SF 3146

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; modifying the definition of "completion date" for
nursing home construction projects; removing the limit on certain nursing
facility planned closure rate adjustments; modifying notice requirements
for nursing home and board and care home resident relocation; modifying
certain construction project rate adjustments; requiring weekly status reports;
amending Minnesota Statutes 2004, sections 144A.161; 256B.434, by adding
a subdivision; 256B.437, subdivision 3; Minnesota Statutes 2005 Supplement,
sections 144A.071, subdivision 1a; 256B.0918, subdivisions 1, 3, 4; 256B.434,
subdivision 4; Laws 2005, First Special Session chapter 4, article 9, section
5, subdivision 8.

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

Section 1.

Minnesota Statutes 2005 Supplement, section 144A.071, subdivision 1a,
is amended to read:

Subd. 1a.

Definitions.

For purposes of sections 144A.071 to 144A.073, the
following terms have the meanings given them:

(a) "Attached fixtures" has the meaning given in Minnesota Rules, part 9549.0020,
subpart 6.

(b) "Buildings" has the meaning given in Minnesota Rules, part 9549.0020, subpart
7.

(c) "Capital assets" has the meaning given in section 256B.421, subdivision 16.

(d) "Commenced construction" means that all of the following conditions were met:
the final working drawings and specifications were approved by the commissioner of
health; the construction contracts were let; a timely construction schedule was developed,
stipulating dates for beginning, achieving various stages, and completing construction;
and all zoning and building permits were applied for.

(e) "Completion date" means the date on which deleted text begin a certificate of occupancy deleted text end new text begin clearance
for the construction project new text end is issued deleted text begin for a construction project deleted text end , or if a deleted text begin certificate of
occupancy deleted text end new text begin clearance for the construction project new text end is not required, the date on which the
construction project deleted text begin is deleted text end new text begin assets are new text end available for facility use.

(f) "Construction" means any erection, building, alteration, reconstruction,
modernization, or improvement necessary to comply with the nursing home licensure
rules.

(g) "Construction project" means:

(1) a capital asset addition to, or replacement of a nursing home or certified boarding
care home that results in new space or the remodeling of or renovations to existing
facility space; and

(2) the remodeling or renovation of existing facility space the use of which is
modified as a result of the project described in clause (1). This existing space and the
project described in clause (1) must be used for the functions as designated on the
construction plans on completion of the project described in clause (1) for a period of
not less than 24 months.

(h) "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.

(i) "New licensed" or "new certified beds" means:

(1) newly constructed beds in a facility or the construction of a new facility that
would increase the total number of licensed nursing home beds or certified boarding
care or nursing home beds in the state; or

(2) newly licensed nursing home beds or newly certified boarding care or nursing
home beds that result from remodeling of the facility that involves relocation of beds but
does not result in an increase in the total number of beds, except when the project involves
the upgrade of boarding care beds to nursing home beds, as defined in section 144A.073,
subdivision 1. "Remodeling" includes any of the type of conversion, renovation,
replacement, or upgrading projects as defined in section 144A.073, subdivision 1.

(j) "Project construction costs" means the cost of the following items that have
a completion date within 12 months before or after the completion date of the project
described in item (g), clause (1):

(1) facility capital asset additions;

(2) replacements;

(3) renovations;

(4) remodeling projects;

(5) construction site preparation costs;

(6) related soft costs; and

(7) the cost of new technology implemented as part of the construction project
and depreciable equipment directly identified to the project, if the construction costs for
clauses (1) to (6) exceed the threshold for additions and replacements stated in section
256B.431, subdivision 16. Technology and depreciable equipment shall be included in the
project construction costs unless a written election is made by the facility, to not include
it in the facility's appraised value for purposes of Minnesota Rules, part 9549.0020,
subpart 5. Debt incurred for purchase of technology and depreciable equipment shall be
included as allowable debt for purposes of Minnesota Rules, part 9549.0060, subpart 5,
items A and C, unless the written election is to not include it. Any new technology and
depreciable equipment included in the project construction costs that the facility elects
not to include in its appraised value and allowable debt shall be treated as provided in
section 256B.431, subdivision 17, paragraph (b). Written election under this paragraph
must be included in the facility's request for the rate change related to the project, and
this election may not be changed.

(k) "Technology" means information systems or devices that make documentation,
charting, and staff time more efficient or encourage and allow for care through alternative
settings including, but not limited to, touch screens, monitors, hand-helds, swipe cards,
motion detectors, pagers, telemedicine, medication dispensers, and equipment to monitor
vital signs and self-injections, and to observe skin and other conditions.

Sec. 2.

Minnesota Statutes 2004, section 144A.161, is amended to read:

144A.161 NURSING deleted text begin FACILITY deleted text end new text begin HOME AND BOARD AND CARE HOME new text end
RESIDENT RELOCATION.

Subdivision 1.

Definitions.

The definitions in this subdivision apply to subdivisions
2 to 10.

(a) "Closure" means the cessation of operations of a facility and the delicensure and
decertification of all beds within the facility.

(b) "Curtailment," "reduction," or "change" refers to any change in operations which
would result in or encourage the relocation of residents.

(c) "Facility" means a nursing home licensed pursuant to this chapter, or a certified
boarding care home licensed pursuant to sections 144.50 to 144.56.

(d) "Licensee" means the owner of the facility or the owner's designee or the
commissioner of health for a facility in receivership.

(e) deleted text begin "Local agency" deleted text end new text begin "County social services agency" new text end means the county or multicounty
social service agency authorized under sections 393.01 and 393.07, as the agency
responsible for providing social services for the county in which the nursing home is
located.

(f) "Plan" means a process developed under subdivision 3, paragraph (b), for the
closure, curtailment, reduction, or change in operations in a facility and the subsequent
relocation of residents.

(g) "Relocation" means the discharge of a resident and movement of the resident to
another facility or living arrangement as a result of the closing, curtailment, reduction, or
change in operations of a nursing home or boarding care home.

new text begin Subd. 1a. new text end

new text begin Scope. new text end

new text begin A facility undertaking a closure, curtailment, reduction, or change
in operations and the county social services agency must comply with the requirements
of this section.
new text end

Subd. 2.

Initial notice from licensee.

(a) A licensee shall notify the following
parties in writing when there is an intent to close or curtail, reduce, or change operations
which would result in or encourage the relocation of residents:

(1) the commissioner of health;

(2) the commissioner of human services;

(3) the deleted text begin local deleted text end new text begin county social services new text end agency;

(4) the Office of the Ombudsman for Older Minnesotans; and

(5) the Office of the Ombudsman for Mental Health and Mental Retardation.

(b) The written notice shall include the names, telephone numbers, facsimile
numbers, and e-mail addresses of the persons in the facility responsible for coordinating
the licensee's efforts in the planning process, and the number of residents potentially
affected by the closure or curtailment, reduction, or change in operations.

new text begin (c) After providing written notice under this section, and prior to admission, the
facility must fully inform prospective residents and their families of the intent to close,
curtail, reduce, or change operations, and of the relocation plan.
new text end

Subd. 3.

Planning process.

(a) The deleted text begin local deleted text end new text begin county social services new text end agency shall,
within five working days of receiving initial notice of the licensee's intent to close or
curtail, reduce, or change operations, provide the licensee and all parties identified in
subdivision 2, paragraph (a), with the names, telephone numbers, facsimile numbers, and
e-mail addresses of those persons responsible for coordinating deleted text begin local deleted text end new text begin county social services new text end
agency efforts in the planning process.

(b) Within ten working days of receipt of the notice under paragraph (a), the deleted text begin local deleted text end new text begin
county social services new text end agency and licensee shall meet to develop the relocation plan.
The deleted text begin local deleted text end new text begin county social services new text end agency shall inform the Departments of Health and
Human Services, the Office of the Ombudsman for Older Minnesotans, and the Office
of the Ombudsman for Mental Health and Mental Retardation of the date, time, and
location of the meeting so that their representatives may attend. The relocation plan
must be completed within 45 days of receipt of the initial notice. However, the plan may
be finalized on an earlier schedule agreed to by all parties. To the extent practicable,
consistent with requirements to protect the safety and health of residents, the commissioner
may authorize the planning process under this subdivision to occur concurrent with the
60-day notice required under subdivision 5a. The plan shall:

(1) identify the expected date of closure, curtailment, reduction, or change in
operations;

(2) outline the process for public notification of the closure, curtailment, reduction,
or change in operations;

(3) identify efforts that will be made to include other stakeholders in the relocation
process;

(4) outline the process to ensure 60-day advance written notice to residents, family
members, and designated representatives;

(5) present an aggregate description of the resident population remaining to be
relocated and the population's needs;

(6) outline the individual resident assessment process to be utilized;

(7) identify an inventory of available relocation options, including home and
community-based services;

(8) identify a timeline for submission of the list identified in subdivision 5c,
paragraph (b); deleted text begin and
deleted text end

(9) identify a schedule for the timely completion of each element of the plan new text begin ; and
new text end

new text begin (10) identify the steps the licensee and the county social services agency will take to
address the relocation needs of individual residents who may be difficult to place due to
specialized care needs such as behavioral health problems new text end .

(c) All parties to the plan shall refrain from any public notification of the intent to
close or curtail, reduce, or change operations until a relocation plan has been established.
If the planning process occurs concurrently with the 60-day notice period, this requirement
does not apply once 60-day notice is given.

Subd. 4.

Responsibilities of licensee for resident relocations.

The licensee shall
provide for the safe, orderly, and appropriate relocation of residents. The licensee and
facility staff shall cooperate with representatives from the deleted text begin local deleted text end new text begin county social services new text end
agency, the Department of Health, the Department of Human Services, the Office of
Ombudsman for Older Minnesotans, and ombudsman for mental health and mental
retardation in planning for and implementing the relocation of residents.

Subd. 5.

Licensee responsibilities prior to relocation.

(a) The licensee shall
establish an interdisciplinary team responsible for coordinating and implementing the
plan. The interdisciplinary team shall include representatives from the deleted text begin local deleted text end new text begin county social
services new text end agency, the Office of Ombudsman for Older Minnesotans, facility staff that
provide direct care services to the residents, and facility administration.

(b) The licensee shall provide a deleted text begin list deleted text end new text begin summary document new text end to the deleted text begin local deleted text end new text begin county social
services new text end agency that includes the following information on each resident to be relocated:

(1) name;

(2) date of birth;

(3) Social Security number;

(4) new text begin payment source and new text end medical assistance identification number new text begin , if applicable new text end ;

new text begin (5) county of financial responsibility;
new text end

new text begin (6) date of admission to the facility;
new text end

deleted text begin (5) deleted text end new text begin (7) new text end all diagnoses; deleted text begin and
deleted text end

new text begin (8) the name of and contact information for the resident's physician;
new text end

deleted text begin (6) deleted text end new text begin (9) new text end the name and contact information for the resident's family or other designated
representative new text begin ;
new text end

new text begin (10) the names of and contact information for any case managers, if known; and
new text end

new text begin (11) information on the resident's status related to commitment and probation new text end .

(c) The licensee shall consult with the deleted text begin local deleted text end new text begin county social services new text end agency on the
availability and development of available resources and on the resident relocation process.

Subd. 5a.

Licensee responsibilities to provide notice.

At least 60 days before the
proposed date of closing, curtailment, reduction, or change in operations as agreed to in
the plan, the licensee shall send a written notice of closure or curtailment, reduction, or
change in operations to each resident being relocated, the resident's family member or
designated representative, and the resident's attending physician. The notice must include
the following:

(1) the date of the proposed closure, curtailment, reduction, or change in operations;

(2) the name, address, telephone number, facsimile number, and e-mail address
of the individual or individuals in the facility responsible for providing assistance and
information;

(3) notification of upcoming meetings for residents, families and designated
representatives, and resident and family councils to discuss the relocation of residents;

(4) the name, address, and telephone number of the deleted text begin local deleted text end new text begin county social services new text end
agency contact person; and

(5) the name, address, and telephone number of the Office of Ombudsman for Older
Minnesotans and the ombudsman for mental health and mental retardation.

The notice must comply with all applicable state and federal requirements for notice
of transfer or discharge of nursing home residents.

Subd. 5b.

Licensee responsibility regarding medical information.

The licensee
shall request the attending physician provide or arrange for the release of medical
information needed to update resident medical records and prepare all required forms
and discharge summaries.

Subd. 5c.

Licensee responsibility regarding placement information.

(a) The
licensee shall provide sufficient preparation to residents to ensure safe, orderly, and
appropriate discharge and relocation. The licensee shall assist residents in finding
placements that respond to personal preferences, such as desired geographic location.

(b) The licensee shall prepare a resource list with several relocation options for each
resident. The list must contain the following information for each relocation option,
when applicable:

(1) the name, address, and telephone and facsimile numbers of each facility with
appropriate, available beds or services;

(2) the certification level of the available beds;

(3) the types of services available; and

(4) the name, address, and telephone and facsimile numbers of appropriate available
home and community-based placements, services, and settings or other options for
individuals with special needs.

The list shall be made available to residents and their families or designated
representatives, and upon request to the Office of Ombudsman for Older Minnesotans,
the ombudsman for mental health and Mental Retardation, and the deleted text begin local deleted text end new text begin county social
services new text end agency.

(c) The Senior LinkAge line may make available via a Web site the name, address,
and telephone and facsimile numbers of each facility with available beds, the certification
level of the available beds, the types of services available, and the number of beds that are
available as updated daily by the listed facilities. The licensee must provide residents,
their families or designated representatives, the Office of the Ombudsman for Older
Minnesotans, the Office of the Ombudsman for Mental Health and Mental Retardation,
and the deleted text begin local deleted text end new text begin county social services new text end agency with the toll-free number and Web site address
for the Senior LinkAge line.

Subd. 5d.

Licensee responsibility to meet with residents and families.

Following
the establishment of the plan, the licensee shall conduct meetings with residents, families
and designated representatives, and resident and family councils to notify them of the
process for resident relocation. Representatives from the local county social services
agency, the Office of Ombudsman for Older Minnesotans, the ombudsman for mental
health and mental retardation, the commissioner of health, and the commissioner of
human services shall receive advance notice of the meetings.

Subd. 5e.

Licensee responsibility for site visits.

The licensee shall assist
residents desiring to make site visits to facilities with available beds or other appropriate
living options to which the resident may relocate, unless it is medically inadvisable,
as documented by the attending physician in the resident's care record. The licensee
shall provide or arrange transportation for site visits to facilities or other living options
within a 50-mile radius to which the resident may relocate, or within a larger radius if no
suitable options are available within 50 miles. The licensee shall provide available written
materials to residents on a potential new facility or living option.

Subd. 5f.

Licensee responsibility for personal property, personal funds, and
telephone service.

(a) The licensee shall complete an inventory of resident personal
possessions and provide a copy of the final inventory to the resident and the resident's
designated representative prior to relocation. The licensee shall be responsible for the
transfer of the resident's possessions for all relocations within a 50-mile radius of the
facility, or within a larger radius if no suitable options are available within 50 miles. The
licensee shall complete the transfer of resident possessions in a timely manner, but no later
than the date of the actual physical relocation of the resident.

(b) The licensee shall complete a final accounting of personal funds held in trust
by the facility and provide a copy of this accounting to the resident and the resident's
family or the resident's designated representative. The licensee shall be responsible for the
transfer of all personal funds held in trust by the facility. The licensee shall complete the
transfer of all personal funds in a timely manner.

(c) The licensee shall assist residents with the transfer and reconnection of service
for telephones or, for residents who are deaf or blind, other personal communication
devices or services. The licensee shall pay the costs associated with reestablishing service
for telephones or other personal communication devices or services, such as connection
fees or other one-time charges. The transfer or reconnection of personal communication
devices or services shall be completed in a timely manner.

Subd. 5g.

Licensee responsibilities for final notice and records transfer.

(a) The
licensee shall provide the resident, the resident's family or designated representative,
and the resident's attending physician final written notice prior to the relocation of the
resident. The notice must:

(1) be provided seven days prior to the actual relocation, unless the resident agrees
to waive the right to advance notice; and

(2) identify the date of the anticipated relocation and the destination to which the
resident is being relocated.

(b) The licensee shall provide the receiving facility or other health, housing, or
care entity with complete and accurate resident records including information on family
members, designated representatives, guardians, social service caseworkers, or other
contact information. These records must also include all information necessary to
provide appropriate medical care and social services. This includes, but is not limited
to, information on preadmission screening, Level I and Level II screening, minimum
data set (MDS), and all other assessments, resident diagnoses, social, behavioral, and
medication information.

(c) For residents with special care needs, the licensee shall consult with the receiving
facility or other placement entity and provide staff training or other preparation as needed
to assist in providing for the special needs.

Subd. 6.

Responsibilities of the licensee during relocation.

(a) The licensee
shall make arrangements or provide for the transportation of residents to the new facility
or placement within a 50-mile radius, or within a larger radius if no suitable options
are available within 50 miles. The licensee shall provide a staff person to accompany
the resident during transportation, upon request of the resident, the resident's family, or
designated representative. The discharge and relocation of residents must comply with all
applicable state and federal requirements and must be conducted in a safe, orderly, and
appropriate manner. The licensee must ensure that there is no disruption in providing
meals, medications, or treatments of a resident during the relocation process.

(b) Beginning the week following development of the initial relocation plan, the
licensee shall submit deleted text begin biweekly deleted text end new text begin weekly new text end status reports to the commissioners of health and
human services or their designees and to the deleted text begin local deleted text end new text begin county social services new text end agency. The
initial status report must identify:

(1) the relocation plan developed;

(2) the interdisciplinary team members; and

(3) the number of residents to be relocated.

(c) Subsequent status reports must identify:

(1) any modifications to the plan;

(2) any change of interdisciplinary team members;

(3) the number of residents relocated;

(4) the destination to which residents have been relocated;

(5) the number of residents remaining to be relocated; and

(6) issues or problems encountered during the process and resolution of these issues.

Subd. 7.

Responsibilities of the licensee following relocation.

The licensee shall
retain or make arrangements for the retention of all remaining resident records for the
period required by law. The licensee shall provide the Department of Health access to
these records. The licensee shall notify the Department of Health of the location of any
resident records that have not been transferred to the new facility or other health care entity.

Subd. 8.

Responsibilities of deleted text begin local deleted text end new text begin county social services new text end agency.

(a) The deleted text begin local deleted text end new text begin
county social services new text end agency shall participate in the meeting as outlined in subdivision 3,
paragraph (b), to develop a relocation plan.

(b) The deleted text begin local deleted text end new text begin county social services new text end agency shall designate a representative to
the interdisciplinary team established by the licensee responsible for coordinating the
relocation efforts.

(c) The deleted text begin local deleted text end new text begin county social services new text end agency shall serve as a resource in the relocation
process.

(d) Concurrent with the notice sent to residents from the licensee as provided in
subdivision 5a, the deleted text begin local deleted text end new text begin county social services new text end agency shall provide written notice to
residents, family, or designated representatives describing:

(1) the county's role in the relocation process and in the follow-up to relocations;

(2) a deleted text begin local deleted text end new text begin county social services new text end agency contact name, address, and telephone
number; and

(3) the name, address, and telephone number of the Office of Ombudsman for Older
Minnesotans and the ombudsman for mental health and mental retardation.

(e) The deleted text begin local deleted text end new text begin county social services new text end agency designee shall meet with appropriate
facility staff to coordinate any assistance in the relocation process. This coordination
shall include participating in group meetings with residents, families, and designated
representatives to explain the relocation process.

(f) The deleted text begin local deleted text end new text begin county social services new text end agency shall monitor compliance with all
components of the plan. If the licensee is not in compliance, the local agency shall notify
the commissioners of the Departments of Health and Human Services.

(g) Except as requested by the resident, family member, or designated representative
and within the parameters of the Vulnerable Adults Act, the local agency may halt a
relocation that it deems inappropriate or dangerous to the health or safety of a resident. The
deleted text begin local deleted text end new text begin county social services new text end agency shall pursue remedies to protect the resident during the
relocation process, including, but not limited to, assisting the resident with filing an appeal
of transfer or discharge, notification of all appropriate licensing boards and agencies, and
other remedies available to the county under section 626.557, subdivision 10.

(h) A member of the deleted text begin local deleted text end new text begin county social services new text end agency staff shall visit residents
relocated within 100 miles of the county within 30 days after the relocation. deleted text begin Local deleted text end new text begin This
requirement does not apply to changes in operation where the facility moved to a new
location and residents chose to move to that new location. The requirement also does not
apply to residents admitted after the notice of closure and discharged prior to the actual
closure. County social services new text end agency staff shall interview the resident and family or
designated representative, observe the resident on site, and review and discuss pertinent
medical or social records with appropriate facility staff to:

(1) assess the adjustment of the resident to the new placement;

(2) recommend services or methods to meet any special needs of the resident; and

(3) identify residents at risk.

(i) The deleted text begin local deleted text end new text begin county social services new text end agency may conduct subsequent follow-up visits
in cases where the adjustment of the resident to the new placement is in question.

(j) Within 60 days of the completion of the follow-up visits, the deleted text begin local deleted text end new text begin county social
services new text end agency shall submit a written summary of the follow-up work to the Departments
of Health and Human Services in a manner approved by the commissioners.

(k) The deleted text begin local deleted text end new text begin county social services new text end agency shall submit to the Departments of Health
and Human Services a report of any issues that may require further review or monitoring.

(l) The deleted text begin local deleted text end new text begin county social services new text end agency shall be responsible for the safe and
orderly relocation of residents in cases where an emergent need arises or when the licensee
has abrogated its responsibilities under the plan.

Subd. 9.

Penalties.

Upon the recommendation of the commissioner of health,
the commissioner of human services may eliminate a closure rate adjustment under
subdivision 10 for violations of this section.

Subd. 10.

Facility closure rate adjustment.

Upon the request of a closing facility,
the commissioner of human services must allow the facility a closure rate adjustment
equal to a 50 percent payment rate increase to reimburse relocation costs or other
costs related to facility closure. This rate increase is effective on the date the facility's
occupancy decreases to 90 percent of capacity days after the written notice of closure is
distributed under subdivision 5 and shall remain in effect for a period of up to 60 days.
The commissioner shall delay the implementation of rate adjustments under section
256B.437, subdivisions 3, paragraph (b), and 6, paragraph (a), to offset the cost of this
rate adjustment.

Subd. 11.

County costs.

The commissioner of human services shall allocate up
to $450 in total state and federal funds per nursing facility bed that is closing, within
the limits of the appropriation specified for this purpose, to be used for relocation costs
incurred by counties for resident relocation under this section or planned closures under
section 256B.437. To be eligible for this allocation, a county in which a nursing facility
closes must provide to the commissioner a detailed statement in a form provided by the
commissioner of additional costs, not to exceed $450 in total state and federal funds per
bed closed, that are directly incurred related to the county's role in the relocation process.

Sec. 3.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 1,
is amended to read:

Subdivision 1.

Program criteria.

Beginning on or after October 1, 2005, within
the limits of appropriations specifically available for this purpose, the commissioner shall
provide funding to qualified provider applicants for employee scholarships for education
in nursing and other health care fields. Employee scholarships must be for a course of
study that is expected to lead to career advancement with the provider or in the field
of long-term care, including home care or care of persons with disabilities, or nursing.
Providers that secure this funding must use it to award scholarships to employees who
work an average of at least 20 hours per week for the provider. new text begin Executive new text end management
staff new text begin without direct care duties new text end , registered nurses, and therapists are not eligible to receive
scholarships under this section.

Sec. 4.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 3,
is amended to read:

Subd. 3.

Provider selection criteria.

To be considered for scholarship funding,
the provider shall submit a completed application within the time frame specified by the
commissioner. In awarding funding, the commissioner shall consider the following:

(1) the size of the provider as measured in annual billing to the medical assistance
program. To be eligible, a provider must receive at least deleted text begin $500,000 deleted text end new text begin $300,000 new text end annually
in medical assistance payments;

(2) the percentage of employees meeting the scholarship program recipient
requirements;

(3) staff retention rates for paraprofessionals; and

(4) other criteria determined by the commissioner.

Sec. 5.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 4,
is amended to read:

Subd. 4.

Funding specifics.

Within the limits of appropriations specifically
available for this purpose, for the rate period beginning on or after October 1, 2005, to
September 30, 2007, the commissioner shall provide to each provider listed in subdivision
2 and awarded funds under subdivision 3 a medical assistance rate increase to fund
scholarships up to deleted text begin two-tenths deleted text end new text begin three-tenths new text end percent of the medical assistance reimbursement
rate. The commissioner shall require providers to repay any portion of funds awarded
under subdivision 3 that is not used to fund scholarships. If applications exceed available
funding, funding shall be targeted to providers that employ a higher percentage of
paraprofessional staff or have lower rates of turnover of paraprofessional staff. During
the subsequent years of the program, the rate adjustment may be recalculated, at the
discretion of the commissioner. In making a recalculation the commissioner may consider
the provider's success at granting scholarships based on the amount spent during the
previous year and the availability of appropriations to continue the program.

Sec. 6.

Minnesota Statutes 2005 Supplement, 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, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July
1, 2008, 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. Beginning in 2005, adjustment to
the property payment rate under this section and section 256B.431 shall be effective on
October 1. 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. deleted text begin Beginning
October 1, 2006, facilities reimbursed under this section shall be allowed to receive a
property rate adjustment for building projects under section 144A.071, subdivision 2.
deleted text end

Sec. 7.

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

new text begin Subd. 4f. new text end

new text begin Construction project rate adjustments effective October 1, 2006. new text end

new text begin (a)
Effective October 1, 2006, facilities reimbursed under this section may receive a property
rate adjustment for construction projects exceeding the threshold in section 256B.431,
subdivision 16, and below the threshold in section 144A.071, subdivision 2, clause (a).
For these projects, capital assets purchased shall be counted as construction project costs
for a rate adjustment request made by a facility if they are:
new text end

new text begin (1) purchased within 24 months of the completion of the construction project;
new text end

new text begin (2) purchased after the completion date of any prior construction project; and
new text end

new text begin (3) not purchased prior to July 14, 2005.
new text end

new text begin Except as otherwise provided in this subdivision, the definitions, rate calculation methods,
and principles in sections 144A.071 and 256B.431, and Minnesota Rules, parts 9549.0010
to 9549.0080, shall be used to calculate rate adjustments for allowable construction
projects under this subdivision and section 144A.073. Facilities completing construction
projects between October 1, 2005, and October 1, 2006, are eligible to have a property
rate adjustment effective October 1, 2006. Facilities completing projects after October
1, 2006, are eligible for a property rate adjustment effective on the first of the month
following the completion date.
new text end

new text begin (b) Notwithstanding subdivision 18, as of July 14, 2005, facilities with rates set
under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, that
commenced a construction project on or after October 1, 2004, and do not have a contract
under subdivision 3 by September 30, 2006, are eligible to request a rate adjustment under
section 256B.431, subdivision 10, through September 30, 2006. If the request results
in the commissioner determining a rate adjustment is allowable, the rate adjustment is
effective on the first of the month following project completion. These facilities shall
be allowed to accumulate construction project costs for the period October 1, 2004, to
September 30, 2006.
new text end

new text begin (c) Facilities shall be allowed construction project rate adjustments no sooner than
12 months after completing a previous construction project. Facilities must request the
rate adjustment according to section 256B.431, subdivision 10.
new text end

new text begin (d) Capacity days shall be computed according to Minnesota Rules, part 9549.0060,
subpart 11. For rate calculations under this section, the number of licensed beds in the
nursing facility shall be the number existing after the construction project is completed
and the number of days in the nursing facility's reporting period shall be 365.
new text end

new text begin (e) The value of assets to be recognized for a total replacement project as defined
in section 256B.431, subdivision 17d, shall be computed as described in clause (1). The
value of assets to be recognized for all other projects shall be computed as described
in clause (2):
new text end

new text begin (1) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the
number of beds allowed under subdivision 3a, paragraph (c), shall be used to compute the
maximum amount of assets allowable in a facility's property rate calculation. If a facility's
current request for a rate adjustment results from the completion of a construction
project that was previously approved under section 144A.073, the assets to be used in
the rate calculation cannot exceed the lesser of the amount determined under sections
144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable costs of
the construction project. A current request that is not the result of a project under section
144A.073 cannot exceed the limit under section 144A.071, subdivision 2, paragraph (a).
Applicable credits must be deducted from the cost of the construction project.
new text end

new text begin (2) (i) Replacement-cost-new limits under section 256B.431, subdivision 17e, and
the number of beds allowed under section 256B.431, subdivision 3a, paragraph (c), shall
be used to compute the maximum amount of assets allowable in a facility's property
rate calculation.
new text end

new text begin (ii) The value of a facility's assets to be compared to the amount in (i) begins with
the total appraised value from the last rate notice a facility received when its rates were set
under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080. This value
shall be indexed by the factor in section 256B.431, subdivision 3f, paragraph (a), for each
rate year the facility received an inflation factor on its property-related rate when its rates
were set under this section. The value of assets listed as previous capital additions, capital
additions, and special projects on the facility's base year rate notice and the value of assets
related to a construction project for which the facility received a rate adjustment when its
rates were determined under this section shall be added to the indexed appraised value.
new text end

new text begin (iii) The maximum amount of assets to be recognized in computing a facility's rate
adjustment after a project is completed is the lesser of the aggregate replacement-cost-new
limit computed in (i) minus the assets recognized in (ii) or the actual allowable costs of
the construction project.
new text end

new text begin (iv) If a facility's current request for a rate adjustment results from the completion of
a construction project that was previously approved under section 144A.073, the assets to
be added to the rate calculation cannot exceed the lesser of the amount determined under
sections 144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable
costs of the construction project. A current request that is not the result of a project under
section 144A.073 cannot exceed the limit stated in section 144A.071, subdivision 2,
paragraph (a). Assets disposed of as a result of a construction project and applicable
credits must be deducted from the cost of the construction project.
new text end

new text begin (f) For construction projects approved under section 144A.073, allowable debt
may never exceed the lesser of the cost of the assets purchased, the threshold limit in
section 144A.071, subdivision 2, or the replacement-cost-new limit less previously
existing capital debt.
new text end

new text begin (g) For construction projects that were not approved under section 144A.073,
allowable debt is limited to the lesser of the threshold in section 144A.071, subdivision 2,
for such construction projects or the applicable limit in paragraph (e), clause (1) or (2),
less previously existing capital debt. Amounts of debt taken out that exceed the costs of a
construction project shall not be allowed regardless of the use of the funds.
new text end

new text begin For all construction projects being recognized, interest expense and average debt
shall be computed based on the first 12 months following project completion. "Previously
existing capital debt" means capital debt recognized on the last rate determined under
section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, and the amount of
debt recognized for a construction project for which the facility received a rate adjustment
when its rates were determined under this section.
new text end

new text begin For a total replacement project as defined in section 256B.431, subdivision 17d, the
value of previously existing capital debt shall be zero.
new text end

new text begin (h) In addition to the interest expense allowed from the application of paragraph (f),
the amounts allowed under section 256B.431, subdivision 17a, paragraph (a), clauses (2)
and (3), will be added to interest expense.
new text end

new text begin (i) The equity portion of the construction project shall be computed as the allowable
assets in paragraph (e), less the average debt in paragraph (f). The equity portion must
be multiplied by 5.66 percent and the allowable interest expense in paragraph (f) must
be added. This sum must be divided by 95 percent of capacity days to compute the
construction project rate adjustment.
new text end

new text begin (j) For projects that are not a total replacement of a nursing facility, the amount
in paragraph (i) is adjusted for nonreimbursable areas and then added to the current
property-related per diem of the facility.
new text end

new text begin (k) For projects that are a total replacement of a nursing facility, the amount
in paragraph (i) becomes the new property-related per diem after being adjusted for
nonreimbursable areas. Any amounts existing in a facility's rate before the effective date
of the construction project for equity incentives under section 256B.431, subdivision 16;
capital repairs and replacements under section 256B.431, subdivision 15; or refinancing
incentives under section 256B.431, subdivision 19, shall be removed from the facility's
rates.
new text end

new text begin (l) No additional equipment allowance is allowed under Minnesota Rules, part
9549.0060, subpart 10, as the result of construction projects under this section. Allowable
equipment shall be included in the construction project costs.
new text end

new text begin (m) Capital assets purchased after the completion date of a construction project shall
be counted as construction project costs for any future rate adjustment request made by a
facility under section 144A.071, subdivision 2, clause (a), if they are purchased within 24
months of the completion of the future construction project.
new text end

new text begin (n) In subsequent rate years, the property-related rate for a facility that results from
the application of this subdivision shall be the amount inflated in subdivision 4.
new text end

new text begin (o) Construction projects are eligible for an equity incentive under section 256B.431,
subdivision 16. When computing the equity incentive for a construction project under
this subdivision, only the allowable costs and allowable debt related to the construction
project shall be used. The equity incentive shall not be a part of the property-related per
diem and not inflated under subdivision 4.
new text end

new text begin (p) At the time of completion of a building project resulting in a rate increase under
this subdivision or section 144A.073, a facility may change its single-bed election for use
in calculating capacity days under Minnesota Rules, part 9549.0060, subpart 11. The
facility shall notify the commissioner of its desire to change its single-bed election at the
time the final cost of the project is submitted to the commissioner, and the change in the
election shall be effective the same date as the rate increase related to the building project.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256B.437, subdivision 3, is amended to read:

Subd. 3.

Applications for planned closure of nursing facilities.

(a) By August
15, 2001, the commissioner of human services shall implement and announce a program
for closure or partial closure of nursing facilities. Names and identifying information
provided in response to the announcement shall remain private unless approved, according
to the timelines established in the plan. The announcement must specify:

(1) the criteria in subdivision 4 that will be used by the commissioner to approve or
reject applications;

(2) the information that must accompany an application; and

(3) that applications may combine planned closure rate adjustments with moratorium
exception funding, in which case a single application may serve both purposes.

Between August 1, 2001, and June 30, 2003, the commissioner may approve planned
closures of up to 5,140 nursing facility beds, less the number of beds delicensed in
facilities during the same time period without approved closure plans or that have notified
the commissioner of health of their intent to close without an approved closure plan.
Beginning July 1, 2004, the commissioner may negotiate a planned closure new text begin rate adjustment new text end
for nursing facilities providing the proposal has no cost to the state. new text begin For planned closure
rate adjustments negotiated after March 1, 2006, the limit of $2,080 in subdivision 6,
paragraph (a), clause (1), shall not apply. The removal of the limit in subdivision 6,
paragraph (a), clause (1), shall not constitute an increase to the amount specified in
subdivision 6, paragraph (a), clause (1), for the purposes of subdivision 6, paragraph (f).
new text end

(b) A facility or facilities reimbursed under section 256B.431 or 256B.434 with a
closure plan approved by the commissioner under subdivision 5 may assign a planned
closure rate adjustment to another facility or facilities that are not closing or in the case of
a partial closure, to the facility undertaking the partial closure. A facility may also elect to
have a planned closure rate adjustment shared equally by the five nursing facilities with
the lowest total operating payment rates in the state development region designated under
section 462.385, in which the facility that is closing is located. The planned closure
rate adjustment must be calculated under subdivision 6. Facilities that delicense beds
without a closure plan, or whose closure plan is not approved by the commissioner, are not
eligible to assign a planned closure rate adjustment under subdivision 6, unless they are
delicensing five or fewer beds, or less than six percent of their total licensed bed capacity,
whichever is greater, are located in a county in the top three quartiles of beds per 1,000
persons aged 65 or older, and have not delicensed beds in the prior three months. Facilities
meeting these criteria are eligible to assign the amount calculated under subdivision 6 to
themselves. If a facility is delicensing the greater of six or more beds, or six percent or
more of its total licensed bed capacity, and does not have an approved closure plan or is
not eligible for the adjustment under subdivision 6, the commissioner shall calculate the
amount the facility would have been eligible to assign under subdivision 6, and shall use
this amount to provide equal rate adjustments to the five nursing facilities with the lowest
total operating payment rates in the state development region designated under section
462.385, in which the facility that delicensed beds is located.

(c) To be considered for approval, an application must include:

(1) a description of the proposed closure plan, which must include identification of
the facility or facilities to receive a planned closure rate adjustment;

(2) the proposed timetable for any proposed closure, including the proposed dates
for announcement to residents, commencement of closure, and completion of closure;

(3) if available, the proposed relocation plan for current residents of any facility
designated for closure. If a relocation plan is not available, the application must include a
statement agreeing to develop a relocation plan designed to comply with section 144A.161;

(4) a description of the relationship between the nursing facility that is proposed for
closure and the nursing facility or facilities proposed to receive the planned closure rate
adjustment. If these facilities are not under common ownership, copies of any contracts,
purchase agreements, or other documents establishing a relationship or proposed
relationship must be provided;

(5) documentation, in a format approved by the commissioner, that all the nursing
facilities receiving a planned closure rate adjustment under the plan have accepted joint
and several liability for recovery of overpayments under section 256B.0641, subdivision
2, for the facilities designated for closure under the plan; and

(6) an explanation of how the application coordinates with planning efforts under
subdivision 2. If the planning group does not support a level of nursing facility closures
that the commissioner considers to be reasonable, the commissioner may approve a
planned closure proposal without its support.

(d) The application must address the criteria listed in subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 1, 2006.
new text end

Sec. 9.

Laws 2005, First Special Session chapter 4, article 9, section 5, subdivision 8,
is amended to read:

Subd. 8. Board of Nursing

3,078,000

3,631,000

new text begin new text end

BASE ADJUSTMENT. The base for the
board of nursing is increased by $141,000
in fiscal year 2008 and by $216,000 in fiscal
year 2009.

BOARD OF NURSING
APPROPRIATIONS INCREASE. Of
this appropriation, $120,000 the first year
and $126,000 the second year are for the
increased cost of board operations, excluding
salary increases and $85,000 each year is to
hire an advanced practice registered nurse.

TRANSFERS FROM SPECIAL
REVENUE FUND. Of this appropriation,
the following transfers shall be made as
directed from the state government special
revenue fund:

(a) $392,000 in fiscal year 2006, $864,000
in fiscal year 2007, $930,000 in fiscal year
2008, and $930,000 in fiscal year 2009
shall be transferred to the general fund
and is appropriated to the Department
of Human Services to offset the state
share of the medical assistance program
costs of the long-term care and home and
community-based care employee scholarship
program and associated administrative costs.
At the end of each biennium, any funds
not expended for the scholarship program
and associated administrative costs shall
be deleted text begin transferred to the state government
special revenue fund deleted text end new text begin carried over to the
next biennium for the same purpose new text end .
Notwithstanding section 15, this paragraph
expires June 30, 2009.

(b) $125,000 the first year and $200,000 the
second year shall be transferred to the health
professional education loan forgiveness
program account for loan forgiveness
for nurses under Minnesota Statutes,
section 144.1501. This appropriation shall
become part of base level funding for the
commissioner for the biennium beginning
July 1, 2007, but shall not be part of base
level funding for the biennium beginning
July 1, 2009. Notwithstanding section 15,
this paragraph expires on June 30, 2009.