In this
case, operating payment rates for services rendered during the
rate year in effect and established based on the date of
admission shall be adjusted to the rate year in effect by the
hospital cost index.

(b) For fee-for-service admissions occurring on or after
July 1, 2002, the total payment, before third-party liability
and spenddown, made to hospitals for inpatient services is
reduced by .5 percent from the current statutory rates.

(c) In addition to the reduction in paragraph (b), the
total payment for fee-for-service admissions occurring on or
after July 1, 2003, made to hospitals for inpatient services
before third-party liability and spenddown, is reduced five
percent from the current statutory rates. Mental health
services within diagnosis related groups 424 to 432, and
facilities defined under subdivision 16 are excluded from this
paragraph.

new text begin (d) In addition to the reduction in paragraphs (b) and (c)
and section 256D.03, subdivision 4, paragraph (k), the total
payment for fee-for-service admissions occurring on or after
July 1, 2005, made to hospitals for inpatient services before
third-party liability and spenddown, is reduced five percent
from the current statutory rates. Mental health services within
diagnosis related groups 424 to 432 and facilities defined under
subdivision 16 are excluded from this paragraph.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256B.04, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Medicare prescription drug subsidy. new text end

new text begin The
commissioner shall perform all duties necessary to administer
eligibility determinations for the Medicare Part D prescription
drug subsidy and facilitate the enrollment of eligible medical
assistance recipients into Medicare prescription drug plans as
required by the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (MMA), Public Law 108-173, and Code of
Federal Regulations, title 42, sections 423.30 through 423.56
and 423.771 through 423.800.
new text end

Sec. 9.

Minnesota Statutes 2004, section 256B.0575, is
amended to read:

256B.0575 AVAILABILITY OF INCOME FOR INSTITUTIONALIZED
PERSONS.

When an institutionalized person is determined eligible for
medical assistance, the income that exceeds the deductions in
paragraphs (a) and (b) must be applied to the cost of
institutional care.

(a) The following amounts must be deducted from the
institutionalized person's income in the following order:

(1) the personal needs allowance under section 256B.35 or,
for a veteran who does not have a spouse or child, or a
surviving spouse of a veteran having no child, the amount of an
improved pension received from the veteran's administration not
exceeding $90 per month;

(2) the personal allowance for disabled individuals under
section 256B.36;

(3) if the institutionalized person has a legally appointed
guardian or conservator, five percent of the recipient's gross
monthly income up to $100 as reimbursement for guardianship or
conservatorship services;

(4) a monthly income allowance determined under section
256B.058, subdivision 2, but only to the extent income of the
institutionalized spouse is made available to the community
spouse;

(5) a monthly allowance for children under age 18 which,
together with the net income of the children, would provide
income equal to the medical assistance standard for families and
children according to section 256B.056, subdivision 4, for a
family size that includes only the minor children. This
deduction applies only if the children do not live with the
community spouse and only to the extent that the deduction is
not included in the personal needs allowance under section
256B.35, subdivision 1, as child support garnished under a court
order;

(6) a monthly family allowance for other family members,
equal to one-third of the difference between 122 percent of the
federal poverty guidelines and the monthly income for that
family member;

(7) reparations payments made by the Federal Republic of
Germany and reparations payments made by the Netherlands for
victims of Nazi persecution between 1940 and 1945;

(8) all other exclusions from income for institutionalized
persons as mandated by federal law; and

(9) amounts for reasonable expenses incurred for necessary
medical or remedial care for the institutionalized person that
are not medical assistance covered expenses and that are not
subject to payment by a third party.

new text begin Reasonable expenses are limited to expenses that have not
been previously used as a deduction from income and are incurred
during the enrollee's current period of eligibility, including
retroactive months associated with the current period of
eligibility, for medical assistance payment of long-term care
services.
new text end

For purposes of clause (6), "other family member" means a
person who resides with the community spouse and who is a minor
or dependent child, dependent parent, or dependent sibling of
either spouse. "Dependent" means a person who could be claimed
as a dependent for federal income tax purposes under the
Internal Revenue Code.

(b) Income shall be allocated to an institutionalized
person for a period of up to three calendar months, in an amount
equal to the medical assistance standard for a family size of
one if:

(1) a physician certifies that the person is expected to
reside in the long-term care facility for three calendar months
or less;

(2) if the person has expenses of maintaining a residence
in the community; and

(3) if one of the following circumstances apply:

(i) the person was not living together with a spouse or a
family member as defined in paragraph (a) when the person
entered a long-term care facility; or

(ii) the person and the person's spouse become
institutionalized on the same date, in which case the allocation
shall be applied to the income of one of the spouses.

For purposes of this paragraph, a person is determined to be
residing in a licensed nursing home, regional treatment center,
or medical institution if the person is expected to remain for a
period of one full calendar month or more.

Sec. 10.

Minnesota Statutes 2004, section 256B.0595,
subdivision 2, is amended to read:

Subd. 2.

Period of ineligibility.

(a) For any
uncompensated transfer occurring on or before August 10, 1993,
the number of months of ineligibility for long-term care
services shall be the lesser of 30 months, or the uncompensated
transfer amount divided by the average medical assistance rate
for nursing facility services in the state in effect on the date
of application. The amount used to calculate the average
medical assistance payment rate shall be adjusted each July 1 to
reflect payment rates for the previous calendar year. The
period of ineligibility begins with the month in which the
assets were transferred. If the transfer was not reported to
the local agency at the time of application, and the applicant
received long-term care services during what would have been the
period of ineligibility if the transfer had been reported, a
cause of action exists against the transferee for the cost of
long-term care services provided during the period of
ineligibility, or for the uncompensated amount of the transfer,
whichever is less. The action may be brought by the state or
the local agency responsible for providing medical assistance
under chapter 256G. The uncompensated transfer amount is the
fair market value of the asset at the time it was given away,
sold, or disposed of, less the amount of compensation received.

(b) For uncompensated transfers made after August 10, 1993,
the number of months of ineligibility for long-term care
services shall be the total uncompensated value of the resources
transferred divided by the average medical assistance rate for
nursing facility services in the state in effect on the date of
application. The amount used to calculate the average medical
assistance payment rate shall be adjusted each July 1 to reflect
payment rates for the previous calendar year. The period of
ineligibility begins with the first day of the month after the
month in which the assets were transferred except that if one or
more uncompensated transfers are made during a period of
ineligibility, the total assets transferred during the
ineligibility period shall be combined and a penalty period
calculated to begin on the first day of the month after the
month in which the first uncompensated transfer was made. If
the new text begin transfer was reported to the local agency after the date
that advance notice of a period of ineligibility that affects
the next month could be provided to the recipient and the
recipient received medical assistance services or the new text end transfer
was not reported to the local agency, and the applicant new text begin or
recipient new text end received medical assistance services during what would
have been the period of ineligibility if the transfer had been
reported, a cause of action exists against the transferee for
the cost of medical assistance services provided during the
period of ineligibility, or for the uncompensated amount of the
transfer, whichever is less. The action may be brought by the
state or the local agency responsible for providing medical
assistance under chapter 256G. The uncompensated transfer
amount is the fair market value of the asset at the time it was
given away, sold, or disposed of, less the amount of
compensation received. Effective for transfers made on or after
March 1, 1996, involving persons who apply for medical
assistance on or after April 13, 1996, no cause of action exists
for a transfer unless:

(1) the transferee knew or should have known that the
transfer was being made by a person who was a resident of a
long-term care facility or was receiving that level of care in
the community at the time of the transfer;

(2) the transferee knew or should have known that the
transfer was being made to assist the person to qualify for or
retain medical assistance eligibility; or

(3) the transferee actively solicited the transfer with
intent to assist the person to qualify for or retain eligibility
for medical assistance.

(c) If a calculation of a penalty period results in a
partial month, payments for long-term care services shall be
reduced in an amount equal to the fraction, except that in
calculating the value of uncompensated transfers, if the total
value of all uncompensated transfers made in a month not
included in an existing penalty period does not exceed $200,
then such transfers shall be disregarded for each month prior to
the month of application for or during receipt of medical
assistance.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for transfers
occurring on or after July 1, 2005.
new text end

Sec. 11.

Minnesota Statutes 2004, section 256B.0625, is
amended by adding a subdivision to read:

new text begin Subd. 3c. new text end

new text begin Medical policy committee. new text end

new text begin The commissioner,
after receiving recommendations from professional physician
associations, professional associations representing licensed
nonphysician health care professionals, and consumer groups,
shall establish an 11-member Medical Policy Committee which will
consist of ten voting members and one nonvoting member. The
Medical Policy Committee will advise the commissioner regarding
medical issues pertaining to the administration of health care
benefits covered under the medical assistance, general
assistance medical care, and MinnesotaCare programs. The
Medical Policy Committee shall meet at least quarterly. The
Medical Policy Committee shall annually elect a physician chair
from among its members, who will work directly with the
commissioner's medical director, to establish the agenda for
each meeting.
new text end

Sec. 12.

Minnesota Statutes 2004, section 256B.0625, is
amended by adding a subdivision to read:

new text begin Subd. 3d. new text end

new text begin Medical policy committee members. new text end

new text begin The Medical
Policy Committee shall be comprised of:
new text end

new text begin (1) seven voting members who are licensed physicians
actively engaged in the practice of medicine in Minnesota, one
of whom must be actively engaged in the treatment of persons
with mental illness and three of whom must represent health
plans currently under contract to serve medical assistance
recipients;
new text end

new text begin (2) two voting members who are either physician specialists
actively practicing their specialty in Minnesota or nonphysician
health care professionals licensed in their profession and
actively engaged in the practice of their profession in
Minnesota;
new text end

new text begin (3) the commissioner's medical director who will serve as a
nonvoting member; and
new text end

new text begin (4) one consumer who shall serve as a voting member.
new text end

new text begin Members of the Medical Policy Committee shall not be
employed by the Department of Human Services, except for the
medical director.
new text end

Sec. 13.

Minnesota Statutes 2004, section 256B.0625, is
amended by adding a subdivision to read:

new text begin Subd. 3e. new text end

new text begin Medical policy committee terms and
compensation. new text end

new text begin Committee members shall serve staggered
three-year terms, with one-third of the voting members' terms
expiring annually. Members may be reappointed by the
commissioner. The commissioner may require more frequent
Medical Policy Committee meetings as needed. An honorarium of
$200 per meeting and reimbursement for mileage and parking shall
be paid to each committee member in attendance except the
medical director. The Medical Policy Committee does not expire
as provided in section 15.059, subdivision 6.
new text end

Sec. 14.

Minnesota Statutes 2004, section 256B.0625,
subdivision 13, is amended to read:

Subd. 13.

Drugs.

(a) Medical assistance covers drugs,
except for fertility drugs when specifically used to enhance
fertility, if prescribed by a licensed practitioner and
dispensed by a licensed pharmacist, by a physician enrolled in
the medical assistance program as a dispensing physician, or by
a physician or a nurse practitioner employed by or under
contract with a community health board as defined in section
145A.02, subdivision 5, for the purposes of communicable disease
control.

(b) The dispensed quantity of a prescription drug must not
exceed a 34-day supply, unless authorized by the commissioner.

(c) Medical assistance covers the following
over-the-counter drugs when prescribed by a licensed
practitioner or by a licensed pharmacist who meets standards
established by the commissioner, in consultation with the board
of pharmacy: antacids, acetaminophen, family planning products,
aspirin, insulin, products for the treatment of lice, vitamins
for adults with documented vitamin deficiencies, vitamins for
children under the age of seven and pregnant or nursing women,
and any other over-the-counter drug identified by the
commissioner, in consultation with the formulary committee, as
necessary, appropriate, and cost-effective for the treatment of
certain specified chronic diseases, conditions, or disorders,
and this determination shall not be subject to the requirements
of chapter 14. A pharmacist may prescribe over-the-counter
medications as provided under this paragraph for purposes of
receiving reimbursement under Medicaid. When prescribing
over-the-counter drugs under this paragraph, licensed
pharmacists must consult with the recipient to determine
necessity, provide drug counseling, review drug therapy for
potential adverse interactions, and make referrals as needed to
other health care professionals.

new text begin (d) Effective January 1, 2006, medical assistance shall not
cover drugs that are coverable under Medicare Part D as defined
in the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, section
1860D-2(e), for individuals eligible for drug coverage as
defined in the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, section
1860D-1(a)(3)(A). For such individuals, medical assistance may
cover drugs from the drug classes listed in United States Code,
title 42, section 1396r-8(d)(2), subject to the provisions of
this subdivision and subdivisions 13a to 13g, except that drugs
listed in United States Code, title 42, section
1396r-8(d)(2)(E), shall not be covered.
new text end

Sec. 15.

Minnesota Statutes 2004, section 256B.0625,
subdivision 13a, is amended to read:

Subd. 13a.

Drug utilization review board.

new text begin The
commissioner, after receiving recommendations from professional
medical associations, professional pharmacy associations, and
consumer groups shall designate new text end a nine-member Drug Utilization
Review Board deleted text begin is established deleted text end . The board deleted text begin is deleted text end new text begin shall be new text end comprised of
at least three but no more than four licensed physicians
actively engaged in the practice of medicine in Minnesota; at
least three licensed pharmacists actively engaged in the
practice of pharmacy in Minnesota; and one consumer
representative; the remainder to be made up of health care
professionals who are licensed in their field and have
recognized knowledge in the clinically appropriate prescribing,
dispensing, and monitoring of covered outpatient drugs. The
board shall be staffed by an employee of the department who
shall serve as an ex officio nonvoting member of the board. new text begin The
department's medical director shall also serve as an ex officio,
nonvoting member of the board. new text end The members of the board shall
be appointed by the commissioner and shall serve three-year
terms. deleted text begin The members shall be selected from lists submitted by
professional associations. deleted text end The commissioner shall appoint the
initial members of the board for terms expiring as follows:
three members for terms expiring June 30, 1996; three members
for terms expiring June 30, 1997; and three members for terms
expiring June 30, 1998. Members may be reappointed deleted text begin once deleted text end new text begin by the
commissioner new text end . The board shall annually elect a chair from among
the members.

The commissioner shall, with the advice of the board:

(1) implement a medical assistance retrospective and
prospective drug utilization review program as required by
United States Code, title 42, section 1396r-8(g)(3);

(2) develop and implement the predetermined criteria and
practice parameters for appropriate prescribing to be used in
retrospective and prospective drug utilization review;

(3) develop, select, implement, and assess interventions
for physicians, pharmacists, and patients that are educational
and not punitive in nature;

(4) establish a grievance and appeals process for
physicians and pharmacists under this section;

(5) publish and disseminate educational information to
physicians and pharmacists regarding the board and the review
program;

(6) adopt and implement procedures designed to ensure the
confidentiality of any information collected, stored, retrieved,
assessed, or analyzed by the board, staff to the board, or
contractors to the review program that identifies individual
physicians, pharmacists, or recipients;

(7) establish and implement an ongoing process to (i)
receive public comment regarding drug utilization review
criteria and standards, and (ii) consider the comments along
with other scientific and clinical information in order to
revise criteria and standards on a timely basis; and

(8) adopt any rules necessary to carry out this section.

The board may establish advisory committees. The
commissioner may contract with appropriate organizations to
assist the board in carrying out the board's duties. The
commissioner may enter into contracts for services to develop
and implement a retrospective and prospective review program.

The board shall report to the commissioner annually on the
date the Drug Utilization Review Annual Report is due to the
Centers for Medicare and Medicaid Services. This report is to
cover the preceding federal fiscal year. The commissioner shall
make the report available to the public upon request. The
report must include information on the activities of the board
and the program; the effectiveness of implemented interventions;
administrative costs; and any fiscal impact resulting from the
program. An honorarium of $100 per meeting and reimbursement
for mileage shall be paid to each board member in attendance.

Sec. 16.

Minnesota Statutes 2004, section 256B.0625,
subdivision 13c, is amended to read:

Subd. 13c.

Formulary committee.

The commissioner, after
receiving recommendations from professional medical associations
and professional pharmacy associations, and consumer groups
shall designate a Formulary Committee to carry out duties as
described in subdivisions 13 to 13g. The Formulary Committee
shall be comprised of four licensed physicians actively engaged
in the practice of medicine in Minnesota one of whom must be
actively engaged in the treatment of persons with mental
illness; at least three licensed pharmacists actively engaged in
the practice of pharmacy in Minnesota; and one consumer
representative; the remainder to be made up of health care
professionals who are licensed in their field and have
recognized knowledge in the clinically appropriate prescribing,
dispensing, and monitoring of covered outpatient drugs. Members
of the Formulary Committee shall not be employed by the
Department of Human Services new text begin , but the committee shall be staffed
by an employee of the department who shall serve as an ex
officio, nonvoting member of the board. The department's
medical director shall also serve as an ex officio, nonvoting
member for the committee new text end . Committee members shall serve
three-year terms and may be reappointed by the commissioner.
The Formulary Committee shall meet at least quarterly. The
commissioner may require more frequent Formulary Committee
meetings as needed. An honorarium of $100 per meeting and
reimbursement for mileage shall be paid to each committee member
in attendance.

Sec. 17.

Minnesota Statutes 2004, section 256B.0625,
subdivision 13e, is amended to read:

Subd. 13e.

Payment rates.

(a) The basis for determining
the amount of payment shall be the lower of the actual
acquisition costs of the drugs plus a fixed dispensing fee; the
maximum allowable cost set by the federal government or by the
commissioner plus the fixed dispensing fee; or the usual and
customary price charged to the public. The amount of payment
basis must be reduced to reflect all discount amounts applied to
the charge by any provider/insurer agreement or contract for
submitted charges to medical assistance programs. The net
submitted charge may not be greater than the patient liability
for the service. The pharmacy dispensing fee shall be $3.65,
except that the dispensing fee for intravenous solutions which
must be compounded by the pharmacist shall be $8 per bag, $14
per bag for cancer chemotherapy products, and $30 per bag for
total parenteral nutritional products dispensed in one liter
quantities, or $44 per bag for total parenteral nutritional
products dispensed in quantities greater than one liter. Actual
acquisition cost includes quantity and other special discounts
except time and cash discounts. The actual acquisition cost of
a drug shall be estimated by the commissioner, at average
wholesale price minus deleted text begin 11.5 deleted text end new text begin 14 new text end percent deleted text begin , except that where a drug
has had its wholesale price reduced as a result of the actions
of the National Association of Medicaid Fraud Control Units, the
estimated actual acquisition cost shall be the reduced average
wholesale price, without the 11.5 percent deduction deleted text end . The
maximum allowable cost of a multisource drug may be set by the
commissioner and it shall be comparable to, but no higher than,
the maximum amount paid by other third-party payors in this
state who have maximum allowable cost programs. Establishment
of the amount of payment for drugs shall not be subject to the
requirements of the Administrative Procedure Act.

(b) An additional dispensing fee of $.30 may be added to
the dispensing fee paid to pharmacists for legend drug
prescriptions dispensed to residents of long-term care
facilities when a unit dose blister card system, approved by the
department, is used. Under this type of dispensing system, the
pharmacist must dispense a 30-day supply of drug. The National
Drug Code (NDC) from the drug container used to fill the blister
card must be identified on the claim to the department. The
unit dose blister card containing the drug must meet the
packaging standards set forth in Minnesota Rules, part
6800.2700, that govern the return of unused drugs to the
pharmacy for reuse. The pharmacy provider will be required to
credit the department for the actual acquisition cost of all
unused drugs that are eligible for reuse. Over-the-counter
medications must be dispensed in the manufacturer's unopened
package. The commissioner may permit the drug clozapine to be
dispensed in a quantity that is less than a 30-day supply.

(c) Whenever a generically equivalent product is available,
payment shall be on the basis of the actual acquisition cost of
the generic drug, or on the maximum allowable cost established
by the commissioner.

(d) The basis for determining the amount of payment for
drugs administered in an outpatient setting shall be the lower
of the usual and customary cost submitted by the provider deleted text begin , the
average wholesale price minus five percent, or the maximum
allowable cost set by the federal government under United States
Code, title 42, chapter 7, section 1396r-8(e), and Code of
Federal Regulations, title 42, section 447.332, or by the
commissioner under paragraphs (a) to (c) deleted text end new text begin or the amount
established for Medicare by the United States Department of
Health and Human Services pursuant to the Social Security Act,
title XVIII, section 1847a new text end .

new text begin (e) The commissioner may negotiate lower reimbursement
rates for specialty pharmacy products than the rates specified
in paragraph (a). The commissioner may require individuals
enrolled in the health care programs administered by the
department to obtain specialty pharmacy products from providers
with whom the commissioner has negotiated lower reimbursement
rates. Specialty pharmacy products are defined as those used by
a small number of recipients or recipients with complex and
chronic diseases that require expensive and challenging drug
regimens. Examples of such conditions include, but are not
limited to: multiple sclerosis, HIV/AIDS, transplantation,
hepatitis C, growth hormone deficiency, Crohn's Disease,
rheumatoid arthritis, and certain forms of cancer. Specialty
pharmaceutical products commonly include injectable and infusion
therapies, biotechnology drugs, high-cost therapies, and
therapies that require complex care. The commissioner shall
consult with the formulary committee to develop a list of
specialty pharmacy products subject to this paragraph.
new text end

new text begin (f) The commissioner may require individuals enrolled in
the health care programs administered by the department to
obtain drugs used to treat hemophilia from a comprehensive
hemophilia diagnostic treatment center as defined in United
States Code, title 42, section 256b(a)(4)(G); provided that the
hemophilia treatment center is enrolled as a covered entity in
the drug pricing program, commonly known as the 340B program,
that is established under that section.
new text end

Sec. 18.

Minnesota Statutes 2004, section 256B.0625,
subdivision 13f, is amended to read:

Subd. 13f.

Prior authorization.

(a) The Formulary
Committee shall review and recommend drugs which require prior
authorization. The Formulary Committee shall establish general
criteria to be used for the prior authorization of brand-name
drugs for which generically equivalent drugs are available, but
the committee is not required to review each brand-name drug for
which a generically equivalent drug is available.

(b) Prior authorization may be required by the commissioner
before certain formulary drugs are eligible for payment. The
Formulary Committee may recommend drugs for prior authorization
directly to the commissioner. The commissioner may also request
that the Formulary Committee review a drug for prior
authorization. Before the commissioner may require prior
authorization for a drug:

(1) the commissioner must provide information to the
Formulary Committee on the impact that placing the drug on prior
authorization may have on the quality of patient care and on
program costs, information regarding whether the drug is subject
to clinical abuse or misuse, and relevant data from the state
Medicaid program if such data is available;

(2) the Formulary Committee must review the drug, taking
into account medical and clinical data and the information
provided by the commissioner; and

(3) the Formulary Committee must hold a public forum and
receive public comment for an additional 15 days.

The commissioner must provide a 15-day notice period before
implementing the prior authorization.

(c) Prior authorization shall not be required or utilized
for any atypical antipsychotic drug prescribed for the treatment
of mental illness if:

(1) there is no generically equivalent drug available; and

(2) the drug was initially prescribed for the recipient
prior to July 1, 2003; or

(3) the drug is part of the recipient's current course of
treatment.

This paragraph applies to any multistate preferred drug list or
supplemental drug rebate program established or administered by
the commissioner.

(d) Prior authorization shall not be required or utilized
for any antihemophilic factor drug prescribed for the treatment
of hemophilia and blood disorders where there is no generically
equivalent drug available if the prior authorization is used in
conjunction with any supplemental drug rebate program or
multistate preferred drug list established or administered by
the commissioner. This paragraph expires July 1, 2005.

(e) The commissioner may require prior authorization for
brand name drugs whenever a generically equivalent product is
available, even if the prescriber specifically indicates
"dispense as written-brand necessary" on the prescription as
required by section 151.21, subdivision 2.

new text begin (f) Notwithstanding the provisions of this subdivision, the
commissioner may automatically require prior authorization, for
a period not to exceed 180 days, for any drug that is approved
by the United States Food and Drug Administration on or after
July 1, 2005. The 180-day period shall begin no later than the
first day that a drug is available for shipment to pharmacies
within the state. The Formulary Committee shall recommend to
the commissioner general criteria to be used for the prior
authorization of such drugs, but the committee is not required
to review each individual drug. In order to continue prior
authorizations for a drug after the 180-day period has expired,
the commissioner must follow the provisions of this subdivision.
new text end

Sec. 19.

Minnesota Statutes 2004, section 256B.32,
subdivision 1, is amended to read:

Subdivision 1.

Facility fee payment.

(a) The
commissioner shall establish a facility fee payment mechanism
that will pay a facility fee to all enrolled outpatient
hospitals for each emergency room or outpatient clinic visit
provided on or after July 1, 1989. This payment mechanism may
not result in an overall increase in outpatient payment rates.
This section does not apply to federally mandated maximum
payment limits, department-approved program packages, or
services billed using a nonoutpatient hospital provider number.

(b) For fee-for-service services provided on or after July
1, 2002, the total payment, before third-party liability and
spenddown, made to hospitals for outpatient hospital facility
services is reduced by .5 percent from the current statutory
rates.

(c) In addition to the reduction in paragraph (b), the
total payment for fee-for-service services provided on or after
July 1, 2003, made to hospitals for outpatient hospital facility
services before third-party liability and spenddown, is reduced
five percent from the current statutory rates. Facilities
defined under section 256.969, subdivision 16, are excluded from
this paragraph.

new text begin (d) In addition to the reduction in paragraphs (b) and (c)
and section 256D.03, subdivision 4, paragraph (k), the total
payment for fee-for-service services provided on or after July
1, 2005, made to hospitals for outpatient hospital facility
services before third-party liability and spenddown, is reduced
five percent from the current statutory rates. Facilities
defined under section 256.969, subdivision 16, are excluded from
this paragraph.
new text end

Sec. 20.

Minnesota Statutes 2004, section 256B.69, is
amended by adding a subdivision to read:

new text begin Subd. 5i. new text end

new text begin Payment reduction. new text end

new text begin In addition to the
reduction in subdivisions 5g and 5h and section 256D.03,
subdivision 4, paragraph (m), the total payment made to managed
care plans is reduced 2.01 percent under the medical assistance
program and 2.20 percent under the general assistance medical
care program for services provided on or after January 1, 2006.
This provision excludes payments for nursing home services, home
and community-based waivers, and payments to demonstration
projects for persons with disabilities.
new text end

Sec. 21.

Minnesota Statutes 2004, section 256B.75, is
amended to read:

256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.

(a) For outpatient hospital facility fee payments for
services rendered on or after October 1, 1992, the commissioner
of human services shall pay the lower of (1) submitted charge,
or (2) 32 percent above the rate in effect on June 30, 1992,
except for those services for which there is a federal maximum
allowable payment. Effective for services rendered on or after
January 1, 2000, payment rates for nonsurgical outpatient
hospital facility fees and emergency room facility fees shall be
increased by eight percent over the rates in effect on December
31, 1999, except for those services for which there is a federal
maximum allowable payment. Services for which there is a
federal maximum allowable payment shall be paid at the lower of
(1) submitted charge, or (2) the federal maximum allowable
payment. Total aggregate payment for outpatient hospital
facility fee services shall not exceed the Medicare upper
limit. If it is determined that a provision of this section
conflicts with existing or future requirements of the United
States government with respect to federal financial
participation in medical assistance, the federal requirements
prevail. The commissioner may, in the aggregate, prospectively
reduce payment rates to avoid reduced federal financial
participation resulting from rates that are in excess of the
Medicare upper limitations.

(b) Notwithstanding paragraph (a), payment for outpatient,
emergency, and ambulatory surgery hospital facility fee services
for critical access hospitals designated under section 144.1483,
clause (11), shall be paid on a cost-based payment system that
is based on the cost-finding methods and allowable costs of the
Medicare program.

(c) Effective for services provided on or after July 1,
2003, rates that are based on the Medicare outpatient
prospective payment system shall be replaced by a budget neutral
prospective payment system that is derived using medical
assistance data. The commissioner shall provide a proposal to
the 2003 legislature to define and implement this provision.

(d) For fee-for-service services provided on or after July
1, 2002, the total payment, before third-party liability and
spenddown, made to hospitals for outpatient hospital facility
services is reduced by .5 percent from the current statutory
rate.

(e) In addition to the reduction in paragraph (d), the
total payment for fee-for-service services provided on or after
July 1, 2003, made to hospitals for outpatient hospital facility
services before third-party liability and spenddown, is reduced
five percent from the current statutory rates. Facilities
defined under section 256.969, subdivision 16, are excluded from
this paragraph.

new text begin (f) In addition to the reduction in paragraphs (d) and (e)
and section 256D.03, subdivision 4, paragraph (k), the total
payment for fee-for-service services provided on or after July
1, 2005, made to hospitals for outpatient hospital facility
services before third-party liability and spenddown, is reduced
five percent from the current statutory rates. Facilities
defined under section 256.969, subdivision 16, are excluded from
this paragraph.
new text end

Sec. 22.

Minnesota Statutes 2004, section 256D.03,
subdivision 3, is amended to read:

Subd. 3.

General assistance medical care; eligibility.

(a) General assistance medical care may be paid for any person
who is not eligible for medical assistance under chapter 256B,
including eligibility for medical assistance based on a
spenddown of excess income according to section 256B.056,
subdivision 5, or MinnesotaCare as defined in paragraph (b),
except as provided in paragraph (c), and:

(1) who is receiving assistance under section 256D.05,
except for families with children who are eligible under
Minnesota family investment program (MFIP), deleted text begin or deleted text end who is having a
payment made on the person's behalf under sections 256I.01 to
256I.06 new text begin , or who resides in group residential housing as defined
in chapter 256I and can meet a spenddown using the cost of
remedial services received through group residential housing new text end ; or

(2) new text begin (i) new text end who is a resident of Minnesota deleted text begin ; deleted text end and

deleted text begin (i) who has gross countable income not in excess of 75
percent of the federal poverty guidelines for the family size,
using a six-month budget period and deleted text end whose equity in assets is
not in excess of $1,000 per assistance unit. Exempt assets, the
reduction of excess assets, and the waiver of excess assets must
conform to the medical assistance program in section 256B.056,
subdivision 3, with the following exception: the maximum amount
of undistributed funds in a trust that could be distributed to
or on behalf of the beneficiary by the trustee, assuming the
full exercise of the trustee's discretion under the terms of the
trust, must be applied toward the asset maximum; deleted text begin or deleted text end new text begin and
new text end

(ii) who has gross countable income deleted text begin above 75 percent deleted text end new text begin not in
excess new text end of new text begin 75 percent of new text end the federal poverty guidelines deleted text begin but not
in excess of 175 percent of the federal poverty guidelines deleted text end for
the family size, using a six-month budget period, new text begin or new text end whose
deleted text begin equity in assets is not in excess of the limits in section
256B.056, subdivision 3c, and who applies during an inpatient
hospitalization deleted text end new text begin excess income is spent down to that standard
using a six-month budget period new text end .

(b) General assistance medical care may not be paid for
applicants or recipients who meet all eligibility requirements
of MinnesotaCare as defined in sections 256L.01 to 256L.16, and
are adults with dependent children under 21 whose gross family
income is equal to or less than deleted text begin 275 deleted text end new text begin 190 new text end percent of the federal
poverty guidelines.

(c) deleted text begin For applications received on or after October 1, 2003,
deleted text end Eligibility may begin no earlier than the date of application.
For individuals eligible under paragraph (a), clause (2), deleted text begin item
(i), deleted text end a redetermination of eligibility must occur every 12
months. deleted text begin Individuals are eligible under paragraph (a), clause
(2), item (ii), only during inpatient hospitalization but may
reapply if there is a subsequent period of inpatient
hospitalization. deleted text end Beginning January 1, 2000, Minnesota health
care program applications completed by recipients and applicants
who are persons described in paragraph (b), may be returned to
the county agency to be forwarded to the Department of Human
Services or sent directly to the Department of Human Services
for enrollment in MinnesotaCare. If all other eligibility
requirements of this subdivision are met, eligibility for
general assistance medical care shall be available in any month
during which a MinnesotaCare eligibility determination and
enrollment are pending. Upon notification of eligibility for
MinnesotaCare, notice of termination for eligibility for general
assistance medical care shall be sent to an applicant or
recipient. If all other eligibility requirements of this
subdivision are met, eligibility for general assistance medical
care shall be available until enrollment in MinnesotaCare
subject to the provisions of paragraph (e).

(d) The date of an initial Minnesota health care program
application necessary to begin a determination of eligibility
shall be the date the applicant has provided a name, address,
and Social Security number, signed and dated, to the county
agency or the Department of Human Services. If the applicant is
unable to provide a name, address, Social Security number, and
signature when health care is delivered due to a medical
condition or disability, a health care provider may act on an
applicant's behalf to establish the date of an initial Minnesota
health care program application by providing the county agency
or Department of Human Services with provider identification and
a temporary unique identifier for the applicant. The applicant
must complete the remainder of the application and provide
necessary verification before eligibility can be determined.
The county agency must assist the applicant in obtaining
verification if necessary.

(e) County agencies are authorized to use all automated
databases containing information regarding recipients' or
applicants' income in order to determine eligibility for general
assistance medical care deleted text begin or MinnesotaCare deleted text end . Such use shall be
considered sufficient in order to determine eligibility and
premium payments by the county agency.

(f) General assistance medical care is not available for a
person in a correctional facility unless the person is detained
by law for less than one year in a county correctional or
detention facility as a person accused or convicted of a crime,
or admitted as an inpatient to a hospital on a criminal hold
order, and the person is a recipient of general assistance
medical care at the time the person is detained by law or
admitted on a criminal hold order and as long as the person
continues to meet other eligibility requirements of this
subdivision.

(g) General assistance medical care is not available for
applicants or recipients who do not cooperate with the county
agency to meet the requirements of medical assistance.

(h) In determining the amount of assets of an individual
eligible under paragraph (a), clause (2), deleted text begin item (i), deleted text end there shall
be included any asset or interest in an asset, including an
asset excluded under paragraph (a), that was given away, sold,
or disposed of for less than fair market value within the 60
months preceding application for general assistance medical care
or during the period of eligibility. Any transfer described in
this paragraph shall be presumed to have been for the purpose of
establishing eligibility for general assistance medical care,
unless the individual furnishes convincing evidence to establish
that the transaction was exclusively for another purpose. For
purposes of this paragraph, the value of the asset or interest
shall be the fair market value at the time it was given away,
sold, or disposed of, less the amount of compensation received.
For any uncompensated transfer, the number of months of
ineligibility, including partial months, shall be calculated by
dividing the uncompensated transfer amount by the average
monthly per person payment made by the medical assistance
program to skilled nursing facilities for the previous calendar
year. The individual shall remain ineligible until this fixed
period has expired. The period of ineligibility may exceed 30
months, and a reapplication for benefits after 30 months from
the date of the transfer shall not result in eligibility unless
and until the period of ineligibility has expired. The period
of ineligibility begins in the month the transfer was reported
to the county agency, or if the transfer was not reported, the
month in which the county agency discovered the transfer,
whichever comes first. For applicants, the period of
ineligibility begins on the date of the first approved
application.

(i) When determining eligibility for any state benefits
under this subdivision, the income and resources of all
noncitizens shall be deemed to include their sponsor's income
and resources as defined in the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, title IV, Public Law
104-193, sections 421 and 422, and subsequently set out in
federal rules.

(j) Undocumented noncitizens and nonimmigrants are
ineligible for general assistance medical care. For purposes of
this subdivision, a nonimmigrant is an individual in one or more
of the classes listed in United States Code, title 8, section
1101(a)(15), and an undocumented noncitizen is an individual who
resides in the United States without the approval or
acquiescence of the Immigration and Naturalization Service.

(k) Notwithstanding any other provision of law, a
noncitizen who is ineligible for medical assistance due to the
deeming of a sponsor's income and resources, is ineligible for
general assistance medical care.

(l) Effective July 1, 2003, general assistance medical care
emergency services end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 23.

Minnesota Statutes 2004, section 256D.03,
subdivision 4, is amended to read:

Subd. 4.

General assistance medical care; services.

(a) deleted text begin (i) deleted text end For a person who is eligible under subdivision 3,
paragraph (a), deleted text begin clause (2), item (i), deleted text end general assistance medical
care covers, except as provided in paragraph (c):

(1) inpatient hospital services;

(2) outpatient hospital services;

(3) services provided by Medicare certified rehabilitation
agencies;

(4) prescription drugs and other products recommended
through the process established in section 256B.0625,
subdivision 13;

(5) equipment necessary to administer insulin and
diagnostic supplies and equipment for diabetics to monitor blood
sugar level;

(6) eyeglasses and eye examinations provided by a physician
or optometrist;

(7) hearing aids;

(8) prosthetic devices;

(9) laboratory and X-ray services;

(10) physician's services;

(11) medical transportation except special transportation;

(12) chiropractic services as covered under the medical
assistance program;

(13) podiatric services;

(14) dental services and dentures, subject to the
limitations specified in section 256B.0625, subdivision 9;

(15) outpatient services provided by a mental health center
or clinic that is under contract with the county board and is
established under section 245.62;

(16) day treatment services for mental illness provided
under contract with the county board;

(17) prescribed medications for persons who have been
diagnosed as mentally ill as necessary to prevent more
restrictive institutionalization;

(18) psychological services, medical supplies and
equipment, and Medicare premiums, coinsurance and deductible
payments;

(19) medical equipment not specifically listed in this
paragraph when the use of the equipment will prevent the need
for costlier services that are reimbursable under this
subdivision;

(20) services performed by a certified pediatric nurse
practitioner, a certified family nurse practitioner, a certified
adult nurse practitioner, a certified obstetric/gynecological
nurse practitioner, a certified neonatal nurse practitioner, or
a certified geriatric nurse practitioner in independent
practice, if (1) the service is otherwise covered under this
chapter as a physician service, (2) the service provided on an
inpatient basis is not included as part of the cost for
inpatient services included in the operating payment rate, and
(3) the service is within the scope of practice of the nurse
practitioner's license as a registered nurse, as defined in
section 148.171;

(21) services of a certified public health nurse or a
registered nurse practicing in a public health nursing clinic
that is a department of, or that operates under the direct
authority of, a unit of government, if the service is within the
scope of practice of the public health nurse's license as a
registered nurse, as defined in section 148.171; and

(22) telemedicine consultations, to the extent they are
covered under section 256B.0625, subdivision 3b.

deleted text begin (ii) Effective October 1, 2003, for a person who is
eligible under subdivision 3, paragraph (a), clause (2), item
(ii), general assistance medical care coverage is limited to
inpatient hospital services, including physician services
provided during the inpatient hospital stay. A $1,000
deductible is required for each inpatient hospitalization.
deleted text end

(b) Gender reassignment surgery and related services are
not covered services under this subdivision unless the
individual began receiving gender reassignment services prior to
July 1, 1995.

(c) In order to contain costs, the commissioner of human
services shall select vendors of medical care who can provide
the most economical care consistent with high medical standards
and shall where possible contract with organizations on a
prepaid capitation basis to provide these services. The
commissioner shall consider proposals by counties and vendors
for prepaid health plans, competitive bidding programs, block
grants, or other vendor payment mechanisms designed to provide
services in an economical manner or to control utilization, with
safeguards to ensure that necessary services are provided.
Before implementing prepaid programs in counties with a county
operated or affiliated public teaching hospital or a hospital or
clinic operated by the University of Minnesota, the commissioner
shall consider the risks the prepaid program creates for the
hospital and allow the county or hospital the opportunity to
participate in the program in a manner that reflects the risk of
adverse selection and the nature of the patients served by the
hospital, provided the terms of participation in the program are
competitive with the terms of other participants considering the
nature of the population served. Payment for services provided
pursuant to this subdivision shall be as provided to medical
assistance vendors of these services under sections 256B.02,
subdivision 8, and 256B.0625. For payments made during fiscal
year 1990 and later years, the commissioner shall consult with
an independent actuary in establishing prepayment rates, but
shall retain final control over the rate methodology.

(d) Recipients eligible under subdivision 3, paragraph (a),
deleted text begin clause (2), item (i), deleted text end shall pay the following co-payments for
services provided on or after October 1, 2003:

(1) $3 per nonpreventive visit. For purposes of this
subdivision, a visit means an episode of service which is
required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory
setting by a physician or physician ancillary, chiropractor,
podiatrist, nurse midwife, advanced practice nurse, audiologist,
optician, or optometrist;

(2) $25 for eyeglasses;

(3) $25 for nonemergency visits to a hospital-based
emergency room;

(4) $3 per brand-name drug prescription and $1 per generic
drug prescription, subject to a $20 per month maximum for
prescription drug co-payments. No co-payments shall apply to
antipsychotic drugs when used for the treatment of mental
illness; and

(5) 50 percent coinsurance on restorative dental services.

(e) Co-payments shall be limited to one per day per
provider for nonpreventive visits, eyeglasses, and nonemergency
visits to a hospital-based emergency room. Recipients of
general assistance medical care are responsible for all
co-payments in this subdivision. The general assistance medical
care reimbursement to the provider shall be reduced by the
amount of the co-payment, except that reimbursement for
prescription drugs shall not be reduced once a recipient has
reached the $20 per month maximum for prescription drug
co-payments. The provider collects the co-payment from the
recipient. Providers may not deny services to recipients who
are unable to pay the co-payment, except as provided in
paragraph (f).

(f) If it is the routine business practice of a provider to
refuse service to an individual with uncollected debt, the
provider may include uncollected co-payments under this
section. A provider must give advance notice to a recipient
with uncollected debt before services can be denied.

(g) Any county may, from its own resources, provide medical
payments for which state payments are not made.

(h) Chemical dependency services that are reimbursed under
chapter 254B must not be reimbursed under general assistance
medical care.

(i) The maximum payment for new vendors enrolled in the
general assistance medical care program after the base year
shall be determined from the average usual and customary charge
of the same vendor type enrolled in the base year.

(j) The conditions of payment for services under this
subdivision are the same as the conditions specified in rules
adopted under chapter 256B governing the medical assistance
program, unless otherwise provided by statute or rule.

(k) Inpatient and outpatient payments shall be reduced by
five percent, effective July 1, 2003. This reduction is in
addition to the five percent reduction effective July 1, 2003,
and incorporated by reference in paragraph (i).

(l) Payments for all other health services except
inpatient, outpatient, and pharmacy services shall be reduced by
five percent, effective July 1, 2003.

(m) Payments to managed care plans shall be reduced by five
percent for services provided on or after October 1, 2003.

(n) A hospital receiving a reduced payment as a result of
this section may apply the unpaid balance toward satisfaction of
the hospital's bad debts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005,
except the amendment to paragraph (a), item (ii), is effective
October 1, 2005.
new text end

Sec. 24.

Minnesota Statutes 2004, section 256D.03, is
amended by adding a subdivision to read:

new text begin Subd. 10. new text end

new text begin Payments after october 1, 2005. new text end

new text begin General
assistance medical care payments made on or after October 1,
2005, shall be made from the health care access fund.
new text end

Sec. 25.

Minnesota Statutes 2004, section 256L.03,
subdivision 1, is amended to read:

Subdivision 1.

Covered health services.

deleted text begin For individuals
under section 256L.04, subdivision 7, with income no greater
than 75 percent of the federal poverty guidelines or deleted text end For
families with children under section 256L.04, subdivision 1, all
subdivisions of this section apply. "Covered health services"
means the health services reimbursed under chapter 256B, with
the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care
services other than services covered under section 256B.0625,
subdivision 9, paragraph (b), orthodontic services, nonemergency
medical transportation services, personal care assistant and
case management services, nursing home or intermediate care
facilities services, inpatient mental health services, and
chemical dependency services. Outpatient mental health services
covered under the MinnesotaCare program are limited to
diagnostic assessments, psychological testing, explanation of
findings, medication management by a physician, day treatment,
partial hospitalization, and individual, family, and group
psychotherapy.

No public funds shall be used for coverage of abortion
under MinnesotaCare except where the life of the female would be
endangered or substantial and irreversible impairment of a major
bodily function would result if the fetus were carried to term;
or where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in
this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 26.

Minnesota Statutes 2004, section 256L.03,
subdivision 3, is amended to read:

Subd. 3.

Inpatient hospital services.

(a) Covered health
services shall include inpatient hospital services, including
inpatient hospital mental health services and inpatient hospital
and residential chemical dependency treatment, subject to those
limitations necessary to coordinate the provision of these
services with eligibility under the medical assistance
spenddown. Prior to July 1, 1997, the inpatient hospital
benefit for adult enrollees is subject to an annual benefit
limit of $10,000. The inpatient hospital benefit for adult
enrollees deleted text begin who qualify under section 256L.04, subdivision 7, or
deleted text end who qualify under section 256L.04, subdivisions 1 and 2, with
family gross income that exceeds 175 percent of the federal
poverty guidelines and who are not pregnant, is subject to an
annual limit of $10,000.

(b) Admissions for inpatient hospital services paid for
under section 256L.11, subdivision 3, must be certified as
medically necessary in accordance with Minnesota Rules, parts
9505.0500 to 9505.0540, except as provided in clauses (1) and
(2):

(1) all admissions must be certified, except those
authorized under rules established under section 254A.03,
subdivision 3, or approved under Medicare; and

(2) payment under section 256L.11, subdivision 3, shall be
reduced by five percent for admissions for which certification
is requested more than 30 days after the day of admission. The
hospital may not seek payment from the enrollee for the amount
of the payment reduction under this clause.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 27.

Minnesota Statutes 2004, section 256L.04,
subdivision 1, is amended to read:

Subdivision 1.

Families with children.

(a) new text begin Through
September 30, 2005, new text end families with children with family income
equal to or less than 275 percent of the federal poverty
guidelines for the applicable family size shall be eligible for
MinnesotaCare according to this section. new text begin Beginning October 1,
2005, children and pregnant women with family income equal to or
less than 275 percent of the federal poverty guidelines for the
applicable family size shall be eligible for MinnesotaCare
according to this section. Beginning October 1, 2005, parents,
grandparents, foster parents, relative caretakers, and legal
guardians ages 21 and over are not eligible for MinnesotaCare if
their gross income exceeds 190 percent of the federal poverty
guidelines for the applicable family size. new text end All other provisions
of sections 256L.01 to 256L.18, including the insurance-related
barriers to enrollment under section 256L.07, shall apply unless
otherwise specified.

(b) Parents who enroll in the MinnesotaCare program must
also enroll their children, if the children are eligible.
Children may be enrolled separately without enrollment by
parents. However, if one parent in the household enrolls, both
parents must enroll, unless other insurance is available. If
one child from a family is enrolled, all children must be
enrolled, unless other insurance is available. If one spouse in
a household enrolls, the other spouse in the household must also
enroll, unless other insurance is available. Families cannot
choose to enroll only certain uninsured members.

(c) deleted text begin Beginning October 1, 2003, the dependent sibling
definition no longer applies to the MinnesotaCare program.
These persons are no longer counted in the parental household
and may apply as a separate household.
deleted text end

deleted text begin (d) deleted text end Beginning July 1, 2003, or upon federal approval,
whichever is later, parents are not eligible for MinnesotaCare
if their gross income exceeds $50,000.

Sec. 28.

Minnesota Statutes 2004, section 256L.04,
subdivision 8, is amended to read:

Subd. 8.

Applicants potentially eligible for medical
assistance.

deleted text begin (a) Individuals who receive supplemental security
income or retirement, survivors, or disability benefits due to a
disability, or other disability-based pension, who qualify under
subdivision 7, but who are potentially eligible for medical
assistance without a spenddown shall be allowed to enroll in
MinnesotaCare for a period of 60 days, so long as the applicant
meets all other conditions of eligibility. The commissioner
shall identify and refer the applications of such individuals to
their county social service agency. The county and the
commissioner shall cooperate to ensure that the individuals
obtain medical assistance coverage for any months for which they
are eligible.
deleted text end

deleted text begin (b) The enrollee must cooperate with the county social
service agency in determining medical assistance eligibility
within the 60-day enrollment period. Enrollees who do not
cooperate with medical assistance within the 60-day enrollment
period shall be disenrolled from the plan within one calendar
month. Persons disenrolled for nonapplication for medical
assistance may not reenroll until they have obtained a medical
assistance eligibility determination. Persons disenrolled for
noncooperation with medical assistance may not reenroll until
they have cooperated with the county agency and have obtained a
medical assistance eligibility determination.
deleted text end

deleted text begin (c) deleted text end Beginning January 1, 2000, counties that choose to
become MinnesotaCare enrollment sites shall consider
MinnesotaCare applications to also be applications for medical
assistance. Applicants who are potentially eligible for medical
assistance deleted text begin , except for those described in paragraph (a), deleted text end may
choose to enroll in either MinnesotaCare or medical assistance.

deleted text begin (d) The commissioner shall redetermine provider payments
made under MinnesotaCare to the appropriate medical assistance
payments for those enrollees who subsequently become eligible
for medical assistance.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 29.

Minnesota Statutes 2004, section 256L.05,
subdivision 5, is amended to read:

Subd. 5.

Availability of private insurance.

The
commissioner, in consultation with the commissioners of health
and commerce, shall provide information regarding the
availability of private health insurance coverage and the
possibility of disenrollment under section 256L.07, subdivision
1, deleted text begin paragraphs (b) and (c), to all: (1) deleted text end new text begin to new text end families enrolled in
the MinnesotaCare program whose gross family income is equal to
or more than 225 percent of the federal poverty guidelines deleted text begin ; and
(2) single adults and households without children enrolled in
the MinnesotaCare program whose gross family income is equal to
or more than 165 percent of the federal poverty guidelines deleted text end .
This information must be provided upon initial enrollment and
annually thereafter. The commissioner shall also include
information regarding the availability of private health
insurance coverage in the notice of ineligibility provided to
persons subject to disenrollment under section 256L.07,
subdivision 1 deleted text begin , paragraphs (b) and (c) deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 30.

Minnesota Statutes 2004, section 256L.07,
subdivision 1, is amended to read:

Subdivision 1.

General requirements.

(a) Children
enrolled in the original children's health plan as of September
30, 1992, children who enrolled in the MinnesotaCare program
after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross
incomes that are equal to or less than 150 percent of the
federal poverty guidelines are eligible without meeting the
requirements of subdivision 2 and the four-month requirement in
subdivision 3, as long as they maintain continuous coverage in
the MinnesotaCare program or medical assistance. Children who
apply for MinnesotaCare on or after the implementation date of
the employer-subsidized health coverage program as described in
Laws 1998, chapter 407, article 5, section 45, who have family
gross incomes that are equal to or less than 150 percent of the
federal poverty guidelines, must meet the requirements of
subdivision 2 to be eligible for MinnesotaCare.

(b) new text begin Through September 30, 2005, new text end families enrolled in
MinnesotaCare under section 256L.04, subdivision 1, whose income
increases above 275 percent of the federal poverty guidelines,
are no longer eligible for the program and shall be disenrolled
by the commissioner. deleted text begin Individuals deleted text end new text begin Beginning October 1, 2005,
children new text end enrolled in MinnesotaCare under section 256L.04,
subdivision deleted text begin 7 deleted text end new text begin 1 new text end , whose income increases above deleted text begin 175 deleted text end new text begin 275 new text end percent of
the federal poverty guidelines new text begin , new text end are no longer eligible for the
program and shall be disenrolled by the commissioner. new text begin Pregnant
women enrolled in MinnesotaCare whose income increases above 275
percent of the federal poverty guidelines remain eligible
through the end of the 60-day postpartum period. Beginning
October 1, 2005, parents, grandparents, foster parents, relative
caretakers, and legal guardians ages 21 and over are no longer
eligible for MinnesotaCare if their gross income exceeds 190
percent of the federal poverty guidelines for the applicable
family size. new text end For persons disenrolled under this subdivision,
MinnesotaCare coverage terminates the last day of the calendar
month following the month in which the commissioner determines
that the income of a family or individual exceeds program income
limits.

(c) deleted text begin (1) Notwithstanding paragraph (b), families enrolled in
MinnesotaCare under section 256L.04, subdivision 1, may remain
enrolled in MinnesotaCare if ten percent of their annual income
is less than the annual premium for a policy with a $500
deductible available through the Minnesota Comprehensive Health
Association. Families who are no longer eligible for
MinnesotaCare under this subdivision shall be given an 18-month
notice period from the date that ineligibility is determined
before disenrollment. This clause expires February 1, 2004.
deleted text end

deleted text begin (2) deleted text end Effective February 1, 2004, notwithstanding paragraph
(b), children may remain enrolled in MinnesotaCare if ten
percent of their annual family income is less than the annual
premium for a policy with a $500 deductible available through
the Minnesota Comprehensive Health Association. Children who
are no longer eligible for MinnesotaCare under this clause shall
be given a 12-month notice period from the date that
ineligibility is determined before disenrollment. The premium
for children remaining eligible under this clause shall be the
maximum premium determined under section 256L.15, subdivision 2,
paragraph (b).

(d) Effective July 1, 2003, notwithstanding paragraphs (b)
and (c), parents are no longer eligible for MinnesotaCare if
gross household income exceeds $50,000.

Sec. 31.

Minnesota Statutes 2004, section 256L.07,
subdivision 3, is amended to read:

Subd. 3.

Other health coverage.

(a) Families and
individuals enrolled in the MinnesotaCare program must have no
health coverage while enrolled or for at least four months prior
to application and renewal. Children enrolled in the original
children's health plan and children in families with income
equal to or less than 150 percent of the federal poverty
guidelines, who have other health insurance, are eligible if the
coverage:

(1) lacks two or more of the following:

(i) basic hospital insurance;

(ii) medical-surgical insurance;

(iii) prescription drug coverage;

(iv) dental coverage; or

(v) vision coverage;

(2) requires a deductible of $100 or more per person per
year; or

(3) lacks coverage because the child has exceeded the
maximum coverage for a particular diagnosis or the policy
excludes a particular diagnosis.

The commissioner may change this eligibility criterion for
sliding scale premiums in order to remain within the limits of
available appropriations. The requirement of no health coverage
does not apply to newborns.

(b) Medical assistance, general assistance medical care,
and the Civilian Health and Medical Program of the Uniformed
Service, CHAMPUS, or other coverage provided under United States
Code, title 10, subtitle A, part II, chapter 55, are not
considered insurance or health coverage for purposes of the
four-month requirement described in this subdivision.

(c) For purposes of this subdivision, new text begin an applicant or
enrollee who is entitled to new text end Medicare Part A or new text begin enrolled in
Medicare Part new text end B coverage under title XVIII of the Social
Security Act, United States Code, title 42, sections 1395c
to deleted text begin 1395w-4 deleted text end new text begin 1395w-152 new text end , is considered new text begin to have new text end health coverage. An
applicant or enrollee new text begin who is entitled to premium free Medicare
Part A new text end may not refuse new text begin to apply for or enroll in new text end Medicare
coverage to establish eligibility for MinnesotaCare.

(d) Applicants who were recipients of medical assistance or
general assistance medical care within one month of application
must meet the provisions of this subdivision and subdivision 2.

(e) Effective October 1, 2003, applicants who were
recipients of medical assistance and had cost-effective health
insurance which was paid for by medical assistance are exempt
from the four-month requirement under this section.

Sec. 32.

Minnesota Statutes 2004, section 256L.09,
subdivision 2, is amended to read:

Subd. 2.

Residency requirement.

deleted text begin (a) To be eligible for
health coverage under the MinnesotaCare program, adults without
children must be permanent residents of Minnesota.
deleted text end

deleted text begin (b) deleted text end To be eligible for health coverage under the
MinnesotaCare program, pregnant women, families, and children
must meet the residency requirements as provided by Code of
Federal Regulations, title 42, section 435.403 deleted text begin , except that the
provisions of section 256B.056, subdivision 1, shall apply upon
receipt of federal approval deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 33.

Minnesota Statutes 2004, section 256L.11,
subdivision 6, is amended to read:

Subd. 6.

Enrollees 18 or older.

Payment by the
MinnesotaCare program for inpatient hospital services provided
to MinnesotaCare enrollees eligible under deleted text begin section 256L.04,
subdivision 7, or who qualify under deleted text end section 256L.04,
subdivisions 1 and 2, with family gross income that exceeds 175
percent of the federal poverty guidelines and who are not
pregnant, who are 18 years old or older on the date of admission
to the inpatient hospital must be in accordance with paragraphs
(a) and (b). Payment for adults who are not pregnant and are
eligible under section 256L.04, subdivisions 1 and 2, and whose
incomes are equal to or less than 175 percent of the federal
poverty guidelines, shall be as provided for under paragraph (c).

(a) If the medical assistance rate minus any co-payment
required under section 256L.03, subdivision deleted text begin 4 deleted text end new text begin 5 new text end , is less than or
equal to the amount remaining in the enrollee's benefit limit
under section 256L.03, subdivision 3, payment must be the
medical assistance rate minus any co-payment required under
section 256L.03, subdivision deleted text begin 4 deleted text end new text begin 5 new text end . The hospital must not seek
payment from the enrollee in addition to the co-payment. The
MinnesotaCare payment plus the co-payment must be treated as
payment in full.

(b) If the medical assistance rate minus any co-payment
required under section 256L.03, subdivision deleted text begin 4 deleted text end new text begin 5 new text end , is greater than
the amount remaining in the enrollee's benefit limit under
section 256L.03, subdivision 3, payment must be the lesser of:

(1) the amount remaining in the enrollee's benefit limit;
or

(2) charges submitted for the inpatient hospital services
less any co-payment established under section 256L.03,
subdivision deleted text begin 4 deleted text end new text begin 5 new text end .

The hospital may seek payment from the enrollee for the
amount by which usual and customary charges exceed the payment
under this paragraph. If payment is reduced under section
256L.03, subdivision 3, paragraph (b), the hospital may not seek
payment from the enrollee for the amount of the reduction.

(c) For admissions occurring during the period of July 1,
1997, through June 30, 1998, for adults who are not pregnant and
are eligible under section 256L.04, subdivisions 1 and 2, and
whose incomes are equal to or less than 175 percent of the
federal poverty guidelines, the commissioner shall pay hospitals
directly, up to the medical assistance payment rate, for
inpatient hospital benefits in excess of the $10,000 annual
inpatient benefit limit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 34.

Minnesota Statutes 2004, section 256L.12,
subdivision 6, is amended to read:

Subd. 6.

Co-payments and benefit limits.

Enrollees are
responsible for all co-payments in deleted text begin sections deleted text end new text begin section new text end 256L.03,
subdivision 5, deleted text begin and 256L.035, deleted text end and shall pay co-payments to the
managed care plan or to its participating providers. The
enrollee is also responsible for payment of inpatient hospital
charges which exceed the MinnesotaCare benefit limit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2005.
new text end

Sec. 35.

Minnesota Statutes 2004, section 256L.12, is
amended by adding a subdivision to read:

new text begin Subd. 9b. new text end

new text begin Rate setting; rateable reduction. new text end

new text begin In addition
to the reduction in subdivision 9a, the total payment made to
managed care plans under the MinnesotaCare program is reduced
1.83 percent for services provided on or after January 1, 2006.
new text end

Sec. 36.

new text begin [501B.895] RECOVERY OF MEDICAL ASSISTANCE FROM
TRUSTS AND ANNUITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Policy, applicability, purpose, and
construction; definition. new text end

new text begin (a) Section 256B.15, subdivision 1,
paragraphs (a), clauses (3) to (5), and (b), shall apply to this
section.
new text end

new text begin (b) The provisions of this section expanding the interests
included in an estate for purposes of recovery under this
section and section 256B.15, give effect to the provisions of
United States Code, title 42, section 1396p, governing
recoveries, but do not give rise to any express or implied liens
in favor of any other parties not named in this or any other
provisions.
new text end

new text begin (c) This section shall be deemed to be included as a
provision of all trusts and annuities first created or
established on and after July 1, 2005, whether or not it appears
in those instruments. All persons establishing, administering,
and benefiting or who might benefit from trusts and annuities
first established after July 1, 2005, are deemed to have
irrevocably consented to the provisions of this section. The
duties, obligations, and responsibilities under this section may
not be disclaimed, waived, or assigned.
new text end

new text begin (d) All trusts and trustees shall be deemed to be located
in and subject to the laws of this state and the personal
jurisdiction of the courts of this state to the extent the
recipient or the recipient's predeceased spouse had an interest
in the trust at the time of the recipient's or recipient's
predeceased spouse's death as provided for in this section.
Notwithstanding any provision of law or rule to the contrary,
all annuities and parties administering annuities shall be
subject to the laws of this state and the personal jurisdiction
of the courts of this state to the extent the recipient or the
recipient's predeceased spouse had an interest in the annuities
at the time of the recipient's or recipient's predeceased
spouse's death.
new text end

new text begin (e) The rights and remedies under this section shall be in
addition to and not in place of any other rights and remedies
provided for by law for the recovery of medical assistance.
These rights and remedies are cumulative, and the use of any
shall not preclude the use of any other rights and remedies
provided for by law for the recovery of medical assistance.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin The terms used in this section
have the meanings given in paragraphs (a) to (o).
new text end

new text begin (a) "Administrator" means any trustee of a trust or any
person, firm, corporation, or other entity that administers an
annuity.
new text end

new text begin (b) "Beneficiary" means any person or party entitled to
receive or who might be entitled to receive any benefit or
anything of value under the terms of a trust or annuity.
new text end

new text begin (c) "Clearance" means a clearance for medical assistance
claims as provided in this section.
new text end

new text begin (d) "Commissioner" means the commissioner of human services
or the commissioner's designee.
new text end

new text begin (e) "County agency" means a county social services or other
count agency with a claim arising under section 256B.15.
new text end

new text begin (f) "Created or established" or similar words and phrases
means, for purposes of determining when a trust is subject to
this section, the date an inter vivos trust is fully executed by
or on behalf of the person whose assets fund any part of the
trust, or the date on which the person contracting for an
annuity or anyone acting on their behalf signs the written
agreement providing for the annuity.
new text end

new text begin (g) "Department" means the Minnesota Department of Human
Services.
new text end

new text begin (h) "Legal instrument, device, or arrangement similar to a
trust or annuity" means any instrument, device, or arrangement
which involves a grantor who transfers or whose property is
transferred by another, including any court, administrative
body, or anyone else with authority to act on their behalf or at
their direction, to an individual or entity with fiduciary,
contractual, or legal obligations to the grantor or others to be
held, managed, or administered by the individual or entity for
the benefit of the grantor or others. These legal instruments,
devices, or other arrangements are trusts or annuities for
purposes of this section.
new text end

new text begin (i) "Marital property" means any and all property acquired
by either or both the recipient and the recipient's surviving
spouse at any time during the marriage regardless of how it was
acquired, titled, or owned, and the proceeds of the property.
new text end

new text begin (j) "Medical assistance" means medical assistance as
defined in section 256B.15, subdivision 1, paragraph (b).
new text end

new text begin (k) "Predeceased spouse" means any spouse of the recipient
or surviving spouse who did not survive the recipient's or
surviving spouse's death.
new text end

new text begin (l) "Recipient" means a person who received medical
assistance as defined for purposes of this section or any
person, court, or administrative body with legal authority to
act in place of or on behalf of or at the direction of the
person or their spouse.
new text end

new text begin (m) "Satisfaction" or "satisfaction of claim" means a
satisfaction of medical assistance claim as provided for in this
section.
new text end

new text begin (n) "Surviving spouse" means the spouse of a recipient who
survived the recipient's death or any person, court, or
administrative body with legal authority to act in place of or
on behalf of or at the direction of the person or their spouse.
new text end

new text begin (o) "Trust" means an inter vivos trust.
new text end

new text begin Subd. 3. new text end

new text begin Applicability. new text end

new text begin This section applies to all
trusts to the extent they contain assets of a recipient or their
spouse, all annuities, legal instruments, devices, or
arrangements similar to trusts and annuities which are first
created or established on and after July 1, 2005, except to the
extent otherwise provided under federal law.
new text end

new text begin Subd. 4. new text end

new text begin Estate. new text end

new text begin For purposes of recovery of medical
assistance under this section, section 256B.15, or any other
federal or state laws, the following shall be part of the estate
and subject to recovery of medical assistance under this section
and section 256B.15:
new text end

new text begin (1) the interests, as defined in this section, a recipient
has in trusts or annuities at the time of the recipient's death;
new text end

new text begin (2) the interests, as defined in this section, a
recipient's surviving spouse has in trusts or annuities at the
time of the recipient's surviving spouse's death; and
new text end

new text begin (3) the life estates in real property owned by a trust or
annuity in which the recipient or the recipient's surviving
spouse has an interest at the time of the recipient or surviving
spouse's death.
new text end

new text begin Subd. 5. new text end

new text begin Extent of interest. new text end

new text begin For purposes of this
section:
new text end

new text begin (a) Except for life estates in real property, a deceased
recipient shall be deemed to have an interest in all of the
unpaid amount of an annuity and all of the trust assets,
proceeds of assets, and income from those assets or proceeds of
assets which the administrator was obligated or had any
discretion to pay to the recipient or for the recipient's
benefit on the date of the recipient's death.
new text end

new text begin (b) Except for life estates in real property, a deceased
surviving spouse shall be deemed to have an interest in the
unpaid amount of the annuity and all of the trust assets,
proceeds of assets, and income from those assets or proceeds of
assets which the trustee was obligated or had any discretion to
pay to the recipient or for the recipient's benefit on the date
of the recipient's death to the extent those assets were
property that was jointly owned or marital property at any time
during the marriage of the decedent and the surviving spouse.
All of the assets and proceeds of assets used to fund the trust
or an annuity shall be presumed to be property which the
deceased recipient and the deceased surviving spouse owned
jointly or which were marital property during their marriage.
Any party asserting otherwise in any appeal under section
256.045, a court proceeding, or otherwise, may overcome this
presumption by clear and convincing evidence to the contrary.
new text end

new text begin (c) For purposes of this section and section 256B.15, and
notwithstanding any provision of law or rule to the contrary, a
deceased recipient or deceased surviving spouse shall be deemed
to have an interest in the entire life estate in real property
that a trust or annuity owns when the recipient or surviving
spouse dies.
new text end

new text begin Subd. 6. new text end

new text begin First use of assets. new text end

new text begin (a) Upon the death of a
recipient or a surviving spouse who is a beneficiary of a trust
or an annuity, the administrator shall set aside and retain
trust assets or the portion of the unpaid amount of the annuity
equal to the decedent's interest in the trust or annuity
determined under this section. The administrator shall not
sell, assign, transfer, convey, or encumber the portion so set
aside except for reasonably equivalent value. The administrator
shall not distribute the portion so set aside until after
receiving a clearance or satisfaction from the department or a
court. As soon as practical after the recipient or surviving
spouse's death, the administrator or administrator's attorney
shall apply to the commissioner for a clearance for medical
assistance claims. The administrator shall retain that portion
set aside and administer and pay it according to this section,
section 256B.15, and all other laws governing or relating to
recovery of medical assistance.
new text end

new text begin (b) Notwithstanding any statute, rule, or the terms of any
trust or annuity to the contrary, the administrator shall have
the duty and the authority to do all things necessary to
liquidate the assets or proceeds of assets set aside to repay
medical assistance as provided for by law. The administrator
shall promptly pay the department or a county agency as provided
for by law.
new text end

new text begin (c) Except as otherwise provided, nothing in this section
shall be construed to be or create an express or implied lien on
the real and personal property included in the portion of the
trust or annuity set aside and administered under this section
or to make the title to the property unmarketable.
new text end

new text begin Subd. 7. new text end

new text begin Clearance for medical assistance claims. new text end

new text begin (a)
The application for a clearance of medical assistance claims
shall be addressed to the commissioner. The application shall
state:
new text end

new text begin (1) the name, date of birth, and Social Security number for
the decedent and any predeceased spouses;
new text end

new text begin (2) the names, current address, and work and home telephone
numbers for all administrators and all surviving beneficiaries
of the trust or annuity;
new text end

new text begin (3) whether the decedent's estate is being probated and, if
it is, the district court and case number for the probate;
new text end

new text begin (4) the approximate value of the portion of the trust or
annuity being set aside; and
new text end

new text begin (5) other contents as the commissioner deems appropriate.
new text end

new text begin (b) The commissioner shall determine whether the decedent
or any predeceased spouses received medical assistance giving
rise to a claim under section 256B.15. If there are no claims,
the commissioner, at no cost to others, shall send the
administrator or the administrator's attorney a clearance claim
by first class mail. If there are claims and the application
states the decedent's estate is being probated, the commissioner
shall send written notice a claim exists to the administrator or
the administrator's attorney and the county agency. If there
are claims and the application states the decedent's estate is
not being probated, the commissioner shall send the
administrator or the administrator's attorney and all of the
beneficiaries listed on the application written notice stating
the approximate amount of the claim, and a notice of the right
to a hearing as provided for in this section and section 256.045.
new text end

new text begin Notice shall be by certified mail, return receipt
requested, at the address in the application.
new text end

new text begin (c) A clearance for medical assistance claims shall
constitute prima facie evidence of compliance with the notice
requirements of this subdivision. Except in cases of fraud,
fraud in fact, or misrepresentation, if the commissioner issues
a clearance for medical assistance claims stating there are no
claims for medical assistance under section 256B.15 with respect
to a person properly identified in the application, the
administrator and all others who do or may benefit from the
trust or annuity with respect to which it is issued shall be
entitled to conclusively rely on the certificate. The
department shall thereafter be fully and finally barred from
recovering any medical assistance for such persons from the
trust or annuity from anyone who becomes or may become entitled
to receive anything from the trust or annuity after the person's
death. The clearance is not a waiver, release, or satisfaction
of any claims for recovery of medical assistance arising under
law.
new text end

new text begin Subd. 8. new text end

new text begin Recovery. new text end

new text begin (a) If the estate of the deceased
recipient or the surviving spouse is probated, the deceased
recipient or the surviving spouse's interest in trusts and
annuities shall be part of the estate and subject to recovery of
medical assistance as provided for under section 256B.15 and all
other applicable laws. The court, upon the court's motion or
upon motion by the personal representative or any party with a
claim under section 256B.15, and upon any prior notice given by
the court, shall enter all orders or grant legal or equitable
remedies that are necessary to carry out the purposes of this
section and all related statutes. Upon payment or satisfaction
of the claim, the party asserting the claim, the personal
representative, or the court shall issue the party administering
the trust or annuity a satisfaction under this section. The
satisfaction shall be prima facie evidence of compliance with
all of the requirements of this section.
new text end

new text begin (b) If the estate of the deceased recipient or surviving
spouse is not being probated, the commissioner shall recover all
medical assistance for which a claim could be filed under
section 256B.15 from that portion of the trust or annuity set
aside under this section. Upon payment or satisfaction of the
claim, the commissioner shall issue the party administering the
trust or annuity a satisfaction. The satisfaction shall be
prima facie evidence of compliance with all of the requirements
of this section.
new text end

new text begin (c) A satisfaction under this section releases a claim
under section 256B.15 only to the extent the claim is actually
paid according to this section. It does not operate as a
release and satisfaction of that claim to the extent the claim
remains unpaid or otherwise unsatisfied.
new text end

new text begin Subd. 9. new text end

new text begin Appeal. new text end

new text begin (a) If the decedent's estate is not
being probated, the administrator or any beneficiary named in
the application for a clearance may request a hearing under
section 256.045 solely to determine the existence or extent of
the claim arising under section 256B.15 or whether property was
jointly owned or marital property at any time during the
marriage of the recipient and the surviving spouse. The appeal
must be made within 30 days of the date of receipt of the notice
of claim. The request must:
new text end

new text begin (1) be in writing;
new text end

new text begin (2) list the names, addresses, and home and business
telephone numbers of the administrator and all of the
beneficiaries of the trust or annuity;
new text end

new text begin (3) state that no application or petition for the
appointment of a personal representative of the decedent is
pending or has been granted in any jurisdiction; and
new text end

new text begin (4) include a copy of the notice of a claim for the
decedent.
new text end

new text begin (b) A request for a hearing shall be deemed to be a request
by all of the administrators and all of the beneficiaries. When
an administrator requests a hearing, the administrator shall be
deemed to be acting on behalf of all of the actual, contingent,
known, and unknown beneficiaries as well. Notice of the hearing
need only be given to the administrator, and the decision in the
appeal shall be final and binding on the administrator and all
beneficiaries. If a beneficiary requests a hearing, notice of
the hearing shall be given to the administrator and all of the
other beneficiaries listed in the request for a hearing.
new text end

new text begin (c) The administrator shall be deemed to represent all
contingent, known, and unknown beneficiaries and any other
beneficiaries for whom there is no current address or home or
work telephone number listed in the hearing request, and any
decision in the appeal shall be final and binding upon the
parties they represent. Any party to whom notice of the hearing
is mailed shall be deemed to have waived any and all of the
party's claims and defenses for themselves and any parties they
represent with respect to the department's claim under section
256B.15 unless that party appears and asserts the party's claims
and defenses at the hearing.
new text end

new text begin Subd. 10. new text end

new text begin Life estates. new text end

new text begin Notwithstanding any law or rule
to the contrary, if a trust or an annuity owns a life estate in
real property, the provisions in paragraphs (a) to (c) apply.
new text end

new text begin (a) The life estate shall continue to exist until
terminated of record as provided for in this section and shall
not terminate except as provided for in this section.
new text end

new text begin (b) The recorder or registrar of titles shall not accept,
record, or file any instrument terminating a life estate of
record or transferring or encumbering the life estate unless a
clearance or a satisfaction is recorded, filed, or attached to
the instrument. The clearance or satisfaction need not be
attested, certified, or acknowledged as a condition of filing
and may be separately recorded or filed if it includes a legal
description of the property. When attached, the clearance or
satisfaction and the instrument to which it is attached shall be
deemed to be a single instrument for all purposes. The life
estate shall terminate upon the filing or recording of the
clearance or satisfaction or an instrument of termination and
attached satisfaction or certificate of clearance for medical
assistance claims, and examiners of title shall not carry the
life estate or instrument of termination forward to any new
certificates.
new text end

new text begin (c) The commissioner may charge the annuity, trust, or any
other party requesting a clearance or satisfaction an issuance
fee not to exceed the lesser of the actual amount of its claim
for medical assistance under section 256B.15 or the value of the
life estate for a satisfaction of claim. The extent of the life
estate in the property shall be the life estate percentage
factor for the person who is the measuring life on the date of
the death of the recipient or the surviving spouse as listed in
the life estate mortality table of the health care program's
manual.
new text end

new text begin Subd. 11. new text end

new text begin Liability and remedies. new text end

new text begin (a) Administrators who
do not comply with this section shall be personally liable to
the department or a county agency for the lesser of the unpaid
amount of claims arising under section 256B.15 or the value of
the portion of the trust or annuity payable in satisfaction of
claims arising under section 256B.15 as provided for under this
section. If there is a failure to comply with this section,
anyone who receives anything of value from the trust or annuity
shall be personally liable to the department or a county agency
for the lesser of the unpaid amount of claims arising under
section 256B.15 or the value of anything or any benefit they
directly or indirectly receive from the trust or annuity on and
after the date the recipient or the surviving spouse dies.
new text end

new text begin (b) The commissioner or a county agency may bring civil
actions in district court to compel compliance with this section
or section 256B.15 or to obtain judgment or other legal or
equitable relief against anyone liable to it under this section
or section 256B.15. Venue for all actions the commissioner
brings shall be in Ramsey County. Venue for all actions a
county agency brings shall be in the county in which the county
agency is located. Administrators or beneficiaries shall be
deemed to submit to the personal jurisdiction of the district
court with venue when they agree to or begin administering the
trust or annuity or become entitled to any actual or potential
benefit from the trust or annuity. A clearance or a
satisfaction shall be admissible as evidence, prima facie
evidence of compliance with the requirements of this section,
and an affirmative defense to any action for recovery or
otherwise. The commissioner shall have the burden of overcoming
the presumption of compliance arising from admission of the
certificate or satisfaction by a preponderance of the evidence.
The court shall have the authority to enter judgments, orders,
and temporary and permanent injunctions granting and providing
all legal and equitable remedies necessary to accomplish the
purposes of this section. As part of a judgment in the
commissioner's or county agency's favor, the court shall award
the commissioner or the county agency reasonable attorney fees
and all other costs associated with obtaining the judgment.
new text end

new text begin (c) The provisions of section 289A.50, subdivision 5, shall
apply with respect to recovery of judgments in favor of the
commissioner in actions arising under this section. Upon being
presented with a certified copy of the judgment entry and a
statement of the unpaid balance of the judgment, the
commissioner of the Department of Revenue or the commissioner's
designee shall withhold any refunds due the judgment debtor from
the state of Minnesota and remit them to the commissioner in the
manner provided for in section 289A.50, subdivision 5. The
withholding shall not exceed the unpaid balance of the judgment,
together with interest and costs.
new text end

new text begin (d) An administrator who sells, liquidates, delivers,
transfers, or pays any of the trust assets or the unpaid amount
of the annuity to the commissioner or a county agency to meet
obligations under this section shall be fully and finally
discharged and released from any and all liability to all
beneficiaries to the same extent as if they had delivered,
transferred, or paid them to the beneficiaries as provided for
in law and the terms of the trust or annuity.
new text end

new text begin Subd. 12. new text end

new text begin Exceptions. new text end

new text begin This section does not apply to
supplemental needs trusts or to special needs trusts that
qualify as exempt assets for purposes of eligibility for medical
assistance, to testamentary trusts, or to a trust or annuity
otherwise subject to this section to the extent that persons
other than a recipient, the recipient's spouse, a predeceased
spouse, or anyone with authority to act on their behalf used
their own funds or assets to fund the trust or annuity at the
time it was created or established.
new text end

new text begin Subd. 13. new text end

new text begin Settlement. new text end

new text begin The commissioner, the
commissioner's designee, or a county agency may, but are not
required to, settle and compromise recoveries under this section
for terms and conditions and for amounts that the commissioner,
the commissioner's designee, or a county agency deems
appropriate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on the day
following final enactment, applies to all trusts and annuities
first created or established on or after July 1, 2005, and
applies to all interests in real or personal property regardless
of the date on which the interest was created, reserved, or
acquired.
new text end

Sec. 37. new text begin HEALTH CARE FINANCING REPORT.
new text end

new text begin The commissioner shall develop recommendations on
simplifying publicly funded health care program financing. The
commissioner shall report the recommendations to the chairs of
the house and senate committees with jurisdiction over health
care financing during the 2007 legislative session.
new text end

Sec. 38. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, sections 256L.035; 256L.04,
subdivision 7; and 256L.09, subdivisions 1, 4, 5, 6, and 7, are
repealed effective October 1, 2005.
new text end

new text begin (b) Minnesota Statutes 2004, section 256.955, is repealed
effective January 1, 2006.
new text end

new text begin (c) Minnesota Statutes 2004, section 295.581, is repealed
the day following final enactment.
new text end

ARTICLE 4

NURSING FACILITY REIMBURSEMENT

Section 1.

Minnesota Statutes 2004, section 256B.431,
subdivision 28, is amended to read:

Subd. 28.

Nursing facility rate increases beginning july
1, 1999, and july 1, 2000.

(a) For the rate years beginning
July 1, 1999, and July 1, 2000, the commissioner shall make
available to each nursing facility reimbursed under this section
or section 256B.434 an adjustment to the total operating payment
rate. For nursing facilities reimbursed under this section or
section 256B.434, the July 1, 2000, operating payment rate
increases provided in this subdivision shall be applied to each
facility's June 30, 2000, operating payment rate. For each
facility, total operating costs shall be separated into costs
that are compensation related and all other costs.
Compensation-related costs include salaries, payroll taxes, and
fringe benefits for all employees except management fees, the
administrator, and central office staff.

(b) For the rate year beginning July 1, 1999, the
commissioner shall make available a rate increase for
compensation-related costs of 4.843 percent and a rate increase
for all other operating costs of 3.446 percent.

(c) For the rate year beginning July 1, 2000, the
commissioner shall make available:

(1) a rate increase for compensation-related costs of 3.632
percent;

(2) an additional rate increase for each case mix payment
rate which must be used to increase the per-hour pay rate of all
employees except management fees, the administrator, and central
office staff by an equal dollar amount and to pay associated
costs for FICA, the Medicare tax, workers' compensation
premiums, and federal and state unemployment insurance, to be
calculated according to clauses (i) to (iii):

(i) the commissioner shall calculate the arithmetic mean of
the 11 June 30, 2000, operating rates for each facility;

(ii) the commissioner shall construct an array of nursing
facilities from highest to lowest, according to the arithmetic
mean calculated in clause (i). A numerical rank shall be
assigned to each facility in the array. The facility with the
highest mean shall be assigned a numerical rank of one. The
facility with the lowest mean shall be assigned a numerical rank
equal to the total number of nursing facilities in the array.
All other facilities shall be assigned a numerical rank in
accordance with their position in the array;

(iii) the amount of the additional rate increase shall be
$1 plus an amount equal to $3.13 multiplied by the ratio of the
facility's numeric rank divided by the number of facilities in
the array; and

(3) a rate increase for all other operating costs of 2.585
percent.

Money received by a facility as a result of the additional
rate increase provided under clause (2) shall be used only for
wage increases implemented on or after July 1, 2000, and shall
not be used for wage increases implemented prior to that date.

(d) The payment rate adjustment for each nursing facility
must be determined under clause (1) or (2):

(1) for each nursing facility that reports salaries for
registered nurses, licensed practical nurses, aides, orderlies,
and attendants separately, the commissioner shall determine the
payment rate adjustment using the categories specified in
paragraph (a) multiplied by the rate increases specified in
paragraph (b) or (c), and then dividing the resulting amount by
the nursing facility's actual resident days. In determining the
amount of a payment rate adjustment for a nursing facility
reimbursed under section 256B.434, the commissioner shall
determine the proportions of the facility's rates that are
compensation-related costs and all other operating costs based
on the facility's most recent cost report; and

(2) for each nursing facility that does not report salaries
for registered nurses, licensed practical nurses, aides,
orderlies, and attendants separately, the payment rate
adjustment shall be computed using the facility's total
operating costs, separated into the categories specified in
paragraph (a) in proportion to the weighted average of all
facilities determined under clause (1), multiplied by the rate
increases specified in paragraph (b) or (c), and then dividing
the resulting amount by the nursing facility's actual resident
days.

(e) A nursing facility may apply for the
compensation-related payment rate adjustment calculated under
this subdivision. The application must be made to the
commissioner and contain a plan by which the nursing facility
will distribute the compensation-related portion of the payment
rate adjustment to employees of the nursing facility. For
nursing facilities in which the employees are represented by an
exclusive bargaining representative, an agreement negotiated and
agreed to by the employer and the exclusive bargaining
representative constitutes the plan. For the second rate year,
a negotiated agreement constitutes the plan only if the
agreement is finalized after the date of enactment of all rate
increases for the second rate year. The commissioner shall
review the plan to ensure that the payment rate adjustment per
diem is used as provided in paragraphs (a) to (c). To be
eligible, a facility must submit its plan for the compensation
distribution by December 31 each year. A facility may amend its
plan for the second rate year by submitting a revised plan by
December 31, 2000. If a facility's plan for compensation
distribution is effective for its employees after July 1 of the
year that the funds are available, the payment rate adjustment
per diem shall be effective the same date as its plan.

(f) A copy of the approved distribution plan must be made
available to all employees. This must be done by giving each
employee a copy or by posting it in an area of the nursing
facility to which all employees have access. If an employee
does not receive the compensation adjustment described in their
facility's approved plan and is unable to resolve the problem
with the facility's management or through the employee's union
representative, the employee may contact the commissioner at an
address or phone number provided by the commissioner and
included in the approved plan.

(g) If the reimbursement system under section 256B.435 is
not implemented until July 1, 2001, the salary adjustment per
diem authorized in subdivision 2i, paragraph (c), shall continue
until June 30, 2001.

(h) For the rate year beginning July 1, 1999, the following
nursing facilities shall be allowed a rate increase equal to 67
percent of the rate increase that would be allowed if
subdivision 26, paragraph (a), was not applied:

(1) a nursing facility in Carver County licensed for 33
nursing home beds and four boarding care beds;

(2) a nursing facility in Faribault County licensed for 159
nursing home beds on September 30, 1998; and

(3) a nursing facility in Houston County licensed for 68
nursing home beds on September 30, 1998.

(i) For the rate year beginning July 1, 1999, the following
nursing facilities shall be allowed a rate increase equal to 67
percent of the rate increase that would be allowed if
subdivision 26, paragraphs (a) and (b), were not applied:

(1) a nursing facility in Chisago County licensed for 135
nursing home beds on September 30, 1998; and

(2) a nursing facility in Murray County licensed for 62
nursing home beds on September 30, 1998.

(j) For the rate year beginning July 1, 1999, a nursing
facility in Hennepin County licensed for 134 beds on September
30, 1998, shall:

(1) have the prior year's allowable care-related per diem
increased by $3.93 and the prior year's other operating cost per
diem increased by $1.69 before adding the inflation in
subdivision 26, paragraph (d), clause (2); and

(2) be allowed a rate increase equal to 67 percent of the
rate increase that would be allowed if subdivision 26,
paragraphs (a) and (b), were not applied.

The increases provided in paragraphs (h), (i), and (j)
shall be included in the facility's total payment rates for the
purposes of determining future rates under this section deleted text begin or any
other section deleted text end .

(k) For the rate years beginning on or after July 1, 2000,
a nursing home facility in Goodhue County that was licensed for
104 beds on February 1, 2000, shall have its employee pension
benefit costs reported on its Rule 50 cost report treated as
PERA contributions for the purpose of computing its payment
rates.

Sec. 2.

Minnesota Statutes 2004, section 256B.431,
subdivision 29, is amended to read:

Subd. 29.

Facility rate increases effective july 1,
2000.

Following the determination under subdivision 28 of the
payment rate for the rate year beginning July 1, 2000, for a
facility in Roseau County licensed for 49 beds, the facility's
operating cost per diem shall be increased by the following
amounts:

(1) case mix class A, $1.97;

(2) case mix class B, $2.11;

(3) case mix class C, $2.26;

(4) case mix class D, $2.39;

(5) case mix class E, $2.54;

(6) case mix class F, $2.55;

(7) case mix class G, $2.66;

(8) case mix class H, $2.90;

(9) case mix class I, $2.97;

(10) case mix class J, $3.10; and

(11) case mix class K, $3.36.

These increases shall be included in the facility's total
payment rates for the purpose of determining future rates under
this section deleted text begin or any other section deleted text end .

Sec. 3.

Minnesota Statutes 2004, section 256B.431,
subdivision 30, is amended to read:

Subd. 30.

Bed layaway and delicensure.

(a) For rate
years beginning on or after deleted text begin July 1, 2000 deleted text end new text begin October 1, 2006 new text end , a
nursing facility reimbursed under this section which has placed
beds on layaway new text begin or removed beds from layaway, or delicensed beds
new text end shall, for purposes of deleted text begin application of the downsizing incentive
in subdivision 3a, paragraph (c), and calculation of the rental
per diem deleted text end new text begin determination of the payment rate for property-related
costs under section 256B.441, subdivision 63 new text end , have those
beds new text begin placed in layaway new text end given the same effect as if the beds had
been delicensed so long as the beds remain on layaway new text begin , and have
the number of beds used in the calculation in section 256B.441,
subdivision 63, paragraph (f), be based on the number of
licensed beds less the number that are in layaway new text end . deleted text begin 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. deleted text end The property payment rate deleted text begin increase shall
be effective the first day of the month following the month in
which deleted text end new text begin changes from new text end the layaway of the beds deleted text begin becomes deleted text end new text begin , the removal
of beds from layaway, and the delicensure of beds shall be
new text end effective deleted text begin under section 144A.071, subdivision 4b. deleted text end new text begin as follows:
new text end

new text begin (1) bed changes effective on or after December 1, but no
later than February 29, have a rate effective date of April 1;
new text end

new text begin (2) bed changes effective on or after March 1, but no later
than May 31, have a rate effective date of July 1;
new text end

new text begin (3) bed changes effective on or after June 1, but no later
than August 31, have a rate effective date of October 1; and
new text end

new text begin (4) bed changes effective on or after September 1, but no
later than November 30, have a rate effective date of January 1.
new text end

deleted text begin (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:
deleted text end

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

deleted text begin (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
deleted text end

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

deleted text begin 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 following the month in
which the layaway of the beds becomes effective.
deleted text end

deleted text begin (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).
deleted text end

deleted text begin (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:
deleted text end

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

deleted text begin (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
deleted text end

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

deleted text begin 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 following the month in
which the delicensure of the beds becomes effective.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (g) deleted text end new text begin (b) new text end A nursing facility receiving a rate adjustment as a
result of this section shall comply with section 256B.47,
subdivision 2.

deleted text begin (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.
deleted text end

Sec. 4.

Minnesota Statutes 2004, section 256B.431,
subdivision 35, is amended to read:

Subd. 35.

Exclusion of raw food cost adjustment.

For
rate years beginning on or after July 1, 2001, in calculating a
nursing facility's operating cost per diem for the purposes of
constructing an array, determining a median, or otherwise
performing a statistical measure of nursing facility payment
rates to be used to determine future rate increases under this
section, section 256B.434, or any other section, the
commissioner shall exclude adjustments for raw food costs under
subdivision 2b, paragraph (h), that are related to providing
special diets based on religious beliefs. new text begin For rates determined
under section 256B.441, the amount determined under subdivision
2b, paragraph (h), shall not be included in the support services
per diem cost determined in section 256B.441, subdivision 56,
and shall be added to the external fixed cost costs payment rate
determined in section 256B.441, subdivision 62, paragraph (j).
new text end

Sec. 5.

Minnesota Statutes 2004, section 256B.431, is
amended by adding a subdivision to read:

new text begin Subd. 41. new text end

new text begin Rate increases beginning october 1, 2005. new text end

new text begin For
the rate year beginning October 1, 2005, the commissioner shall
provide to each nursing facility reimbursed under this section
or section 256B.434 an increase in each case mix payment rate
equal to two percent of the operating portion of that case mix
payment rate.
new text end

Sec. 6.

Minnesota Statutes 2004, section 256B.432,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this
section, the following terms have the meanings given them.

(a) "Management agreement" means an agreement in which one
or more of the following criteria exist:

(1) the central, affiliated, or corporate office has or is
authorized to assume day-to-day operational control of the
nursing facility for any six-month period within a 24-month
period. "Day-to-day operational control" means that the
central, affiliated, or corporate office has the authority to
require, mandate, direct, or compel the employees of the nursing
facility to perform or refrain from performing certain acts, or
to supplant or take the place of the top management of the
nursing facility. "Day-to-day operational control" includes the
authority to hire or terminate employees or to provide an
employee of the central, affiliated, or corporate office to
serve as administrator of the nursing facility;

(2) the central, affiliated, or corporate office performs
or is authorized to perform two or more of the following: the
execution of contracts; authorization of purchase orders;
signature authority for checks, notes, or other financial
instruments; requiring the nursing facility to use the group or
volume purchasing services of the central, affiliated, or
corporate office; or the authority to make annual capital
expenditures for the nursing facility exceeding $50,000, or $500
per licensed bed, whichever is less, without first securing the
approval of the nursing facility board of directors;

(3) the central, affiliated, or corporate office becomes or
is required to become the licensee under applicable state law;

(4) the agreement provides that the compensation for
services provided under the agreement is directly related to any
profits made by the nursing facility; or

(5) the nursing facility entering into the agreement is
governed by a governing body that meets fewer than four times a
year, that does not publish notice of its meetings, or that does
not keep formal records of its proceedings.

(b) "Consulting agreement" means any agreement the purpose
of which is for a central, affiliated, or corporate office to
advise, counsel, recommend, or suggest to the owner or operator
of the nonrelated nursing facility measures and methods for
improving the operations of the nursing facility.

(c) "Nursing facility" means a deleted text begin nursing deleted text end facility deleted text begin whose
medical assistance rates are determined according to section
256B.431 deleted text end new text begin with a medical assistance provider agreement that is
licensed as a nursing home under chapter 144A or as a boarding
care home under sections 144.50 to 144.56 new text end .

Sec. 7.

Minnesota Statutes 2004, section 256B.432,
subdivision 2, is amended to read:

Subd. 2.

Effective date.

For rate years beginning on or
after July 1, 1990, the central, affiliated, or corporate office
cost allocations in subdivisions 3 to 6 must be used when
determining medical assistance rates under section 256B.431 new text begin ,
256B.434, or 256B.441 new text end .

Sec. 8.

Minnesota Statutes 2004, section 256B.432, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Allocation; costs allocable on a functional
basis. new text end

new text begin (a) Costs that have not been directly identified must be
allocated to nursing facilities on a basis designed to equitably
allocate the costs to the nursing facilities or activities
receiving the benefits of the costs. This allocation must be
made in a manner reasonably related to the services received by
the nursing facilities. Where practical and the amounts are
material, these costs must be allocated on a functional basis.
The functions, or cost centers used to allocate central office
costs, and the unit bases used to allocate the costs, including
those central office costs allocated according to subdivision 5,
must be used consistently from one central office accounting
period to another.
new text end

new text begin (b) If the central office wishes to change its allocation
bases and believes the change will result in more appropriate
and more accurate allocations, the central office must make a
written request, with its justification, to the commissioner for
approval of the change no later than 120 days after the
beginning of the central office accounting period to which the
change is to apply. The commissioner's approval of a central
office request will be furnished to the central office in
writing. Where the commissioner approves the central office
request, the change must be applied to the accounting period for
which the request was made, and to all subsequent central office
accounting periods unless the commissioner approves a subsequent
request for change by the central office. The effective date of
the change will be the beginning of the accounting period for
which the request was made.
new text end

Sec. 9.

Minnesota Statutes 2004, section 256B.432,
subdivision 5, is amended to read:

Subd. 5.

Allocation of remaining costs; allocation
ratio.

(a) After the costs that can be directly identified
according to subdivisions 3 and 4 have been allocated, the
remaining central, affiliated, or corporate office costs must be
allocated between the nursing facility operations and the other
activities or facilities unrelated to the nursing facility
operations based on the ratio of total operating
costs. new text begin However, in the event that these remaining costs are
partially attributable to the start-up of home and
community-based services intended to fill a gap identified by
the local agency, the facility may assign these remaining costs
to the appropriate cost category of the facility for a period
not to exceed two years.
new text end

(b) For purposes of allocating these remaining central,
affiliated, or corporate office costs, the numerator for the
allocation ratio shall be determined as follows:

(1) for nursing facilities that are related organizations
or are controlled by a central, affiliated, or corporate office
under a management agreement, the numerator of the allocation
ratio shall be equal to the sum of the total operating costs
incurred by each related organization or controlled nursing
facility;

(2) for a central, affiliated, or corporate office
providing goods or services to related organizations that are
not nursing facilities, the numerator of the allocation ratio
shall be equal to the sum of the total operating costs incurred
by the nonnursing facility related organizations;

(3) for a central, affiliated, or corporate office
providing goods or services to unrelated nursing facilities
under a consulting agreement, the numerator of the allocation
ratio shall be equal to the greater of directly identified
central, affiliated, or corporate costs or the contracted
amount; or

(4) for business activities that involve the providing of
goods or services to unrelated parties which are not nursing
facilities, the numerator of the allocation ratio shall be equal
to the greater of directly identified costs or revenues
generated by the activity or function.

(c) The denominator for the allocation ratio is the sum of
the numerators in paragraph (b), clauses (1) to (4).

Sec. 10.

Minnesota Statutes 2004, section 256B.432, is
amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin Related organization costs. new text end

new text begin (a) Costs
applicable to services, capital assets, and supplies directly or
indirectly furnished to the nursing facility by any related
organization are includable in the allowable cost of the nursing
facility at the purchase price paid by the related organization
for capital assets or supplies and at the cost incurred by the
related organization for the provision of services to the
nursing facility if these prices or costs do not exceed the
price of comparable services, capital assets, or supplies that
could be purchased elsewhere. For this purpose, the related
organization's costs must not include an amount for markup or
profit.
new text end

new text begin (b) If the related organization in the normal course of
business sells services, capital assets, or supplies to
nonrelated organizations, the cost to the nursing facility shall
be the nonrelated organization's price provided that sales to
nonrelated organizations constitute at least 50 percent of total
annual sales of similar services, capital assets, or supplies.
new text end

Sec. 11.

Minnesota Statutes 2004, section 256B.434,
subdivision 3, is amended to read:

Subd. 3.

Duration and termination of contracts.

(a)
Subject to available resources, the commissioner may begin to
execute contracts with nursing facilities November 1, 1995.

(b) All contracts entered into under this section are for a
term deleted text begin of one year deleted text end new text begin not to exceed three years new text end . Either party may
terminate a contract at any time without cause by providing 90
calendar days advance written notice to the other party. The
decision to terminate a contract is not appealable.
Notwithstanding section 16C.05, subdivision 2, paragraph (a),
clause (5), the contract shall be renegotiated for
additional deleted text begin one-year deleted text end new text begin three-year new text end terms, unless either party
provides written notice of termination. The provisions of the
contract shall be renegotiated deleted text begin annually deleted text end new text begin at a minimum of every
three years new text end by the parties prior to the expiration date of the
contract. The parties may voluntarily renegotiate the terms of
the contract at any time by mutual agreement.

(c) If a nursing facility fails to comply with the terms of
a contract, the commissioner shall provide reasonable notice
regarding the breach of contract and a reasonable opportunity
for the facility to come into compliance. If the facility fails
to come into compliance or to remain in compliance, the
commissioner may terminate the contract. If a contract is
terminated, the contract payment remains in effect for the
remainder of the rate year in which the contract was terminated,
but in all other respects the provisions of this section do not
apply to that facility effective the date the contract is
terminated. The contract shall contain a provision governing
the transition back to the cost-based reimbursement system
established under section 256B.431 and Minnesota Rules, parts
9549.0010 to 9549.0080. A contract entered into under this
section may be amended by mutual agreement of the parties.

Sec. 12.

Minnesota Statutes 2004, section 256B.434,
subdivision 4, is amended to read:

Subd. 4.

Alternate rates for nursing facilities.

(a) For
nursing facilities which have their payment rates determined
under this section rather than section 256B.431, the
commissioner shall establish a rate under this subdivision. The
nursing facility must enter into a written contract with the
commissioner.

(b) A nursing facility's case mix payment rate for the
first rate year of a facility's contract under this section is
the payment rate the facility would have received under section
256B.431.

(c) A nursing facility's case mix payment rates for the
second and subsequent years of a facility's contract under this
section are the previous rate year's contract payment rates 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 finance's national
economic consultant, 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, deleted text begin and deleted text end July 1, 2004 new text begin , July 1, 2005, July 1, 2006, July 1,
2007, July 1, 2008, and July 1, 2009 new text end , this paragraph shall apply
only to the property-related payment rate, except that
adjustments to include the cost of any increase in Health
Department licensing fees taking effect on or after July 1,
2001, shall be provided. new text begin Beginning in 2005, adjustment to the
property payment rate under this section and section 256B.431
shall be effective on October 1. new text end 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.

(d) The commissioner shall develop additional
incentive-based payments of up to five percent above the
standard contract rate for achieving outcomes specified in each
contract. The specified facility-specific outcomes must be
measurable and approved by the commissioner. The commissioner
may establish, for each contract, various levels of achievement
within an outcome. After the outcomes have been specified the
commissioner shall assign various levels of payment associated
with achieving the outcome. Any incentive-based payment cancels
if there is a termination of the contract. In establishing the
specified outcomes and related criteria the commissioner shall
consider the following state policy objectives:

(1) improved cost effectiveness and quality of life as
measured by improved clinical outcomes;

(2) successful diversion or discharge to community
alternatives;

(3) decreased acute care costs;

(4) improved consumer satisfaction;

(5) the achievement of quality; or

(6) any additional outcomes proposed by a nursing facility
that the commissioner finds desirable.

Sec. 13.

Minnesota Statutes 2004, section 256B.434,
subdivision 4a, is amended to read:

Subd. 4a.

Facility rate increases.

For the rate year
beginning July 1, 1999, the nursing facilities described in
clauses (1) to (5) shall receive the rate increases indicated.
The increases provided under this subdivision shall be included
in the facility's total payment rates for the purpose of
determining future rates under this section deleted text begin or any other section deleted text end :

(1) a nursing facility in Becker County licensed for 102
nursing home beds on September 30, 1998, shall receive an
increase of $1.30 in its case mix class A payment rate; an
increase of $1.33 in its case mix class B payment rate; an
increase of $1.36 in its case mix class C payment rate; an
increase of $1.39 in its case mix class D payment rate; an
increase of $1.42 in its case mix class E payment rate; an
increase of $1.42 in its case mix class F payment rate; an
increase of $1.45 in its case mix class G payment rate; an
increase of $1.49 in its case mix class H payment rate; an
increase of $1.51 in its case mix class I payment rate; an
increase of $1.54 in its case mix class J payment rate; and an
increase of $1.59 in its case mix class K payment rate;

(2) a nursing facility in Chisago County licensed for 101
nursing home beds on September 30, 1998, shall receive an
increase of $3.67 in each case mix payment rate;

(3) a nursing facility in Canby, licensed for 75 beds shall
have its property-related per diem rate increased by $1.21.
This increase shall be recognized in the facility's contract
payment rate under this section;

(4) a nursing facility in Golden Valley with all its beds
licensed to provide residential rehabilitative services to young
adults under Minnesota Rules, parts 9570.2000 to 9570.3400,
shall have the payment rate computed according to this section
increased by $14.83; and

(5) a county-owned 130-bed nursing facility in Park Rapids
shall have its per diem contract payment rate increased by $1.02
for costs related to compliance with comparable worth
requirements.

Sec. 14.

Minnesota Statutes 2004, section 256B.434,
subdivision 4b, is amended to read:

Subd. 4b.

Facility rate increases effective july 1,
2000.

For the rate year beginning July 1, 2000, the nursing
facilities described in clauses (1) to (6) shall receive the
rate increases indicated. The increases under this subdivision
shall be added following the determination under section
256B.431, subdivision 28, of the payment rate for the rate year
beginning July 1, 2000, and shall be included in the facility's
total payment rates for the purposes of determining future rates
under this section deleted text begin or any other section deleted text end :

(1) a nursing facility in Hennepin County licensed for 290
beds shall receive an operating cost per diem increase of 5.9
percent, provided that the facility delicenses, decertifies, or
places on layaway status, if that status is otherwise permitted
by law, 70 beds;

(2) a nursing facility in Goodhue County licensed for 84
beds shall receive an increase of $1.54 in each case mix payment
rate;

(3) a nursing facility located in Rochester and licensed
for 103 beds on January 1, 2000, shall receive an increase in
its case mix resident class A payment of $3.78, and an increase
in the payment rate for all other case mix classes of that
amount multiplied by the class weight for that case mix class
established in Minnesota Rules, part 9549.0058, subpart 3;

(4) a nursing facility in Wright County licensed for 154
beds shall receive an increase of $2.03 in each case mix payment
rate to be used for employee wage and benefit enhancements;

(5) a facility in Todd County licensed for 78 beds, shall
have its operating cost per diem increased by the following
amounts:

(i) case mix class A, $1.16;

(ii) case mix class B, $1.50;

(iii) case mix class C, $1.89;

(iv) case mix class D, $2.26;

(v) case mix class E, $2.63;

(vi) case mix class F, $2.65;

(vii) case mix class G, $2.96;

(viii) case mix class H, $3.55;

(ix) case mix class I, $3.76;

(x) case mix class J, $4.08; and

(xi) case mix class K, $4.76; and

(6) a nursing facility in Pine City that decertified 22
beds in calendar year 1999 shall have its property-related per
diem payment rate increased by $1.59.

Sec. 15.

Minnesota Statutes 2004, section 256B.434,
subdivision 4c, is amended to read:

Subd. 4c.

Facility rate increases effective january 1,
2002.

For the rate period beginning January 1, 2002, and for
the rate year beginning July 1, 2002, a nursing facility in
Morrison County licensed for 83 beds as of March 1, 2001, shall
receive an increase of $2.54 in each case mix payment rate to
offset property tax payments due as a result of the facility's
conversion from nonprofit to for-profit status. The increase
under this subdivision shall be added following the
determination under this chapter of the payment rate for the
rate year beginning July 1, 2001, and shall be included in the
facility's total payment rates for the purposes of determining
future rates under this section deleted text begin or any other section deleted text end .

Sec. 16.

Minnesota Statutes 2004, section 256B.434,
subdivision 4d, is amended to read:

Subd. 4d.

Facility rate increases effective july 1,
2001.

For the rate year beginning July 1, 2001, a nursing
facility in Hennepin County licensed for 302 beds shall receive
an increase of 29 cents in each case mix payment rate to correct
an error in the cost-reporting system that occurred prior to the
date that the facility entered the alternative payment
demonstration project. The increase under this subdivision
shall be added following the determination under this chapter of
the payment rate for the rate year beginning July 1, 2001, and
shall be included in the facility's total payment rates for the
purposes of determining future rates under this section deleted text begin or any
other section deleted text end .

Sec. 17.

Minnesota Statutes 2004, section 256B.434, is
amended by adding a subdivision to read:

new text begin Subd. 18. new text end

new text begin Phase-out of alternative payment system
contracts. new text end

new text begin Nursing facilities that have entered into a contract
with the commissioner under the provisions of this section will
cease their contractual agreement with the commissioner
effective October 1, 2006. Nursing facilities with a contract
in effect on September 30, 2006, shall be paid the contract
payment rate for the remainder of the phase-in period according
to the provisions of section 256B.441, subdivision 65, except as
provided in section 256B.441, subdivision 63, paragraph (i).
new text end

Sec. 18.

Minnesota Statutes 2004, section 256B.438,
subdivision 3, is amended to read:

Subd. 3.

Case mix indices.

(a) The commissioner of human
services shall assign a case mix index to each resident class
based on the Centers for Medicare and Medicaid Services staff
time measurement study and adjusted for Minnesota-specific wage
indices. The case mix indices assigned to each resident class
shall be published in the Minnesota State Register at least 120
days prior to the implementation of the 34 group, RUG-III
resident classification system.

(b) An index maximization approach shall be used to
classify residents.

(c) After implementation of the revised case mix system,
the commissioner of human services may annually rebase case mix
indices and base rates using more current data on average wage
rates and staff time measurement studies. This rebasing shall
be calculated under subdivision 7, paragraph (b). The
commissioner shall publish in the Minnesota State Register
adjusted case mix indices at least 45 days prior to the
effective date of the adjusted case mix indices. new text begin In the event
that new case mix indices are implemented together with a new
payment system, rebasing of rates under subdivision 7, paragraph
(b), shall not apply.
new text end

Sec. 19.

new text begin [256B.441] NURSING FACILITY REIMBURSEMENT SYSTEM
EFFECTIVE OCTOBER 1, 2005.
new text end

new text begin Subdivision 1. new text end

new text begin In general. new text end

new text begin (a) The commissioner shall
establish a value-based nursing facility reimbursement system
which will provide facility-specific, prospective rates for
nursing facilities participating in the medical assistance
program. The rates shall be determined using an annual
statistical and cost report filed by each nursing facility. The
total payment rate shall be composed of four rate components:
direct care services, support services, external fixed, and
property-related rate components. The payment rate shall be
derived from statistical measures of actual costs incurred in
facility operation of nursing facilities. From this cost basis,
the components of the total payment rate shall be adjusted for
quality of services provided, actual costs of operation of each
facility, geographic variation in labor costs, rental value, and
resident acuity.
new text end

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

new text begin (c) The commissioner shall begin to phase in the new
reimbursement system beginning October 1, 2006. Full phase-in
shall be completed by October 1, 2009.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the
terms in subdivisions 3 to 53 have the meanings given unless
otherwise provided for in this section.
new text end

new text begin Subd. 3. new text end

new text begin Active beds. new text end

new text begin "Active beds" means licensed beds
that are not currently in layaway status.
new text end

new text begin Subd. 4. new text end

new text begin Activities costs. new text end

new text begin "Activities costs" means the
costs for the salaries and wages of the supervisor and other
activities workers, associated fringe benefits and payroll
taxes, supplies, services, and consultants.
new text end

new text begin Subd. 5. new text end

new text begin Administrative costs. new text end

new text begin "Administrative costs"
means the direct 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, training, voice and data
communication or transmission, office supplies, liability
insurance and other forms of insurance not designated to other
areas, personnel recruitment, legal services, accounting
services, management or business consultants, data processing,
central or home office costs, business meetings and seminars,
postage, fees for professional organizations, subscriptions,
security services, advertising, board of director's fees,
working capital interest expense, and bad debts and bad debt
collection fees.
new text end

new text begin Subd. 6. new text end

new text begin Allowed costs. new text end

new text begin "Allowed costs" means the
amounts reported by the facility which are necessary for the
operation of the facility and the care of residents and which
are reviewed by the department for accuracy, reasonableness, and
compliance with this section and generally accepted accounting
principles.
new text end

new text begin Subd. 7. new text end

new text begin Center for medicare and medicaid
services. new text end

new text begin "Center for Medicare and Medicaid services" means the
federal agency, in the United States Department of Health and
Human Services that administers Medicaid, also referred to as
"CMS."
new text end

new text begin Subd. 8. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the
commissioner of human services unless specified otherwise.
new text end

new text begin Subd. 9. new text end

new text begin Depreciation guidelines. new text end

new text begin "Depreciation
guidelines" means the most recent publication of "The Estimated
Useful Lives of Depreciable Hospital Assets," issued by the
American Hospital Association, 840 North Lake Shore Drive,
Chicago, Illinois 60611.
new text end

new text begin Subd. 10. new text end

new text begin Desk audit. new text end

new text begin "Desk audit" means the
establishment of the payment rate based on the commissioner's
review and analysis of required reports, supporting
documentation, and work sheets submitted by the nursing facility.
new text end

new text begin Subd. 11. new text end

new text begin Dietary costs. new text end

new text begin "Dietary costs" means the costs
for the salaries and wages of the dietary supervisor,
dietitians, chefs, cooks, dishwashers, and other employees
assigned to the kitchen and dining room, and associated fringe
benefits and payroll taxes. Dietary costs also includes the
salaries or fees of dietary consultants, direct costs of raw
food (both normal and special diet food), dietary supplies, and
food preparation and serving. Also included are special dietary
supplements used for tube feeding or oral feeding, such as
elemental high nitrogen diet, even if written as a prescription
item by a physician.
new text end

new text begin Subd. 12. new text end

new text begin Direct care costs category. new text end

new text begin "Direct care costs
category" means costs for nursing services, activities, and
social services.
new text end

new text begin Subd. 13. new text end

new text begin Effective age. new text end

new text begin "Effective age" means the age
of a nursing facility adjusted for improvements made to the
property since it was originally constructed, purchased, or
leased.
new text end

new text begin Subd. 14. new text end

new text begin External fixed costs category. new text end

new text begin "External fixed
costs category" means costs related to the nursing home
surcharge under section 256.9657, subdivision 1; licensure fees
under section 144.122; long-term care consultation fees under
section 256B.0911, subdivision 6; family advisory council fee
under section 144A.35; scholarships under section 256B.431,
subdivision 36; planned closure rate adjustments under section
256B.437; property taxes and property insurance; PERA; and
equipment allowance.
new text end

new text begin Subd. 15. new text end [FACILITY AVERAGE CASE MIX INDEX
(CMI).] new text begin "Facility average case mix index" or "CMI" means a
numerical value score that describes the relative resource use
for all residents within the groups under the resource
utilization group (RUG-III) classification system prescribed by
the commissioner based on an assessment of each resident. The
facility average CMI shall be computed as the standardized days
divided by total days for all residents in the facility.
new text end

new text begin Subd. 16. new text end

new text begin Field audit. new text end

new text begin "Field audit" means the
examination, verification, and review of the financial records,
statistical records, and related supporting documentation on the
nursing home and any related organization.
new text end

new text begin Subd. 17. new text end

new text begin Final rate. new text end

new text begin "Final rate" means the rate
established after any adjustment by the commissioner, including,
but not limited to, adjustments resulting from audits.
new text end

new text begin Subd. 18. new text end

new text begin Fringe benefit costs. new text end

new text begin "Fringe benefit costs"
means the costs for group life, health, dental, workers'
compensation, and other employee insurances and pension,
profit-sharing, and retirement plans for which the employer pays
all or a portion of the costs and that are available to at least
all employees who work at least 20 hours per week.
new text end

new text begin Subd. 19. new text end

new text begin Generally accepted accounting principles.
new text end

new text begin "Generally Accepted Accounting Principles" means the body of
pronouncements adopted by the American Institute of Certified
Public Accountants regarding proper accounting procedures,
guidelines, and rules.
new text end

new text begin Subd. 20. new text end

new text begin Historical cost. new text end

new text begin "Historical cost" means the
direct costs incurred by the nursing facility of acquiring
services, supplies, or assets.
new text end

new text begin Subd. 21. new text end

new text begin Hospital-attached nursing facility status. new text end

new text begin (a)
For the purpose of setting rates under this section, for rate
years beginning after September 30, 2006, "hospital-attached
nursing facility" means a nursing facility which meets the
requirements of clauses (1) and (2) or (3) or (4):
new text end

new text begin (1) the nursing facility is recognized by the federal
Medicare program to be a hospital-based nursing facility;
new text end

new text begin (2) the hospital and nursing facility are physically
attached or connected by a corridor;
new text end

new text begin (3) a nursing facility and hospital, which have applied for
hospital-based nursing facility status under the federal
Medicare program during the reporting year, shall be considered
a hospital-attached nursing facility for purposes of setting
payment rates under this section. The nursing facility must
file its cost report for that reporting year using Medicare
principles and Medicare's recommended cost allocation methods
had the Medicare program's hospital-based nursing facility
status been granted to the nursing facility. For each
subsequent rate year, the nursing facility must meet the
definition requirements in clauses (1) and (2). If the nursing
facility is denied hospital-based nursing facility status under
the Medicare program, the nursing facility's payment rates for
the rate years the nursing facility was considered to be a
hospital-attached nursing facility according to this paragraph
shall be recalculated treating the nursing facility as a
non-hospital-attached nursing facility;
new text end

new text begin (4) if a nonprofit or community-operated hospital and
attached nursing facility suspend operation of the hospital, the
remaining nursing facility must be allowed to continue its
status as hospital-attached for rate calculations in the three
rate years subsequent to the one in which the hospital ceased
operations.
new text end

new text begin (b) The nursing facility's cost report filed as
hospital-attached facility shall use the same cost allocation
principles and methods used in the reports filed for the
Medicare program. Direct identification of costs to the nursing
facility cost center will be permitted only when the comparable
hospital costs have also been directly identified to a cost
center which is not allocated to the nursing facility.
new text end

new text begin Subd. 22. new text end

new text begin Housekeeping costs. new text end

new text begin "Housekeeping costs" means
the costs for the salaries and wages of the housekeeping
supervisor, housekeepers, and other cleaning employees and
associated fringe benefits and payroll taxes. It also includes
the cost of housekeeping supplies, including cleaning and
lavatory supplies and contract services.
new text end

new text begin Subd. 23. new text end

new text begin Laundry costs. new text end

new text begin "Laundry costs" means the costs
for the salaries and wages of the laundry supervisor and other
laundry employees, associated fringe benefits, and payroll
taxes. It also includes the costs of linen and bedding, the
laundering of resident clothing, laundry supplies, and contract
services.
new text end

new text begin Subd. 24. new text end

new text begin Licensee. new text end

new text begin "Licensee" means the individual or
organization listed on the form issued by the Minnesota
Department of Health under chapter 144A.
new text end

new text begin Subd. 25. new text end

new text begin Maintenance and plant operations
costs. new text end

new text begin "Maintenance and plant operations costs" means the costs
for the salaries and wages of the maintenance supervisor,
engineers, heating-plant employees, and other maintenance
employees and associated fringe benefits and payroll taxes. It
also includes direct costs for maintenance and operation of the
building and grounds, including fuel, electricity, medical waste
and garbage removal, water, sewer, supplies, tools, and repairs.
new text end

new text begin Subd. 26. new text end

new text begin Metropolitan statistical area or msa.
new text end

new text begin "Metropolitan statistical area" or "MSA" means a regional area
as determined by the centers for Medicare and Medicaid services.
new text end

new text begin Subd. 27. new text end

new text begin Movable equipment costs. new text end

new text begin "Movable equipment
costs" means the direct costs to the nursing facility to
purchase items listed as major movable equipment in the
depreciation guidelines and technology. Technology, used
directly for resident care, is defined in section 144A.071,
subdivision 1a, paragraph (j).
new text end

new text begin Subd. 28. new text end

new text begin Multiple bed room. new text end

new text begin "Multiple bed room" means a
room with two or more licensed beds that does not meet the
definition of a split-double bed room.
new text end

new text begin Subd. 29. new text end

new text begin Normalized direct care costs per
day. new text end

new text begin "Normalized direct care costs per day" means direct care
costs divided by standardized days. It is the costs per day for
direct care services associated with a RUGs index of 1.00.
new text end

new text begin Subd. 30. new text end

new text begin Nursing costs. new text end

new text begin "Nursing costs" means the costs
for the wages of nursing administration, staff education, and
direct care registered nurses, licensed practical nurses,
certified nursing assistants, and trained medication aides;
mental health workers and other direct care employees, and
associated fringe benefits and payroll taxes; services from a
supplemental nursing services agency and supplies that are
stocked at nursing stations or on the floor and distributed or
used individually, including: 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, and clinical reagents or similar diagnostic
agents, and drugs which are not paid on a separate fee schedule
by the medical assistance program or any other payer.
new text end

new text begin Subd. 31. new text end

new text begin Nursing facility. new text end

new text begin "Nursing facility" means a
facility with a medical assistance provider agreement that is
licensed as a nursing home under chapter 144A or as a boarding
care home under sections 144.50 to 144.56.
new text end

new text begin Subd. 32. new text end

new text begin Operating costs. new text end

new text begin "Operating costs" means costs
associated with the direct care costs category and the support
services costs category.
new text end

new text begin Subd. 33. new text end

new text begin Payroll taxes. new text end

new text begin "Payroll taxes" means the costs
for the employer's share of the FICA and Medicare withholding
tax, and state and federal unemployment compensation taxes.
new text end

new text begin Subd. 34. new text end

new text begin Prior rate-setting method. new text end

new text begin "Prior rate-setting
method" means the rate determination process in effect prior to
October 1, 2006, under Minnesota Rules and Minnesota Statutes.
new text end

new text begin Subd. 35. new text end

new text begin Private bed room. new text end

new text begin "Private bed room" means a
single bed room that has a toileting area that is not shared
with another bed.
new text end

new text begin Subd. 36. new text end

new text begin Private paying resident. new text end

new text begin "Private paying
resident" means a nursing facility resident who is not a medical
assistance recipient and whose payment rate is not established
by another third party, including the veterans administration or
Medicare.
new text end

new text begin Subd. 37. new text end

new text begin Property-related costs. new text end

new text begin "Property-related
costs" means the cost of purchasing buildings, attached
fixtures, and land improvements used directly for resident
care. The costs of improvements to those assets after the date
of construction are called additional property-related costs.
new text end

new text begin Subd. 38. new text end

new text begin Quality tier. new text end

new text begin "Quality tier" means a specified
range of quality scores to which facilities may be assigned.
Tier 1 shall refer to the range of quality scores in the lowest
ten percent of the maximum available quality points, and tier 10
shall refer to the range of quality scores in the highest ten
percent of the maximum available quality points.
new text end

new text begin Subd. 39. new text end

new text begin Rate year. new text end

new text begin "Rate year" means the 12-month
period beginning on October 1 following the second most recent
reporting year.
new text end

new text begin Subd. 40. new text end

new text begin Related organization. new text end

new text begin "Related organization"
means a person that furnishes goods or services to a nursing
facility and that is a close relative of a nursing facility, an
affiliate of a nursing facility, a close relative of an
affiliate of a nursing facility, or an affiliate of a close
relative of an affiliate of a nursing facility. As used in this
subdivision, paragraphs (a) to (d) apply:
new text end

new text begin (a) "Affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls or is controlled
by, or is under common control with another person.
new text end

new text begin (b) "Person" means an individual, a corporation, a
partnership, an association, a trust, an unincorporated
organization, or a government or political subdivision.
new text end

new text begin (c) "Close relative of an affiliate of a nursing facility"
means an individual whose relationship by blood, marriage, or
adoption to an individual who is an affiliate of a nursing
facility is no more remote than first cousin.
new text end

new text begin (d) "Control" including the terms "controlling,"
"controlled by," and "under common control with" means the
possession, direct or indirect, of the power to direct or cause
the direction of the management, operations, or policies of a
person, whether through the ownership of voting securities, by
contract, or otherwise, or to influence in any manner other than
through an arms length, legal transaction.
new text end

new text begin Subd. 41. new text end

new text begin Reporting period. new text end

new text begin "Reporting period" means the
one-year period beginning on October 1 and ending on the
following September 30 during which incurred costs are
accumulated and then reported on the statistical and cost report.
new text end

new text begin Subd. 42. new text end

new text begin Resident day or actual resident day. new text end

new text begin "Resident
day" or "actual resident day" means a day for which nursing
services are rendered and billable, or a day for which a bed is
held and billed. The day of admission is considered a resident
day, regardless of the time of admission. The day of discharge
is not considered a resident day, regardless of the time of
discharge.
new text end

new text begin Subd. 43. new text end

new text begin Salaries and wages. new text end

new text begin "Salaries and wages" means
amounts earned by and paid to employees or on behalf of
employees to compensate for necessary services provided.
Salaries and wages include accrued vested vacation and accrued
vested sick leave pay. Salaries and wages must be paid within
30 days of the end of the reporting period in order to be
allowable costs of the reporting period.
new text end

new text begin Subd. 44. new text end

new text begin Single bed room. new text end

new text begin "Single bed room" means a
room with one licensed bed that does not share access to the
corridor with another bed.
new text end

new text begin Subd. 45. new text end

new text begin Social services costs. new text end

new text begin "Social services costs"
means the costs for the salaries and wages of the supervisor and
other social work employees, associated fringe benefits and
payroll taxes, supplies, services, and consultants.
new text end

new text begin Subd. 46. new text end

new text begin Split-double bed room. new text end

new text begin "Split-double bed room"
means a room with two licensed beds that share access to the
corridor where there is a fixed, floor-to-ceiling partition
separating the two beds and each bed has its own window.
new text end

new text begin Subd. 47. new text end

new text begin Stakeholders. new text end

new text begin "Stakeholders" means individuals
and representatives of organizations interested in long-term
care, including nursing homes, consumers, and labor unions.
new text end

new text begin Subd. 48. new text end

new text begin Standardized days. new text end

new text begin "Standardized days" means
the sum of resident days by case mix category multiplied by the
RUG index for each category.
new text end

new text begin Subd. 49. new text end

new text begin Statistical and cost report. new text end

new text begin "Statistical and
cost report" means the forms supplied by the commissioner for
annual reporting of nursing facility expenses and statistics,
including instructions and definitions of items in the report.
new text end

new text begin Subd. 50. new text end

new text begin Support services costs category. new text end

new text begin "Support
services costs category" means the costs for dietary,
housekeeping, laundry, maintenance, and administration.
new text end

new text begin Subd. 51. new text end

new text begin Target prices. new text end

new text begin "Target prices" means the
measures of costs for the direct care costs category and for
support services costs category determined as a statistical
measure of per diem costs for groups of facilities.
new text end

new text begin Subd. 52. new text end

new text begin Unadjusted facility age. new text end

new text begin "Unadjusted facility
age" means the age of the nursing facility before considering
additional property-related costs.
new text end

new text begin Subd. 53. new text end

new text begin Value of new construction put in place. new text end

new text begin "Value
of New Construction Put in Place" means the statistic published
by the federal Bureau of Labor Statistics.
new text end

new text begin Subd. 54. new text end

new text begin Reporting of statistical and cost
information. new text end

new text begin (a) Beginning in 2006, all nursing facilities
shall provide information annually to the commissioner on a form
and in a manner determined by the commissioner. The
commissioner may also require nursing facilities to provide
statistical and cost information for a subset of the items in
the annual report on a semiannual basis. Nursing facilities
shall report only costs directly related to the operation of the
nursing facility. The facility shall not include costs which
are separately reimbursed by residents, medical assistance, or
other payors. Allocations of costs from central, affiliated, or
corporate office and related organization transactions shall be
reported according to section 256B.432. The commissioner may
grant to facilities one extension of up to 15 days for the
filing of this report if the extension is requested by December
15 and the commissioner determines that the extension will not
prevent the commissioner from establishing rates in a timely
manner required by law. The commissioner may separately require
facilities to submit in a manner specified by the commissioner
documentation of statistical and cost information included in
the report to ensure accuracy in establishing payment rates and
to perform audit and appeal review functions under this section.
Facilities shall retain all records necessary to document
statistical and cost information on the report for a period of
no less than seven years. The commissioner may amend
information in the report according to subdivision 67. The
commissioner may reject a report filed by a nursing facility
under this section if the commissioner determines that the
report has been filed in a form that is incomplete or inaccurate
and the information is insufficient to establish accurate
payment rates. In the event that a complete report is not
submitted in a timely manner, the commissioner shall reduce the
reimbursement payments to a nursing facility to 85 percent of
amounts due until the information is filed. The release of
withheld payments shall be retroactive for no more than 90
days. A nursing facility that does not submit a report or whose
report is filed in a timely manner but determined to be
incomplete shall be given written notice that a payment
reduction is to be implemented and allowed ten days to complete
the report prior to any payment reduction. The commissioner may
delay the payment withhold under exceptional circumstances to be
determined at the sole discretion of the commissioner.
new text end

new text begin (b) Nursing facilities may, within 12 months of the due
date of a statistical and cost report, file an amendment when
errors or omissions in the annual statistical and cost report
are discovered and an amendment would result in a rate increase
of at least 20 cents per resident day in a case mix category
with a weight of 1.00 and shall, at any time, file an amendment
which would result in a rate reduction of at least 20 cents per
resident day in a case mix category with a weight of 1.00. The
commissioner shall make retroactive adjustments to the total
payment rate of a nursing facility if an amendment is accepted.
Where a retroactive adjustment is to be made as a result of an
amended report, audit findings, or other determination of an
incorrect payment rate, the commissioner may settle the payment
error through a negotiated agreement with the facility and a
gross adjustment of the payments to the facility. Retroactive
adjustments shall not be applied to private pay residents. An
error or omission for purposes of this item does not include a
nursing facility's determination that an election between
permissible alternatives was not advantageous and should be
changed.
new text end

new text begin (c) If the commissioner determines that a nursing facility
knowingly supplied inaccurate or false information or failed to
file an amendment to a statistical and cost report that resulted
in or would result in an overpayment, the commissioner shall
immediately adjust the nursing facility's payment rate and
recover the entire overpayment. The commissioner may also
terminate the commissioner's agreement with the nursing facility
and prosecute under applicable state or federal law.
new text end

new text begin Subd. 55. new text end

new text begin Calculation of direct care per diem costs. new text end

new text begin The
commissioner shall calculate, for each nursing facility, the
normalized per diem cost for direct care services by dividing
the total allowable reported costs for direct care services by
the number of standardized days for the same reporting period.
The commissioner shall determine the portion of the allowable
reported direct care services that are labor related and shall
divide this portion by the facility's MSA wage index, and the
quotient is added to the nonlabor portion.
new text end

new text begin Subd. 56. new text end

new text begin Calculation of support services per diem
costs. new text end

new text begin The commissioner shall calculate, for each nursing
facility, the per diem cost for support services by dividing the
total allowable reported costs for support services by the
number of resident days for the same reporting period. The
commissioner shall determine the portion of the allowable
reported support services that are labor related and shall
divide this portion by the facility's MSA wage index, and the
quotient is added to the nonlabor portion.
new text end

new text begin Subd. 57. new text end

new text begin Calculation of a quality score. new text end

new text begin (a) The
commissioner shall determine a quality score for each nursing
facility using quality measures established in section 256B.439,
according to methods determined by the commissioner in
consultation with stakeholders and experts. These methods shall
be exempt from the rulemaking requirements under chapter 14.
new text end

new text begin (b) For each quality measure, a score shall be determined
with a maximum number of points available and number of points
assigned as determined by the commissioner using the methodology
established according to this subdivision. The scores
determined for all quality measures shall be totaled. Ten
quality tiers shall be established in increments of ten percent
of the maximum available points. Quality scores shall be used
to assign facilities to quality tiers. The determination of the
quality measures to be used and the methods of calculating
scores may be revised annually by the commissioner.
new text end

new text begin (c) For the initial rate year under the new payment system,
the quality measures shall include:
new text end

new text begin (1) direct care hours per standardized resident day;
new text end

new text begin (2) staff turnover;
new text end

new text begin (3) staff retention;
new text end

new text begin (4) use of pool staff;
new text end

new text begin (5) proportion of beds in single bed rooms;
new text end

new text begin (6) quality indicators from the minimum data set;
new text end

new text begin (7) survey deficiencies; and
new text end

new text begin (8) measures of consumer satisfaction and quality of life.
new text end

new text begin (d) For rate years beginning after October 1, 2006, when
making revisions to the quality measures or method for
calculating scores, the commissioner shall publish the
methodology in the State Register at least 15 months prior to
the start of the rate year for which the revised methodology is
to be used for rate-setting purposes. The quality score used to
determine payment rates shall be established for a rate year
using data submitted in the statistical and cost report from the
associated reporting year, and using data from other sources
related to a period beginning no more than six months prior to
the associated reporting year.
new text end

new text begin Subd. 58. new text end

new text begin Calculation of target prices. new text end

new text begin Annually, the
commissioner shall calculate target prices to be associated with
each quality tier for direct care and for support services costs.
new text end

new text begin (a) The costs calculated in subdivisions 55 and 56 shall be
arranged from lowest to highest. The commissioner shall include
in the array all facilities that have filed a complete
statistical and cost report within eight weeks of the date
specified under subdivision 54. Amendments and audit
corrections shall not be incorporated into the costs in the
array.
new text end

new text begin (b) For each operating cost category, the target price for
the quality tier associated with the facility with the highest
quality score shall be the per diem costs of the facility with
costs of the 70th percentile multiplied by the budget factor in
paragraph (d).
new text end

new text begin (c) For each operating cost category, the target price for
the quality tier associated with the facility with the lowest
quality score shall be the per diem costs of the facility with
costs at the 30th percentile multiplied by the budget factor in
paragraph (d).
new text end

new text begin (d) For the rate year beginning on October 1, 2006, the
budget neutrality factor to be used in paragraphs (b) and (c),
shall be a percentage amount that will result in an average per
diem rate $1.03 less than the case mix and MSA normalized
medical assistance average charge per resident day used to
determine the nursing facility forecast published in February
2006 for the 2007 state fiscal year. The case mix normalized
medical assistance average charge per resident day shall be
equal to the average medical assistance payment per day, plus
the average medical assistance recipient contribution per day,
divided by the average medical assistance RUGs weight. The same
percentage amount shall be used each year as in the previous
year, except that in the event that the commissioner publishes a
new methodology under subdivision 57, the commissioner may
increase the percentile referenced in paragraph (b) by as much
as five percentile points and shall reduce the percentile
referenced in paragraph (c) by an equal amount, and a new budget
neutrality factor shall be determined. This new budget
neutrality factor shall be the percentage amount that will
result in a weighted average per diem rate equal to the weighted
average per diem used to determine the most recently published
nursing facility forecast. In no event shall the percentile
amount in paragraph (b) exceed the 90th percentile. The same
budget neutrality factor shall be used for all three groups of
facilities in paragraph (f).
new text end

new text begin (e) The target prices for the remaining quality tiers shall
be calculated by using a straight line interpolation from the
target prices determined in paragraphs (b) and (c).
new text end

new text begin (f) The calculations in paragraphs (a) to (c) and (e) shall
be performed separately for three groups of facilities in
clauses (1) to (3) to establish different target prices for each
group for direct care costs:
new text end

new text begin (1) facilities that have three or more admissions per bed
per year, are hospital attached, or are licensed under Minnesota
Rules, parts 9570.2000 to 9570.3600;
new text end

new text begin (2) facilities that have more than 50 percent of their beds
licensed as boarding care homes; and
new text end

new text begin (3) all other facilities.
new text end

new text begin (g) For facilities with both nursing home and boarding care
home licensed beds, the target price shall be the average of the
target prices under paragraph (f), clauses (2), and either (1)
or (3), weighted for the number of beds of each type.
new text end

new text begin Subd. 59. new text end

new text begin Calculation of uninflated payment rates for
operating costs. new text end

new text begin The commissioner shall determine the
uninflated payment rates for direct care costs and for support
services costs for each facility according to paragraphs (a) to
(j).
new text end

new text begin (a) For direct care costs, determine the lesser of the
target price for the quality tier assigned to the facility or
the per diem costs in subdivision 55.
new text end

new text begin (b) Determine the difference between the two amounts in
paragraph (a).
new text end

new text begin (c) For direct care costs, for facilities with costs
greater than the target price, determine the portion of the
difference determined in paragraph (b) to be included in the
payment rate with this table:
new text end

new text begin For new text end new text begin The rate shall include this portion
Quality new text end new text begin of differences of:
Tier new text end new text begin $0- new text end new text begin 5.01- new text end new text begin 10.01- new text end new text begin 15.01- new text end new text begin 20.01- new text end new text begin 25.01- new text end new text begin >35
5 new text end new text begin 10 new text end new text begin 15 new text end new text begin 20 new text end new text begin 25 new text end new text begin 35
1 new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
2 new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
3 new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
4 new text end new text begin 40% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
5 new text end new text begin 70% new text end new text begin 50% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
6 new text end new text begin 100% new text end new text begin 70% new text end new text begin 40% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
7 new text end new text begin 105% new text end new text begin 70% new text end new text begin 50% new text end new text begin 30% new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
8 new text end new text begin 110% new text end new text begin 90% new text end new text begin 70% new text end new text begin 50% new text end new text begin 30% new text end new text begin 10% new text end new text begin 0%
9 new text end new text begin 110% new text end new text begin 100% new text end new text begin 90% new text end new text begin 60% new text end new text begin 40% new text end new text begin 20% new text end new text begin 0%
10 new text end new text begin 120% new text end new text begin 100% new text end new text begin 100% new text end new text begin 80% new text end new text begin 50% new text end new text begin 30% new text end new text begin 0%
new text end

new text begin (d) For direct care costs, for facilities with costs less
than the target price, determine the portion of the difference
determined in paragraph (b) to be included in the payment rate
with this table:
new text end

new text begin For new text end new text begin The rate shall include this portion
Quality new text end new text begin of differences of:
Tier new text end new text begin $0-5 new text end new text begin 5.01-10 new text end new text begin >10
1 new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
2 new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
3 new text end new text begin 20% new text end new text begin 10% new text end new text begin 0%
4 new text end new text begin 30% new text end new text begin 15% new text end new text begin 0%
5 new text end new text begin 50% new text end new text begin 25% new text end new text begin 0%
6 new text end new text begin 50% new text end new text begin 25% new text end new text begin 0%
7 new text end new text begin 60% new text end new text begin 30% new text end new text begin 0%
8 new text end new text begin 80% new text end new text begin 40% new text end new text begin 0%
9 new text end new text begin 90% new text end new text begin 45% new text end new text begin 0%
10 new text end new text begin 100% new text end new text begin 50% new text end new text begin 0%
new text end

new text begin (e) The payment rate for direct care costs shall be the
amount determined in paragraph (a) plus the amount determined in
either paragraph (c) or (d).
new text end

new text begin (f) For support services costs, determine the lesser of the
target price for the quality tier assigned to the facility or
the per diem costs in subdivision 56.
new text end

new text begin (g) Determine the difference between the two amounts in
paragraph (f).
new text end

new text begin (h) For support services costs, for facilities with costs
greater than the target price, determine the portion of the
difference determined in paragraph (g) to be included in the
payment rate with this table:
new text end

new text begin For new text end new text begin The rate shall include this portion
Quality new text end new text begin of differences of:
Tier new text end new text begin $0-2 new text end new text begin 2.01-4 new text end new text begin 4.01-6 new text end new text begin 6.01-8 new text end new text begin 8.01-10 new text end new text begin 10.01-12 new text end new text begin >12
1 new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
2 new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
3 new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
4 new text end new text begin 40% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
5 new text end new text begin 70% new text end new text begin 50% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
6 new text end new text begin 100% new text end new text begin 70% new text end new text begin 40% new text end new text begin 20% new text end new text begin 0% new text end new text begin 0% new text end new text begin 0%
7 new text end new text begin 105% new text end new text begin 70% new text end new text begin 50% new text end new text begin 30% new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
8 new text end new text begin 110% new text end new text begin 90% new text end new text begin 70% new text end new text begin 50% new text end new text begin 30% new text end new text begin 10% new text end new text begin 0%
9 new text end new text begin 110% new text end new text begin 100% new text end new text begin 90% new text end new text begin 60% new text end new text begin 40% new text end new text begin 20% new text end new text begin 0%
10 new text end new text begin 120% new text end new text begin 100% new text end new text begin 100% new text end new text begin 80% new text end new text begin 50% new text end new text begin 30% new text end new text begin 0%
new text end

new text begin (i) For support services costs, for facilities with costs
less than the target price, determine the portion of the
difference determined in paragraph (g) to be included in the
payment rate with this table:
new text end

new text begin For new text end new text begin The rate shall include this portion
Quality new text end new text begin of differences of:
Tier new text end new text begin $0-2 new text end new text begin 2.01-4 new text end new text begin >4
1 new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
2 new text end new text begin 10% new text end new text begin 0% new text end new text begin 0%
3 new text end new text begin 20% new text end new text begin 10% new text end new text begin 0%
4 new text end new text begin 30% new text end new text begin 15% new text end new text begin 0%
5 new text end new text begin 50% new text end new text begin 25% new text end new text begin 0%
6 new text end new text begin 50% new text end new text begin 25% new text end new text begin 0%
7 new text end new text begin 60% new text end new text begin 30% new text end new text begin 0%
8 new text end new text begin 80% new text end new text begin 40% new text end new text begin 0%
9 new text end new text begin 90% new text end new text begin 45% new text end new text begin 0%
10 new text end new text begin 100% new text end new text begin 50% new text end new text begin 0%
new text end

new text begin (j) The payment rate for support services costs shall be
the amount determined in paragraph (f) plus the amount
determined in either paragraph (h) or (i).
new text end

new text begin Subd. 60. new text end

new text begin Geographic adjustments. new text end

new text begin The commissioner shall
multiply the labor-related share of the operating rate by the
wage index published by the Center for Medicare and Medicaid
Services in the Federal Register effective on the October 1
prior to the start of the year for which rates are established.
new text end

new text begin Subd. 61. new text end

new text begin Calculation of payment rate for external fixed
costs. new text end

new text begin The commissioner shall calculate a payment rate for
external fixed costs.
new text end

new text begin (a) For facilities licensed as nursing homes, the portion
related to section 256.9657 shall be equal to $8.86. For
facilities licensed as both nursing homes and boarding care
homes, the portion related to section 256.9657 shall be equal to
$8.86 multiplied by the ratio of their number of nursing home
beds divided by their total number of active licensed and
certified nursing home and boarding care beds.
new text end

new text begin (b) The portion related to the licensure fee under section
144.122, paragraph (d), shall be the amount of the fee divided
by actual resident days.
new text end

new text begin (c) The portion related to scholarships shall be determined
under section 256B.431, subdivision 36.
new text end

new text begin (d) The portion related to long-term care consultation
shall be determined according to section 256B.0911, subdivision
6.
new text end

new text begin (e) The portion related to development and education of
resident and family advisory councils under section 144A.33
shall be $5 divided by 365.
new text end

new text begin (f) The portion related to planned closure rate adjustments
shall be as determined under section 256B.437.
new text end

new text begin (g) The portions related to property insurance, real estate
taxes, special assessments, and payments made in lieu of real
estate taxes directly identified or allocated to the nursing
facility shall be the actual amounts divided by actual resident
days.
new text end

new text begin (h) The portion related to the provision of movable
equipment shall be an equipment allowance. Each facility shall
report the cumulative purchase price of all movable equipment in
active use in the facility. This amount shall be divided by the
product of ten, 365, and the number of licensed beds not in
layaway in the facility on the last day of the reporting
period. These values shall be arrayed and the median
determined. The equipment allowance shall be this value
multiplied by the property budget neutrality factor determined
in subdivision 62, paragraph (g), clause (6).
new text end

new text begin (i) The portion related to PERA shall be actual costs
divided by actual resident days.
new text end

new text begin (j) The payment rate for external fixed costs shall be the
sum of the amounts in paragraphs (a) to (i).
new text end

new text begin Subd. 62. new text end

new text begin Calculation of payment rate for
property-related costs. new text end

new text begin The commissioner shall calculate a
payment rate for property-related costs according to paragraphs
(a) to (h).
new text end

new text begin (a) Determine common rental value per bed. The
commissioner shall determine a common rental value that will be
used by all facilities. The common rental value for the rate
year beginning on October 1, 2006, will be computed based upon
the replacement cost new per bed limit in effect at the end of
the reporting year for multiple-bed rooms as found in section
256B.431, subdivision 17e. In subsequent rate years, the
multiple-bed replacement cost new limit will be adjusted
annually by the percentage change in the Bureau of the Census:
Composite fixed-weighted price index as published in the C30
Report, Value of New Construction Put in Place.
new text end

new text begin The equipment allowance determined under subdivision 61,
paragraph (h), shall be multiplied by 365 and by ten. This
amount shall be deducted from the multiple-bed replacement cost
new limit to determine the common rental value.
new text end

new text begin (b) Compute each facility's specific rental value per bed.
Each nursing facility's specific rental value shall equal the
common rental value multiplied by its space adjuster, location
adjuster, split-double bed room adjuster, and age adjuster as
described in paragraphs (c), (d), (e), and (f).
new text end

new text begin (c) Space adjuster. Each nursing facility shall have a
space adjuster computed that will be used to convert the common
rental value to its facility specific rental value. A
facility's square footage of space used for the operation of the
nursing facility shall be divided by the number of its active
beds. Each of these values shall be arrayed from lowest to
highest and the median value determined. The space adjuster is
one-fourth of the sum of the number three plus the quotient of
the facility's square footage per active bed divided by the
median square footage per active bed. The minimum adjuster
shall be 0.85 and the maximum adjuster shall be 1.15.
new text end

new text begin (d) Location adjuster. Each nursing facility shall have a
location adjuster assigned that will be used to convert the
common rental value to its facility specific rental value. The
location adjuster shall be the value published by RS Means and
assigned to each Metropolitan Statistical Area (MSA) published
by CMS and used for the Medicare prospective payment system for
skilled nursing facilities. The RS Means location factor is
assigned to each MSA as follows:
new text end

new text begin MSA Region new text end new text begin Applies to the counties of
new text end

new text begin 2240 new text end new text begin St. Louis
new text end

new text begin 2520 new text end new text begin Clay
new text end

new text begin 2985 new text end new text begin Polk, Red Lake
new text end

new text begin 3870 new text end new text begin Houston
new text end

new text begin 5120 new text end new text begin Anoka, Carver, Chisago,
new text end

new text begin Dakota, Hennepin, Isanti,
new text end

new text begin Ramsey, Scott, Sherburne,
new text end

new text begin Washington, Wright
new text end

new text begin 6820 new text end new text begin Olmsted
new text end

new text begin 6980 new text end new text begin Benton, Stearns
new text end

new text begin Rural new text end new text begin All other counties not
new text end

new text begin listed above
new text end

new text begin (e) Split-double bed room adjuster. Each nursing facility
shall have a split-double bed room adjuster computed that will
be used to convert the common rental value to its facility
specific rental value. The amount for a facility shall be the
number one plus the quotient of the number of active beds in
split-double bed rooms divided by four times the number of total
active beds.
new text end

new text begin (f) Age adjuster.
new text end

new text begin (1) Each nursing facility shall have an age adjuster
computed that will be used to convert the common rental value to
its facility specific rental value. A facility's age shall be
the number of days between the date of completion of
construction and the beginning of the rate year divided by
365.25 rounded to the nearest tenth.
new text end

new text begin (2) For facilities that have been sold since completion of
construction, if the licensee reports that the date of
completion of construction is unknown, and the commissioner
agrees the date is unknown, the most recent purchase date of the
facility shall be used to determine the presumed age as follows:
new text end

new text begin (i) the purchase price of the facility will be reduced by
20 percent to account for movable equipment, technology, and the
business operations;
new text end

new text begin (ii) the adjusted purchase price in item (i) shall be
divided by the number of active beds;
new text end

new text begin (iii) the common rental value computed in paragraph (a)
will be indexed backward from the beginning of the rate year to
the date of the facility's purchase using the indices described
in paragraph (a);
new text end

new text begin (iv) multiply the facility's location adjuster in paragraph
(d) by its space adjuster in paragraph (c) and by the
split-double adjuster in paragraph (e);
new text end

new text begin (v) the adjusted purchase price per active bed in item (ii)
shall be divided by the product of the location adjuster, space
adjuster, and by the split-double adjuster in item (iv);
new text end

new text begin (vi) divide the value in item (v) by the indexed common
rental value in item (iii);
new text end

new text begin (vii) the value in item (vi) is subtracted from 1.0;
new text end

new text begin (viii) the age at the time of purchase shall be the value
in item (vii) divided by 0.015; and
new text end

new text begin (ix) the age as of the beginning of the rate year shall be
the value computed in item (viii) plus the quotient of the
number of days between the date of purchase and the start of the
rate year divided by 365.25.
new text end

new text begin (3) For facilities that are used by the current licensee,
under an operating leasee according to generally accepted
accounting principles, and for which the licensee reports that
the date of completion of construction is unknown and that the
most recent date and price of sale is also unknown, and the
commissioner agrees that these facts are unknown, the presumed
age shall be computed as follows:
new text end

new text begin (i) compute the present value of the minimum lease payments
as of the effective date of the lease according to generally
accepted accounting principles using an interest rate equal to
the ten-year United States Treasury Bond rate plus two percent
and a term of 20 years;
new text end

new text begin (ii) the present value in item (i) shall be reduced by 20
percent to account for movable equipment, technology, and
business operations;
new text end

new text begin (iii) the adjusted present value in item (ii) shall be
divided by the number of active beds;
new text end

new text begin (iv) the common rental value computed in paragraph (a) will
be indexed backward from the beginning of the rate year to the
date of the facility's lease using the indices described in
paragraph (a);
new text end

new text begin (v) multiply the facility's location adjuster, space
adjuster, and split-double adjuster;
new text end

new text begin (vi) the adjusted present value per active bed in item (iii)
shall be divided by the product of the location adjuster and
space adjuster in item (v);
new text end

new text begin (vii) divide the value in item (vi) by the indexed common
rental value in item (iv);
new text end

new text begin (viii) the value in item (vii) is subtracted from 1.0;
new text end

new text begin (ix) the age at the time of the inception of the lease
shall be the value in item (viii) divided by 0.015; and
new text end

new text begin (x) the age as of the beginning of the rate year shall be
the value computed in item (ix) plus the quotient of the number
of days between the date of lease inception and the start of the
rate year divided by 365.25.
new text end

new text begin (4) For the rate year beginning on October 1, 2006, the age
of the facility shall be adjusted for the value of
property-related costs added since the date of construction,
purchase, or lease to determine the effective age. The
additions allowed in this calculation will be those recognized
as improvements, and not as repairs, under generally accepted
accounting principles. The effective age shall be computed by
determining the following:
new text end

new text begin (i) the per-bed value of the depreciated portion of the
facility's total value. The value of the depreciated portion
equals the common rental value in paragraph (a) multiplied by
the space adjusted in paragraph (c), the location adjuster in
paragraph (d), the split-double adjuster in paragraph (e), the
age in paragraph (f), clause (1), (2), or (3), and 0.015;
new text end

new text begin (ii) the discount factor for allowable additional
property-related costs. The discount factor for allowable
additional property-related costs is a value no greater than 2.0
and is calculated by adding 35 to the age of the building
computed in either paragraph (f), clause (1), (2), or (3), and
dividing the sum by 35;
new text end

new text begin (iii) the per-bed value of allowable additional
property-related costs. The per-bed value of allowable
additional property-related costs shall include actual costs
between the date of construction, purchase, or lease and the
last day of the reporting period, divided by the discount factor
in item (ii) and then divided by the number of beds in active
service on the last day of the reporting period;
new text end

new text begin (iv) the portion of the age that is restored. The portion
of the age that is restored is the value in item (iii) divided
by the value in item (i), rounded to the nearest one hundredth,
not to exceed 1.00; and
new text end

new text begin (v) the effective age of the facility. The effective age
equals the age in paragraph (f), clause (1), (2), or (3), minus
the product of the age in paragraph (f), clause (1), (2), or
(3), multiplied by the value in item (iv).
new text end

new text begin (5) For years beginning on or after October 1, 2007, the
facility's age shall be adjusted for additional property-related
costs incurred during the reporting year. Additional
property-related costs incurred during the reporting year shall
be used to adjust the facility's effective age as follows:
new text end

new text begin (i) determine the effective age used for the prior rate
year;
new text end

new text begin (ii) increase the age in item (i) by 1.0;
new text end

new text begin (iii) determine the per bed value of the depreciated
portion of the facility's total value. The value of the
depreciated portion equals the common rental value in paragraph
(a) multiplied by the space adjuster in paragraph (c), the
location adjuster in paragraph (d), the split-double adjuster in
paragraph (e), the effective age in item (ii), and 0.015;
new text end

new text begin (iv) determine the per bed value of allowable additional
property-related costs. The value of allowable additional
property-related costs shall include actual costs incurred
during the reporting period subject to the requirements in
sections 144A.071 and 144A.073. This amount is divided by the
number of beds in active service on the last day of the
reporting period to determine the per bed value;
new text end

new text begin (v) determine the portion of the age that is restored. The
portion of the age that is restored is the value in item (iv)
divided by the value in item (iii), rounded to the nearest one
hundredth, not to exceed 1.00; and
new text end

new text begin (vi) determine the effective age of the facility. The
effective age equals the age in item (ii) minus the product of
the age in item (ii) multiplied by the value in item (v).
new text end

new text begin The age adjuster shall be the number one minus the product
of the effective age and 0.015. The age adjuster cannot be less
than 0.4.
new text end

new text begin (g) Compute the property-related rate. The
property-related payment rate for a facility is computed as:
new text end

new text begin (1) an interest rate shall be computed that is the mean of
the United States Treasury Bond Ten-Year Rates for the most
recent 12 quarters ending with the July 1 date immediately
preceding the beginning of the rate year. The rates to be used
are those published on the first business day of each quarter;
new text end

new text begin (2) the amount in clause (1) shall be increased by two
percent;
new text end

new text begin (3) a facility's specific rental value shall be multiplied
by the value in clause (2);
new text end

new text begin (4) a divisor for all facilities will be 365 multiplied by
0.95;
new text end

new text begin (5) the value in clause (3) divided by the value in clause
(4);
new text end

new text begin (6) determine the property budget neutrality factor as
follows:
new text end

new text begin (i) calculate the weighted average of the property payment
rates under the prior rate-setting method. The weighting shall
be by the number of active beds on September 30, 2005;
new text end

new text begin (ii) calculate the weighted average of the property payment
rates determined in clause (5). The weighting shall be by the
number of active beds on September 30, 2005;
new text end

new text begin (iii) add the amount in item (ii) to the equipment
allowance in subdivision 61, paragraph (h), determined for the
rate year beginning October 1, 2006;
new text end

new text begin (iv) the property budget neutrality factor equals the value
in item (i) divided by the value in item (iii). The property
budget neutrality factor determined for the rate year beginning
October 1, 2006, shall be used in subsequent years; and
new text end

new text begin (7) the property-related payment rate shall be the value
determined in clause (5) multiplied by the value in clause (6),
item (iv).
new text end

new text begin (h) Private bed room and single bed room payment adjustment.
The commissioner shall allow a private bed room payment rate by
increasing the property-related rate computed in paragraph (g)
by 1.65 for a medical assistance recipient in a private bed
room. The commissioner shall allow a single bed room payment
rate by increasing the property-related rate computed in
paragraph (g) by 1.35 for a medical assistance recipient in a
single bed room. Rates charged to private-paying residents in
private bed or single bed rooms are not limited.
new text end

new text begin (i) Additions to property-related costs during the phase-in
period. If a facility makes additions to property-related costs
during the period October 1, 2006, to September 30, 2009, the
commissioner will compute the change to the property-related
rate as described in paragraph (f). Notwithstanding the
requirements of the rate-setting method for property-related
costs in Minnesota Rules and Minnesota Statutes, the amount of
the rate change computed in paragraph (f) shall be recognized as
an additional rate change under the prior rate-setting method
for the calculation of rates in subdivision 64, paragraph (c).
new text end

new text begin Subd. 63. new text end

new text begin Calculation of total payment rate. new text end

new text begin The
commissioner shall calculate the total payment rate by adding
together the payment rates determined in subdivisions 61 and 62.
new text end

new text begin Subd. 64. new text end

new text begin Phase-in. new text end

new text begin The commissioner shall implement the
rate-setting methods in this section according to paragraphs (a)
to (j).
new text end

new text begin (a) Rates effective on June 30, 2006, shall remain in
effect through September 30, 2006.
new text end

new text begin (b) By August 15 of 2006, 2007, and 2008, the commissioner
shall notify nursing facilities of the rates they will receive
under both this section and under the prior rate-setting method,
and of the actual rates that will apply based on a blending of
these two rate sets.
new text end

new text begin (c) For purposes of determining payment rates under the
prior rate-setting method, for rate years beginning after June
30, 2006, the rate adjustment under section 256B.434,
subdivision 4, paragraph (c), shall apply only to the
property-related payment rate, and this method shall be used for
computing property payment rates under the prior rate-setting
method for all facilities.
new text end

new text begin (d) For rate years beginning October 1 of 2006, 2007, and
2008, for operating payment rate components under the prior
rate-setting method, the commissioner shall use the amounts in
effect on June 30, 2006.
new text end

new text begin (e) Notwithstanding the requirements of the prior
rate-setting method, for purposes of determining rates under the
prior rate-setting method, facilities with property-related
rates computed under Minnesota Rules, parts 9549.0010 to
9549.0080 for the rate year beginning on July 1, 2005, will have
the equity incentive under section 256B.431, subdivision 16, the
refinancing incentive under section 256B.431, subdivision 19,
and the capital repairs and replacements rate under section
256B.431, subdivision 15, held constant until September 30, 2009.
new text end

new text begin (f) For the determination of the rate under the prior
rate-setting method, the real estate and special assessments
payment rate will be computed as described under sections
256B.431, subdivision 2b, paragraph (g), and 256B.0911,
subdivision 6.
new text end

new text begin (g) The actual total payment rate that will apply on
October 1, 2006, shall consist of ten percent of the amount
determined under this section and 90 percent of the amount
determined under the prior rate-setting method.
new text end

new text begin (h) The actual total payment rate that will apply on
October 1, 2007, shall consist of 40 percent of the amount
determined under this section and 60 percent of the amount
determined under the prior rate-setting method.
new text end

new text begin (i) A nursing facility shall have the actual total payment
rate that will apply on October 1, 2007, consist of 60 percent
of the amount determined under this section and 40 percent of
the amount determined under the prior rate-setting method if
this amount is greater than the amount determined under
paragraph (h) by more than 20 cents per resident day for a case
mix category with a weight of 1.00.
new text end

new text begin (j) The actual total payment rate that will apply on
October 1, 2008, shall consist of 70 percent of the amount
determined under this section and 30 percent of the amount
determined under the prior rate-setting method.
new text end

new text begin (k) A nursing facility shall have the actual total payment
rate that will apply on October 1, 2008, consist of 90 percent
of the amount determined under this section and ten percent of
the amount determined under the prior rate-setting method if
this amount is greater than the amount determined under
paragraph (i) by more than 20 cents per resident day for a case
mix category with a weight of 1.00.
new text end

new text begin (l) The actual total payment rate that will apply on
October 1, 2009, shall be the amount determined under this
section.
new text end

new text begin (m) In the event that the actual total payment rates
calculated in paragraph (g), (h), (j), or (k), or for rate years
starting on October 1, 2010, or 2011, result in a payment rate
for which the operating costs components are less than the
allowable reported per diem costs determined under subdivisions
55 and 56 and less than the actual operating per diem rate in
effect on September 30 of that year, by more than $3 for a
resident day with a RUGs index of 1.00, the actual normalized
operating payment rate shall be $3 less than the lesser of the
operating per diem costs or the operating per diem payment rate
previously in effect. This provision shall apply on October 1,
2010, and 2011, only if it also applied in the immediately
preceding year.
new text end

new text begin (n) The additional payment for a private bed room or a
single bed room allowed in subdivision 62, paragraph (h), shall
be added to the amounts determined under this section and the
prior rate-setting method.
new text end

new text begin (o) A flexible funding allocation for October 1, 2007, and
October 1, 2008, shall be computed according to clauses (1) to
(4):
new text end

new text begin (1) determine wage-adjusted, direct care compensated hours
per standardized day for each nursing facility for the reporting
year completed on September 30, 2005;
new text end

new text begin (2) determine the average of the values in clause (1),
weighted by the number of beds in active service in each nursing
facility on the last day of the reporting year;
new text end

new text begin (3) for each nursing facility, determine a ratio equal to
the value in clause (1) subtracted from 5.00 and then divided by
the value in clause (2); and
new text end

new text begin (4) the amount of the flexible funding allocation for each
nursing facility shall be 50 cents plus an amount equal to $2
multiplied by the ratio in clause (3). This flexible funding
allocation shall be added to the direct care services rate
component for a RUGs weight of 1.00 as determined under this
section and the prior rate-setting method.
new text end

new text begin Subd. 65. new text end

new text begin Exception allowing contracting for specialized
care. new text end

new text begin (a) The commissioner shall publish a request for
proposals annually, and may negotiate operating payment rates
with up to 2.5 percent of nursing facilities, that provide
specialized care. Rate negotiations must be based on costs. In
selecting facilities to negotiate with, the commissioner shall
consider the following criteria:
new text end

new text begin (1) the facility should have a high quality score;
new text end

new text begin (2) the facility should have high direct care per diem
costs;
new text end

new text begin (3) the facility must serve residents with diagnoses or
other circumstances that require care costing more than normal
in a nursing home setting; and
new text end

new text begin (4) the facility must provide a specialized program or
programs to meet the needs of these individuals and serve a
large portion of the individuals residing in the facility.
new text end

new text begin (b) Negotiated rate adjustments shall not exceed 50 percent
of the direct care portion of the payment rate associated with
the RUGs group with the highest index, that would otherwise be
established under this section. Negotiated rates shall apply to
the entire facility. The commissioner may negotiate rates that
will apply for either one or two years. Facilities with
negotiated rates under this subdivision shall not be included in
determining target prices under subdivision 58.
new text end

new text begin Subd. 66. new text end

new text begin Audit authority. new text end

new text begin (a) The commissioner may
subject reports and supporting documentation to desk and field
audits to determine compliance with this section. Retroactive
adjustments shall be made as a result of desk or field audit
findings if the cumulative impact of the finding would result in
a rate adjustment of at least 20 cents per resident day in a
case mix category with a weight of 1.00. If a field audit
reveals inadequacies in a nursing facility's record keeping or
accounting practices, the commissioner may require the nursing
facility to engage competent professional assistance to correct
those inadequacies within 90 days so that the field audit may
proceed.
new text end

new text begin (b) Field audits may cover the four most recent annual
statistical and cost reports for which desk audits have been
completed and payment rates have been established. The field
audit must be an independent review of the nursing facility's
statistical and cost report. All transactions, invoices, or
other documentation that support or relate to the statistics and
costs claimed on the annual statistical and cost reports are
subject to review by the field auditor. If the provider fails
to provide the field auditor access to supporting documentation
related to the information reported on the statistical and cost
report within the time period specified by the commissioner, the
commissioner shall calculate the total payment rate by
disallowing the cost of the items for which access to the
supporting documentation is not provided.
new text end

new text begin (c) Changes in the total payment rate which result from
desk or field audit adjustments to statistical and cost reports
for reporting years earlier than the four most recent annual
cost reports must be made to the four most recent annual
statistical and cost reports, the current statistical and cost
report, and future statistical and cost reports to the extent
that those adjustments affect the total payment rate established
by those reporting years.
new text end

new text begin (d) The commissioner shall extend the period for retention
of records under subdivision 54 for purposes of performing field
audits as necessary to enforce section 256B.48 with written
notice to the facility postmarked no later than 90 days prior to
the expiration of the record retention requirement.
new text end

new text begin Subd. 67. new text end

new text begin Remedies for disputes. new text end

new text begin The commissioner shall
provide remedies for disputes under this section.
new text end

new text begin (a) A provider may appeal a determination of a payment rate
established under this section if the appeal, if successful,
would result in a change to the provider's payment rate of at
least 20 cents per resident day in a case-mix category with a
weight of 1.00. Appeals must be filed according to procedures
in this subdivision.
new text end

new text begin (b) To appeal, the provider shall file with the
commissioner a written notice of appeal and the appeal must be
postmarked or received by the commissioner within 60 days of the
date the determination of the payment rate was mailed or
personally received by a provider, whichever is earlier.
new text end

new text begin (c) The notice of appeal must specify:
new text end

new text begin (1) each disputed item;
new text end

new text begin (2) the reason for the dispute;
new text end

new text begin (3) the computation that the provider believes is correct;
new text end

new text begin (4) the impact upon the facility's payment rate if the
appeal is successful;
new text end

new text begin (5) the authority in statute or rule upon which the
provider relies for each disputed item;
new text end

new text begin (6) the name and address of the person or firm with whom
contacts may be made regarding the appeal; and
new text end

new text begin (7) additional information the provider wishes to offer
with the appeal to support the provider's position. The
commissioner may request additional information to clarify the
provider's position.
new text end

new text begin (d) The commissioner shall review appeals and issue a
written appeal determination on each appealed item within 180
days of the due date of the appeal. Upon mutual agreement, the
commissioner and the provider may extend the time for issuing a
determination for a specified period. The appeal determination
takes effect 30 days following the date of issuance specified in
the determination.
new text end

new text begin (e) For an appeal item on which the provider disagrees with
the appeal determination, the provider may request
reconsideration. A request for reconsideration must be
postmarked or received by the commissioner within 30 days of the
date of issuance of the determination. A request for
reconsideration delays the date on which the determination takes
effect. The appeal determination and any changes resulting from
reconsideration shall be implemented 30 days following the
issuance of the reconsideration response.
new text end

new text begin (f) For an appeal item on which the provider disagrees with
the appeal determination and the reconsideration response, if
any, the provider may file with the commissioner a written
demand for a contested case hearing to determine the proper
resolution of specified appeal items. The demand must be
postmarked or received by the commissioner within 30 days of the
date of issuance specified in the determination or within 30
days of the issuance of the reconsideration response, if
reconsideration was requested. A demand for a contested case
hearing for an appeal item nullifies the written appeal
determination issued by the commissioner for that appeal item.
The commissioner shall refer any demand for a contested case
hearing to the Office of the Attorney General.
new text end

new text begin (g) A contested case hearing shall be heard by an
administrative law judge according to sections 14.48 to 14.56.
In any proceeding under this section, the appealing party must
demonstrate by a preponderance of the evidence that the
determination of a payment rate is incorrect.
new text end

new text begin (h) Regardless of any rate appeal, the rate established
must be the rate paid and must remain in effect until final
resolution of the appeal or a subsequent rate determination.
new text end

new text begin (i) A provider shall not use this process to challenge the
method of determining a quality score under subdivision 57; the
calculation of target prices under subdivision 58; the
determination of the weighted median square feet per bed under
subdivision 62; or the commissioner's determination under
subdivision 65 or 68 to negotiate rates. This process does not
apply to a request from a resident or nursing facility for
reconsideration of the classification of a resident under
section 144.0722 or 144.0724.
new text end

new text begin (j) Target prices must not be recalculated to reflect
changes to cost or statistical data resulting from an appeal
resolution.
new text end

new text begin Subd. 68. new text end

new text begin Interim rates. new text end

new text begin (a) The commissioner shall
determine interim payment rates for nursing facilities that have
no cost history. The facilities shall provide statistical and
cost information, according to subdivision 54, on a prospective
basis. The commissioner shall establish an interim rate using
the quality tier of the nursing facility with a quality score at
the 60th percentile, costs according to a budget negotiated with
the provider, and the methods provided in subdivisions 59, 61,
and 62. The interim rate shall apply until a rate can be
established under this section. Upon providing final
information under subdivision 54 for the interim rate period,
the commissioner shall determine that an overpayment has
occurred if per diem costs for total operating cost categories
were less than budgeted by an amount greater than four percent,
and shall recover any overpayment subject to the following
limitations:
new text end

new text begin (1) based upon the actual quality score, the commissioner
shall adjust the quality tier to be used, but may not reduce the
quality tier by more than one level;
new text end

new text begin (2) in establishing the final rate for the interim period,
the commissioner shall use target prices as provided under
subdivision 58; and
new text end

new text begin (3) in the event of an overpayment, the commissioner may
allow up to six months for complete repayment if the provider
demonstrates that immediate repayment of the overpayment would
result in an undue hardship to the operation of the facility.
new text end

new text begin (b) The commissioner may negotiate an interim rate with a
nursing facility, according to the process in paragraph (a),
when that facility has been purchased by an unrelated party
within the last six months. In determining if negotiations
shall be initiated, the commissioner shall consider:
new text end

new text begin (1) the potential inadequacy of current rates as evidenced
by the position in the arrays of operating costs of the rates of
the requesting facility;
new text end

new text begin (2) preventing closure of facilities in under-bedded areas
of the state, as measured by the number of beds per 1,000
elderly in the county or in contiguous counties in which the
facility is located;
new text end

new text begin (3) the ability of the purchaser to provide high quality
services as evidenced by high quality scores of any other
facility under the control of the purchaser operating in
Minnesota;
new text end

new text begin (4) the ability of the purchasing entity to operate
efficiently as evidenced by the difference between the operating
costs and target prices of the other facility or facilities
under the control of the purchaser operating in Minnesota;
new text end

new text begin (5) previous success of the purchaser with negotiated
interim rates;
new text end

new text begin (6) the financial soundness of the purchaser;
new text end

new text begin (7) avoiding negotiating interim rates with purchasers who
have sold facilities that then requested interim rate
negotiation; and
new text end

new text begin (8) avoiding too much consolidation of the nursing facility
industry within any small number of providers.
new text end

Sec. 20.

Minnesota Statutes 2004, section 256B.47,
subdivision 2, is amended to read:

Subd. 2.

Notice to residents.

(a) No increase in nursing
facility rates for private paying residents shall be effective
unless the nursing facility notifies the resident or person
responsible for payment of the increase in writing 30 days
before the increase takes effect.

A nursing facility may adjust its rates without giving the
notice required by this subdivision when the purpose of the rate
adjustment is to reflect a change in the case-mix classification
of the resident. If the state fails to set rates as required by
section deleted text begin 256B.431 deleted text end new text begin 256B.441 new text end , deleted text begin subdivision 1, deleted text end the time required for
giving notice is decreased by the number of days by which the
state was late in setting the rates.

(b) If the state does not set rates by the date required in
section deleted text begin 256B.431 deleted text end new text begin 256B.441 new text end , deleted text begin subdivision 1, deleted text end nursing facilities
shall meet the requirement for advance notice by informing the
resident or person responsible for payments, on or before the
effective date of the increase, that a rate increase will be
effective on that date. If the exact amount has not yet been
determined, the nursing facility may raise the rates by the
amount anticipated to be allowed. Any amounts collected from
private pay residents in excess of the allowable rate must be
repaid to private pay residents with interest at the rate used
by the commissioner of revenue for the late payment of taxes and
in effect on the date the rate increase is effective.

ARTICLE 5

CHILDREN AND FAMILIES

Section 1.

Minnesota Statutes 2004, section 119B.13,
subdivision 1, is amended to read:

Subdivision 1.

Subsidy restrictions.

new text begin The provider rates
determined under this section for fiscal year 2003 and
implemented July 1, 2002, are to be continued in effect through
June 30, 2007. Beginning in fiscal year 2008, new text end the maximum rate
paid for child care assistance new text begin in any county or multicounty
region new text end under the child care fund deleted text begin may not exceed deleted text end new text begin shall be the
lesser of new text end the 75th percentile rate for like-care arrangements in
the county new text begin or multicounty region new text end as surveyed by the commissioner
new text begin or the previous year's rate for like-care arrangements in the
county increased by the percent change in the average quarterly
national CPI-U index for the current state fiscal year over the
average quarterly index for the previous state fiscal year.
When the commissioner determines that, using the commissioner's
established protocol, the number of providers responding to the
survey is too small to determine the 75th percentile rate for
like-care arrangements in a county or multicounty region, the
commissioner may establish the 75th percentile maximum rate
based on like-care arrangements in a county, region, or category
that the commissioner deems to be similar new text end .

A rate which includes a special needs rate paid under
subdivision 3 may be in excess of the maximum rate allowed under
this subdivision. The department shall monitor the effect of
this paragraph on provider rates. The county shall pay the
provider's full charges for every child in care up to the
maximum established. The commissioner shall determine the
maximum rate for each type of care on an hourly, full-day, and
weekly basis, including special needs and handicapped care. Not
less than once every two years, the commissioner shall evaluate
market practices for payment of absences and shall establish
policies for payment of absent days that reflect current market
practice.

When the provider charge is greater than the maximum
provider rate allowed, the parent is responsible for payment of
the difference in the rates in addition to any family co-payment
fee.

Sec. 2.

Minnesota Statutes 2004, section 256.01, is
amended by adding a subdivision to read:

new text begin Subd. 14b. new text end

new text begin American indian child welfare projects. new text end

new text begin (a)
new text end [PROJECTS.] new text begin The commissioner of human services may authorize
projects to test tribal delivery of child welfare services to
American Indian children and their parents and custodians living
on the reservation. The commissioner has authority to solicit
and determine which tribes may participate in a project. Grants
may be issued to Minnesota Indian tribes to support the
projects. The commissioner may waive existing state rules as
needed to accomplish the projects. Notwithstanding section
626.556, the commissioner may authorize projects to use
alternative methods of investigating and assessing reports of
child maltreatment, provided that the projects comply with the
provisions of section 626.556 dealing with the rights of
individuals who are subjects of reports or investigations,
including notice and appeal rights and data practices
requirements. The commissioner may seek any federal approvals
necessary to carry out the projects as well as seek and use any
funds available to the commissioner, including use of federal
funds, foundation funds, existing grant funds, and other funds.
The commissioner is authorized to advance state funds as
necessary to operate the projects. Federal reimbursement
applicable to the projects is appropriated to the commissioner
for the purposes of the projects. The projects must be required
to address responsibility for safety, permanency, and well-being
of children.
new text end

new text begin (b) new text end [DEFINITIONS.] new text begin For the purposes of this section,
"American Indian child" means a person between the ages of 0 and
18 who is a tribal member or eligible for membership of an
American Indian tribe with reservation land in Minnesota and who
is residing on the reservation of that tribe.
new text end

new text begin (c) new text end [CRITERIA.] new text begin In order to qualify for an American Indian
child welfare project, a tribe must:
new text end

new text begin (1) be one of the existing tribes with reservation land in
Minnesota;
new text end

new text begin (2) have a tribal court with jurisdiction over child
custody proceedings;
new text end

new text begin (3) have a greater number of children for which
determinations of maltreatment have occurred;
new text end

new text begin (4) have capacity to respond to reports of abuse and
neglect under section 626.556;
new text end

new text begin (5) provide a wide range of services to families in need of
child welfare services; and
new text end

new text begin (6) have a tribal-state title IV-E agreement in effect.
new text end

new text begin (d) new text end [COVERED EXPENSES.] new text begin Grants awarded under this section
may be used for the nonfederal costs of providing child welfare
services to American Indian children on the tribe's reservation,
including costs associated with:
new text end

new text begin (1) assessment and prevention of child abuse and neglect;
new text end

new text begin (2) family preservation;
new text end

new text begin (3) facilitative, supportive, and reunification services;
new text end

new text begin (4) out-of-home placement for children removed from the
home for child protective purposes; and
new text end

new text begin (5) other activities and services approved by the
commissioner that further the goals of providing safety,
permanency, and well-being of American Indian children.
new text end

new text begin (e) new text end [COUNTY RESPONSIBILITIES.] new text begin When a tribe has initiated a
project and has been approved by the commissioner to assume
child welfare responsibilities for American Indian children of
that tribe under this section, the affected county social
service agency is relieved of responsibility for responding to
reports of abuse and neglect under section 626.556 for those
children. The commissioner shall work with tribes and affected
counties to develop procedures for data collection, evaluation,
and clarification of ongoing role and financial responsibilities
of the county and tribe for child welfare services during the
course of the project. Children who have not been identified by
the tribe as participating in the project shall remain the
responsibility of the county.
new text end

new text begin (f) new text end [STUDY.] new text begin The commissioner shall collect information on
outcomes relating to child safety, permanency, and well-being of
American Indian children who are served in the projects.
Participating tribes must provide information to the state that
is deemed acceptable by the state to meet state and federal
reporting requirements.
new text end

Sec. 3.

Minnesota Statutes 2004, section 256D.06, is
amended by adding a subdivision to read:

new text begin Subd. 1d. new text end

new text begin Standard of assistance. new text end

new text begin For a general
assistance applicant who has resided in the state for less than
90 days and who lives independently in the community, the
standard of assistance shall be 60 percent of the full
standard. The full standard of assistance shall be available
beginning the first day of either the month that the 90 days'
residency is completed if the 90th day occurs on or before the
15th of the month or the following month if the 90th day occurs
the 16th of the month or after. The 30-day residence period in
section 256D.02, subdivision 12a, shall count toward the 90-day
payment standard.
new text end

Sec. 4.

Minnesota Statutes 2004, section 256D.06,
subdivision 5, is amended to read:

Subd. 5.

Eligibility; requirements.

new text begin (a) new text end Any applicant,
otherwise eligible for general assistance and possibly eligible
for maintenance benefits from any other source shall deleted text begin (a) deleted text end new text begin (1)
new text end make application for those benefits within 30 days of the
general assistance application; and deleted text begin (b) deleted text end new text begin (2) new text end execute an interim
assistance deleted text begin authorization deleted text end agreement on a form as directed by the
commissioner.

new text begin (b) new text end The commissioner shall review a denial of an
application for other maintenance benefits and may require a
recipient of general assistance to file an appeal of the denial
if appropriate. If found eligible for benefits from other
sources, and a payment received from another source relates to
the period during which general assistance was also being
received, the recipient shall be required to reimburse the
county agency for the interim assistance paid. Reimbursement
shall not exceed the amount of general assistance paid during
the time period to which the other maintenance benefits apply
and shall not exceed the state standard applicable to that time
period.

new text begin (c) new text end The commissioner deleted text begin shall adopt rules authorizing county
agencies or other client representatives to retain from the
amount recovered under an interim assistance agreement 25
percent plus actual reasonable fees, costs, and disbursements of
appeals and litigation, of providing special assistance to the
recipient in processing the recipient's claim for maintenance
benefits from another source. The deleted text end new text begin may contract with the county
agencies, qualified agencies, organizations, or persons to
provide advocacy and support services to process claims for
federal disability benefits for applicants or recipients of
services or benefits supervised by the commissioner using new text end money
retained under this section deleted text begin shall be from the state share of the
recovery. The commissioner or the county agency may contract
with qualified persons to provide the special assistance deleted text end .

new text begin (d) new text end The deleted text begin rules adopted by the deleted text end commissioner deleted text begin shall include the
deleted text end new text begin may provide new text end methods by which county agencies shall identify,
refer, and assist recipients who may be eligible for benefits
under federal programs for the disabled. deleted text begin This subdivision does
not require repayment of per diem payments made to shelters for
battered women pursuant to section 256D.05, subdivision 3.
deleted text end

new text begin (e) The total amount of interim assistance recoveries
retained under this section for advocacy, support, and claim
processing services shall not exceed 35 percent of the interim
assistance recoveries in the prior fiscal year.
new text end

Sec. 5.

Minnesota Statutes 2004, section 256D.06,
subdivision 7, is amended to read:

Subd. 7.

Ssi conversions and back claims.

(a) [ SSI
CONVERSIONS.] The commissioner of human services shall contract
with agencies or organizations capable of ensuring that clients
who are presently receiving assistance under sections 256D.01 to
256D.21, and who may be eligible for benefits under the federal
Supplemental Security Income program, apply and, when eligible,
are converted to the federal income assistance program and made
eligible for health care benefits under the medical assistance
program. The commissioner shall ensure that money owing to the
state under interim assistance agreements is collected.

(b) [BACK CLAIMS FOR FEDERAL HEALTH CARE BENEFITS.] The
commissioner shall also directly or through contract implement
procedures for collecting federal Medicare and medical
assistance funds for which clients converted to SSI are
retroactively eligible.

(c) [ADDITIONAL REQUIREMENTS.] The commissioner shall
deleted text begin begin contracting deleted text end new text begin contract new text end with agencies to ensure
implementation of this section deleted text begin within 14 days after April 29,
1992 deleted text end . County contracts with providers for residential services
shall include the requirement that providers screen residents
who may be eligible for federal benefits and provide that
information to the local agency. The commissioner shall modify
the MAXIS computer system to provide information on clients who
have been on general assistance for two years or longer. The
list of clients shall be provided to local services for
screening under this section.

deleted text begin (d) [REPORT.] The commissioner shall report to the
legislature by January 15, 1993, on the implementation of this
section. The report shall contain information on the following:
deleted text end

deleted text begin (1) the number of clients converted from general assistance
to SSI, by county;
deleted text end

deleted text begin (2) information on the organizations involved;
deleted text end

deleted text begin (3) the amount of money collected through interim
assistance agreements;
deleted text end

deleted text begin (4) the amount of money collected in federal Medicare or
Medicaid funds;
deleted text end

deleted text begin (5) problems encountered in processing conversions and back
claims; and
deleted text end

deleted text begin (6) recommended changes to enhance recoveries and maximize
the receipt of federal money in the most efficient way possible.
deleted text end

Sec. 6.

Minnesota Statutes 2004, section 256J.12,
subdivision 1, is amended to read:

Subdivision 1.

Simple residency.

To be eligible for MFIP
new text begin or DWP new text end , an assistance unit must have established residency in
this state which means the assistance unit is present in the
state and intends to remain here. A person who lives in this
state and who entered this state with a job commitment or to
seek employment in this state, whether or not that person is
currently employed, meets the criteria in this subdivision.

Sec. 7.

Minnesota Statutes 2004, section 256J.12, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Residency requirement for dwp applicants.
new text end

new text begin Assistance to an eligible DWP family unit in which all members
have resided in this state for fewer than 90 consecutive days
shall be paid at the standard specified in section 256J.95,
subdivision 21. The 30-day residence period shall count toward
the 90-day DWP residence requirement.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256J.95, is
amended by adding a subdivision to read:

new text begin Subd. 21. new text end

new text begin Interstate payment standards. new text end

new text begin (a) Effective
July 1, 2005, the amount of assistance paid to an eligible DWP
family unit in which all members have resided in this state for
fewer than 90 consecutive days shall be calculated according to
paragraph (b).
new text end

new text begin (b) Payment must be calculated by applying DWP budgeting
policies, and the unit's net income must be deducted from the
payment standard in the other state or Minnesota, whichever is
less. Payments shall be vendor paid according to subdivision 1,
paragraph (d).
new text end

new text begin (c) The lesser payment must continue until the DWP family
unit meets the 90-day residency requirement. A family unit that
has not resided in Minnesota for 90 days is not exempt from the
payment provisions solely because a child is born in Minnesota
to a member of the family unit.
new text end

new text begin (d) Any eligible noncitizen who comes directly to Minnesota
from another country, and whose United States Citizenship and
Immigration Services (USCIS) settlement destination is
Minnesota, will receive the amount calculated using DWP policy
and standards. If the USCIS settlement destination is another
state, apply the lesser of the payment standard for that size
family in the other state or the standards under DWP.
new text end

new text begin (e) The assistance unit shall be eligible for the full
amount of assistance based on DWP standards beginning either the
month during which the 90-day residency requirement is met, if
the 90th day occurs on or before the 15th of the month, or the
following month if the 90th day occurs on the 16th of the month
or after.
new text end

new text begin (f) This policy applies whether or not the family unit
received similar benefits while residing in the state of
previous residence.
new text end

new text begin (g) For the purposes of this section, "state of immediate
prior residence" means the state in which the applicant declares
the applicant spent the most time in the 30 days prior to moving
to Minnesota.
new text end

new text begin (h) Applicants must provide verification of their state of
immediate prior residence, in the form of tax statements, a
driver's license, automobile registration, rent receipts, or
other forms of verification approved by the commissioner.
new text end

Sec. 9.

Minnesota Statutes 2004, section 256J.95, is
amended by adding a subdivision to read:

new text begin Subd. 22. new text end

new text begin Temporary absence from minnesota. new text end

new text begin For an
assistance unit that has met the 30-day residency requirements
in section 256J.12, subdivisions 1 to 4, the 90-day period in
subdivision 21 is not affected by a subsequent absence from
Minnesota for fewer than 30 consecutive days, provided the
family unit maintains a residence in Minnesota.
new text end

Sec. 10.

Minnesota Statutes 2004, section 256J.95, is
amended by adding a subdivision to read:

new text begin Subd. 23. new text end

new text begin Ineligible mandatory unit members. new text end

new text begin The 90-day
residency requirement in subdivision 21 does not apply if the
family unit includes an ineligible mandatory family unit member
who has resided in Minnesota for 90 consecutive days immediately
before the unit's date of application.
new text end

Sec. 11.

new text begin [256K.26] LONG-TERM HOMELESS SUPPORTIVE
SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment and purpose. new text end

new text begin The
commissioner shall establish the long-term homeless supportive
services fund to provide integrated services needed to stabilize
individuals, families, and youth living in supportive housing
developed to further the goals set forth in Laws 2003, chapter
128, article 15, section 9.
new text end

new text begin Subd. 2. new text end

new text begin Implementation. new text end

new text begin The commissioner, in
consultation with the commissioners of the Department of
Corrections and the Minnesota Housing Finance Agency, counties,
and providers of supportive housing and services, shall develop
application requirements and make funds available according to
this section, with the goal of providing maximum flexibility in
program design.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the
following terms have the meanings given:
new text end

new text begin (1) "long-term homelessness" means lacking a permanent
place to live continuously for one year or more or at least four
times in the past three years; and
new text end

new text begin (2) "household" means an individual, family, or
unaccompanied minor experiencing long-term homelessness.
new text end

new text begin Subd. 4. new text end

new text begin County eligibility. new text end

new text begin Counties are eligible for
funding under this section. Priority will be given to proposals
submitted on behalf of multicounty partnerships.
new text end

new text begin Subd. 5. new text end

new text begin Content of proposals. new text end

new text begin Proposals will be
evaluated on the extent to which they:
new text end

new text begin (1) include partnerships with providers of services or
other partners;
new text end

new text begin (2) develop strategies to enhance housing stability for
people experiencing long-term homelessness by integrating
services and establishing consistent services and procedures
across jurisdictions as appropriate;
new text end

new text begin (3) evidence a commitment to working with the commissioners
of human services, corrections, and the housing finance agency
to identify appropriate households to be served under this
section;
new text end

new text begin (4) ensure that projects make maximum use of mainstream
resources, including employment, social, and health services,
and leverage additional public and private resources in order to
serve the maximum number of households;
new text end

new text begin (5) demonstrate cost-effectiveness by identifying and
prioritizing those services most necessary for housing
stability; and
new text end

new text begin (6) evaluate and report on outcomes of the projects
according to protocols developed by the commissioner of human
services in cooperation with the commissioners of corrections
and the housing finance agency. Evaluation would include
methods for determining the quality of the integrated service
approach, improvement in outcomes, cost savings, or reduction in
service disparities that may result.
new text end

new text begin Subd. 6. new text end

new text begin Outcomes. new text end

new text begin Projects will be selected to further
the following outcomes:
new text end

new text begin (1) reduce the number of Minnesota individuals and families
that experience long-term homelessness;
new text end

new text begin (2) increase the number of housing opportunities with
supportive services;
new text end

new text begin (3) develop integrated, cost-effective service models that
address the multiple barriers to obtaining housing stability
faced by people experiencing long-term homelessness, including
abuse, neglect, chemical dependency, disability, chronic health
problems, or other factors including ethnicity and race that may
result in poor outcomes or service disparities;
new text end

new text begin (4) encourage partnerships among counties, community
agencies, schools, and other providers so that the service
delivery system is seamless for people experiencing long-term
homelessness;
new text end

new text begin (5) increase employability, self-sufficiency, and other
social outcomes for individuals and families experiencing
long-term homelessness; and
new text end

new text begin (6) reduce inappropriate use of emergency health care,
shelter, chemical dependency, foster care, child protection,
corrections, and similar services used by people experiencing
long-term homelessness.
new text end

new text begin Subd. 7. new text end

new text begin Eligible services. new text end

new text begin Services eligible for
funding under this section are all services needed to maintain
households in permanent supportive housing, as determined by the
county or counties administering the project or projects.
new text end

Sec. 12. new text begin REPEALER.
new text end

new text begin (a) Laws 2003, First Special Session chapter 14, article 9,
section 34, is repealed.
new text end

new text begin (b) Minnesota Statutes 2004, section 256D.54, subdivision
3, and Minnesota Rules, parts 9500.1254 and 9500.1256, are
repealed.
new text end

ARTICLE 6

MISCELLANEOUS

Section 1.

Minnesota Statutes 2004, section 256.01,
subdivision 2, is amended to read:

Subd. 2.

Specific powers.

Subject to the provisions of
section 241.021, subdivision 2, the commissioner of human
services shall carry out the specific duties in paragraphs (a)
through deleted text begin (aa) deleted text end new text begin (bb) new text end :

(a) Administer and supervise all forms of public assistance
provided for by state law and other welfare activities or
services as are vested in the commissioner. Administration and
supervision of human services activities or services includes,
but is not limited to, assuring timely and accurate distribution
of benefits, completeness of service, and quality program
management. In addition to administering and supervising human
services activities vested by law in the department, the
commissioner shall have the authority to:

(1) require county agency participation in training and
technical assistance programs to promote compliance with
statutes, rules, federal laws, regulations, and policies
governing human services;

(2) monitor, on an ongoing basis, the performance of county
agencies in the operation and administration of human services,
enforce compliance with statutes, rules, federal laws,
regulations, and policies governing welfare services and promote
excellence of administration and program operation;

(3) develop a quality control program or other monitoring
program to review county performance and accuracy of benefit
determinations;

(4) require county agencies to make an adjustment to the
public assistance benefits issued to any individual consistent
with federal law and regulation and state law and rule and to
issue or recover benefits as appropriate;

(5) delay or deny payment of all or part of the state and
federal share of benefits and administrative reimbursement
according to the procedures set forth in section 256.017;

(6) make contracts with and grants to public and private
agencies and organizations, both profit and nonprofit, and
individuals, using appropriated funds; and

(7) enter into contractual agreements with federally
recognized Indian tribes with a reservation in Minnesota to the
extent necessary for the tribe to operate a federally approved
family assistance program or any other program under the
supervision of the commissioner. The commissioner shall consult
with the affected county or counties in the contractual
agreement negotiations, if the county or counties wish to be
included, in order to avoid the duplication of county and tribal
assistance program services. The commissioner may establish
necessary accounts for the purposes of receiving and disbursing
funds as necessary for the operation of the programs.

(b) Inform county agencies, on a timely basis, of changes
in statute, rule, federal law, regulation, and policy necessary
to county agency administration of the programs.

(c) Administer and supervise all child welfare activities;
promote the enforcement of laws protecting handicapped,
dependent, neglected and delinquent children, and children born
to mothers who were not married to the children's fathers at the
times of the conception nor at the births of the children;
license and supervise child-caring and child-placing agencies
and institutions; supervise the care of children in boarding and
foster homes or in private institutions; and generally perform
all functions relating to the field of child welfare now vested
in the State Board of Control.

(d) Administer and supervise all noninstitutional service
to handicapped persons, including those who are visually
impaired, hearing impaired, or physically impaired or otherwise
handicapped. The commissioner may provide and contract for the
care and treatment of qualified indigent children in facilities
other than those located and available at state hospitals when
it is not feasible to provide the service in state hospitals.

(e) Assist and actively cooperate with other departments,
agencies and institutions, local, state, and federal, by
performing services in conformity with the purposes of Laws
1939, chapter 431.

(f) Act as the agent of and cooperate with the federal
government in matters of mutual concern relative to and in
conformity with the provisions of Laws 1939, chapter 431,
including the administration of any federal funds granted to the
state to aid in the performance of any functions of the
commissioner as specified in Laws 1939, chapter 431, and
including the promulgation of rules making uniformly available
medical care benefits to all recipients of public assistance, at
such times as the federal government increases its participation
in assistance expenditures for medical care to recipients of
public assistance, the cost thereof to be borne in the same
proportion as are grants of aid to said recipients.

(g) Establish and maintain any administrative units
reasonably necessary for the performance of administrative
functions common to all divisions of the department.

(h) Act as designated guardian of both the estate and the
person of all the wards of the state of Minnesota, whether by
operation of law or by an order of court, without any further
act or proceeding whatever, except as to persons committed as
mentally retarded. For children under the guardianship of the
commissioner whose interests would be best served by adoptive
placement, the commissioner may contract with a licensed
child-placing agency or a Minnesota tribal social services
agency to provide adoption services. A contract with a licensed
child-placing agency must be designed to supplement existing
county efforts and may not replace existing county programs,
unless the replacement is agreed to by the county board and the
appropriate exclusive bargaining representative or the
commissioner has evidence that child placements of the county
continue to be substantially below that of other counties.
Funds encumbered and obligated under an agreement for a specific
child shall remain available until the terms of the agreement
are fulfilled or the agreement is terminated.

(i) Act as coordinating referral and informational center
on requests for service for newly arrived immigrants coming to
Minnesota.

(j) The specific enumeration of powers and duties as
hereinabove set forth shall in no way be construed to be a
limitation upon the general transfer of powers herein contained.

(k) Establish county, regional, or statewide schedules of
maximum fees and charges which may be paid by county agencies
for medical, dental, surgical, hospital, nursing and nursing
home care and medicine and medical supplies under all programs
of medical care provided by the state and for congregate living
care under the income maintenance programs.

(l) Have the authority to conduct and administer
experimental projects to test methods and procedures of
administering assistance and services to recipients or potential
recipients of public welfare. To carry out such experimental
projects, it is further provided that the commissioner of human
services is authorized to waive the enforcement of existing
specific statutory program requirements, rules, and standards in
one or more counties. The order establishing the waiver shall
provide alternative methods and procedures of administration,
shall not be in conflict with the basic purposes, coverage, or
benefits provided by law, and in no event shall the duration of
a project exceed four years. It is further provided that no
order establishing an experimental project as authorized by the
provisions of this section shall become effective until the
following conditions have been met:

(1) the secretary of health and human services of the
United States has agreed, for the same project, to waive state
plan requirements relative to statewide uniformity; and

(2) a comprehensive plan, including estimated project
costs, shall be approved by the Legislative Advisory Commission
and filed with the commissioner of administration.

(m) According to federal requirements, establish procedures
to be followed by local welfare boards in creating citizen
advisory committees, including procedures for selection of
committee members.

(n) Allocate federal fiscal disallowances or sanctions
which are based on quality control error rates for the aid to
families with dependent children program formerly codified in
sections 256.72 to 256.87, medical assistance, or food stamp
program in the following manner:

(1) one-half of the total amount of the disallowance shall
be borne by the county boards responsible for administering the
programs. For the medical assistance and the AFDC program
formerly codified in sections 256.72 to 256.87, disallowances
shall be shared by each county board in the same proportion as
that county's expenditures for the sanctioned program are to the
total of all counties' expenditures for the AFDC program
formerly codified in sections 256.72 to 256.87, and medical
assistance programs. For the food stamp program, sanctions
shall be shared by each county board, with 50 percent of the
sanction being distributed to each county in the same proportion
as that county's administrative costs for food stamps are to the
total of all food stamp administrative costs for all counties,
and 50 percent of the sanctions being distributed to each county
in the same proportion as that county's value of food stamp
benefits issued are to the total of all benefits issued for all
counties. Each county shall pay its share of the disallowance
to the state of Minnesota. When a county fails to pay the
amount due hereunder, the commissioner may deduct the amount
from reimbursement otherwise due the county, or the attorney
general, upon the request of the commissioner, may institute
civil action to recover the amount due; and

(2) notwithstanding the provisions of clause (1), if the
disallowance results from knowing noncompliance by one or more
counties with a specific program instruction, and that knowing
noncompliance is a matter of official county board record, the
commissioner may require payment or recover from the county or
counties, in the manner prescribed in clause (1), an amount
equal to the portion of the total disallowance which resulted
from the noncompliance, and may distribute the balance of the
disallowance according to clause (1).

(o) Develop and implement special projects that maximize
reimbursements and result in the recovery of money to the
state. For the purpose of recovering state money, the
commissioner may enter into contracts with third parties. Any
recoveries that result from projects or contracts entered into
under this paragraph shall be deposited in the state treasury
and credited to a special account until the balance in the
account reaches $1,000,000. When the balance in the account
exceeds $1,000,000, the excess shall be transferred and credited
to the general fund. All money in the account is appropriated
to the commissioner for the purposes of this paragraph.

(p) Have the authority to make direct payments to
facilities providing shelter to women and their children
according to section 256D.05, subdivision 3. Upon the written
request of a shelter facility that has been denied payments
under section 256D.05, subdivision 3, the commissioner shall
review all relevant evidence and make a determination within 30
days of the request for review regarding issuance of direct
payments to the shelter facility. Failure to act within 30 days
shall be considered a determination not to issue direct payments.

(q) Have the authority to establish and enforce the
following county reporting requirements:

(1) the commissioner shall establish fiscal and statistical
reporting requirements necessary to account for the expenditure
of funds allocated to counties for human services programs.
When establishing financial and statistical reporting
requirements, the commissioner shall evaluate all reports, in
consultation with the counties, to determine if the reports can
be simplified or the number of reports can be reduced;

(2) the county board shall submit monthly or quarterly
reports to the department as required by the commissioner.
Monthly reports are due no later than 15 working days after the
end of the month. Quarterly reports are due no later than 30
calendar days after the end of the quarter, unless the
commissioner determines that the deadline must be shortened to
20 calendar days to avoid jeopardizing compliance with federal
deadlines or risking a loss of federal funding. Only reports
that are complete, legible, and in the required format shall be
accepted by the commissioner;

(3) if the required reports are not received by the
deadlines established in clause (2), the commissioner may delay
payments and withhold funds from the county board until the next
reporting period. When the report is needed to account for the
use of federal funds and the late report results in a reduction
in federal funding, the commissioner shall withhold from the
county boards with late reports an amount equal to the reduction
in federal funding until full federal funding is received;

(4) a county board that submits reports that are late,
illegible, incomplete, or not in the required format for two out
of three consecutive reporting periods is considered
noncompliant. When a county board is found to be noncompliant,
the commissioner shall notify the county board of the reason the
county board is considered noncompliant and request that the
county board develop a corrective action plan stating how the
county board plans to correct the problem. The corrective
action plan must be submitted to the commissioner within 45 days
after the date the county board received notice of
noncompliance;

(5) the final deadline for fiscal reports or amendments to
fiscal reports is one year after the date the report was
originally due. If the commissioner does not receive a report
by the final deadline, the county board forfeits the funding
associated with the report for that reporting period and the
county board must repay any funds associated with the report
received for that reporting period;

(6) the commissioner may not delay payments, withhold
funds, or require repayment under clause (3) or (5) if the
county demonstrates that the commissioner failed to provide
appropriate forms, guidelines, and technical assistance to
enable the county to comply with the requirements. If the
county board disagrees with an action taken by the commissioner
under clause (3) or (5), the county board may appeal the action
according to sections 14.57 to 14.69; and

(7) counties subject to withholding of funds under clause
(3) or forfeiture or repayment of funds under clause (5) shall
not reduce or withhold benefits or services to clients to cover
costs incurred due to actions taken by the commissioner under
clause (3) or (5).

(r) Allocate federal fiscal disallowances or sanctions for
audit exceptions when federal fiscal disallowances or sanctions
are based on a statewide random sample for the foster care
program under title IV-E of the Social Security Act, United
States Code, title 42, in direct proportion to each county's
title IV-E foster care maintenance claim for that period.

(s) Be responsible for ensuring the detection, prevention,
investigation, and resolution of fraudulent activities or
behavior by applicants, recipients, and other participants in
the human services programs administered by the department.

(t) Require county agencies to identify overpayments,
establish claims, and utilize all available and cost-beneficial
methodologies to collect and recover these overpayments in the
human services programs administered by the department.

(u) Have the authority to administer a drug rebate program
for drugs purchased pursuant to the prescription drug program
established under section 256.955 after the beneficiary's
satisfaction of any deductible established in the program. The
commissioner shall require a rebate agreement from all
manufacturers of covered drugs as defined in section 256B.0625,
subdivision 13. Rebate agreements for prescription drugs
delivered on or after July 1, 2002, must include rebates for
individuals covered under the prescription drug program who are
under 65 years of age. For each drug, the amount of the rebate
shall be equal to the rebate as defined for purposes of the
federal rebate program in United States Code, title 42, section
1396r-8. The manufacturers must provide full payment within 30
days of receipt of the state invoice for the rebate within the
terms and conditions used for the federal rebate program
established pursuant to section 1927 of title XIX of the Social
Security Act. The manufacturers must provide the commissioner
with any information necessary to verify the rebate determined
per drug. The rebate program shall utilize the terms and
conditions used for the federal rebate program established
pursuant to section 1927 of title XIX of the Social Security Act.

(v) Have the authority to administer the federal drug
rebate program for drugs purchased under the medical assistance
program as allowed by section 1927 of title XIX of the Social
Security Act and according to the terms and conditions of
section 1927. Rebates shall be collected for all drugs that
have been dispensed or administered in an outpatient setting and
that are from manufacturers who have signed a rebate agreement
with the United States Department of Health and Human Services.

(w) Have the authority to administer a supplemental drug
rebate program for drugs purchased under the medical assistance
program. The commissioner may enter into supplemental rebate
contracts with pharmaceutical manufacturers and may require
prior authorization for drugs that are from manufacturers that
have not signed a supplemental rebate contract. Prior
authorization of drugs shall be subject to the provisions of
section 256B.0625, subdivision 13.

(x) Operate the department's communication systems account
established in Laws 1993, First Special Session chapter 1,
article 1, section 2, subdivision 2, to manage shared
communication costs necessary for the operation of the programs
the commissioner supervises. A communications account may also
be established for each regional treatment center which operates
communications systems. Each account must be used to manage
shared communication costs necessary for the operations of the
programs the commissioner supervises. The commissioner may
distribute the costs of operating and maintaining communication
systems to participants in a manner that reflects actual usage.
Costs may include acquisition, licensing, insurance,
maintenance, repair, staff time and other costs as determined by
the commissioner. Nonprofit organizations and state, county,
and local government agencies involved in the operation of
programs the commissioner supervises may participate in the use
of the department's communications technology and share in the
cost of operation. The commissioner may accept on behalf of the
state any gift, bequest, devise or personal property of any
kind, or money tendered to the state for any lawful purpose
pertaining to the communication activities of the department.
Any money received for this purpose must be deposited in the
department's communication systems accounts. Money collected by
the commissioner for the use of communication systems must be
deposited in the state communication systems account and is
appropriated to the commissioner for purposes of this section.

(y) Receive any federal matching money that is made
available through the medical assistance program for the
consumer satisfaction survey. Any federal money received for
the survey is appropriated to the commissioner for this
purpose. The commissioner may expend the federal money received
for the consumer satisfaction survey in either year of the
biennium.

(z) Designate community information and referral call
centers and incorporate cost reimbursement claims from the
designated community information and referral call centers into
the federal cost reimbursement claiming processes of the
department according to federal law, rule, and regulations.
Existing information and referral centers provided by Greater
Twin Cities United Way or existing call centers for which
Greater Twin Cities United Way has legal authority to represent,
shall be included in these designations upon review by the
commissioner and assurance that these services are accredited
and in compliance with national standards. Any reimbursement is
appropriated to the commissioner and all designated information
and referral centers shall receive payments according to normal
department schedules established by the commissioner upon final
approval of allocation methodologies from the United States
Department of Health and Human Services Division of Cost
Allocation or other appropriate authorities.

(aa) Develop recommended standards for foster care homes
that address the components of specialized therapeutic services
to be provided by foster care homes with those services.

new text begin (bb) Authorize the method of payment to or from the
department as part of the human services programs administered
by the department. This authorization includes the receipt or
disbursement of funds held by the department in a fiduciary
capacity as part of the human services programs administered by
the department.
new text end

Sec. 2.

Minnesota Statutes 2004, section 256.741,
subdivision 4, is amended to read:

Subd. 4.

Effect of assignment.

Assignments in this
section take effect upon a determination that the applicant is
eligible for public assistance. The amount of support assigned
under this subdivision may not exceed the total amount of public
assistance issued or the total support obligation, whichever is
less. Child care support collections made according to an
assignment under subdivision 2, paragraph (c), must be
deposited, subject to any limitations of federal law, deleted text begin by the
commissioner of human services in the child support collection
account in the special revenue fund and appropriated to the
commissioner of education for child care assistance under
section 119B.03. These collections are in addition to state and
federal funds appropriated to the child care deleted text end new text begin in the general new text end fund.

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 119B.074, is repealed
effective July 1, 2005.
new text end

ARTICLE 7

HEALTH POLICY

Section 1.

Minnesota Statutes 2004, section 103I.101,
subdivision 6, is amended to read:

Subd. 6.

Fees for variances.

The commissioner shall
charge a nonrefundable application fee of deleted text begin $150 deleted text end new text begin $175 new text end to cover the
administrative cost of processing a request for a variance or
modification of rules adopted by the commissioner under this
chapter.

Sec. 2.

Minnesota Statutes 2004, section 103I.208,
subdivision 1, is amended to read:

Subdivision 1.

Well notification fee.

The well
notification fee to be paid by a property owner is:

(1) for a new well, deleted text begin $150 deleted text end new text begin $175 new text end , which includes the state
core function fee;

(2) for a well sealing, deleted text begin $30 deleted text end new text begin $35 new text end for each well, which
includes the state core function fee, except that for monitoring
wells constructed on a single property, having depths within a
25 foot range, and sealed within 48 hours of start of
construction, a single fee of deleted text begin $30 deleted text end new text begin $35 new text end ; and

(3) for construction of a dewatering well, deleted text begin $150 deleted text end new text begin $175 new text end , which
includes the state core function fee, for each well except a
dewatering project comprising five or more wells shall be
assessed a single fee of deleted text begin $750 deleted text end new text begin $875 new text end for the wells recorded on the
notification.

Sec. 3.

Minnesota Statutes 2004, section 103I.208,
subdivision 2, is amended to read:

Subd. 2.

Permit fee.

The permit fee to be paid by a
property owner is:

(1) for a well that is not in use under a maintenance
permit, deleted text begin $125 deleted text end new text begin $150 new text end annually;

(2) for construction of a monitoring well, deleted text begin $150 deleted text end new text begin $175 new text end , which
includes the state core function fee;

(3) for a monitoring well that is unsealed under a
maintenance permit, deleted text begin $125 deleted text end new text begin $150 new text end annually;

(4) for monitoring wells used as a leak detection device at
a single motor fuel retail outlet, a single petroleum bulk
storage site excluding tank farms, or a single agricultural
chemical facility site, the construction permit fee
is deleted text begin $150 deleted text end new text begin $175 new text end , which includes the state core function fee, per
site regardless of the number of wells constructed on the site,
and the annual fee for a maintenance permit for unsealed
monitoring wells is deleted text begin $125 deleted text end new text begin $150 new text end per site regardless of the number
of monitoring wells located on site;

(5) for a groundwater thermal exchange device, in addition
to the notification fee for wells, deleted text begin $150 deleted text end new text begin $175 new text end , which includes the
state core function fee;

(6) for a vertical heat exchanger, deleted text begin $150 deleted text end new text begin $175 new text end ;

(7) for a dewatering well that is unsealed under a
maintenance permit, deleted text begin $125 deleted text end new text begin $150 new text end annually for each well, except a
dewatering project comprising more than five wells shall be
issued a single permit for deleted text begin $625 deleted text end new text begin $750 new text end annually for wells recorded
on the permit; and

(8) for excavating holes for the purpose of installing
elevator shafts, deleted text begin $150 deleted text end new text begin $175 new text end for each hole.

Sec. 4.

Minnesota Statutes 2004, section 103I.235,
subdivision 1, is amended to read:

Subdivision 1.

Disclosure of wells to buyer.

(a) Before
signing an agreement to sell or transfer real property, the
seller must disclose in writing to the buyer information about
the status and location of all known wells on the property, by
delivering to the buyer either a statement by the seller that
the seller does not know of any wells on the property, or a
disclosure statement indicating the legal description and
county, and a map drawn from available information showing the
location of each well to the extent practicable. In the
disclosure statement, the seller must indicate, for each well,
whether the well is in use, not in use, or sealed.

(b) At the time of closing of the sale, the disclosure
statement information, name and mailing address of the buyer,
and the quartile, section, township, and range in which each
well is located must be provided on a well disclosure
certificate signed by the seller or a person authorized to act
on behalf of the seller.

(c) A well disclosure certificate need not be provided if
the seller does not know of any wells on the property and the
deed or other instrument of conveyance contains the statement:
"The Seller certifies that the Seller does not know of any wells
on the described real property."

(d) If a deed is given pursuant to a contract for deed, the
well disclosure certificate required by this subdivision shall
be signed by the buyer or a person authorized to act on behalf
of the buyer. If the buyer knows of no wells on the property, a
well disclosure certificate is not required if the following
statement appears on the deed followed by the signature of the
grantee or, if there is more than one grantee, the signature of
at least one of the grantees: "The Grantee certifies that the
Grantee does not know of any wells on the described real
property." The statement and signature of the grantee may be on
the front or back of the deed or on an attached sheet and an
acknowledgment of the statement by the grantee is not required
for the deed to be recordable.

(e) This subdivision does not apply to the sale, exchange,
or transfer of real property:

(1) that consists solely of a sale or transfer of severed
mineral interests; or

(2) that consists of an individual condominium unit as
described in chapters 515 and 515B.

(f) For an area owned in common under chapter 515 or 515B
the association or other responsible person must report to the
commissioner by July 1, 1992, the location and status of all
wells in the common area. The association or other responsible
person must notify the commissioner within 30 days of any change
in the reported status of wells.

(g) For real property sold by the state under section
92.67, the lessee at the time of the sale is responsible for
compliance with this subdivision.

(h) If the seller fails to provide a required well
disclosure certificate, the buyer, or a person authorized to act
on behalf of the buyer, may sign a well disclosure certificate
based on the information provided on the disclosure statement
required by this section or based on other available information.

(i) A county recorder or registrar of titles may not record
a deed or other instrument of conveyance dated after October 31,
1990, for which a certificate of value is required under section
272.115, or any deed or other instrument of conveyance dated
after October 31, 1990, from a governmental body exempt from the
payment of state deed tax, unless the deed or other instrument
of conveyance contains the statement made in accordance with
paragraph (c) or (d) or is accompanied by the well disclosure
certificate containing all the information required by paragraph
(b) or (d). The county recorder or registrar of titles must not
accept a certificate unless it contains all the required
information. The county recorder or registrar of titles shall
note on each deed or other instrument of conveyance accompanied
by a well disclosure certificate that the well disclosure
certificate was received. The notation must include the
statement "No wells on property" if the disclosure certificate
states there are no wells on the property. The well disclosure
certificate shall not be filed or recorded in the records
maintained by the county recorder or registrar of titles. After
noting "No wells on property" on the deed or other instrument of
conveyance, the county recorder or registrar of titles shall
destroy or return to the buyer the well disclosure certificate.
The county recorder or registrar of titles shall collect from
the buyer or the person seeking to record a deed or other
instrument of conveyance, a fee of deleted text begin $30 deleted text end new text begin $40 new text end for receipt of a
completed well disclosure certificate. By the tenth day of each
month, the county recorder or registrar of titles shall transmit
the well disclosure certificates to the commissioner of health.
By the tenth day after the end of each calendar quarter, the
county recorder or registrar of titles shall transmit to the
commissioner of health deleted text begin $27.50 deleted text end new text begin $32.50 new text end of the fee for each well
disclosure certificate received during the quarter. The
commissioner shall maintain the well disclosure certificate for
at least six years. The commissioner may store the certificate
as an electronic image. A copy of that image shall be as valid
as the original.

(j) No new well disclosure certificate is required under
this subdivision if the buyer or seller, or a person authorized
to act on behalf of the buyer or seller, certifies on the deed
or other instrument of conveyance that the status and number of
wells on the property have not changed since the last previously
filed well disclosure certificate. The following statement, if
followed by the signature of the person making the statement, is
sufficient to comply with the certification requirement of this
paragraph: "I am familiar with the property described in this
instrument and I certify that the status and number of wells on
the described real property have not changed since the last
previously filed well disclosure certificate." The
certification and signature may be on the front or back of the
deed or on an attached sheet and an acknowledgment of the
statement is not required for the deed or other instrument of
conveyance to be recordable.

(k) The commissioner in consultation with county recorders
shall prescribe the form for a well disclosure certificate and
provide well disclosure certificate forms to county recorders
and registrars of titles and other interested persons.

(l) Failure to comply with a requirement of this
subdivision does not impair:

(1) the validity of a deed or other instrument of
conveyance as between the parties to the deed or instrument or
as to any other person who otherwise would be bound by the deed
or instrument; or

(2) the record, as notice, of any deed or other instrument
of conveyance accepted for filing or recording contrary to the
provisions of this subdivision.

Sec. 5.

Minnesota Statutes 2004, section 103I.601,
subdivision 2, is amended to read:

Subd. 2.

License required to make borings.

(a) Except as
provided in paragraph deleted text begin (b) deleted text end new text begin (d) new text end , a person deleted text begin may deleted text end new text begin must new text end not make an
exploratory boring without an deleted text begin exploratory borer's deleted text end new text begin explorer's
new text end license. new text begin The fee for an explorer's license is $75. The
explorer's license is valid until the date prescribed in the
license by the commissioner.
new text end

(b) new text begin A person must file an application and renewal
application fee to renew the explorer's license by the date
stated in the license. The renewal application fee is $75.
new text end

new text begin (c) If the licensee submits an application fee after the
required renewal date, the licensee:
new text end

new text begin (1) must include a late fee of $75; and
new text end

new text begin (2) may not conduct activities authorized by an explorer's
license until the renewal application, renewal application fee,
late fee, and sealing reports required in subdivision 9 are
submitted.
new text end

new text begin (d) new text end An explorer deleted text begin may deleted text end new text begin must new text end designate a responsible individual
to supervise and oversee the making of exploratory borings.
Before an individual supervises or oversees an exploratory
boring, the individual must new text begin file an application and application
fee of $75 to qualify as a responsible individual. The
individual must new text end take and pass an examination relating to
construction, location, and sealing of exploratory borings. A
professional engineer deleted text begin registered deleted text end new text begin or geoscientist licensed new text end under
sections 326.02 to 326.15 or a deleted text begin certified deleted text end professional geologist
new text begin certified by the American Institute of Professional Geologists
new text end is not required to take the examination required in this
subdivision new text begin , new text end but must be deleted text begin licensed deleted text end new text begin certified as a responsible
individual new text end to deleted text begin make deleted text end new text begin supervise new text end an exploratory boring.

Sec. 6.

Minnesota Statutes 2004, section 144.122, is
amended to read:

144.122 LICENSE, PERMIT, AND SURVEY FEES.

(a) The state commissioner of health, by rule, may
prescribe reasonable procedures and fees for filing with the
commissioner as prescribed by statute and for the issuance of
original and renewal permits, licenses, registrations, and
certifications issued under authority of the commissioner. The
expiration dates of the various licenses, permits,
registrations, and certifications as prescribed by the rules
shall be plainly marked thereon. Fees may include application
and examination fees and a penalty fee for renewal applications
submitted after the expiration date of the previously issued
permit, license, registration, and certification. The
commissioner may also prescribe, by rule, reduced fees for
permits, licenses, registrations, and certifications when the
application therefor is submitted during the last three months
of the permit, license, registration, or certification period.
Fees proposed to be prescribed in the rules shall be first
approved by the Department of Finance. All fees proposed to be
prescribed in rules shall be reasonable. The fees shall be in
an amount so that the total fees collected by the commissioner
will, where practical, approximate the cost to the commissioner
in administering the program. All fees collected shall be
deposited in the state treasury and credited to the state
government special revenue fund unless otherwise specifically
appropriated by law for specific purposes.

(b) The commissioner may charge a fee for voluntary
certification of medical laboratories and environmental
laboratories, and for environmental and medical laboratory
services provided by the department, without complying with
paragraph (a) or chapter 14. Fees charged for environment and
medical laboratory services provided by the department must be
approximately equal to the costs of providing the services.

(c) The commissioner may develop a schedule of fees for
diagnostic evaluations conducted at clinics held by the services
for children with handicaps program. All receipts generated by
the program are annually appropriated to the commissioner for
use in the maternal and child health program.

(d) The commissioner shall set license fees for hospitals
and nursing homes that are not boarding care homes at the
following levels:

Joint Commission on Accreditation of Healthcare

Organizations (JCAHO hospitals) deleted text begin $7,055 deleted text end new text begin $7,555 plus $13 per bed
new text end

Non-JCAHO hospitals deleted text begin $4,680 deleted text end new text begin $5,180 new text end plus deleted text begin $234
deleted text end new text begin $247 new text end per bed

Nursing home $183 plus $91 per bed

The commissioner shall set license fees for outpatient
surgical centers, boarding care homes, and supervised living
facilities at the following levels:

Outpatient surgical centers deleted text begin $1,512 deleted text end new text begin $3,349
new text end

Boarding care homes $183 plus $91 per bed

Supervised living facilities $183 plus $91 per bed.

(e) Unless prohibited by federal law, the commissioner of
health shall charge applicants the following fees to cover the
cost of any initial certification surveys required to determine
a provider's eligibility to participate in the Medicare or
Medicaid program:

Prospective payment surveys for $ 900
hospitals
Swing bed surveys for nursing homes $1,200
Psychiatric hospitals $1,400
Rural health facilities $1,100
Portable x-ray providers $ 500
Home health agencies $1,800
Outpatient therapy agencies $ 800
End stage renal dialysis providers $2,100
Independent therapists $ 800
Comprehensive rehabilitation $1,200
outpatient facilities
Hospice providers $1,700
Ambulatory surgical providers $1,800
Hospitals $4,200
Other provider categories or Actual surveyor costs:
additional resurveys required average surveyor cost x
to complete initial certification number of hours for the
survey process.

These fees shall be submitted at the time of the
application for federal certification and shall not be
refunded. All fees collected after the date that the imposition
of fees is not prohibited by federal law shall be deposited in
the state treasury and credited to the state government special
revenue fund.

Sec. 7.

Minnesota Statutes 2004, section 144.1501,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this
section, the following definitions apply.

(b) new text begin "Dentist" means an individual who is licensed to
practice dentistry.
new text end

new text begin (c) new text end "Designated rural area" means:

(1) an area in Minnesota outside the counties of Anoka,
Carver, Dakota, Hennepin, Ramsey, Scott, and Washington,
excluding the cities of Duluth, Mankato, Moorhead, Rochester,
and St. Cloud; or

(2) a municipal corporation, as defined under section
471.634, that is physically located, in whole or in part, in an
area defined as a designated rural area under clause (1).

deleted text begin (c) deleted text end new text begin (d) new text end "Emergency circumstances" means those conditions
that make it impossible for the participant to fulfill the
service commitment, including death, total and permanent
disability, or temporary disability lasting more than two years.

deleted text begin (d) deleted text end new text begin (e) new text end "Medical resident" means an individual
participating in a medical residency in family practice,
internal medicine, obstetrics and gynecology, pediatrics, or
psychiatry.

deleted text begin (e) deleted text end new text begin (f) new text end "Midlevel practitioner" means a nurse practitioner,
nurse-midwife, nurse anesthetist, advanced clinical nurse
specialist, or physician assistant.

deleted text begin (f) deleted text end new text begin (g) new text end "Nurse" means an individual who has completed
training and received all licensing or certification necessary
to perform duties as a licensed practical nurse or registered
nurse.

deleted text begin (g) deleted text end new text begin (h) new text end "Nurse-midwife" means a registered nurse who has
graduated from a program of study designed to prepare registered
nurses for advanced practice as nurse-midwives.

deleted text begin (h) deleted text end new text begin (i) new text end "Nurse practitioner" means a registered nurse who
has graduated from a program of study designed to prepare
registered nurses for advanced practice as nurse practitioners.

deleted text begin (i) deleted text end new text begin (j) new text end "Physician" means an individual who is licensed to
practice medicine in the areas of family practice, internal
medicine, obstetrics and gynecology, pediatrics, or psychiatry.

deleted text begin (j) deleted text end new text begin (k) new text end "Physician assistant" means a person registered
under chapter 147A.

deleted text begin (k) deleted text end new text begin (l) new text end "Qualified educational loan" means a government,
commercial, or foundation loan for actual costs paid for
tuition, reasonable education expenses, and reasonable living
expenses related to the graduate or undergraduate education of a
health care professional.

deleted text begin (l) deleted text end new text begin (m) new text end "Underserved urban community" means a Minnesota
urban area or population included in the list of designated
primary medical care health professional shortage areas (HPSAs),
medically underserved areas (MUAs), or medically underserved
populations (MUPs) maintained and updated by the United States
Department of Health and Human Services.

Sec. 8.

Minnesota Statutes 2004, section 144.1501,
subdivision 2, is amended to read:

Subd. 2.

Creation of account.

A health professional
education loan forgiveness program account is established. The
commissioner of health shall use money from the account to
establish a loan forgiveness program for medical residents
agreeing to practice in designated rural areas or underserved
urban communities deleted text begin , deleted text end new text begin ; for dentists agreeing to deliver at least 25
percent of the dentist's yearly patient encounters to state
public program enrollees or patients receiving sliding fee
schedule discounts through a formal sliding fee schedule meeting
the standards established by the United States Department of
Health and Human Services under Code of Federal Regulations,
title 42, section 51, chapter 303; new text end for midlevel practitioners
agreeing to practice in designated rural areas deleted text begin , deleted text end new text begin ; new text end and for nurses
who agree to practice in a Minnesota nursing home or
intermediate care facility for persons with mental retardation
or related conditions. Appropriations made to the account do
not cancel and are available until expended, except that at the
end of each biennium, any remaining balance in the account that
is not committed by contract and not needed to fulfill existing
commitments shall cancel to the fund.

Sec. 9.

Minnesota Statutes 2004, section 144.1501,
subdivision 3, is amended to read:

Subd. 3.

Eligibility.

(a) To be eligible to participate
in the loan forgiveness program, an individual must:

(1) be a medical new text begin or dental new text end resident or be enrolled in a
new text begin dentist, new text end midlevel practitioner, registered nurse, or a licensed
practical nurse training program; and

(2) submit an application to the commissioner of
health. new text begin If fewer applications are submitted by dental students
or residents than there are dentist participant slots available,
the commissioner may consider applications submitted by dental
program graduates who are licensed dentists.
new text end

(b) An applicant selected to participate must sign a
contract to agree to serve a minimum three-year full-time
service obligation according to subdivision 2, which shall begin
no later than March 31 following completion of required training.

Sec. 10.

Minnesota Statutes 2004, section 144.1501,
subdivision 4, is amended to read:

Subd. 4.

Loan forgiveness.

The commissioner of health
may select applicants each year for participation in the loan
forgiveness program, within the limits of available funding. The
commissioner shall distribute available funds for loan
forgiveness proportionally among the eligible professions
according to the vacancy rate for each profession in the
required geographic area new text begin , patient group, new text end or facility type
specified in subdivision 2. The commissioner shall allocate
funds for physician loan forgiveness so that 75 percent of the
funds available are used for rural physician loan forgiveness
and 25 percent of the funds available are used for underserved
urban communities loan forgiveness. If the commissioner does
not receive enough qualified applicants each year to use the
entire allocation of funds for deleted text begin urban underserved communities deleted text end new text begin any
eligible profession new text end , the remaining funds may be allocated deleted text begin for
rural physician loan forgiveness deleted text end new text begin proportionally among the other
eligible professions according to the vacancy rate for each
profession in the required geographic area, patient group, or
facility type specified in subdivision 2 new text end . Applicants are
responsible for securing their own qualified educational loans.
The commissioner shall select participants based on their
suitability for practice serving the required geographic area or
facility type specified in subdivision 2, as indicated by
experience or training. The commissioner shall give preference
to applicants closest to completing their training. For each
year that a participant meets the service obligation required
under subdivision 3, up to a maximum of four years, the
commissioner shall make annual disbursements directly to the
participant equivalent to 15 percent of the average educational
debt for indebted graduates in their profession in the year
closest to the applicant's selection for which information is
available, not to exceed the balance of the participant's
qualifying educational loans. Before receiving loan repayment
disbursements and as requested, the participant must complete
and return to the commissioner an affidavit of practice form
provided by the commissioner verifying that the participant is
practicing as required under subdivisions 2 and 3. The
participant must provide the commissioner with verification that
the full amount of loan repayment disbursement received by the
participant has been applied toward the designated loans. After
each disbursement, verification must be received by the
commissioner and approved before the next loan repayment
disbursement is made. Participants who move their practice
remain eligible for loan repayment as long as they practice as
required under subdivision 2.

Sec. 11.

Minnesota Statutes 2004, section 144.226,
subdivision 1, is amended to read:

Subdivision 1.

Which services are for fee.

The fees for
the following services shall be the following or an amount
prescribed by rule of the commissioner:

(a) The fee for new text begin processing a request for new text end the issuance of a
certified vital record or a certification that the vital record
cannot be found is deleted text begin $8 deleted text end new text begin $9 new text end . No fee shall be charged for a
certified birth or death record that is reissued within one year
of the original issue, if an amendment is made to the vital
record and if the previously issued vital record is
surrendered. new text begin The fee is payable at the time of application and
is nonrefundable.
new text end

(b) The fee for new text begin processing a request for new text end the replacement of
a birth record for all events, except when filing a recognition
of parentage pursuant to section 257.73, subdivision 1,
is deleted text begin $20 deleted text end new text begin $40 new text end . new text begin The fee is payable at the time of application and
is nonrefundable.
new text end

(c) The fee for new text begin processing a request for new text end the filing of a
delayed registration of birth or death is deleted text begin $20 deleted text end new text begin $40 new text end . new text begin The fee is
payable at the time of application and is nonrefundable. This
fee includes one subsequent review of the request if the request
is not acceptable upon the initial receipt.
new text end

(d) The fee for new text begin processing a request for new text end the amendment of
any vital record when requested more than 45 days after the
filing of the vital record is deleted text begin $20 deleted text end new text begin $40 new text end . No fee shall be charged
for an amendment requested within 45 days after the filing of
the vital record. new text begin The fee is payable at the time of application
and is nonrefundable. This fee includes one subsequent review
of the request if the request is not acceptable upon the initial
receipt.
new text end

(e) The fee for new text begin processing a request for new text end the verification
of information from vital records is deleted text begin $8 deleted text end new text begin $9 new text end when the applicant
furnishes the specific information to locate the vital record.
When the applicant does not furnish specific information, the
fee is $20 per hour for staff time expended. Specific
information includes the correct date of the event and the
correct name of the registrant. Fees charged shall approximate
the costs incurred in searching and copying the vital records.
The fee deleted text begin shall be deleted text end new text begin is new text end payable at the time of application new text begin and is
nonrefundable new text end .

(f) The fee for new text begin processing a request for the new text end issuance of a
copy of any document on file pertaining to a vital record or
statement that a related document cannot be found is deleted text begin $8 deleted text end new text begin $9 new text end . new text begin The
fee is payable at the time of application and is nonrefundable.
new text end

Sec. 12.

Minnesota Statutes 2004, section 144.226,
subdivision 4, is amended to read:

Subd. 4.

Vital records surcharge.

In addition to any fee
prescribed under subdivision 1, there is a nonrefundable
surcharge of deleted text begin $2 deleted text end new text begin $4 new text end for each certified and noncertified birth or
death record, and for a certification that the record cannot be
found. The local or state registrar shall forward this amount
to the commissioner of finance to be deposited into the state
government special revenue fund. This surcharge shall not be
charged under those circumstances in which no fee for a birth or
death record is permitted under subdivision 1, paragraph (a).

Sec. 13.

Minnesota Statutes 2004, section 144.226, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Electronic verification. new text end

new text begin A fee for the
electronic verification of a vital event, when the information
being verified is obtained from a certified birth or death
record, shall be established through contractual or interagency
agreements with interested local, state, or federal government
agencies.
new text end

Sec. 14.

Minnesota Statutes 2004, section 144.226, is
amended by adding a subdivision to read:

new text begin Subd. 6. new text end

new text begin Alternative payment methods. new text end

new text begin Notwithstanding
subdivision 1, alternative payment methods may be approved and
implemented by the state registrar or a local registrar.
new text end

Sec. 15.

Minnesota Statutes 2004, section 144.3831,
subdivision 1, is amended to read:

Subdivision 1.

Fee setting.

The commissioner of health
may assess an annual fee of deleted text begin $5.21 deleted text end new text begin $6.36 new text end for every service
connection to a public water supply that is owned or operated by
a home rule charter city, a statutory city, a city of the first
class, or a town. The commissioner of health may also assess an
annual fee for every service connection served by a water user
district defined in section 110A.02.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

Sec. 16.

Minnesota Statutes 2004, section 144.98,
subdivision 3, is amended to read:

Subd. 3.

Fees.

(a) An application for certification
under subdivision 1 must be accompanied by the biennial fee
specified in this subdivision. The fees are for:

(1) deleted text begin nonrefundable deleted text end base certification fee, deleted text begin $1,200
deleted text end new text begin $1,600 new text end ; deleted text begin and
deleted text end

(2) new text begin sample preparation techniques fees, $100 per technique;
and
new text end

new text begin (3) new text end test category certification fees:

Test Category Certification Fee

Clean water program bacteriology deleted text begin $600 deleted text end new text begin $800
new text end Safe drinking water program bacteriology deleted text begin $600 deleted text end new text begin $800
new text end Clean water program inorganic chemistry deleted text begin $600 deleted text end new text begin $800
new text end Safe drinking water program inorganic chemistry deleted text begin $600 deleted text end new text begin $800
new text end Clean water program chemistry metals deleted text begin $800 deleted text end new text begin $1,200
new text end Safe drinking water program chemistry metals deleted text begin $800 deleted text end new text begin $1,200
new text end Resource conservation and recovery program
chemistry metals deleted text begin $800 deleted text end new text begin $1,200
new text end Clean water program volatile organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Safe drinking water program
volatile organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Resource conservation and recovery program
volatile organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Underground storage tank program
volatile organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Clean water program other organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Safe drinking water program other organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
new text end Resource conservation and recovery program
other organic compounds deleted text begin $1,200 deleted text end new text begin $1,500
Clean water program radiochemistry new text end new text begin $2,500
Safe drinking water program radiochemistry new text end new text begin $2,500
Resource conservation and recovery program
agricultural contaminants new text end new text begin $2,500
Resource conservation and recovery program
emerging contaminants new text end new text begin $2,500
new text end

(b) deleted text begin The total biennial certification fee is the base fee
plus the applicable test category fees.
deleted text end

deleted text begin (c) deleted text end Laboratories located outside of this state that require
an on-site deleted text begin survey will deleted text end new text begin inspection shall new text end be assessed an
additional deleted text begin $2,500 deleted text end new text begin $3,750 new text end fee.

new text begin (c) The total biennial certification fee includes the base
fee, the sample preparation techniques fees, the test category
fees, and, when applicable, the on-site inspection fee.
new text end

(d) Fees must be set so that the total fees support the
laboratory certification program. Direct costs of the
certification service include program administration,
inspections, the agency's general support costs, and attorney
general costs attributable to the fee function.

(e) A change fee shall be assessed if a laboratory requests
additional analytes or methods at any time other than when
applying for or renewing its certification. The change fee is
equal to the test category certification fee for the analyte.

(f) A variance fee shall be assessed if a laboratory
requests and is granted a variance from a rule adopted under
this section. The variance fee is $500 per variance.

(g) Refunds or credits shall not be made for analytes or
methods requested but not approved.

(h) Certification of a laboratory shall not be awarded
until all fees are paid.

Sec. 17.

new text begin [145.4231] POSITIVE ABORTION ALTERNATIVES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this
section, the following terms have the meaning given:
new text end

new text begin (1) "abortion" means the use of any means to terminate the
pregnancy of a woman known to be pregnant with knowledge that
the termination with those means will, with reasonable
likelihood, cause the death of the unborn child. For purposes
of this section, abortion does not include an abortion necessary
to prevent the death of the mother; and
new text end

new text begin (2) "unborn child" means an individual organism of the
species Homo sapiens from fertilization until birth.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility for grants. new text end

new text begin (a) The commissioner of
health shall award grants to eligible applicants under paragraph
(b) for the reasonable expenses of programs to support,
encourage, and assist women in carrying their pregnancies to
term in one or more of the following areas:
new text end

new text begin (1) provide information on, referral to, and assistance
with securing necessary services that enable women to carry
their pregnancies to term. Necessary services include, but are
not limited to:
new text end

new text begin (i) medical care;
new text end

new text begin (ii) nutritional services;
new text end

new text begin (iii) housing assistance;
new text end

new text begin (iv) adoption services;
new text end

new text begin (v) education and employment assistance; and
new text end

new text begin (vi) parenting education and support services; or
new text end

new text begin (2) provide one or more of the necessary services under
clause (1) that assist women in carrying their pregnancies to
term. To avoid duplication of efforts, grantees may refer to
other public or private programs, rather than provide the care
directly, if a woman meets eligibility criteria for the other
programs.
new text end

new text begin (b) To be eligible for a grant, an agency or organization
must:
new text end

new text begin (1) be a private, nonprofit organization;
new text end

new text begin (2) demonstrate that the program is conducted under
appropriate supervision;
new text end

new text begin (3) not charge women for services provided under the
program;
new text end

new text begin (4) provide each pregnant woman counseled with accurate
information on the developmental characteristics of unborn
children, including offering the printed information described
in section 145.4243;
new text end

new text begin (5) ensure that the program's sole purposes are to assist
and encourage women in carrying their pregnancies to term and to
maximize their potentials thereafter;
new text end

new text begin (6) ensure that none of the funds provided are used to
encourage or counsel a woman to have an abortion not necessary
to prevent her death, to provide her such an abortion, or to
refer her for such an abortion; and
new text end

new text begin (7) have had an alternatives to abortion program in
existence for at least one year as of July 1, 2005.
new text end

new text begin (c) The provisions, words, phrases, and clauses of
paragraph (b) are inseverable from this subdivision, and if any
provision, word, phrase, or clause of paragraph (b) or the
application thereof to any person or circumstance is held
invalid, such invalidity shall apply to all of this subdivision.
new text end

new text begin (d) An organization that provides abortions, promotes
abortions, or directly refers for abortions is ineligible to
receive a grant under this program. An affiliate of an
organization that provides abortions, promotes abortions, or
directly refers for abortions is ineligible to receive a grant
under this section unless the organizations are separately
incorporated and independent from each other. To be
independent, the organizations may not share any of the
following:
new text end

new text begin (1) the same or a similar name;
new text end

new text begin (2) medical facilities or nonmedical facilities, including
but not limited to, business offices, treatment rooms,
consultation rooms, examination rooms, and waiting rooms;
new text end

new text begin (3) expenses;
new text end

new text begin (4) employee wages or salaries; or
new text end

new text begin (5) equipment or supplies, including but not limited to,
computers, telephone systems, telecommunications equipment, and
office supplies.
new text end

new text begin (e) An organization that receives a grant under this
section and that is affiliated with an organization that
provides abortion services must maintain financial records that
demonstrate strict compliance with this subdivision and that
demonstrate that its independent affiliate that provides
abortion services receives no direct or indirect economic or
marketing benefit from the grant under this section.
new text end

new text begin Subd. 3. new text end

new text begin Duties of commissioner. new text end

new text begin The commissioner of
health shall make grants under subdivision 2 beginning no later
than July 1, 2006. The commissioner shall monitor and review
the programs of each grantee to ensure that the grantee
carefully adheres to the purposes and requirements of
subdivision 2 and shall cease funding a grantee that fails to do
so.
new text end

new text begin Subd. 4. new text end

new text begin Severability. new text end

new text begin Except as provided in subdivision
2, paragraph (c), if any provision, word, phrase, or clause of
this section or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect
the provisions, words, phrases, clauses, or applications of this
section that can be given effect without the invalid provision,
word, phrase, clause, or application and to this end, the
provisions, words, phrases, and clauses of this section are
declared to be severable.
new text end

new text begin Subd. 5. new text end

new text begin Supreme court jurisdiction. new text end

new text begin The Minnesota
Supreme Court has original jurisdiction over an action
challenging the constitutionality of this section and shall
expedite the resolution of the action.
new text end

Sec. 18.

Minnesota Statutes 2004, section 145.56,
subdivision 2, is amended to read:

Subd. 2.

Community-based programs.

(a) new text begin To the extent
funds are appropriated for the purposes of this subdivision, new text end the
commissioner shall establish a grant program to fund:

(1) community-based programs to provide education,
outreach, and advocacy services to populations who may be at
risk for suicide;

(2) community-based programs that educate community helpers
and gatekeepers, such as family members, spiritual leaders,
coaches, and business owners, employers, and coworkers on how to
prevent suicide by encouraging help-seeking behaviors;

(3) community-based programs that educate populations at
risk for suicide and community helpers and gatekeepers that must
include information on the symptoms of depression and other
psychiatric illnesses, the warning signs of suicide, skills for
preventing suicides, and making or seeking effective referrals
to intervention and community resources; and

(4) community-based programs to provide evidence-based
suicide prevention and intervention education to school staff,
parents, and students in grades kindergarten through 12.

Sec. 19.

Minnesota Statutes 2004, section 145.56,
subdivision 5, is amended to read:

Subd. 5.

Periodic evaluations; biennial reports.

new text begin To the
extent funds are appropriated for the purposes of this
subdivision, new text end the commissioner shall conduct periodic evaluations
of the impact of and outcomes from implementation of the state's
suicide prevention plan and each of the activities specified in
this section. By July 1, 2002, and July 1 of each even-numbered
year thereafter, the commissioner shall report the results of
these evaluations to the chairs of the policy and finance
committees in the house and senate with jurisdiction over health
and human services issues.

Sec. 20.

Minnesota Statutes 2004, section 147A.08, is
amended to read:

147A.08 EXEMPTIONS.

(a) This chapter does not apply to, control, prevent, or
restrict the practice, service, or activities of persons listed
in section 147.09, clauses (1) to (6) and (8) to (13), persons
regulated under section 214.01, subdivision 2, or persons
defined in section 144.1501, subdivision 1, paragraphs
deleted text begin (e) deleted text end new text begin (f) new text end , deleted text begin (g) deleted text end new text begin (h) new text end , and deleted text begin (h) deleted text end new text begin (i) new text end .

(b) Nothing in this chapter shall be construed to require
registration of:

(1) a physician assistant student enrolled in a physician
assistant or surgeon assistant educational program accredited by
the Committee on Allied Health Education and Accreditation or by
its successor agency approved by the board;

(2) a physician assistant employed in the service of the
federal government while performing duties incident to that
employment; or

(3) technicians, other assistants, or employees of
physicians who perform delegated tasks in the office of a
physician but who do not identify themselves as a physician
assistant.

Sec. 21.

Minnesota Statutes 2004, section 157.15, is
amended by adding a subdivision to read:

new text begin Subd. 19. new text end

new text begin Statewide hospitality fee. new text end

new text begin "Statewide
hospitality fee" means a fee to fund statewide food, beverage,
and lodging program development activities, including training
for inspection staff, technical assistance, maintenance of a
statewide integrated food safety and security information
system, and other related statewide activities that support the
food, beverage, and lodging program activities.
new text end

Sec. 22.

Minnesota Statutes 2004, section 157.16,
subdivision 2, is amended to read:

Subd. 2.

License renewal.

Initial and renewal licenses
for all food and beverage service establishments, hotels,
motels, lodging establishments, and resorts shall be issued for
the calendar year for which application is made and shall expire
on December 31 of such year. Any person who operates a place of
business after the expiration date of a license or without
having submitted an application and paid the fee shall be deemed
to have violated the provisions of this chapter and shall be
subject to enforcement action, as provided in the Health
Enforcement Consolidation Act, sections 144.989 to 144.993. In
addition, a penalty of deleted text begin $25 deleted text end new text begin $50 new text end shall be added to the total of
the license fee for any food and beverage service establishment
operating without a license as a mobile food unit, a seasonal
temporary or seasonal permanent food stand, or a special event
food stand, and a penalty of deleted text begin $50 deleted text end new text begin $100 new text end shall be added to the
total of the license fee for all restaurants, food carts,
hotels, motels, lodging establishments, and resorts operating
without a license new text begin for a period of up to 30 days. A late fee of
$300 shall be added to the license fee for establishments
operating more than 30 days without a license new text end .

Sec. 23.

Minnesota Statutes 2004, section 157.16, is
amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Food manager certification. new text end

new text begin An applicant for
certification or certification renewal as a food manager must
submit to the commissioner a $28 nonrefundable certification fee
payable to the Department of Health.
new text end

Sec. 24.

Minnesota Statutes 2004, section 157.16,
subdivision 3, is amended to read:

Subd. 3.

Establishment fees; definitions.

(a) The
following fees are required for food and beverage service
establishments, hotels, motels, lodging establishments, and
resorts licensed under this chapter. Food and beverage service
establishments must pay the highest applicable fee under
paragraph deleted text begin (e) deleted text end new text begin (d) new text end , clause (1), (2), (3), or (4), and
establishments serving alcohol must pay the highest applicable
fee under paragraph deleted text begin (e) deleted text end new text begin (d) new text end , clause (6) or (7). The license fee
for new operators previously licensed under this chapter for the
same calendar year is one-half of the appropriate annual license
fee, plus any penalty that may be required. The license fee for
operators opening on or after October 1 is one-half of the
appropriate annual license fee, plus any penalty that may be
required.

(b) All food and beverage service establishments, except
special event food stands, and all hotels, motels, lodging
establishments, and resorts shall pay an annual base fee of
deleted text begin $145 deleted text end new text begin $150 new text end .

(c) A special event food stand shall pay a flat fee
of deleted text begin $35 deleted text end new text begin $40 new text end annually. "Special event food stand" means a fee
category where food is prepared or served in conjunction with
celebrations, county fairs, or special events from a special
event food stand as defined in section 157.15.

(d) In addition to the base fee in paragraph (b), each food
and beverage service establishment, other than a special event
food stand, and each hotel, motel, lodging establishment, and
resort shall pay an additional annual fee for each fee category
deleted text begin as deleted text end new text begin , additional food service, or required additional inspection
new text end specified in this paragraph:

(1) Limited food menu selection, deleted text begin $40 deleted text end new text begin $50 new text end . "Limited food
menu selection" means a fee category that provides one or more
of the following:

(i) prepackaged food that receives heat treatment and is
served in the package;

(ii) frozen pizza that is heated and served;

(iii) a continental breakfast such as rolls, coffee, juice,
milk, and cold cereal;

(iv) soft drinks, coffee, or nonalcoholic beverages; or

(v) cleaning for eating, drinking, or cooking utensils,
when the only food served is prepared off site.

(2) Small establishment, including boarding establishments,
deleted text begin $75 deleted text end new text begin $100 new text end . "Small establishment" means a fee category that has
no salad bar and meets one or more of the following:

(i) possesses food service equipment that consists of no
more than a deep fat fryer, a grill, two hot holding containers,
and one or more microwave ovens;

(ii) serves dipped ice cream or soft serve frozen desserts;

(iii) serves breakfast in an owner-occupied bed and
breakfast establishment;

(iv) is a boarding establishment; or

(v) meets the equipment criteria in clause (3), item (i) or
(ii), and has a maximum patron seating capacity of not more than
50.

(3) Medium establishment, deleted text begin $210 deleted text end new text begin $260 new text end . "Medium establishment"
means a fee category that meets one or more of the following:

(i) possesses food service equipment that includes a range,
oven, steam table, salad bar, or salad preparation area;

(ii) possesses food service equipment that includes more
than one deep fat fryer, one grill, or two hot holding
containers; or

(iii) is an establishment where food is prepared at one
location and served at one or more separate locations.

Establishments meeting criteria in clause (2), item (v),
are not included in this fee category.

(4) Large establishment, deleted text begin $350 deleted text end new text begin $460 new text end . "Large establishment"
means either:

(i) a fee category that (A) meets the criteria in clause
(3), items (i) or (ii), for a medium establishment, (B) seats
more than 175 people, and (C) offers the full menu selection an
average of five or more days a week during the weeks of
operation; or

(ii) a fee category that (A) meets the criteria in clause
(3), item (iii), for a medium establishment, and (B) prepares
and serves 500 or more meals per day.

(5) Other food and beverage service, including food carts,
mobile food units, seasonal temporary food stands, and seasonal
permanent food stands, deleted text begin $40 deleted text end new text begin $50 new text end .

(6) Beer or wine table service, deleted text begin $40 deleted text end new text begin $50 new text end . "Beer or wine
table service" means a fee category where the only alcoholic
beverage service is beer or wine, served to customers seated at
tables.

(7) Alcoholic beverage service, other than beer or wine
table service, deleted text begin $105 deleted text end new text begin $135 new text end .

"Alcohol beverage service, other than beer or wine table
service" means a fee category where alcoholic mixed drinks are
served or where beer or wine are served from a bar.

(8) Lodging per sleeping accommodation unit, deleted text begin $6 deleted text end new text begin $8 new text end ,
including hotels, motels, lodging establishments, and resorts,
up to a maximum of deleted text begin $600 deleted text end new text begin $800 new text end . "Lodging per sleeping
accommodation unit" means a fee category including the number of
guest rooms, cottages, or other rental units of a hotel, motel,
lodging establishment, or resort; or the number of beds in a
dormitory.

(9) First public swimming pool, deleted text begin $140 deleted text end new text begin $180 new text end ; each additional
public swimming pool, deleted text begin $80 deleted text end new text begin $100 new text end . "Public swimming pool" means a
fee category that has the meaning given in Minnesota Rules, part
4717.0250, subpart 8.

(10) First spa, deleted text begin $80 deleted text end new text begin $110 new text end ; each additional spa, deleted text begin $40 deleted text end new text begin $50 new text end .
"Spa pool" means a fee category that has the meaning given in
Minnesota Rules, part 4717.0250, subpart 9.

(11) Private sewer or water, deleted text begin $40 deleted text end new text begin $50 new text end . "Individual private
water" means a fee category with a water supply other than a
community public water supply as defined in Minnesota Rules,
chapter 4720. "Individual private sewer" means a fee category
with an individual sewage treatment system which uses subsurface
treatment and disposal.

new text begin (12) Additional food service, $130. "Additional food
service" means a location at a food service establishment, other
than the primary food preparation and service area, used to
prepare or serve food to the public.
new text end

new text begin (13) Additional inspection fee, $300. "Additional
inspection fee" means a fee to conduct the second inspection
each year for elementary and secondary education facility school
lunch programs when required by the Richard B. Russell National
School Lunch Act.
new text end

(e) A fee of deleted text begin $150 deleted text end new text begin $350 new text end for review of the construction plans
must accompany the initial license application for deleted text begin food and
beverage service establishments deleted text end new text begin restaurants new text end , hotels, motels,
lodging establishments, or resorts new text begin with five or more sleeping
units new text end .

(f) When existing food and beverage service establishments,
hotels, motels, lodging establishments, or resorts are
extensively remodeled, a fee of deleted text begin $150 deleted text end new text begin $250 new text end must be submitted with
the remodeling plans. new text begin A fee of $250 must be submitted for new
construction or remodeling for a restaurant with a limited food
menu selection, a seasonal permanent food stand, a mobile food
unit, or a food cart, or for a hotel, motel, resort, or lodging
establishment addition of less than five sleeping units.
new text end

(g) Seasonal temporary food stands and special event food
stands are not required to submit construction or remodeling
plans for review.

Sec. 25.

Minnesota Statutes 2004, section 157.16, is
amended by adding a subdivision to read:

new text begin Subd. 3a. new text end

new text begin Statewide hospitality fee. new text end

new text begin Every person, firm,
or corporation that operates a licensed boarding establishment,
food and beverage service establishment, seasonal temporary or
permanent food stand, special event food stand, mobile food
unit, food cart, resort, hotel, motel, or lodging establishment
in Minnesota must submit to the commissioner a $35 annual
statewide hospitality fee for each licensed activity. The fee
for establishments licensed by the Department of Health is
required at the same time the licensure fee is due. For
establishments licensed by local governments, the fee is due by
July 1 of each year.
new text end

Sec. 26.

Minnesota Statutes 2004, section 157.20,
subdivision 2, is amended to read:

Subd. 2.

Inspection frequency.

The frequency of
inspections of the establishments shall be based on the degree
of health risk.

(a) High-risk establishments must be inspected at least
once deleted text begin a year deleted text end new text begin every 12 months new text end .

(b) Medium-risk establishments must be inspected at least
once every 18 months.

(c) Low-risk establishments must be inspected at least once
every deleted text begin two years deleted text end new text begin 24 months new text end .

Sec. 27.

Minnesota Statutes 2004, section 157.20,
subdivision 2a, is amended to read:

Subd. 2a.

Risk categories.

(a) [HIGH-RISK
ESTABLISHMENT.] "High-risk establishment" means any food and
beverage service establishment, hotel, motel, lodging
establishment, or resort that:

(1) serves potentially hazardous foods that require
extensive processing on the premises, including manual handling,
cooling, reheating, or holding for service;

(2) prepares foods several hours or days before service;

(3) serves menu items that epidemiologic experience has
demonstrated to be common vehicles of food-borne illness;

(4) has a public swimming pool; or

(5) draws its drinking water from a surface water supply.

(b) [MEDIUM-RISK ESTABLISHMENT.] "Medium-risk
establishment" means a food and beverage service establishment,
hotel, motel, lodging establishment, or resort that:

(1) serves potentially hazardous foods but with minimal
holding between preparation and service; or

(2) serves foods, such as pizza, that require extensive
handling followed by heat treatment.

(c) [LOW-RISK ESTABLISHMENT.] "Low-risk establishment"
means a food and beverage service establishment, hotel, motel,
lodging establishment, or resort that is not a high-risk or
medium-risk establishment.

(d) [RISK EXCEPTIONS.] Mobile food units, seasonal
permanent and seasonal temporary food stands, food carts, and
special event food stands are not inspected on an established
schedule and therefore are not defined as high-risk,
medium-risk, or low-risk establishments.

new text begin (e) new text end [SCHOOL INSPECTION FREQUENCY.] new text begin Elementary and
secondary school food service establishments must be inspected
according to the assigned risk category or by the frequency
required in the Richard B. Russell National School Lunch Act,
whichever frequency is more restrictive.
new text end

Sec. 28.

Minnesota Statutes 2004, section 214.01,
subdivision 2, is amended to read:

Subd. 2.

Health-related licensing board.

"Health-related
licensing board" means the Board of Examiners of Nursing Home
Administrators established pursuant to section 144A.19, deleted text begin the
Office of Unlicensed Complementary and Alternative Health Care
Practice established pursuant to section 146A.02, deleted text end the Board of
Medical Practice created pursuant to section 147.01, the Board
of Nursing created pursuant to section 148.181, the Board of
Chiropractic Examiners established pursuant to section 148.02,
the Board of Optometry established pursuant to section 148.52,
the Board of Physical Therapy established pursuant to section
148.67, the Board of Psychology established pursuant to section
148.90, the Board of Social Work pursuant to section 148B.19,
the Board of Marriage and Family Therapy pursuant to section
148B.30, the Office of Mental Health Practice established
pursuant to section 148B.61, the Board of Behavioral Health and
Therapy established by section 148B.51, the Alcohol and Drug
Counselors Licensing Advisory Council established pursuant to
section 148C.02, the Board of Dietetics and Nutrition Practice
established under section 148.622, the Board of Dentistry
established pursuant to section 150A.02, the Board of Pharmacy
established pursuant to section 151.02, the Board of Podiatric
Medicine established pursuant to section 153.02, and the Board
of Veterinary Medicine, established pursuant to section 156.01.

Sec. 29.

Minnesota Statutes 2004, section 326.42,
subdivision 2, is amended to read:

Subd. 2.

Fees.

Plumbing system plans and specifications
that are submitted to the commissioner for review shall be
accompanied by the appropriate plan examination fees. If the
commissioner determines, upon review of the plans, that
inadequate fees were paid, the necessary additional fees shall
be paid prior to plan approval. The commissioner shall charge
the following fees for plan reviews and audits of plumbing
installations for public, commercial, and industrial buildings:

(1) systems with both water distribution and drain, waste,
and vent systems and having:

(i) 25 or fewer drainage fixture units, $150;

(ii) 26 to 50 drainage fixture units, $250;

(iii) 51 to 150 drainage fixture units, $350;

(iv) 151 to 249 drainage fixture units, $500;

(v) 250 or more drainage fixture units, $3 per drainage
fixture unit to a maximum of $4,000; and

(vi) interceptors, separators, or catch basins, $70 per
interceptor, separator, or catch basin new text begin design new text end ;

(2) building sewer service only, $150;

(3) building water service only, $150;

(4) building water distribution system only, no drainage
system, $5 per supply fixture unit or $150, whichever is
greater;

(5) storm drainage system, a minimum fee of $150 or:

(i) $50 per drain opening, up to a maximum of $500; and

(ii) $70 per interceptor, separator, or catch basin new text begin design new text end ;

(6) manufactured home park or campground, one to 25 sites,
$300;

(7) manufactured home park or campground, 26 to 50 sites,
$350;

(8) manufactured home park or campground, 51 to 125 sites,
$400;

(9) manufactured home park or campground, more than 125
sites, $500;

(10) accelerated review, double the regular fee, one-half
to be refunded if no response from the commissioner within 15
business days; and

(11) revision to previously reviewed or incomplete plans:

(i) review of plans for which commissioner has issued two
or more requests for additional information, per review, $100 or
ten percent of the original fee, whichever is greater;

(ii) proposer-requested revision with no increase in
project scope, $50 or ten percent of original fee, whichever is
greater; and

(iii) proposer-requested revision with an increase in
project scope, $50 plus the difference between the original
project fee and the revised project fee.

Sec. 30. new text begin RULE AMENDMENT.
new text end

new text begin The commissioner of health shall amend Minnesota Rules,
part 4626.2015, subparts 3, item C; and 6, item B, to conform
with section 23. The commissioner may use the good cause
exemption under Minnesota Statutes, section 14.388, subdivision
1, clause (3). Minnesota Statutes, section 14.386, does not
apply, except to the extent provided under Minnesota Statutes,
section 14.388.
new text end

Sec. 31. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 13.383, subdivision 3;
13.411, subdivision 3; 144.1502; 146A.01; 146A.02; 146A.025;
146A.03; 146A.04; 146A.05; 146A.06; 146A.07; 146A.08; 146A.09;
146A.10; 146A.11; and 157.215, are repealed.
new text end

ARTICLE 8

APPROPRIATIONS

Section 1. new text begin HEALTH AND HUMAN SERVICES APPROPRIATIONS.
new text end

The sums shown in the columns marked "APPROPRIATIONS" are
appropriated from the general fund, or any other fund named, to
the agencies and for the purposes specified in the sections of
this article, to be available for the fiscal years indicated for
each purpose. The figures "2006" and "2007" where used in this
article, mean that the appropriation or appropriations listed
under them are available for the fiscal year ending June 30,
2006, or June 30, 2007, respectively.
SUMMARY BY FUND

BIENNIAL
2006 2007 TOTAL

General $3,903,584,000 $4,079,810,000 $7,983,394,000

State Government
Special Revenue 48,959,000 49,368,000 98,327,000

Health Care
Access 496,964,000 566,072,000 1,063,036,000

Federal TANF 289,567,000 286,959,000 576,526,000

Lottery Prize
Fund 1,456,000 1,456,000 2,912,000

TOTAL $4,740,530,000 $4,983,665,000 $9,724,195,000

APPROPRIATIONS
Available for the Year
Ending June 30
2006 2007

Sec. 2. COMMISSIONER OF
HUMAN SERVICES

Subdivision 1.

Total
Appropriation $4,581,296,000 $4,819,634,000

Summary by Fund

General 3,804,964,000 3,976,829,000

State Government
Special Revenue 534,000 534,000

Health Care
Access 490,748,000 559,856,000

Federal TANF 283,567,000 280,959,000

Lottery Cash
Flow 1,456,000 1,456,000

[RECEIPTS FOR SYSTEMS PROJECTS.]
Appropriations and federal receipts for
information system projects for MAXIS,
PRISM, MMIS, AND SSIS must be deposited
in the state system account authorized
in Minnesota Statutes, section
256.014. Money appropriated for
computer projects approved by the
Minnesota Office of Technology, funded
by the legislature, and approved by the
commissioner of finance, may be
transferred from one project to another
and from development to operations as
the commissioner of human services
considers necessary. Any unexpended
balance in the appropriation for these
projects does not cancel but is
available for ongoing development and
operations.

[SYSTEMS CONTINUITY.] In the event of
disruption of technical systems or
computer operations, the commissioner
may use available grant appropriations
to ensure continuity of payments for
maintaining the health, safety, and
well-being of clients served by
programs administered by the Department
of Human Services. Grant funds must be
used in a manner consistent with the
original intent of the appropriation.

[NONFEDERAL SHARE TRANSFERS.] The
nonfederal share of activities for
which federal administrative
reimbursement is appropriated to the
commissioner may be transferred to the
special revenue fund.

[TANF FUNDS APPROPRIATED TO OTHER
ENTITIES.] Any expenditures from the
TANF block grant shall be expended in
accordance with the requirements and
limitations of part A of title IV of
the Social Security Act, as amended,
and any other applicable federal
requirement or limitation. Prior to
any expenditure of these funds, the
commissioner shall ensure that funds
are expended in compliance with the
requirements and limitations of federal
law and that any reporting requirements
of federal law are met. It shall be
the responsibility of any entity to
which these funds are appropriated to
implement a memorandum of understanding
with the commissioner that provides the
necessary assurance of compliance prior
to any expenditure of funds. The
commissioner shall receipt TANF funds
appropriated to other state agencies
and coordinate all related interagency
accounting transactions necessary to
implement these appropriations.
Unexpended TANF funds appropriated to
any state, local, or nonprofit entity
cancel at the end of the state fiscal
year unless appropriating or statutory
language permits otherwise.

[TANF MAINTENANCE OF EFFORT.] (a) In
order to meet the basic maintenance of
effort (MOE) requirements of the TANF
block grant specified under Code of
Federal Regulations, title 45, section
263.1, the commissioner may only report
nonfederal money expended for allowable
activities listed in the following
clauses as TANF/MOE expenditures:

(1) MFIP cash, diversionary work
program, and food assistance benefits
under Minnesota Statutes, chapter 256J;

(2) the child care assistance programs
under Minnesota Statutes, sections
119B.03 and 119B.05, and county child
care administrative costs under
Minnesota Statutes, section 119B.15;

(3) state and county MFIP
administrative costs under Minnesota
Statutes, chapters 256J and 256K;

(4) state, county, and tribal MFIP
employment services under Minnesota
Statutes, chapters 256J and 256K;

(5) expenditures made on behalf of
noncitizen MFIP recipients who qualify
for the medical assistance without
federal financial participation program
under Minnesota Statutes, section
256B.06, subdivision 4, paragraphs (d),
(e), and (j); and

(6) qualifying working family credit
expenditures under Minnesota Statutes,
section 290.0671.

(b) The commissioner shall ensure that
sufficient qualified nonfederal
expenditures are made each year to meet
the state's TANF/MOE requirements. For
the activities listed in paragraph (a),
clauses (2) to (6), the commissioner
may only report expenditures that are
excluded from the definition of
assistance under Code of Federal
Regulations, title 45, section 260.31.

(c) For fiscal years beginning with
state fiscal year 2003, the
commissioner shall assure that the
maintenance of effort used by the
commissioner of finance for the
February and November forecasts
required under Minnesota Statutes,
section 16A.103, contains expenditures
under paragraph (a), clause (1), equal
to at least 25 percent of the total
required under Code of Federal
Regulations, title 45, section 263.1.

(d) Minnesota Statutes, section
256.011, subdivision 3, which requires
that federal grants or aids secured or
obtained under that subdivision be used
to reduce any direct appropriations
provided by law, do not apply if the
grants or aids are federal TANF funds.

(e) Notwithstanding section 12,
paragraph (a), clauses (1) to (6), and
paragraphs (b) to (d), expire June 30,
2009.

[WORKING FAMILY CREDIT EXPENDITURES AS
TANF/MOE.] The commissioner may claim
as TANF maintenance of effort up to the
following amounts of working family
credit expenditures for the following
fiscal years:

(1) fiscal year 2006, $6,942,000; and

(2) fiscal year 2007 and thereafter,
$6,707,000.

[GIFTS.] Notwithstanding Minnesota
Statutes, chapter 7, the commissioner
may accept, on behalf of the state,
additional funding from sources other
than state funds for the purpose of
financing the cost of assistance
program grants or nongrant
administration. All additional funding
is appropriated to the commissioner for
use as designated by the grantor of
funding.

[CAPITATION RATE INCREASE.] Of the
health care access fund appropriations
to the University of Minnesota in the
higher education omnibus appropriation
bill, $2,157,000 in fiscal year 2006
and $2,157,000 in fiscal year 2007 are
to be used to increase the capitation
payments under Minnesota Statutes,
section 256B.69. Notwithstanding the
provisions of section 12, this
provision shall not expire.

[INCREASE WORKING FAMILY CREDIT
EXPENDITURES TO BE CLAIMED FOR
TANF/MOE.] In addition to the amounts
provided in this section, the
commissioner may count the following
amounts of working family credit
expenditure as TANF/MOE:

(1) fiscal year 2006, $40,043,000;

(2) fiscal year 2007, $28,846,000;

(3) fiscal year 2008, $9,819,000; and

(4) fiscal year 2009, $1,367,000.

Subd. 2.

Agency Management

Summary by Fund

General 47,094,000 46,977,000

State Government
Special Revenue 415,000 415,000

Health Care Access 5,565,000 5,200,000

Federal TANF 222,000 222,000

The amounts that may be spent from the
appropriation for each purpose are as
follows:

(a) Financial Operations

General 10,851,000 10,851,000

Health Care Access 813,000 837,000

Federal TANF 122,000 122,000

[ADMINISTRATIVE BASE ADJUSTMENT - WEB
PAYMENT.] The health care access fund
base is increased by $28,000 in fiscal
year 2008 and $61,000 in fiscal year
2009 for fees associated with web-based
payment collections.

(b) Legal and
Regulation Operations

General 9,860,000 9,513,000

State Government
Special Revenue 415,000 415,000

Health Care Access 755,000 319,000

Federal TANF 100,000 100,000

(c) Management Operations

General 3,281,000 3,281,000

Health Care Access 68,000 68,000

(d) Information Technology
Operations

General 23,102,000 23,332,000

Health Care Access 3,929,000 3,976,000

Subd. 3.

Revenue and Pass-Through Expenditures

Summary by Fund

Federal TANF 61,408,000 58,966,000

The amounts that may be spent from the
appropriation for each purpose are as
follows:

[TANF TRANSFER TO FEDERAL CHILD CARE
AND DEVELOPMENT FUND.] $6,692,000 in
fiscal year 2006 and $3,192,000 in
fiscal year 2007 and each fiscal year
thereafter is appropriated to the
commissioner for the purposes of
MFIP/Transition Year child care under
Minnesota Statutes, section 119B.05.
The commissioner shall authorize
transfer of sufficient TANF funds to
the federal child care and development
fund to meet this appropriation and
shall ensure that all transferred funds
are expended according to the federal
child care and development fund
regulations.

Subd. 4.

Children and Economic
Assistance Grants

Summary by Fund

General 397,509,000 418,977,000

Federal TANF 221,485,000 221,319,000

The amounts that may be spent from this
appropriation for each purpose are as
follows:

(a) MFIP/DWP Grants

General 32,932,000 31,939,000

Federal TANF 118,891,000 118,687,000

(b) Support Services Grants

General 8,697,000 8,715,000

Federal TANF 102,594,000 102,632,000

(c) MFIP Child Care Assistance Grants

General 57,629,000 60,498,000

(d) Basic Sliding Fee Child Care
Assistance Grants

General 22,161,000 26,188,000

[BASE ADJUSTMENT FOR FREEZE MAXIMUM
RATES FOR CHILD CARE ASSISTANCE.] The
general fund base is increased by
$1,804,000 in fiscal year 2008 and
$3,697,000 in fiscal year 2009 for
basic sliding fee child care assistance.

(e) Child Care Development Grants

General 1,540,000 1,540,000

(f) Child Support Enforcement Grants

General 3,255,000 3,255,000

(g) Children's Services Grants

General 40,488,000 49,580,000

[BASE ADJUSTMENT FOR ADOPTION
ASSISTANCE GRANTS.] The general fund
base is increased by $2,153,000 in
fiscal year 2008 and $4,310,000 in
fiscal year 2009 for adoption
assistance grants.

[BASE ADJUSTMENT FOR RELATIVE CUSTODY
ASSISTANCE GRANTS.] The general fund
base is increased by $838,000 in fiscal
year 2008 and $1,689,000 in fiscal year
2009 for relative custody assistance
grants.

[ADOPTION ASSISTANCE AND RELATIVE
CUSTODY ASSISTANCE.] The commissioner
may transfer unencumbered appropriation
balances for adoption assistance and
relative custody assistance between
fiscal years and between programs.

[PRIVATIZED ADOPTION GRANTS.] Federal
reimbursement for privatized adoption
grant and foster care recruitment grant
expenditures is appropriated to the
commissioner for adoption grants and
foster care and adoption administrative
purposes.

(h) Children and Community
Services Grants

General 68,488,000 68,488,000

[DELAY PROJECTS OF REGIONAL
SIGNIFICANCE.] Notwithstanding
Minnesota Statutes, section 256M.40,
subdivision 2, the projects of the
regional significance grant program are
delayed until July 1, 2007. The
general fund base for the program shall
be $25,000,000 in fiscal year 2008 and
$25,000,000 in fiscal year 2009.

(i) General Assistance Grants

General 29,825,000 30,607,000

[GENERAL ASSISTANCE STANDARD.] The
commissioner shall set the monthly
standard of assistance for general
assistance units consisting of an adult
recipient who is childless and
unmarried or living apart from parents
or a legal guardian at $203. The
commissioner may reduce this amount
according to Laws 1997, chapter 85,
article 3, section 54.

[EMERGENCY GENERAL ASSISTANCE.] The
amount appropriated for emergency
general assistance funds is limited to
no more that $7,889,812 in fiscal year
2006 and $7,889,812 in fiscal year
2007. Funds to counties shall be
allocated by the commissioner using the
allocation method specified in
Minnesota Statutes, section 256D.06.

(j) Minnesota Supplemental Aid Grants

General 30,125,000 30,655,000

[EMERGENCY MINNESOTA SUPPLEMENTAL AID
FUNDS.] The amount appropriated for
emergency Minnesota supplemental aid
funds is limited to no more than
$1,100,000 in fiscal year 2006 and
$1,100,000 in fiscal year 2007. Funds
to counties shall be allocated by the
commissioner using the allocation
method specified in Minnesota Statutes,
section 256D.46.

(k) Group Residential Housing Grants

General 84,588,000 90,110,000

(l) Other Children and Economic
Assistance Grants

General 17,781,000 17,402,000

Subd. 5.

Children and Economic Assistance
Management

Summary by Fund

General 42,388,000 42,408,000

Health Care Access 249,000 249,000

Federal TANF 452,000 452,000

The amounts that may be spent from the
appropriation for each purpose are as
follows:

(a) Children and Economic
Assistance Administration

General 7,643,000 7,637,000

Federal TANF 452,000 452,000

(b) Children and Economic
Assistance Operations

General 34,745,000 34,771,000

Health Care Access 249,000 249,000

[SPENDING AUTHORITY FOR FOOD STAMPS
BONUS AWARDS.] In the event that
Minnesota qualifies for the United
States Department of Agriculture Food
and Nutrition Services Food Stamp
Program performance bonus awards
beginning in federal fiscal year 2004,
the funding is appropriated to the
commissioner. The commissioner shall
retain 25 percent of the funding, with
the other 75 percent divided among the
counties according to a formula that
takes into account each county's impact
on state performance in the applicable
bonus categories.

[CHILD SUPPORT PAYMENT CENTER.]
Payments to the commissioner from other
governmental units, private
enterprises, and individuals for
services performed by the child support
payment center must be deposited in the
state systems account authorized under
Minnesota Statutes, section 256.014.
These payments are appropriated to the
commissioner for the operation of the
child support payment center or system,
according to Minnesota Statutes,
section 256.014.

[CHILD SUPPORT COST RECOVERY FEES.] The
commissioner shall transfer $34,000 of
child support cost recovery fees
collected in fiscal year 2006 and
fiscal year 2007 to the PRISM special
revenue account to offset PRISM system
costs of maintaining the fee.

[FINANCIAL INSTITUTION DATA MATCH AND
PAYMENT OF FEES.] The commissioner is
authorized to allocate up to $310,000
each year in fiscal year 2006 and
fiscal year 2007 from the PRISM special
revenue account to make payments to
financial institutions in exchange for
performing data matches between account
information held by financial
institutions and the public authority's
database of child support obligors as
authorized by Minnesota Statutes,
section 13B.06, subdivision 7.

Subd. 6.

Basic Health Care Grants

Summary by Fund

General 1,529,766,000 1,625,551,000

Health Care Access 465,516,000 536,757,000

[UPDATING FEDERAL POVERTY GUIDELINES.]
Annual updates to the federal poverty
guidelines are effective each July 1,
following publication by the United
States Department of Health and Human
Services for health care programs under
Minnesota Statutes, chapters 256, 256B,
256D, and 256L.

[TRANSFERS.] The commissioner of human
services, with the approval of the
commissioner of finance, and after
notification of the chairs of the
relevant house finance committee and
senate budget division, may expend
money appropriated from the health care
access fund for MinnesotaCare and
general assistance medical care in
either fiscal year of the biennium and
transfer unencumbered appropriation
balances between these two programs
within or between fiscal years for the
biennium ending June 30, 2007.

The amounts that may be spent from the
appropriation for each purpose are as
follows:

(a) MinnesotaCare Grants

Health Care Access 204,943,000 115,669,000

[MINNESOTACARE FEDERAL RECEIPTS.]
Receipts received as a result of
federal participation pertaining to
administrative costs of the Minnesota
health care reform waiver shall be
deposited as nondedicated revenue in
the health care access fund. Receipts
received as a result of federal
participation pertaining to grants
shall be deposited in the federal fund
and shall offset health care access
funds for payments to providers.

(b) MA Basic Health Care -
Families and Children

General 631,465,000 761,133,000

(c) MA Basic Health Care -
Elderly and Disabled

General 802,944,000 861,359,000

(d) General Assistance Medical Care
Grants

General 88,570,000 -0-

Health Care Access 259,823,000 420,338,000

(e) Prescription Drug Program Grants

General 4,228,000 -0-

[PDP TO MEDICARE PART D TRANSITION.]
The commissioner of human services,
with the approval of the commissioner
of finance, and after notification of
the chair of the senate Health and
Human Services Budget Division and the
chair of the house Health Policy and
Finance Committee, may transfer fiscal
year 2006 appropriations between the
medical assistance program and the
prescription drug program.

(f) Health Care Grants -
Other Assistance

General 2,559,000 3,059,000

Health Care Access 750,000 750,000

Subd. 7.

Health Care Management

Summary by Fund

General 25,044,000 25,867,000

Health Care Access 19,418,000 17,650,000

The amounts that may be spent from the
appropriation for each purpose are as
follows:

(a) Health Care Policy Administration

General 8,391,000 8,612,000

Health Care Access 3,482,000 2,630,000

[HEALTH CARE ACCESS FUND TRANSFERS
EXPIRATION.] Notwithstanding Laws 2003,
First Special Session chapter 14,
article 13C, section 2, subdivision 6,
paragraph (b), designating funds
available for transfer to the general
fund, the commissioner of finance's
authorization to transfer those
designated funds from the health care
access fund shall expire July 1, 2005.

[HEALTH CARE ACCESS FUND TRANSFERS.]
Transfers of funds between the health
care access fund and the general fund
authorized under Minnesota Statutes,
section 16A.724, supersede the
transfers authorized in Laws 2003,
First Special Session chapter 14,
article 13C, section 2, subdivision 7,
paragraph (a). This provision is
effective the day following final
enactment.

[ADMINISTRATIVE BASE ADJUSTMENT.] The
health care access fund base is
increased by $1,868,000 in fiscal year
2008 and $1,874,000 in fiscal year
2009, for implementation of business
process redesign in health care.

[MINNESOTACARE OUTREACH REIMBURSEMENT.]
Federal administrative reimbursement
resulting from MinnesotaCare outreach
is appropriated to the commissioner for
this activity.

[MINNESOTA SENIOR HEALTH OPTIONS
REIMBURSEMENT.] Federal administrative
reimbursement resulting from the
Minnesota senior health options project
is appropriated to the commissioner for
this activity.

[UTILIZATION REVIEW.] Federal
administrative reimbursement resulting
from prior authorization and inpatient
admission certification by a
professional review organization shall
be dedicated to the commissioner for
these purposes. A portion of these
funds must be used for activities to
decrease unnecessary pharmaceutical
costs in medical assistance.

(b) Health Care Operations

General 16,653,000 17,255,000

Health Care Access 15,936,000 15,020,000

Subd. 8.

Continuing Care Grants

Summary by Fund

General 1,542,138,000 1,601,248,000

Lottery Prize 1,308,000 1,308,000

The amounts that may be spent from the
appropriation for each purpose are as
follows:

(a) Aging and Adult Services Grant

General 17,359,000 16,047,000

(b) Alternative Care Grants

General 67,424,000 67,525,000

[ALTERNATIVE CARE TRANSFER.] Any money
allocated to the alternative care
program that is not spent for the
purposes indicated does not cancel but
shall be transferred to the medical
assistance account.

(c) Medical Assistance Grants -
Long-term Care Facilities

General 509,730,000 503,732,000

(d) Medical Assistance Grants -
Long-Term Care Waivers and
Home Care Grants

General 821,107,000 880,404,000

[LIMITING GROWTH IN COMMUNITY
ALTERNATIVES FOR DISABLED INDIVIDUALS
WAIVER.] For each year of the biennium
ending June 30, 2007, the commissioner
shall make available additional
allocations for home and
community-based services covered under
Minnesota Statutes, section 256B.49, at
a rate of 95 per month or 1,140 per
year, plus any additional legislatively
authorized growth. Priorities for the
allocation of funds shall be for
individuals anticipated to be
discharged from institutional settings
or who are at imminent risk of a
placement in an institutional setting.

[LIMITING GROWTH IN TBI WAIVER.] For
each year of the biennium ending June
30, 2007, the commissioner shall make
available additional allocations for
home and community-based services
covered under Minnesota Statutes,
section 256B.49, at a rate of 150 per
year. Priorities for the allocation of
funds shall be for individuals
anticipated to be discharged from
institutional settings or who are at
imminent risk of a placement in an
institutional setting.

[LIMITING GROWTH IN MR/RC WAIVER.] For
each year of the biennium ending June
30, 2007, the commissioner shall limit
the new diversion caseload growth in
the MR/RC waiver to 50 additional
allocations. Notwithstanding Minnesota
Statutes, section 256B.0916,
subdivision 5, paragraph (b), the
available diversion allocations shall
be awarded to support individuals whose
health and safety needs result in an
imminent risk of an institutional
placement at any time during the fiscal
year.

(e) Mental Health Grants

General 46,141,000 45,908,000

Lottery Prize 1,308,000 1,308,000

[RESTRUCTURING OF ADULT MENTAL HEALTH
SERVICES.] The commissioner may make
transfers that do not increase the
state share of costs to effectively
implement the restructuring of adult
mental health services.

(f) Deaf and Hard-of-Hearing
Grants

General 1,445,000 1,445,000

(g) Chemical Dependency
Entitlement Grants

General 63,183,000 70,438,000

(h) Chemical Dependency Nonentitlement
Grants

General 1,355,000 1,355,000

[METHAMPHETAMINE ABUSE TREATMENT.]
$300,000 is appropriated from the
general fund for the fiscal year ending
June 30, 2006, and $300,000 is
appropriated from the general fund for
the fiscal year ending June 30, 2007,
to the commissioner of human services
for grants to counties for treatment
related services provided to women with
children, or adolescents receiving
chemical dependency treatment
subsequent to abusing methamphetamine.
Counties must meet the following
criteria in order to be eligible for
these grant funds by:

(1) establishing a local
methamphetamine task force;

(2) enacting ordinances governing
cleanup of clandestine drug laboratory
sites;

(3) establishing a child protection
services protocol for drug endangered
children; and

(4) providing aftercare services for
persons completing treatment for
methamphetamine abuse.

(i) Other Continuing Care Grants

General 14,394,000 14,394,000

Subd. 9.

Continuing Care Management

Summary by Fund

General 14,539,000 14,496,000

State Government
Special Revenue 119,000 119,000

Lottery Prize 148,000 148,000

Subd. 10.

State-Operated Services

Summary by Fund

General 206,486,000 201,305,000

[TRANSFER AUTHORITY RELATED TO
STATE-OPERATED SERVICES.] Money
appropriated to finance state-operated
services programs and administrative
services may be transferred between
fiscal years of the biennium with the
approval of the commissioner of finance.

[BASE ADJUSTMENT FOR STATE-OPERATED
SERVICES UTILIZATION.] The general fund
base is increased by $3,856,000 in
fiscal year 2008 and $8,025,000 in
fiscal year 2009 for state-operated
services forensic operations, with
corresponding adjustments to
nondedicated revenue estimates.

Sec. 3. COMMISSIONER OF HEALTH

Subdivision 1.

Total
Appropriation 112,425,000 117,185,000

Summary by Fund

General 63,902,000 68,263,000

State Government
Special Revenue 36,307,000 36,706,000

Health Care Access 6,216,000 6,216,000

Federal TANF 6,000,000 6,000,000

[TANF APPROPRIATIONS.] (a) $4,000,000
of TANF funds is appropriated each year
to the commissioner for home visiting
and nutritional services listed under
Minnesota Statutes, section 145.882,
subdivision 7, clauses (6) and (7).
Funding shall be distributed to
community health boards based on
Minnesota Statutes, section 145A.131,
subdivision 1, and tribal governments
based on Minnesota Statutes, section
145A.14, subdivision 2, paragraph (b).

(b) $2,000,000 of TANF funds is
appropriated each year to the
commissioner for decreasing racial and
ethnic disparities in infant mortality
rates under Minnesota Statutes, section
145.928, subdivision 7.

Subd. 2.

Community and Family
Health Promotion

Summary by Fund

General 39,592,000 42,092,000

State Government
Special Revenue 128,000 128,000

Health Care Access 3,453,000 3,453,000

Federal TANF 3,580,000 3,580,000

[COMMUNITY HEALTH AND FAMILY
PROMOTION.] Of the general fund
appropriation in fiscal year 2007,
$2,500,000 is for positive abortion
alternatives under Minnesota Statutes,
section 145.4231. Of this amount,
$100,000 may be used for administrative
costs of implementing the grant program.

Subd. 3.

Policy Quality and
Compliance

Summary by Fund

General 3,600,000 3,600,000

State Government
Special Revenue 11,528,000 11,428,000

Health Care Access 2,763,000 2,763,000

Subd. 4.

Health Protection

Summary by Fund

General 9,118,000 9,118,000

State Government
Special Revenue 24,316,000 24,815,000

Subd. 5.

Minority and
Multicultural Health

Summary by Fund

General 4,982,000 4,982,000

Federal TANF 2,420,000 2,420,000

Subd. 6.

Administrative
Support Services

Summary by Fund

General 6,610,000 8,471,000

State Government
Special Revenue 335,000 335,000

Sec. 4. VETERANS NURSING HOMES BOARD

General 30,030,000 30,030,000

Sec. 5. HEALTH-RELATED BOARDS

Subdivision 1.

Total
Appropriation 11,572,000 11,582,000

Summary by Fund

State Government
Special Revenue 11,572,000 11,582,000

[STATE GOVERNMENT SPECIAL REVENUE
FUND.] The appropriations in this
section are from the state government
special revenue fund, except where
noted.

[NO SPENDING IN EXCESS OF REVENUES.]
The commissioner of finance shall not
permit the allotment, encumbrance, or
expenditure of money appropriated in
this section in excess of the
anticipated biennial revenues or
accumulated surplus revenues from fees
collected by the boards. Neither this
provision nor Minnesota Statutes,
section 214.06, applies to transfers
from the general contingent account.

[HEALTH PROFESSIONAL SERVICES
ACTIVITY.] $546,000 each year from the
state government special revenue fund
is for the health professional services
activity.

Subd. 2.

Board of Behavioral
Health and Therapy 673,000 673,000

Subd. 3.

Board of Chiropractic
Examiners 384,000 384,000

Subd. 4.

Board of Dentistry

State Government Special
Revenue Fund 858,000 858,000

Subd. 5.

Board of Dietetic and
Nutrition Practice 101,000 101,000

Subd. 6.

Board of Marriage and
Family Therapy 118,000 118,000

Subd. 7.

Board of Medical
Practice 3,404,000 3,404,000

Subd. 8.

Board of Nursing 2,356,000 2,356,000

Subd. 9.

Board of Nursing
Home Administrators 597,000 597,000

[ADMINISTRATIVE SERVICES UNIT.] Of this
appropriation, $359,000 the first year
and $359,000 the second year are for
the health boards administrative
services unit. The administrative
services unit may receive and expend
reimbursements for services performed
for other agencies.

Subd. 10.

Board of Optometry 96,000 96,000

Subd. 11.

Board of Pharmacy 1,027,000 1,027,000

Subd. 12.

Board of Physical
Therapy 197,000 197,000

Subd. 13.

Board of Podiatry 45,000 45,000

Subd. 14.

Board of Psychology 680,000 680,000

Subd. 15.

Board of Social
Work 873,000 873,000

Subd. 16.

Board of Veterinary
Medicine 163,000 163,000

Sec. 6. EMERGENCY MEDICAL SERVICES BOARD

Subdivision 1.

Total
Appropriation 3,027,000 3,027,000

Summary by Fund

General 2,481,000 2,481,000

State Government
Special Revenue 546,000 546,000

Sec. 7. COUNCIL ON DISABILITY

General 500,000 500,000

Sec. 8. OMBUDSMAN FOR MENTAL HEALTH
AND MENTAL RETARDATION

General 1,462,000 1,462,000

Sec. 9. OMBUDSMAN FOR FAMILIES

General 245,000 245,000

Sec. 10. new text begin TRANSFERS.
new text end

new text begin Subdivision 1. new text end

new text begin Grants. new text end

new text begin The commissioner of human
services, with the approval of the commissioner of finance, and
after notification of the chairs of the relevant senate budget
division and house finance committee, may transfer unencumbered
appropriation balances for the biennium ending June 30, 2007,
within fiscal years among the MFIP, general assistance, medical
assistance, MFIP child care assistance under Minnesota Statutes,
section 119B.05, Minnesota supplemental aid, and group
residential housing programs, and the entitlement portion of the
chemical dependency consolidated treatment fund, and between
fiscal years of the biennium.
new text end

new text begin Subd. 2. new text end

new text begin Administration. new text end

new text begin Positions, salary money, and
nonsalary administrative money may be transferred within the
departments of human services and health and within the programs
operated by the veterans nursing homes board as the
commissioners and the board consider necessary, with the advance
approval of the commissioner of finance. The commissioner or
the board shall inform the chairs of the relevant house and
senate health committees quarterly about transfers made under
this provision.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited transfers. new text end

new text begin Grant money shall not be
transferred to operations within the departments of human
services and health and within the programs operated by the
veterans nursing homes board without the approval of the
legislature.
new text end

Sec. 11. new text begin INDIRECT COSTS NOT TO FUND PROGRAMS.
new text end

new text begin The commissioners of health and of human services shall not
use indirect cost allocations to pay for the operational costs
of any program for which they are responsible.
new text end

Sec. 12. new text begin SUNSET OF UNCODIFIED LANGUAGE.
new text end

new text begin All uncodified language contained in this article expires
on June 30, 2007, unless a different expiration date is explicit.
new text end

Sec. 13. new text begin EFFECTIVE DATE.
new text end

new text begin The provisions in this article are effective July 1, 2005,
unless a different effective date is specified.
new text end