Minnesota Legislature
SF 1471
3rd Engrossment - 89th Legislature (2015 - 2016) Posted on 09/15/2015 10:03am
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A bill for an act
relating to health; making changes to provisions governing receivership of
nursing homes or certified boarding care homes; amending Minnesota Statutes
2014, sections 144A.15; 152.34; 256B.0641, subdivision 3; 256B.495,
subdivisions 1, 5; repealing Minnesota Statutes 2014, sections 144A.14;
256B.495, subdivisions 1a, 2, 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 144A.15, is amended to read:
144A.15 deleted text begin INVOLUNTARYdeleted text end new text begin STATEnew text end RECEIVERSHIP.
Subdivision 1.
Petition, notice.
In addition to any other remedy provided by law,
the commissioner of health may petition the district court in Ramsey or Hennepin County
or in the district in which a nursing home or certified boarding care home is located for
an order directing the controlling persons of the nursing home or certified boarding
care home to show cause why the commissioner of health deleted text begin or a designeedeleted text end should not be
appointed receiver to operate the facility. The petition to the district court shall contain
proof by affidavit thatnew text begin one or more of the following exists:new text end
new text begin (1) new text end the commissioner of health has deleted text begin eitherdeleted text end commenced new text begin proceedings to suspend or
revoke the state new text end license deleted text begin suspension or revocation proceedings, suspended or revoked a
license, or decided not to renew the nursing home license, or thatdeleted text end new text begin , or refuses to renew
a license;
new text end
new text begin (2) new text end violations of section 1919(b), (c), or (d), of the Social Security Act, or the
regulations adopted under that section, or violations of state deleted text begin lawdeleted text end new text begin lawsnew text end or rules, create an
emergencydeleted text begin .deleted text end new text begin for the residents of the facility;
new text end
new text begin
(3) there is a threat of imminent abandonment by the owner or operator;
new text end
new text begin
(4) there is a pattern of failure to meet ongoing financial obligations such as failing
to pay for food, pharmaceuticals, personnel, or required insurance;
new text end
new text begin
(5) the Centers for Medicare and Medicaid Services (CMS) has appointed a
temporary manager to oversee the operation of the facility; or
new text end
new text begin
(6) notice by CMS has been given that the federal Medicare or Medicaid provider
agreement will be terminated, revoked, canceled, or not renewed.
new text end
The order to show cause shall be deleted text begin returnable not less than five days after service is
completed and shall provide for personal service of a copy todeleted text end new text begin personally served to either
new text end the nursing home administrator deleted text begin anddeleted text end new text begin ornew text end to the deleted text begin personsdeleted text end new text begin personnew text end designated as deleted text begin agentsdeleted text end new text begin the
agentnew text end by the controlling persons to accept service on their behalf pursuant to section
144A.03, subdivision 2.
Subd. 2.
Appointment of receiver, rental.
If, after hearing, the court finds that
deleted text begin involuntarydeleted text end receivership is necessary as a means of protecting the health, safety or welfare
of a resident of deleted text begin a nursing homedeleted text end new text begin the facilitynew text end , the court shall appoint the commissioner
of health, deleted text begin or any other person designated by the commissioner of health,deleted text end as a receiver
to take charge of the facility. new text begin The commissioner may enter into an agreement for a
managing agent to work on the commissioner's behalf in operating the facility during the
receivership. new text end The court shall determine a fair monthly rental for the facility, taking into
account all relevant factors including the condition of the facility. This rental fee shall
be paid by the receiver to the appropriate controlling deleted text begin personsdeleted text end new text begin personnew text end for each month
that the receivership remains in effectnew text begin but shall be reduced by the amount that the costs
of the receivership provided under section 256B.495 are in excess of the facility rate.
The controlling person may agree to waive the fair monthly rent by affidavit to the
courtnew text end . Notwithstanding any other law to the contrary, no payment made to a controlling
person by any state agency during a period of deleted text begin involuntarydeleted text end receivership shall include any
allowance for profit or be based on any formula which includes an allowance for profit.
new text begin
Notwithstanding state contracting requirements in chapter 16C, the commissioner
shall establish and maintain a list of qualified licensed nursing home administrators,
or other qualified persons or organizations with experience in delivering skilled health
care services and the operation of long-term care facilities for those interested in being a
managing agent on the commissioner's behalf during a state receivership of a facility. This
list will be a resource for choosing a managing agent and the commissioner may update
the list at any time. A managing agent cannot be someone who: (1) is the owner, licensee,
or administrator of the facility; (2) has a financial interest in the facility at the time of the
receivership or is a related party to the owner, licensee, or administrator; or (3) has owned or
operated any nursing facility or boarding care home that has been ordered into receivership.
new text end
Subd. 2a.
Emergency procedure.
If it appears from the petition filed under
subdivision 1, or from an affidavit or affidavits filed with the petition, or from testimony
of witnesses under oath when the court determines that this is necessary, that there
is probable cause to believe that an emergency exists in a nursing home or certified
boarding care homenew text begin requiring the receivershipnew text end , the court shall issue a temporary order for
appointment of a receiver within deleted text begin five daysdeleted text end new text begin two daysnew text end after receipt of the petition. Notice
of the petition shall be served personally on the nursing home administrator deleted text begin anddeleted text end new text begin ornew text end on
the deleted text begin personsdeleted text end new text begin personnew text end designated as deleted text begin agentsdeleted text end new text begin the agentnew text end by the controlling deleted text begin personsdeleted text end new text begin personnew text end to
accept service on their behalf according to section 144A.03, subdivision 2. A hearing on
the petition shall be held within five days' after notice is served unless the administrator
or designated agent consents to a later date. After the hearing, the court may continue,
modify, or terminate the temporary order.
Subd. 3.
Powers and duties of receiver.
new text begin (a) new text end A nursing home receiver appointed
pursuant to this section shall with all reasonable speed, but in any case, within 18
months after the receivership order,new text begin determine whether to close the facility or to make
other provisions intended to keep it open. If facility closure is the determination, the
commissioner shallnew text end provide for the orderly transfer of all the nursing home's residents to
other facilities deleted text begin or make other provisions for their continued safety and health care.deleted text end new text begin pursuant
to the relocation procedures required in section 144A.161. During the receivership,
new text end the receiver may correct or eliminate those deficiencies in the facility which seriously
endanger the life, health or safety of the residents unless the correction or elimination of
deficiencies involves major alterations in the physical structure of the nursing home.
The receiver shall, during this period, operate the nursing home in a manner designed to
guarantee the safety and adequate health care of the residents. The receiver shall take no
action which impairs the legal rights of a resident of the nursing home. The receiver
shall have power to make contracts and incur lawful expenses.new text begin The receiver shall use the
building, fixtures, furnishings, and any accompanying consumable goods in the provision
of care and services to the residents during the receivership period. The receiver shall take
action as is reasonably necessary to protect or conserve the tangible assets or property
during receivership.new text end The receiver shall collect incoming payments from all sources and
apply them to the cost incurred in the performance of the receiver's functions. No security
interest in any real or personal property comprising the nursing home or contained within
it, or in any fixture of the facility, shall be impaired or diminished in priority by the receiver.
The receiver shall pay all valid obligations deleted text begin ofdeleted text end the deleted text begin nursing homedeleted text end new text begin facility incurred during the
course of the receivership and may pay obligations incurred prior to the receivership if, in
the judgment of the commissioner, these payments must be made to ensure the health,
safety, or welfare of the residentsnew text end and shall deduct these expensesdeleted text begin , if appropriate,deleted text end from
rental payments owed to any controlling person by virtue of the receivership.new text begin The receiver
has authority to hire, direct, manage, and discharge any employees of the facility including
the administrator, director of nursing, medical director, or manager of the facility.
new text end
new text begin
(b) Nothing in this section shall relieve any owner, operator, or controlling person
of a facility placed in receivership of any civil or criminal liability incurred, or any duty
imposed by law, by reason of acts or omissions of the owner, licensee, or controlling
person prior to the order for receivership under this section, nor shall anything contained
in this section be construed to suspend during the receivership any obligation of the owner,
licensee, or controlling person for payment of taxes or other operating and maintenance
expenses of the facility nor of the owner, licensee, or controlling person or any other
person for the payment of mortgages or liens.
new text end
Subd. 4.
Receiver's fee; liability; commissioner assistance.
deleted text begin A nursing home
receiverdeleted text end new text begin The commissioner of health, as receivernew text end appointed deleted text begin pursuant to this section shall
bedeleted text end new text begin by the court, may hire a managing agent to work on the commissioner's behalf to
operate the facility during the receivership, and that managing agent is new text end entitled to a
reasonable deleted text begin receiver'sdeleted text end fee deleted text begin as determined by the courtdeleted text end . The receivernew text begin and its managing agent
new text end shall be liable only in an official capacity for injury to person and property by reason of
the conditions of the nursing home. The receiver new text begin and its managing agent new text end shall not be
personally liable, except for gross negligence and intentional acts. The commissioner of
health shall assist the deleted text begin receiverdeleted text end new text begin managing agentnew text end in carrying out deleted text begin thesedeleted text end new text begin itsnew text end duties.
Subd. 5.
Termination.
deleted text begin An involuntarydeleted text end Receivership imposed pursuant to this
section shall terminate 18 months after the date on which it was ordered or at any other
time designated by the court or upon the occurrence of any of the following events:
deleted text begin (a)deleted text end new text begin (1) new text end a determination by the commissioner of health that the nursing home's license
should be renewed or should not be suspended or revoked;
deleted text begin (b)deleted text end new text begin (2) new text end the granting of a new license to the nursing home; or
deleted text begin (c)deleted text end new text begin (3) new text end a determination by the commissioner of health that all of the residents of
the nursing home have been provided alternative health care, either in another facility
or otherwise.
new text begin Subd. 6. new text end
new text begin Postreceivership period; facility remaining open. new text end
new text begin
(a) If a facility remains
open after the receivership is concluded, a new operator is only legally responsible under
state law for its actions after the receivership has concluded.
new text end
new text begin
(b) The commissioner of human services may adjust, reclassify, or disallow costs
reported for a facility that was in receivership for periods of a reporting year during which
the receivership was in effect and for the prior year.
new text end
Sec. 2.
Minnesota Statutes 2014, section 152.34, is amended to read:
152.34 deleted text begin NURSINGdeleted text end new text begin HEALTH CAREnew text end FACILITIES.
deleted text begin Nursingdeleted text end new text begin (a) Health carenew text end facilities licensed under chapter 144A, boarding care
homes licensed under section 144.50, deleted text begin anddeleted text end assisted living facilitiesnew text begin , and facilities owned,
controlled, managed, or under common control with hospitals licensed under chapter 144,
new text end may adopt reasonable restrictions on the use of medical cannabis by a patient enrolled
in the registry program who resides at new text begin or is actively receiving treatment or care at new text end the
facility. The restrictions may include a provision that the facility will not store or maintain
the patient's supply of medical cannabis, that the facility is not responsible for providing
the medical cannabis for patients, and that medical cannabis be used only in a place
specified by the facility.
new text begin (b) Any employee or agent of a facility listed in this section or a person licensed
under chapter 144E is not subject to violations under this chapter for possession of medical
cannabis while carrying out employment duties, including providing or supervising care to
a registered patient, or distribution of medical cannabis to a registered patient who resides
at or is actively receiving treatment or care at the facility with which the employee or agent
is affiliated.new text end Nothing deleted text begin containeddeleted text end in this section shall require the facilities to adopt such
restrictions and no facility shall unreasonably limit a patient's access to or use of medical
cannabis to the extent that use is authorized by the patient under sections 152.22 to 152.37.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2014, section 256B.0641, subdivision 3, is amended to read:
Subd. 3.
Facility in receivership.
Subdivision 2 does not apply to the change of
ownership of a facility to a nonrelated organization while the facility to be sold, transferred
or reorganized is in receivership under section deleted text begin 144A.14,deleted text end 144A.15, 245A.12, or 245A.13,
and the commissioner during the receivership has not determined the need to place
residents of the facility into a newly constructed or newly established facility. Nothing
in this subdivision limits the liability of a former owner.
Sec. 4.
Minnesota Statutes 2014, section 256B.495, subdivision 1, is amended to read:
Subdivision 1.
Payment of receivership fees.
new text begin (a) When the commissioner of
health notifies the commissioner of human services that a nursing facility is subject to
the receivership provisions under section 144A.15 and provides a recommendation
in accordance with section 144A.154, new text end the commissioner in consultation with the
commissioner of health may establish a receivership fee that deleted text begin exceedsdeleted text end new text begin is added tonew text end a nursing
facility paymentnew text begin .new text end deleted text begin rate when the commissioner of health determines a nursing facility is
subject to the receivership provisions under section 144A.14 or 144A.15. In establishing
the receivership fee, the commissioner must reduce the receiver's requested receivership
fee by amounts that the commissioner determines are included in the nursing facility's
payment rate and that can be used to cover part or all of the receivership fee. Amounts
that can be used to reduce the receivership fee shall be determined by reallocating facility
staff or costs that were formerly paid by the nursing facility before the receivership and
are no longer required to be paid. The amounts may include any efficiency incentive,
allowance, and other amounts not specifically required to be paid for expenditures of the
nursing facility.deleted text end new text begin The commissioner shall reduce the requested amount by any amounts the
commissioner determines are included in the nursing facility's payment rate and that are
not specifically required to be paid for expenditures of the nursing facility.
new text end
deleted text begin If the receivership fee cannot be covered by amounts in the nursing facility's
payment rate,deleted text end A receivership fee shall be set according to paragraphs deleted text begin (a)deleted text end new text begin (b) new text end and deleted text begin (b)deleted text end new text begin (c)
new text end and payment shall be according to paragraphs deleted text begin (c)deleted text end new text begin (d) new text end to deleted text begin (e)deleted text end new text begin (f)new text end .
deleted text begin (a)deleted text end new text begin (b)new text end The receivership fee per diem shall be determined new text begin and revised as necessary
new text end by dividing the deleted text begin annualdeleted text end new text begin estimated amount of needed additional funding or actual additional
costs of thenew text end receivership deleted text begin feedeleted text end by the deleted text begin nursing facility'sdeleted text end new text begin estimatednew text end resident days deleted text begin from the
most recent cost report for which the commissioner has established a payment rate or the
estimated resident days in the projected receivership fee perioddeleted text end new text begin for the projected duration
of the receivershipnew text end .
deleted text begin (b)deleted text end new text begin (c) new text end The receivership fee per diem shall be added to the nursing facility's payment
rate.
deleted text begin (c)deleted text end new text begin (d) new text end Notification of the payment rate increase must meet the requirements of
section 256B.47, subdivision 2.
deleted text begin (d)deleted text end new text begin (e) new text end The payment rate in paragraph deleted text begin (b)deleted text end new text begin (c) new text end for a nursing facility shall be effective
the first day of the deleted text begin month following the receiver's compliance with the notice conditions in
paragraph (c)deleted text end new text begin receivershipnew text end .
deleted text begin (e)deleted text end new text begin (f) new text end The commissioner may elect to make a lump-sum payment of a portion of the
receivership fee to the receiver or managing agent. In this case, the commissioner and
the receiver or managing agent shall agree to a repayment plan. Regardless of whether
the commissioner makes a lump-sum payment under this paragraph, the provisions of
paragraphs deleted text begin (a) to (d) and subdivision 2 alsodeleted text end new text begin (b) to (e) new text end apply.
Sec. 5.
Minnesota Statutes 2014, section 256B.495, subdivision 5, is amended to read:
Subd. 5.
Sale or transfer of a nursing facility in receivership after closure.
(a)
Upon the subsequent sale or transfer of a nursing facility in receivership, the commissioner
deleted text begin mustdeleted text end new text begin shall seek tonew text end recovernew text begin from the prior licenseenew text end any amounts paid through payment
rate adjustments under subdivision deleted text begin 4 which exceed the normal cost of operating the
nursing facility. Examples of costs in excess of the normal cost of operating the nursing
facility include the managing agent's fee, directly identifiable costs of the managing
agent, bonuses paid to employees for their continued employment during the downsizing
to closure of the nursing facility, prereceivership expenditures paid by the receiver,
additional professional services such as accountants, psychologists, and dietitians, and
other similar costs incurred by the receiver to complete receivershipdeleted text end new text begin 1new text end . The deleted text begin buyer or
transfereedeleted text end new text begin prior licenseenew text end shall repay this amount to the commissioner within 60 days
after the commissioner notifies the deleted text begin buyer or transfereedeleted text end new text begin prior licenseenew text end of the obligation to
repay. deleted text begin The buyer or transferee must also repay the private-pay resident the amount the
private-pay resident paid through payment rate adjustment.
deleted text end
(b) new text begin The commissioner may recover amounts paid through the receivership fee by
means of withholding from the prior licensee payments related to any other medical
assistance provider of the prior licensee in Minnesota. The prior licensee must also repay
private-pay residents the amount the private-pay resident paid for the receivership fee.
new text end
new text begin (c) new text end If a nursing facility with payment rates deleted text begin subject to subdivision 4, paragraph (a),
deleted text end new text begin determined under subdivision 1new text end is later sold while the nursing facility is in receivership,
the payment rates in effect prior to the receivership shall be the new owner's payment
rates. deleted text begin Those payment rates shall continue to be in effect until the rate year following the
reporting period ending on September 30 for the new owner. The reporting period shall,
whenever possible, be at least five consecutive months. If the reporting period is less than
five months but more than three months, the nursing facility's resident days for the last
two months of the reporting period must be annualized over the reporting period for the
purpose of computing the payment rate for the rate year following the reporting period.
deleted text end new text begin The commissioner shall apply to these rates any rate adjustment provided to other nursing
facilities for which the facility is qualified.
new text end
Sec. 6. new text begin REVISOR'S INSTRUCTION.
new text end
new text begin
The revisor shall remove cross-references to the repealed sections in section 7 and
make conforming changes necessary to correct punctuation, grammar, or the structure of
the remaining text and preserve its meaning.
new text end
Sec. 7. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2014, sections 144A.14; and 256B.495, subdivisions 1a, 2,
and 4,
new text end
new text begin
are repealed.
new text end