SF 2708

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 04/01/2016 09:05am

A bill for an act
relating to human services; creating alternative residential placement options
and modified payment methods and rates for patients with complex and serious
medical and behavioral health conditions to reduce unnecessary hospitalization,
excessive lengths of stay, and higher rates of readmission after discharge;
appropriating money; amending Minnesota Statutes 2014, sections 144A.071,
subdivision 4c; 256.969, by adding a subdivision; 256.9693; 256B.0755, by
adding a subdivision; 256B.441, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2014, section 144A.071, subdivision 4c, is amended to
read:

Subd. 4c.

Exceptions for replacement beds after June 30, 2003.

(a) The
commissioner of health, in coordination with the commissioner of human services, may
approve the renovation, replacement, upgrading, or relocation of a nursing home or
boarding care home, under the following conditions:

(1) to license and certify an 80-bed city-owned facility in Nicollet County to be
constructed on the site of a new city-owned hospital to replace an existing 85-bed facility
attached to a hospital that is also being replaced. The threshold allowed for this project
under section 144A.073 shall be the maximum amount available to pay the additional
medical assistance costs of the new facility;

(2) to license and certify 29 beds to be added to an existing 69-bed facility in St.
Louis County, provided that the 29 beds must be transferred from active or layaway status
at an existing facility in St. Louis County that had 235 beds on April 1, 2003.

The licensed capacity at the 235-bed facility must be reduced to 206 beds, but the payment
rate at that facility shall not be adjusted as a result of this transfer. The operating payment
rate of the facility adding beds after completion of this project shall be the same as it was
on the day prior to the day the beds are licensed and certified. This project shall not
proceed unless it is approved and financed under the provisions of section 144A.073;

(3) to license and certify a new 60-bed facility in Austin, provided that: (i) 45 of
the new beds are transferred from a 45-bed facility in Austin under common ownership
that is closed and 15 of the new beds are transferred from a 182-bed facility in Albert Lea
under common ownership; (ii) the commissioner of human services is authorized by the
2004 legislature to negotiate budget-neutral planned nursing facility closures; and (iii)
money is available from planned closures of facilities under common ownership to make
implementation of this clause budget-neutral to the state. The bed capacity of the Albert
Lea facility shall be reduced to 167 beds following the transfer. Of the 60 beds at the
new facility, 20 beds shall be used for a special care unit for persons with Alzheimer's
disease or related dementias;

(4) to license and certify up to 80 beds transferred from an existing state-owned
nursing facility in Cass County to a new facility located on the grounds of the
Ah-Gwah-Ching campus. The operating cost payment rates for the new facility shall be
determined based on the interim and settle-up payment provisions of Minnesota Rules,
part 9549.0057, and the reimbursement provisions of section 256B.431. The property
payment rate for the first three years of operation shall be $35 per day. For subsequent
years, the property payment rate of $35 per day shall be adjusted for inflation as provided
in section 256B.434, subdivision 4, paragraph (c), as long as the facility has a contract
under section 256B.434;

(5) to initiate a pilot program to license and certify up to 80 beds transferred from
an existing county-owned nursing facility in Steele County relocated to the site of a new
acute care facility as part of the county's Communities for a Lifetime comprehensive plan
to create innovative responses to the aging of its population. Upon relocation to the new
site, the nursing facility shall delicense 28 beds. The property payment rate for the first
three years of operation of the new facility shall be increased by an amount as calculated
according to items (i) to (v):

(i) compute the estimated decrease in medical assistance residents served by the
nursing facility by multiplying the decrease in licensed beds by the historical percentage
of medical assistance resident days;

(ii) compute the annual savings to the medical assistance program from the
delicensure of 28 beds by multiplying the anticipated decrease in medical assistance
residents, determined in item (i), by the existing facility's weighted average payment rate
multiplied by 365;

(iii) compute the anticipated annual costs for community-based services by
multiplying the anticipated decrease in medical assistance residents served by the nursing
facility, determined in item (i), by the average monthly elderly waiver service costs for
individuals in Steele County multiplied by 12;

(iv) subtract the amount in item (iii) from the amount in item (ii);

(v) divide the amount in item (iv) by an amount equal to the relocated nursing
facility's occupancy factor under section 256B.431, subdivision 3f, paragraph (c),
multiplied by the historical percentage of medical assistance resident days.

For subsequent years, the adjusted property payment rate shall be adjusted for
inflation as provided in section 256B.434, subdivision 4, paragraph (c), as long as the
facility has a contract under section 256B.434; and

(6) to consolidate and relocate nursing facility beds to a new site in Goodhue County
and to integrate these services with other community-based programs and services under a
communities for a lifetime pilot program and comprehensive plan to create innovative
responses to the aging of its population. Eighty beds in the city of Red Wing shall be
transferred from the downsizing and relocation of an existing 84-bed, hospital-owned
nursing facility and the entire closure or downsizing of beds from a 65-bed nonprofit
nursing facility in the community resulting in the delicensure of 69 beds in the two
existing facilities. Notwithstanding the carryforward of the approval authority in section
144A.073, subdivision 11, the funding approved in April 2009 by the commissioner of
health for a project in Goodhue County shall not carry forward. The closure of the 69 beds
shall not be eligible for a planned closure rate adjustment under section 256B.437. The
construction project permitted in this clause shall not be eligible for a threshold project
rate adjustment under section 256B.434, subdivision 4f. The property payment rate for
the first three years of operation of the new facility shall be increased by an amount as
calculated according to items (i) to (vi):

(i) compute the estimated decrease in medical assistance residents served by both
nursing facilities by multiplying the difference between the occupied beds of the two
nursing facilities for the reporting year ending September 30, 2009, and the projected
occupancy of the facility at 95 percent occupancy by the historical percentage of medical
assistance resident days;

(ii) compute the annual savings to the medical assistance program from the
delicensure by multiplying the anticipated decrease in the medical assistance residents,
determined in item (i), by the hospital-owned nursing facility weighted average payment
rate multiplied by 365;

(iii) compute the anticipated annual costs for community-based services by
multiplying the anticipated decrease in medical assistance residents served by the
facilities, determined in item (i), by the average monthly elderly waiver service costs for
individuals in Goodhue County multiplied by 12;

(iv) subtract the amount in item (iii) from the amount in item (ii);

(v) multiply the amount in item (iv) by 48.5 percent; and

(vi) divide the difference of the amount in item (iv) and the amount in item (v) by an
amount equal to the relocated nursing facility's occupancy factor under section 256B.431,
subdivision 3f, paragraph (c), multiplied by the historical percentage of medical assistance
resident days.

For subsequent years, the adjusted property payment rate shall be adjusted for
inflation as provided in section 256B.434, subdivision 4, paragraph (c), as long as the
facility has a contract under section 256B.434.

(b) Projects approved under this subdivision shall be treated in a manner equivalent
to projects approved under subdivision 4a.

new text begin (c) The commissioner of health, in coordination with the commissioner of human
services, may approve the renovation, replacement, upgrading, or relocation of a nursing
home or boarding care home to establish new or replacement beds in a unit within a
nursing facility to be used for the care of patients committed to the commissioner of
human services and who have complex co-occurring chronic medical conditions and
serious mental illness or substance abuse conditions after discharge from a hospital when
the commissioners of health and of human services have determined that:
new text end

new text begin (1) there are inadequate options available within the community or region to provide
subacute, transitional care, or residential outpatient options for these patients; and
new text end

new text begin (2) the lack of available placement options is resulting in poorer treatment outcomes
and higher total costs of care for these patients because of higher rates of admission to
hospital inpatient and emergency department services, longer lengths of inpatient hospital
stays, and increased risks of readmission after a discharge.
new text end

Sec. 2.

Minnesota Statutes 2014, section 256.969, is amended by adding a subdivision
to read:

new text begin Subd. 31. new text end

new text begin Hospital rates for certain patients committed to the commissioner.
new text end

new text begin (a) The commissioner shall provide an additional payment for inpatient hospital services
provided to a patient who is committed to the commissioner and either:
new text end

new text begin (1) is eligible and appropriate for admission to a state-operated inpatient facility for
treatment of serious psychiatric or substance abuse disorders but is placed in a community
hospital due to lack of available beds at a state-operated inpatient facility; or
new text end

new text begin (2) remains in the inpatient community hospital after no longer needing a hospital
level of care for the treatment of serious psychiatric or substance abuse disorders because
of the lack of any available, safe, and suitable placement in residential or community
settings after discharge from the hospital.
new text end

new text begin (b) The commissioner shall establish the amount of the additional hospital inpatient
payment rate to be paid under this subdivision by:
new text end

new text begin (1) requesting applications for the additional payment from community hospitals.
Applications must include documentation of the hospital's total number of inpatient days
serving patients who no longer needed a hospital level of care but could not be discharged
because of the lack of availability of placements as provided in paragraph (a);
new text end

new text begin (2) determining a per-day additional hospital inpatient payment rate amount by
dividing the amount of the annual appropriation provided for purposes of this subdivision
by the total annual number of inpatient days reported by all eligible hospitals under
clause (1); and
new text end

new text begin (3) establishing an add-on payment rate for each hospital eligible for the additional
payment based on each hospital's ratio of its total reported inpatient days to the total
inpatient days reported by all eligible hospitals.
new text end

Sec. 3.

Minnesota Statutes 2014, section 256.9693, is amended to read:

256.9693 INPATIENT TREATMENT FOR MENTAL ILLNESS.

new text begin (a) new text end The commissioner shall establish a continuing care benefit program for persons
with mental illness in which persons with mental illness may obtain acute care hospital
inpatient treatment for mental illness for up to 45 days beyond that allowed by section
256.969. The commissioner may authorize additional days beyond 45 based on an
individual review of medical necessity. Persons with mental illness who are eligible for
medical assistance may obtain inpatient treatment under this program in hospital beds for
which the commissioner contracts under this section. The commissioner may selectively
contract with hospitals to provide this benefit through competitive bidding when reasonable
geographic access by recipients can be assured. Payments under this section shall not
affect payments under section 256.969. The commissioner may contract externally with
a utilization review organization to authorize persons with mental illness to access the
continuing care benefit program. The commissioner, as part of the contracts with hospitals,
shall establish admission criteria to allow persons with mental illness to access the
continuing care benefit program. If a court orders acute care hospital inpatient treatment
for mental illness for a person, the person may obtain the treatment under the continuing
care benefit program. The commissioner shall not require, as part of the admission criteria,
any commitment or petition under chapter 253B as a condition of accessing the program.
This benefit is not available for people who are also eligible for Medicare and who have
not exhausted their annual or lifetime inpatient psychiatric benefit under Medicare.

new text begin (b) new text end If a recipient is enrolled in a deleted text begin prepaid deleted text end new text begin managed care plan or county-based
purchasing new text end plan, this program is included in the deleted text begin plan's deleted text end new text begin plans' new text end coverage. new text begin Plans must use
the same admission criteria for the continuing care benefit program as is used in the
commissioner's contracts with hospitals.
new text end

Sec. 4.

Minnesota Statutes 2014, section 256B.0755, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Prototype demonstration projects for small high-cost populations. new text end

new text begin The
commissioner may authorize small demonstration projects under this section to test new
interventions that will improve treatment outcomes and reduce the total cost of care for
small populations of high-cost patients who:
new text end

new text begin (1) have complex and serious medical and behavioral health conditions; and
new text end

new text begin (2) are at high risk of recurring admissions to inpatient and emergency services,
extensive lengths of inpatient stays due to a lack of appropriate placements upon
discharge, and high rates of readmission after discharge.
new text end

new text begin Projects approved under this subdivision must test innovative new strategies to improve
treatment outcomes and reduce total costs of care that, if effective, could be expanded to
and replicated in other regions and with other high-risk, high-cost populations.
new text end

Sec. 5.

Minnesota Statutes 2014, section 256B.441, is amended by adding a
subdivision to read:

new text begin Subd. 68. new text end

new text begin Rate adjustment for committed patients. new text end

new text begin The commissioner of human
services shall establish a higher payment rate for payments to nursing facilities for patients
committed to the commissioner and admitted to a special nursing facility or unit within
a nursing facility that accepts patients with complex co-occurring chronic medical
conditions and serious mental illness or substance abuse conditions after discharge from a
hospital when no other appropriate subacute, transitional care, or residential outpatient
options are available for placement upon hospital discharge. The payment rate must be
sufficient to cover the additional costs of the program and to create an adequate incentive
for nursing facility providers to develop or offer placement options for these patients.
new text end

Sec. 6. new text begin APPROPRIATIONS.
new text end

new text begin (a) $....... is appropriated in fiscal year 2017 from the general fund to the
commissioner of human services to be used as follows:
new text end

new text begin (1) $3,000,000 for additional inpatient hospital payments under section 2.
new text end

new text begin (2) $....... for committed patients under section 5.
new text end

new text begin (b) $....... is added to the base.
new text end