SF 1521

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

A bill for an act
relating to human services; placing nursing facilities
in the county of Meeker into a different geographic
group; amending Minnesota Statutes 2004, section
256B.431, subdivision 2b.

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

Section 1.

Minnesota Statutes 2004, section 256B.431,
subdivision 2b, is amended to read:

Subd. 2b.

Operating costs, after july 1, 1985.

(a) For
rate years beginning on or after July 1, 1985, the commissioner
shall establish procedures for determining per diem
reimbursement for operating costs.

(b) The commissioner shall contract with an econometric
firm with recognized expertise in and access to national
economic change indices that can be applied to the appropriate
cost categories when determining the operating cost payment rate.

(c) The commissioner shall analyze and evaluate each
nursing facility's cost report of allowable operating costs
incurred by the nursing facility during the reporting year
immediately preceding the rate year for which the payment rate
becomes effective.

(d) The commissioner shall establish limits on actual
allowable historical operating cost per diems based on cost
reports of allowable operating costs for the reporting year that
begins October 1, 1983, taking into consideration relevant
factors including resident needs, geographic location, and size
of the nursing facility. In developing the geographic groups
for purposes of reimbursement under this section, the
commissioner shall ensure that nursing facilities in any county
contiguous to the Minneapolis-St. Paul seven-county metropolitan
area are included in the same geographic group. new text begin For rate years
beginning on or after July 1, 2005, a nursing facility in the
county of Meeker shall be in geographic group II. new text end The limits
established by the commissioner shall not be less, in the
aggregate, than the 60th percentile of total actual allowable
historical operating cost per diems for each group of nursing
facilities established under subdivision 1 based on cost reports
of allowable operating costs in the previous reporting year.
For rate years beginning on or after July 1, 1989, facilities
located in geographic group I as described in Minnesota Rules,
part 9549.0052, on January 1, 1989, may choose to have the
commissioner apply either the care related limits or the other
operating cost limits calculated for facilities located in
geographic group II, or both, if either of the limits calculated
for the group II facilities is higher. The efficiency incentive
for geographic group I nursing facilities must be calculated
based on geographic group I limits. The phase-in must be
established utilizing the chosen limits. For purposes of these
exceptions to the geographic grouping requirements, the
definitions in Minnesota Rules, parts 9549.0050 to 9549.0059
(Emergency), and 9549.0010 to 9549.0080, apply. The limits
established under this paragraph remain in effect until the
commissioner establishes a new base period. Until the new base
period is established, the commissioner shall adjust the limits
annually using the appropriate economic change indices
established in paragraph (e). In determining allowable
historical operating cost per diems for purposes of setting
limits and nursing facility payment rates, the commissioner
shall divide the allowable historical operating costs by the
actual number of resident days, except that where a nursing
facility is occupied at less than 90 percent of licensed
capacity days, the commissioner may establish procedures to
adjust the computation of the per diem to an imputed occupancy
level at or below 90 percent. The commissioner shall establish
efficiency incentives as appropriate. The commissioner may
establish efficiency incentives for different operating cost
categories. The commissioner shall consider establishing
efficiency incentives in care related cost categories. The
commissioner may combine one or more operating cost categories
and may use different methods for calculating payment rates for
each operating cost category or combination of operating cost
categories. For the rate year beginning on July 1, 1985, the
commissioner shall:

(1) allow nursing facilities that have an average length of
stay of 180 days or less in their skilled nursing level of care,
125 percent of the care related limit and 105 percent of the
other operating cost limit established by rule; and

(2) exempt nursing facilities licensed on July 1, 1983, by
the commissioner to provide residential services for the
physically handicapped under Minnesota Rules, parts 9570.2000 to
9570.3600, from the care related limits and allow 105 percent of
the other operating cost limit established by rule.

For the purpose of calculating the other operating cost
efficiency incentive for nursing facilities referred to in
clause (1) or (2), the commissioner shall use the other
operating cost limit established by rule before application of
the 105 percent.

(e) The commissioner shall establish a composite index or
indices by determining the appropriate economic change
indicators to be applied to specific operating cost categories
or combination of operating cost categories.

(f) Each nursing facility shall receive an operating cost
payment rate equal to the sum of the nursing facility's
operating cost payment rates for each operating cost category.
The operating cost payment rate for an operating cost category
shall be the lesser of the nursing facility's historical
operating cost in the category increased by the appropriate
index established in paragraph (e) for the operating cost
category plus an efficiency incentive established pursuant to
paragraph (d) or the limit for the operating cost category
increased by the same index. If a nursing facility's actual
historic operating costs are greater than the prospective
payment rate for that rate year, there shall be no retroactive
cost settle-up. In establishing payment rates for one or more
operating cost categories, the commissioner may establish
separate rates for different classes of residents based on their
relative care needs.

(g) The commissioner shall include the reported actual real
estate tax liability or payments in lieu of real estate tax of
each nursing facility as an operating cost of that nursing
facility. Allowable costs under this subdivision for payments
made by a nonprofit nursing facility that are in lieu of real
estate taxes shall not exceed the amount which the nursing
facility would have paid to a city or township and county for
fire, police, sanitation services, and road maintenance costs
had real estate taxes been levied on that property for those
purposes. For rate years beginning on or after July 1, 1987,
the reported actual real estate tax liability or payments in
lieu of real estate tax of nursing facilities shall be adjusted
to include an amount equal to one-half of the dollar change in
real estate taxes from the prior year. The commissioner shall
include a reported actual special assessment, and reported
actual license fees required by the Minnesota Department of
Health, for each nursing facility as an operating cost of that
nursing facility. For rate years beginning on or after July 1,
1989, the commissioner shall include a nursing facility's
reported Public Employee Retirement Act contribution for the
reporting year as apportioned to the care-related operating cost
categories and other operating cost categories multiplied by the
appropriate composite index or indices established pursuant to
paragraph (e) as costs under this paragraph. Total adjusted
real estate tax liability, payments in lieu of real estate tax,
actual special assessments paid, the indexed Public Employee
Retirement Act contribution, and license fees paid as required
by the Minnesota Department of Health, for each nursing facility
(1) shall be divided by actual resident days in order to compute
the operating cost payment rate for this operating cost
category, (2) shall not be used to compute the care-related
operating cost limits or other operating cost limits established
by the commissioner, and (3) shall not be increased by the
composite index or indices established pursuant to paragraph
(e), unless otherwise indicated in this paragraph.

(h) For rate years beginning on or after July 1, 1987, the
commissioner shall adjust the rates of a nursing facility that
meets the criteria for the special dietary needs of its
residents and the requirements in section 31.651. The
adjustment for raw food cost shall be the difference between the
nursing facility's allowable historical raw food cost per diem
and 115 percent of the median historical allowable raw food cost
per diem of the corresponding geographic group.

The rate adjustment shall be reduced by the applicable
phase-in percentage as provided under subdivision 2h.