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SF 800

2nd Unofficial Engrossment - 90th Legislature (2017 - 2018) Posted on 04/18/2017 12:02pm

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A bill for an act
relating to state government; establishing the health and human services budget;
modifying provisions governing health care, continuing care, health department
and public health, children and families, health occupations, chemical and mental
health, and opiate abuse prevention; establishing prescribed pediatric extended
care center license; modifying provisions governing medical cannabis; establishing
intentional diversion of medical cannabis violation and penalties; modifying tax
levy; modifying certain definitions; establishing federally facilitated marketplace;
modifying sections related to telemedicine, nursing, psychology, dentistry, and
medical practice; requiring legislative approval for certain federal waivers and
approval; repealing MNsure; making technical changes; requiring reports;
establishing and modifying fees; making forecast adjustments; appropriating
money;amending Minnesota Statutes 2016, sections 3.972, by adding a subdivision;
119B.011, by adding subdivisions; 119B.02, subdivision 5; 119B.03, subdivisions
4, 6; 119B.09, subdivision 9a; 119B.125, subdivisions 4, 6; 119B.13, subdivisions
1, 6; 119B.16, subdivisions 1, 1a, 1b, by adding subdivisions; 144.0722, subdivision
1; 144.0724, subdivisions 1, 2, 6, 9; 144.1501, subdivision 2; 144.1506; 144.551,
subdivision 1; 144.562, subdivision 2; 144.99, subdivision 1; 144A.071,
subdivisions 3, 4a, 4c, 4d; 144A.073, subdivision 3c; 144A.10, subdivision 4;
144A.15, subdivision 2; 144A.154; 144A.161, subdivision 10; 144A.1888;
144A.474, subdivision 11; 144A.4799, subdivision 3; 144A.611, subdivision 1;
144A.70, subdivision 6, by adding a subdivision; 144A.74; 145.4131, subdivision
1; 145.4716, subdivision 2; 148.171, subdivision 7b, by adding a subdivision;
148.211, subdivisions 1a, 1c, 2; 148.881; 148.89; 148.90, subdivisions 1, 2;
148.905, subdivision 1; 148.907, subdivisions 1, 2; 148.9105, subdivisions 1, 4,
5; 148.916, subdivisions 1, 1a; 148.925; 148.96, subdivision 3; 148B.53, subdivision
1; 150A.06, subdivisions 3, 8; 150A.10, subdivision 4; 151.01, subdivision 5, by
adding subdivisions; 151.21; 151.212, subdivision 2; 152.11, by adding a
subdivision; 152.25, by adding subdivisions; 152.33, by adding a subdivision;
245.462, subdivision 9; 245.4871, by adding a subdivision; 245.4876, subdivision
2; 245.4889, subdivision 1; 245.814, subdivisions 2, 3; 245.91, subdivisions 4, 6;
245.94, subdivision 1; 245.97, subdivision 6; 245A.02, subdivisions 2b, 5a, by
adding subdivisions; 245A.03, subdivision 2; 245A.04, subdivision 4; 245A.06,
subdivision 8, by adding a subdivision; 245A.191; 245D.03, subdivision 1; 245E.01,
by adding a subdivision; 245E.02, subdivisions 1, 3, 4; 245E.03, subdivisions 2,
4; 245E.04; 245E.05, subdivision 1; 245E.06, subdivisions 1, 2, 3; 245E.07,
subdivision 1; 252.27, subdivision 2a; 252.41, subdivision 3; 254A.03, subdivision
3; 254A.08, subdivision 2; 254B.01, by adding a subdivision; 254B.03, subdivision
2; 254B.05, subdivisions 1, 5; 254B.12, by adding a subdivision; 256.9657,
subdivision 1; 256.9686, subdivision 8; 256.969, subdivisions 1, 2b, 3a, 4b, 8, 8c,
9, 12, by adding a subdivision; 256.98, subdivision 8; 256B.04, subdivision 12;
256B.0621, subdivision 10; 256B.0625, subdivisions 3b, 6a, 13, 13e, 17, 17b, 18h,
20, 30, 45a, 60a, 64, by adding subdivisions; 256B.0644; 256B.0653, subdivisions
2, 3, 4, 5, 6, by adding a subdivision; 256B.072; 256B.0755; 256B.0915,
subdivision 3e; 256B.0924, by adding a subdivision; 256B.0943, subdivision 13;
256B.0945, subdivisions 2, 4; 256B.15, subdivisions 1, 1a, 2; 256B.196,
subdivisions 2, 3, 4; 256B.35, subdivision 4; 256B.431, subdivision 30; 256B.434,
subdivision 4; 256B.4913, subdivision 4a, by adding a subdivision; 256B.4914,
subdivisions 2, 3, 5, 6, 7, 8, 9, 10; 256B.50, subdivisions 1, 1b; 256B.5012, by
adding subdivisions; 256B.69, subdivision 5a, by adding a subdivision; 256B.75;
256B.763; 256B.766; 256C.23, subdivision 2, by adding subdivisions; 256C.233,
subdivisions 1, 2; 256C.24, subdivisions 1, 2; 256C.261; 256I.04, subdivisions 1,
3; 256I.05, by adding subdivisions; 256I.06, subdivision 8; 256J.45, subdivision
2; 256L.15, subdivision 2; 256P.06, subdivision 2; 256R.02, subdivisions 4, 17,
18, 19, 22, 42, 52, by adding subdivisions; 256R.06, subdivision 5; 256R.07,
subdivision 1, by adding a subdivision; 256R.13, subdivision 4; 256R.37; 256R.40,
subdivisions 1, 5; 256R.41; 256R.47; 256R.49; 256R.53, subdivision 2; 260C.451,
subdivision 6; 609.5315, subdivision 5c; 626.556, subdivisions 2, 3, 3c, 10d; Laws
1988, chapter 645, section 3, as amended; Laws 2015, chapter 71, article 7, section
54; proposing coding for new law in Minnesota Statutes, chapters 119B; 144; 147;
148; 152; 181; 245A; 256; 256B; 256N; 256R; proposing coding for new law as
Minnesota Statutes, chapter 144H; repealing Minnesota Statutes 2016, sections
62V.01; 62V.02; 62V.03; 62V.04; 62V.05; 62V.051; 62V.055; 62V.06; 62V.07;
62V.08; 62V.09; 62V.10; 62V.11; 119B.16, subdivision 2; 144.4961; 147.0375,
subdivision 7; 148.211, subdivision 1b; 148.243, subdivision 15; 148.906; 148.907,
subdivision 5; 148.908; 148.909, subdivision 7; 148.96, subdivisions 4, 5; 179A.50;
179A.51; 179A.52; 179A.53; 245E.03, subdivision 3; 245E.06, subdivisions 4, 5;
256B.4914, subdivision 16; 256B.7631; 256C.23, subdivision 3; 256C.233,
subdivision 4; 256C.25, subdivisions 1, 2; Minnesota Rules, part 3400.0185,
subpart 5.

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

ARTICLE 1

HEALTH CARE

Section 1.

Minnesota Statutes 2016, section 3.972, is amended by adding a subdivision
to read:


Subd. 2a.

Audits of Department of Human Services.

(a) To ensure continuous
legislative oversight and accountability, the legislative auditor shall give high priority to
auditing the programs, services, and benefits administered by the Department of Human
Services. The audits shall determine whether the department offered programs and provided
services and benefits only to eligible persons and organizations, and complied with applicable
legal requirements.

(b) The legislative auditor shall, no less than three times each year, test a representative
sample of persons enrolled in medical assistance and MinnesotaCare to determine whether
they are eligible to receive benefits under those programs. The legislative auditor shall report
the results to the commissioner of human services and recommend corrective actions, which
the commissioner must implement within 20 business days. The legislative auditor shall
monitor the commissioner's implementation of corrective actions and periodically report
the results to the Legislative Audit Commission and the chairs and ranking minority members
of the legislative committees with jurisdiction over health and human services policy and
finance. The legislative auditor's reports to the commission and the chairs and ranking
minority members must include recommendations for any legislative actions needed to
ensure that medical assistance and MinnesotaCare benefits are provided only to eligible
persons.

Sec. 2.

Minnesota Statutes 2016, section 245.4889, subdivision 1, is amended to read:


Subdivision 1.

Establishment and authority.

(a) The commissioner is authorized to
make grants from available appropriations to assist:

(1) counties;

(2) Indian tribes;

(3) children's collaboratives under section 124D.23 or 245.493; or

(4) mental health service providers.

(b) The following services are eligible for grants under this section:

(1) services to children with emotional disturbances as defined in section 245.4871,
subdivision 15, and their families;

(2) transition services under section 245.4875, subdivision 8, for young adults under
age 21 and their families;

(3) respite care services for children with severe emotional disturbances who are at risk
of out-of-home placement;

(4) children's mental health crisis services;

(5) mental health services for people from cultural and ethnic minorities;

(6) children's mental health screening and follow-up diagnostic assessment and treatment;

(7) services to promote and develop the capacity of providers to use evidence-based
practices in providing children's mental health services;

(8) school-linked mental health services;

(9) building evidence-based mental health intervention capacity for children birth to age
five;

(10) suicide prevention and counseling services that use text messaging statewide;

(11) mental health first aid training;

(12) training for parents, collaborative partners, and mental health providers on the
impact of adverse childhood experiences and trauma and development of an interactive
Web site to share information and strategies to promote resilience and prevent trauma;

(13) transition age services to develop or expand mental health treatment and supports
for adolescents and young adults 26 years of age or younger;

(14) early childhood mental health consultation;

(15) evidence-based interventions for youth at risk of developing or experiencing a first
episode of psychosis, and a public awareness campaign on the signs and symptoms of
psychosis; and

(16) psychiatric consultation for primary care practitioners.; and

(17) start-up funding to support providers in meeting program requirements and beginning
operations when establishing a new children's mental health program.

(c) Services under paragraph (b) must be designed to help each child to function and
remain with the child's family in the community and delivered consistent with the child's
treatment plan. Transition services to eligible young adults under paragraph (b) must be
designed to foster independent living in the community.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2016, section 256.9686, subdivision 8, is amended to read:


Subd. 8.

Rate year.

"Rate year" means a calendar year from January 1 to December 31.
Effective with the 2012 base year, rate year means a state fiscal year from July 1 to June
30.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2016, section 256.969, subdivision 1, is amended to read:


Subdivision 1.

Hospital cost index.

(a) The hospital cost index shall be the change in
the Centers for Medicare and Medicaid Services Inpatient Hospital Market Basket. The
commissioner shall use the indices as forecasted for the midpoint of the prior rate year to
the midpoint of the current rate year.

(b) Except as authorized under this section, for fiscal years beginning on or after July
1, 1993, the commissioner of human services shall not provide automatic annual inflation
adjustments for hospital payment rates under medical assistance.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 5.

Minnesota Statutes 2016, section 256.969, subdivision 2b, is amended to read:


Subd. 2b.

Hospital payment rates.

(a) For discharges occurring on or after November
1, 2014, hospital inpatient services for hospitals located in Minnesota shall be paid according
to the following:

(1) critical access hospitals as defined by Medicare shall be paid using a cost-based
methodology;

(2) long-term hospitals as defined by Medicare shall be paid on a per diem methodology
under subdivision 25;

(3) rehabilitation hospitals or units of hospitals that are recognized as rehabilitation
distinct parts as defined by Medicare shall be paid according to the methodology under
subdivision 12; and

(4) all other hospitals shall be paid on a diagnosis-related group (DRG) methodology.

(b) For the period beginning January 1, 2011, through October 31, 2014, rates shall not
be rebased, except that a Minnesota long-term hospital shall be rebased effective January
1, 2011, based on its most recent Medicare cost report ending on or before September 1,
2008, with the provisions under subdivisions 9 and 23, based on the rates in effect on
December 31, 2010. For rate setting periods after November 1, 2014, in which the base
years are updated, a Minnesota long-term hospital's base year shall remain within the same
period as other hospitals.

(c) Effective for discharges occurring on and after November 1, 2014, payment rates
for hospital inpatient services provided by hospitals located in Minnesota or the local trade
area, except for the hospitals paid under the methodologies described in paragraph (a),
clauses (2) and (3), shall be rebased, incorporating cost and payment methodologies in a
manner similar to Medicare. The base year for the rates effective November 1, 2014, shall
be calendar year 2012. The rebasing under this paragraph shall be budget neutral, ensuring
that the total aggregate payments under the rebased system are equal to the total aggregate
payments that were made for the same number and types of services in the base year. Separate
budget neutrality calculations shall be determined for payments made to critical access
hospitals and payments made to hospitals paid under the DRG system. Only the rate increases
or decreases under subdivision 3a or 3c that applied to the hospitals being rebased during
the entire base period shall be incorporated into the budget neutrality calculation.

(d) For discharges occurring on or after November 1, 2014, through the next rebasing
that occurs, the rebased rates under paragraph (c) that apply to hospitals under paragraph
(a), clause (4), shall include adjustments to the projected rates that result in no greater than
a five percent increase or decrease from the base year payments for any hospital. Any
adjustments to the rates made by the commissioner under this paragraph and paragraph (e)
shall maintain budget neutrality as described in paragraph (c).

(e) For discharges occurring on or after November 1, 2014, through the next two rebasing
that occurs periods the commissioner may make additional adjustments to the rebased rates,
and when evaluating whether additional adjustments should be made, the commissioner
shall consider the impact of the rates on the following:

(1) pediatric services;

(2) behavioral health services;

(3) trauma services as defined by the National Uniform Billing Committee;

(4) transplant services;

(5) obstetric services, newborn services, and behavioral health services provided by
hospitals outside the seven-county metropolitan area;

(6) outlier admissions;

(7) low-volume providers; and

(8) services provided by small rural hospitals that are not critical access hospitals.

(f) Hospital payment rates established under paragraph (c) must incorporate the following:

(1) for hospitals paid under the DRG methodology, the base year payment rate per
admission is standardized by the applicable Medicare wage index and adjusted by the
hospital's disproportionate population adjustment;

(2) for critical access hospitals, payment rates for discharges between November 1, 2014,
and June 30, 2015, shall be set to the same rate of payment that applied for discharges on
October 31, 2014;

(3) the cost and charge data used to establish hospital payment rates must only reflect
inpatient services covered by medical assistance; and

(4) in determining hospital payment rates for discharges occurring on or after the rate
year beginning January 1, 2011, through December 31, 2012, the hospital payment rate per
discharge shall be based on the cost-finding methods and allowable costs of the Medicare
program in effect during the base year or years. In determining hospital payment rates for
discharges in subsequent base years, the per discharge rates shall be based on the cost-finding
methods and allowable costs of the Medicare program in effect during the base year or
years.

(g) The commissioner shall validate the rates effective November 1, 2014, by applying
the rates established under paragraph (c), and any adjustments made to the rates under
paragraph (d) or (e), to hospital claims paid in calendar year 2013 to determine whether the
total aggregate payments for the same number and types of services under the rebased rates
are equal to the total aggregate payments made during calendar year 2013.

(h) Effective for discharges occurring on or after July 1, 2017, and every two years
thereafter, payment rates under this section shall be rebased to reflect only those changes
in hospital costs between the existing base year and the next base year. Changes in costs
between base years shall be measured using the lower of the hospital cost index defined in
subdivision 1, paragraph (a), or the percentage change in the case mix adjusted cost per
claim.
The commissioner shall establish the base year for each rebasing period considering
the most recent year for which filed Medicare cost reports are available. The estimated
change in the average payment per hospital discharge resulting from a scheduled rebasing
must be calculated and made available to the legislature by January 15 of each year in which
rebasing is scheduled to occur, and must include by hospital the differential in payment
rates compared to the individual hospital's costs.

(i) Effective for discharges occurring on or after July 1, 2015, inpatient payment rates
for critical access hospitals located in Minnesota or the local trade area shall be determined
using a new cost-based methodology. The commissioner shall establish within the
methodology tiers of payment designed to promote efficiency and cost-effectiveness.
Payment rates for hospitals under this paragraph shall be set at a level that does not exceed
the total cost for critical access hospitals as reflected in base year cost reports. Until the
next rebasing that occurs, the new methodology shall result in no greater than a five percent
decrease from the base year payments for any hospital, except a hospital that had payments
that were greater than 100 percent of the hospital's costs in the base year shall have their
rate set equal to 100 percent of costs in the base year. The rates paid for discharges on and
after July 1, 2016, covered under this paragraph shall be increased by the inflation factor
in subdivision 1, paragraph (a). The new cost-based rate shall be the final rate and shall not
be settled to actual incurred costs. Hospitals shall be assigned a payment tier based on the
following criteria:

(1) hospitals that had payments at or below 80 percent of their costs in the base year
shall have a rate set that equals 85 percent of their base year costs;

(2) hospitals that had payments that were above 80 percent, up to and including 90
percent of their costs in the base year shall have a rate set that equals 95 percent of their
base year costs; and

(3) hospitals that had payments that were above 90 percent of their costs in the base year
shall have a rate set that equals 100 percent of their base year costs.

(j) The commissioner may refine the payment tiers and criteria for critical access hospitals
to coincide with the next rebasing under paragraph (h). The factors used to develop the new
methodology may include, but are not limited to:

(1) the ratio between the hospital's costs for treating medical assistance patients and the
hospital's charges to the medical assistance program;

(2) the ratio between the hospital's costs for treating medical assistance patients and the
hospital's payments received from the medical assistance program for the care of medical
assistance patients;

(3) the ratio between the hospital's charges to the medical assistance program and the
hospital's payments received from the medical assistance program for the care of medical
assistance patients;

(4) the statewide average increases in the ratios identified in clauses (1), (2), and (3);

(5) the proportion of that hospital's costs that are administrative and trends in
administrative costs; and

(6) geographic location.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 6.

Minnesota Statutes 2016, section 256.969, is amended by adding a subdivision to
read:


Subd. 2e.

Alternate inpatient payment rate.

(a) If the days, costs, and revenues
associated with patients who are eligible for medical assistance and also have private health
insurance are required to be included in the calculation of the hospital-specific
disproportionate share hospital payment limit for a rate year, then the commissioner, effective
retroactively to rate years beginning on or after January 1, 2015, shall compute an alternate
inpatient payment rate for a Minnesota hospital that is designated as a children's hospital
and enumerated as such by Medicare. The commissioner shall reimburse the hospital for a
rate year at the higher of the amount calculated under the alternate payment rate or the
amount calculated under subdivision 9.

(b) The alternate payment rate must meet the criteria in clauses (1) to (4):

(1) the alternate payment rate shall be structured to target a total aggregate reimbursement
amount equal to two percent less than each children's hospital's cost coverage percentage
in the applicable base year for providing fee-for-service inpatient services under this section
to patients enrolled in medical assistance;

(2) costs shall be determined using the most recently available medical assistance cost
report provided under subdivision 4b, paragraph (a), clause (3), for the applicable base year.
Costs shall be determined using standard Medicare cost finding and cost allocation methods
and applied in the same manner as the costs were in the rebasing for the applicable base
year. If the medical assistance cost report is not available, costs shall be determined in the
interim using the Medicare Cost Report;

(3) in any rate year in which payment to a hospital is made using the alternate payment
rate, no payments shall be made to the hospital under subdivision 9; and

(4) if the alternate payment amount increases payments at a rate that is higher than the
inflation factor applied over the rebasing period, the commissioner shall take this into
consideration when setting payment rates at the next rebasing.

Sec. 7.

Minnesota Statutes 2016, section 256.969, subdivision 3a, is amended to read:


Subd. 3a.

Payments.

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

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

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

(d) In addition to the reduction in paragraphs (b) and (c), the total payment for
fee-for-service admissions occurring on or after August 1, 2005, made to hospitals for
inpatient services before third-party liability and spenddown, is reduced 6.0 percent from
the current statutory rates. Mental health services within diagnosis related groups 424 to
432 or corresponding APR-DRGs, and facilities defined under subdivision 16 are excluded
from this paragraph. Payments made to managed care plans shall be reduced for services
provided on or after January 1, 2006, to reflect this reduction.

(e) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for
fee-for-service admissions occurring on or after July 1, 2008, through June 30, 2009, made
to hospitals for inpatient services before third-party liability and spenddown, is reduced
3.46 percent from the current statutory rates. Mental health services with diagnosis related
groups 424 to 432 or corresponding APR-DRGs, and facilities defined under subdivision
16 are excluded from this paragraph. Payments made to managed care plans shall be reduced
for services provided on or after January 1, 2009, through June 30, 2009, to reflect this
reduction.

(f) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for
fee-for-service admissions occurring on or after July 1, 2009, through June 30, 2011, made
to hospitals for inpatient services before third-party liability and spenddown, is reduced 1.9
percent from the current statutory rates. Mental health services with diagnosis related groups
424 to 432 or corresponding APR-DRGs, and facilities defined under subdivision 16 are
excluded from this paragraph. Payments made to managed care plans shall be reduced for
services provided on or after July 1, 2009, through June 30, 2011, to reflect this reduction.

(g) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for
fee-for-service admissions occurring on or after July 1, 2011, made to hospitals for inpatient
services before third-party liability and spenddown, is reduced 1.79 percent from the current
statutory rates. Mental health services with diagnosis related groups 424 to 432 or
corresponding APR-DRGs, and facilities defined under subdivision 16 are excluded from
this paragraph. Payments made to managed care plans shall be reduced for services provided
on or after July 1, 2011, to reflect this reduction.

(h) In addition to the reductions in paragraphs (b), (c), (d), (f), and (g), the total payment
for fee-for-service admissions occurring on or after July 1, 2009, made to hospitals for
inpatient services before third-party liability and spenddown, is reduced one percent from
the current statutory rates. Facilities defined under subdivision 16 are excluded from this
paragraph. Payments made to managed care plans shall be reduced for services provided
on or after October 1, 2009, to reflect this reduction.

(i) In addition to the reductions in paragraphs (b), (c), (d), (g), and (h), the total payment
for fee-for-service admissions occurring on or after July 1, 2011, made to hospitals for
inpatient services before third-party liability and spenddown, is reduced 1.96 percent from
the current statutory rates. Facilities defined under subdivision 16 are excluded from this
paragraph. Payments made to managed care plans shall be reduced for services provided
on or after January 1, 2011, to reflect this reduction.

(j) Effective for discharges on and after November 1, 2014, from hospitals paid under
subdivision 2b, paragraph (a), clauses (1) and (4), the rate adjustments in this subdivision
must be incorporated into the rebased rates established under subdivision 2b, paragraph (c),
and must not be applied to each claim.

(k) Effective for discharges on and after July 1, 2015, from hospitals paid under
subdivision 2b, paragraph (a), clauses (2) and (3), the rate adjustments in this subdivision
must be incorporated into the rates and must not be applied to each claim.

(l) Effective for discharges on and after July 1, 2017, from hospitals paid under
subdivision 2b, paragraph (a), clause (2), the rate adjustments in this subdivision must be
incorporated into the rates and must not be applied to each claim.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 8.

Minnesota Statutes 2016, section 256.969, subdivision 4b, is amended to read:


Subd. 4b.

Medical assistance cost reports for services.

(a) A hospital that meets one
of the following criteria must annually submit to the commissioner medical assistance cost
reports within six months of the end of the hospital's fiscal year:

(1) a hospital designated as a critical access hospital that receives medical assistance
payments; or

(2) a Minnesota hospital or out-of-state hospital located within a Minnesota local trade
area that receives a disproportionate population adjustment under subdivision 9; or

(3) a Minnesota hospital that is designated as a children's hospital and enumerated as
such by Medicare
.

For purposes of this subdivision, local trade area has the meaning given in subdivision
17.

(b) The commissioner shall suspend payments to any hospital that fails to submit a report
required under this subdivision. Payments must remain suspended until the report has been
filed with and accepted by the commissioner.

EFFECTIVE DATE.

This section is effective retroactively from January 1, 2015.

Sec. 9.

Minnesota Statutes 2016, section 256.969, subdivision 8, is amended to read:


Subd. 8.

Unusual length of stay experience.

(a) The commissioner shall establish day
outlier thresholds for each diagnostic category established under subdivision 2 at two standard
deviations beyond the mean length of stay. Payment for the days beyond the outlier threshold
shall be in addition to the operating and property payment rates per admission established
under subdivisions 2 and 2b. Payment for outliers shall be at 70 percent of the allowable
operating cost, after adjustment by the case mix index, hospital cost index, relative values
and the disproportionate population adjustment. The outlier threshold for neonatal and burn
diagnostic categories shall be established at one standard deviation beyond the mean length
of stay, and payment shall be at 90 percent of allowable operating cost calculated in the
same manner as other outliers. A hospital may choose an alternative to the 70 percent outlier
payment that is at a minimum of 60 percent and a maximum of 80 percent if the
commissioner is notified in writing of the request by October 1 of the year preceding the
rate year. The chosen percentage applies to all diagnostic categories except burns and
neonates. The percentage of allowable cost that is unrecognized by the outlier payment shall
be added back to the base year operating payment rate per admission.

(b) Effective for admissions and transfers occurring on and after November 1, 2014, the
commissioner shall establish payment rates for outlier payments that are based on Medicare
methodologies.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 10.

Minnesota Statutes 2016, section 256.969, subdivision 8c, is amended to read:


Subd. 8c.

Hospital residents.

(a) For discharges occurring on or after November 1,
2014, payments for hospital residents shall be made as follows:

(1) payments for the first 180 days of inpatient care shall be the APR-DRG system plus
any outliers; and

(2) payment for all medically necessary patient care subsequent to the first 180 days
shall be reimbursed at a rate computed by multiplying the statewide average cost-to-charge
ratio by the usual and customary charges.

(b) For discharges occurring on or after July 1, 2017, payment for hospital residents
shall be equal to the payments under subdivision 8, paragraph (b).

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 11.

Minnesota Statutes 2016, section 256.969, subdivision 9, is amended to read:


Subd. 9.

Disproportionate numbers of low-income patients served.

(a) For admissions
occurring on or after July 1, 1993, the medical assistance disproportionate population
adjustment shall comply with federal law and shall be paid to a hospital, excluding regional
treatment centers and facilities of the federal Indian Health Service, with a medical assistance
inpatient utilization rate in excess of the arithmetic mean. The adjustment must be determined
as follows:

(1) for a hospital with a medical assistance inpatient utilization rate above the arithmetic
mean for all hospitals excluding regional treatment centers and facilities of the federal Indian
Health Service but less than or equal to one standard deviation above the mean, the
adjustment must be determined by multiplying the total of the operating and property
payment rates by the difference between the hospital's actual medical assistance inpatient
utilization rate and the arithmetic mean for all hospitals excluding regional treatment centers
and facilities of the federal Indian Health Service; and

(2) for a hospital with a medical assistance inpatient utilization rate above one standard
deviation above the mean, the adjustment must be determined by multiplying the adjustment
that would be determined under clause (1) for that hospital by 1.1. The commissioner shall
report annually on the number of hospitals likely to receive the adjustment authorized by
this paragraph. The commissioner shall specifically report on the adjustments received by
public hospitals and public hospital corporations located in cities of the first class.

(b) Certified public expenditures made by Hennepin County Medical Center shall be
considered Medicaid disproportionate share hospital payments. Hennepin County and
Hennepin County Medical Center shall report by June 15, 2007, on payments made beginning
July 1, 2005, or another date specified by the commissioner, that may qualify for
reimbursement under federal law. Based on these reports, the commissioner shall apply for
federal matching funds.

(c) Upon federal approval of the related state plan amendment, paragraph (b) is effective
retroactively from July 1, 2005, or the earliest effective date approved by the Centers for
Medicare and Medicaid Services.

(d) Effective July 1, 2015, disproportionate share hospital (DSH) payments shall be paid
in accordance with a new methodology using 2012 as the base year. Annual payments made
under this paragraph shall equal the total amount of payments made for 2012. A licensed
children's hospital shall receive only a single DSH factor for children's hospitals. Other
DSH factors may be combined to arrive at a single factor for each hospital that is eligible
for DSH payments. The new methodology shall make payments only to hospitals located
in Minnesota and include the following factors:

(1) a licensed children's hospital with at least 1,000 fee-for-service discharges in the
base year shall receive a factor of 0.868. A licensed children's hospital with less than 1,000
fee-for-service discharges in the base year shall receive a factor of 0.7880;

(2) a hospital that has in effect for the initial rate year a contract with the commissioner
to provide extended psychiatric inpatient services under section 256.9693 shall receive a
factor of 0.0160;

(3) a hospital that has received payment from the fee-for-service program for at least 20
transplant services in the base year shall receive a factor of 0.0435;

(4) a hospital that has a medical assistance utilization rate in the base year between 20
percent up to one standard deviation above the statewide mean utilization rate shall receive
a factor of 0.0468;

(5) a hospital that has a medical assistance utilization rate in the base year that is at least
one standard deviation above the statewide mean utilization rate but is less than three standard
deviations above the mean shall receive a factor of 0.2300; and

(6) a hospital that has a medical assistance utilization rate in the base year that is at least
three standard deviations above the statewide mean utilization rate shall receive a factor of
0.3711.

(e) Any payments or portion of payments made to a hospital under this subdivision that
are subsequently returned to the commissioner because the payments are found to exceed
the hospital-specific DSH limit for that hospital shall be redistributed, proportionate to the
number of fee-for-service discharges, to other DSH-eligible nonchildren's non-children's
hospitals that have a medical assistance utilization rate that is at least one standard deviation
above the mean.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 12.

Minnesota Statutes 2016, section 256.969, subdivision 12, is amended to read:


Subd. 12.

Rehabilitation hospitals and distinct parts.

(a) Units of hospitals that are
recognized as rehabilitation distinct parts by the Medicare program shall have separate
provider numbers under the medical assistance program for rate establishment and billing
purposes only. These units shall also have operating payment rates and the disproportionate
population adjustment, if allowed by federal law, established separately from other inpatient
hospital services.

(b) The commissioner shall establish separate relative values under subdivision 2 for
rehabilitation hospitals and distinct parts as defined by the Medicare program. Effective for
discharges occurring on and after November 1, 2014, the commissioner, to the extent
possible, shall replicate the existing payment rate methodology under the new diagnostic
classification system. The result must be budget neutral, ensuring that the total aggregate
payments under the new system are equal to the total aggregate payments made for the same
number and types of services in the base year, calendar year 2012.

(c) For individual hospitals that did not have separate medical assistance rehabilitation
provider numbers or rehabilitation distinct parts in the base year, hospitals shall provide the
information needed to separate rehabilitation distinct part cost and claims data from other
inpatient service data.

(d) Effective with discharges on or after July 1, 2017, payment to rehabilitation hospitals
shall be established under subdivision 2b, paragraph (a), clause (4).

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 13.

Minnesota Statutes 2016, section 256B.04, subdivision 12, is amended to read:


Subd. 12.

Limitation on services.

(a) Place limits on the types of services covered by
medical assistance, the frequency with which the same or similar services may be covered
by medical assistance for an individual recipient, and the amount paid for each covered
service. The state agency shall promulgate rules establishing maximum reimbursement rates
for emergency and nonemergency transportation.

The rules shall provide:

(1) an opportunity for all recognized transportation providers to be reimbursed for
nonemergency transportation consistent with the maximum rates established by the agency;
and

(2) reimbursement of public and private nonprofit providers serving the disabled
population generally at reasonable maximum rates that reflect the cost of providing the
service regardless of the fare that might be charged by the provider for similar services to
individuals other than those receiving medical assistance or medical care under this chapter;
and
.

(3) reimbursement for each additional passenger carried on a single trip at a substantially
lower rate than the first passenger carried on that trip.

(b) The commissioner shall encourage providers reimbursed under this chapter to
coordinate their operation with similar services that are operating in the same community.
To the extent practicable, the commissioner shall encourage eligible individuals to utilize
less expensive providers capable of serving their needs.

(c) For the purpose of this subdivision and section 256B.02, subdivision 8, and effective
on January 1, 1981, "recognized provider of transportation services" means an operator of
special transportation service as defined in section 174.29 that has been issued a current
certificate of compliance with operating standards of the commissioner of transportation
or, if those standards do not apply to the operator, that the agency finds is able to provide
the required transportation in a safe and reliable manner. Until January 1, 1981, "recognized
transportation provider" includes an operator of special transportation service that the agency
finds is able to provide the required transportation in a safe and reliable manner.

Sec. 14.

Minnesota Statutes 2016, section 256B.0625, subdivision 3b, is amended to read:


Subd. 3b.

Telemedicine services.

(a) Medical assistance covers medically necessary
services and consultations delivered by a licensed health care provider via telemedicine in
the same manner as if the service or consultation was delivered in person. Coverage is
limited to three telemedicine services per enrollee per calendar week. Telemedicine services
shall be paid at the full allowable rate.

(b) The commissioner shall establish criteria that a health care provider must attest to
in order to demonstrate the safety or efficacy of delivering a particular service via
telemedicine. The attestation may include that the health care provider:

(1) has identified the categories or types of services the health care provider will provide
via telemedicine;

(2) has written policies and procedures specific to telemedicine services that are regularly
reviewed and updated;

(3) has policies and procedures that adequately address patient safety before, during,
and after the telemedicine service is rendered;

(4) has established protocols addressing how and when to discontinue telemedicine
services; and

(5) has an established quality assurance process related to telemedicine services.

(c) As a condition of payment, a licensed health care provider must document each
occurrence of a health service provided by telemedicine to a medical assistance enrollee.
Health care service records for services provided by telemedicine must meet the requirements
set forth in Minnesota Rules, part 9505.2175, subparts 1 and 2, and must document:

(1) the type of service provided by telemedicine;

(2) the time the service began and the time the service ended, including an a.m. and p.m.
designation;

(3) the licensed health care provider's basis for determining that telemedicine is an
appropriate and effective means for delivering the service to the enrollee;

(4) the mode of transmission of the telemedicine service and records evidencing that a
particular mode of transmission was utilized;

(5) the location of the originating site and the distant site;

(6) if the claim for payment is based on a physician's telemedicine consultation with
another physician, the written opinion from the consulting physician providing the
telemedicine consultation; and

(7) compliance with the criteria attested to by the health care provider in accordance
with paragraph (b).

(d) For purposes of this subdivision, unless otherwise covered under this chapter,
"telemedicine" is defined as the delivery of health care services or consultations while the
patient is at an originating site and the licensed health care provider is at a distant site. A
communication between licensed health care providers, or a licensed health care provider
and a patient that consists solely of a telephone conversation, e-mail, or facsimile transmission
does not constitute telemedicine consultations or services. Telemedicine may be provided
by means of real-time two-way, interactive audio and visual communications, including the
application of secure video conferencing or store-and-forward technology to provide or
support health care delivery, which facilitate the assessment, diagnosis, consultation,
treatment, education, and care management of a patient's health care.

(e) For purposes of this section, "licensed health care provider" is defined means a
licensed health care provider
under section 62A.671, subdivision 6, and a mental health
practitioner defined under section 245.462, subdivision 17, or 245.4871, subdivision 26,
working under the general supervision of a mental health professional
; "health care provider"
is defined under section 62A.671, subdivision 3; and "originating site" is defined under
section 62A.671, subdivision 7.

Sec. 15.

Minnesota Statutes 2016, section 256B.0625, subdivision 13, is amended to read:


Subd. 13.

Drugs.

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

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

(c) For the purpose of this subdivision and subdivision 13d, an "active pharmaceutical
ingredient" is defined as a substance that is represented for use in a drug and when used in
the manufacturing, processing, or packaging of a drug becomes an active ingredient of the
drug product. An "excipient" is defined as an inert substance used as a diluent or vehicle
for a drug. The commissioner shall establish a list of active pharmaceutical ingredients and
excipients which are included in the medical assistance formulary. Medical assistance covers
selected active pharmaceutical ingredients and excipients used in compounded prescriptions
when the compounded combination is specifically approved by the commissioner or when
a commercially available product:

(1) is not a therapeutic option for the patient;

(2) does not exist in the same combination of active ingredients in the same strengths
as the compounded prescription; and

(3) cannot be used in place of the active pharmaceutical ingredient in the compounded
prescription.

(d) Medical assistance covers the following over-the-counter drugs when prescribed by
a licensed practitioner or by a licensed pharmacist who meets standards established by the
commissioner, in consultation with the board of pharmacy: antacids, acetaminophen, family
planning products, aspirin, insulin, products for the treatment of lice, vitamins for adults
with documented vitamin deficiencies, vitamins for children under the age of seven and
pregnant or nursing women, and any other over-the-counter drug identified by the
commissioner, in consultation with the formulary committee, as necessary, appropriate, and
cost-effective for the treatment of certain specified chronic diseases, conditions, or disorders,
and this determination shall not be subject to the requirements of chapter 14. A pharmacist
may prescribe over-the-counter medications as provided under this paragraph for purposes
of receiving reimbursement under Medicaid. When prescribing over-the-counter drugs under
this paragraph, licensed pharmacists must consult with the recipient to determine necessity,
provide drug counseling, review drug therapy for potential adverse interactions, and make
referrals as needed to other health care professionals. Over-the-counter medications must
be dispensed in a quantity that is the lowest of: (1) the number of dosage units contained in
the manufacturer's original package; (2) the number of dosage units required to complete
the patient's course of therapy; or (3) if applicable, the number of dosage units dispensed
from a system using retrospective billing, as provided under subdivision 13e, paragraph
(b).

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

(f) Medical assistance covers drugs acquired through the federal 340B Drug Pricing
Program and dispensed by 340B covered entities and ambulatory pharmacies under common
ownership of the 340B covered entity. Medical assistance does not cover drugs acquired
through the federal 340B Drug Pricing Program and dispensed by 340B contract pharmacies.

Sec. 16.

Minnesota Statutes 2016, section 256B.0625, subdivision 13e, is amended to
read:


Subd. 13e.

Payment rates.

(a) Effective April 1, 2017, or upon federal approval,
whichever is later,
the basis for determining the amount of payment shall be the lower of
the actual acquisition costs ingredient cost of the drugs or the maximum allowable cost by
the commissioner
plus the fixed professional dispensing fee; or the usual and customary
price charged to the public. The usual and customary price is defined as the lowest price
charged by the provider to a patient who pays for the prescription by cash, check, or charge
account and includes those prices the pharmacy charges to customers enrolled in a
prescription savings club or prescription discount club administered by the pharmacy or
pharmacy chain.
The amount of payment basis must be reduced to reflect all discount
amounts applied to the charge by any third-party provider/insurer agreement or contract for
submitted charges to medical assistance programs. The net submitted charge may not be
greater than the patient liability for the service. The pharmacy professional dispensing fee
shall be $3.65 $11.35 for legend prescription drugs prescriptions filled with legend drugs
meeting the definition of "covered outpatient drugs" according to United States Code, title
42, section 1396r-8(k)(2)
, except that the dispensing fee for intravenous solutions which
must be compounded by the pharmacist shall be $8 $11.35 per bag, $14 per bag for cancer
chemotherapy products, and $30 per bag for total parenteral nutritional products dispensed
in one liter quantities, or $44 per bag for total parenteral nutritional products dispensed in
quantities greater than one liter
. The professional dispensing fee for prescriptions filled with
over-the-counter drugs meeting the definition of covered outpatient drugs shall be $11.35
for dispensed quantities equal to or greater than the number of units contained in the
manufacturer's original package. The professional dispensing fee shall be prorated based
on the percentage of the package dispensed when the pharmacy dispenses a quantity less
than the number of units contained in the manufacturer's original package.
The pharmacy
dispensing fee for prescribed over-the-counter drugs not meeting the definition of covered
outpatient drugs
shall be $3.65, except that the fee shall be $1.31 for retrospectively billing
pharmacies when billing for quantities less than the number of units contained in the
manufacturer's original package. Actual acquisition cost includes quantity and other special
discounts except time and cash discounts. The actual acquisition
for quantities equal to or
greater than the number of units contained in the manufacturer's original package and shall
be prorated based on the percentage of the package dispensed when the pharmacy dispenses
a quantity less than the number of units contained in the manufacturer's original package.
The National Average Drug Acquisition Cost (NADAC) shall be used to determine the
ingredient
cost of a drug shall be estimated by the commissioner at wholesale acquisition
cost plus four percent for independently owned pharmacies located in a designated rural
area within Minnesota, and at wholesale acquisition cost plus two percent for all other
pharmacies. A pharmacy is "independently owned" if it is one of four or fewer pharmacies
under the same ownership nationally. A "designated rural area" means an area defined as
a small rural area or isolated rural area according to the four-category classification of the
Rural Urban Commuting Area system developed for the United States Health Resources
and Services Administration. Effective January 1, 2014, the actual acquisition
. For drugs
for which a NADAC is not reported, the commissioner shall estimate the ingredient cost at
wholesale acquisition cost minus two percent. The commissioner shall establish the ingredient

cost of a drug acquired through the federal 340B Drug Pricing Program shall be estimated
by the commissioner at wholesale acquisition cost minus 40 percent
at a 340B Drug Pricing
Program maximum allowable cost. The 340B Drug Pricing Program maximum allowable
cost shall be comparable to, but no higher than, the 340B Drug Pricing Program ceiling
price established by the Health Resources and Services Administration
. Wholesale acquisition
cost is defined as the manufacturer's list price for a drug or biological to wholesalers or
direct purchasers in the United States, not including prompt pay or other discounts, rebates,
or reductions in price, for the most recent month for which information is available, as
reported in wholesale price guides or other publications of drug or biological pricing data.
The maximum allowable cost of a multisource drug may be set by the commissioner and it
shall be comparable to, but the actual acquisition cost of the drug product and no higher
than, the maximum amount paid by other third-party payors in this state who have maximum
allowable cost programs and no higher than the NADAC of the generic product.
Establishment of the amount of payment for drugs shall not be subject to the requirements
of the Administrative Procedure Act.

(b) Pharmacies dispensing prescriptions to residents of long-term care facilities using
an automated drug distribution system meeting the requirements of section 151.58, or a
packaging system meeting the packaging standards set forth in Minnesota Rules, part
6800.2700, that govern the return of unused drugs to the pharmacy for reuse, may employ
retrospective billing for prescription drugs dispensed to long-term care facility residents. A
retrospectively billing pharmacy must submit a claim only for the quantity of medication
used by the enrolled recipient during the defined billing period. A retrospectively billing
pharmacy must use a billing period not less than one calendar month or 30 days.

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

(d) Whenever a maximum allowable cost has been set for If a pharmacy dispenses a
multisource drug, payment shall be the lower of the usual and customary price charged to
the public or
the ingredient cost shall be the NADAC of the generic product or the maximum
allowable cost established by the commissioner unless prior authorization for the brand
name product has been granted according to the criteria established by the Drug Formulary
Committee as required by subdivision 13f, paragraph (a), and the prescriber has indicated
"dispense as written" on the prescription in a manner consistent with section 151.21,
subdivision 2
.

(e) The basis for determining the amount of payment for drugs administered in an
outpatient setting shall be the lower of the usual and customary cost submitted by the
provider, 106 percent of the average sales price as determined by the United States
Department of Health and Human Services pursuant to title XVIII, section 1847a of the
federal Social Security Act, the specialty pharmacy rate, or the maximum allowable cost
set by the commissioner. If average sales price is unavailable, the amount of payment must
be lower of the usual and customary cost submitted by the provider, the wholesale acquisition
cost, the specialty pharmacy rate, or the maximum allowable cost set by the commissioner.
Effective January 1, 2014, the commissioner shall discount the payment rate for drugs
obtained through the federal 340B Drug Pricing Program by 20 percent. The payment for
drugs administered in an outpatient setting shall be made to the administering facility or
practitioner. A retail or specialty pharmacy dispensing a drug for administration in an
outpatient setting is not eligible for direct reimbursement.

(f) The commissioner may negotiate lower reimbursement rates establish maximum
allowable cost rates
for specialty pharmacy products than the rates that are lower than the
ingredient cost formulas
specified in paragraph (a). The commissioner may require
individuals enrolled in the health care programs administered by the department to obtain
specialty pharmacy products from providers with whom the commissioner has negotiated
lower reimbursement rates
able to provide enhanced clinical services and willing to accept
the specialty pharmacy reimbursement
. Specialty pharmacy products are defined as those
used by a small number of recipients or recipients with complex and chronic diseases that
require expensive and challenging drug regimens. Examples of these conditions include,
but are not limited to: multiple sclerosis, HIV/AIDS, transplantation, hepatitis C, growth
hormone deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms of cancer.
Specialty pharmaceutical products include injectable and infusion therapies, biotechnology
drugs, antihemophilic factor products, high-cost therapies, and therapies that require complex
care. The commissioner shall consult with the formulary committee to develop a list of
specialty pharmacy products subject to this paragraph maximum allowable cost
reimbursement
. In consulting with the formulary committee in developing this list, the
commissioner shall take into consideration the population served by specialty pharmacy
products, the current delivery system and standard of care in the state, and access to care
issues. The commissioner shall have the discretion to adjust the reimbursement rate maximum
allowable cost
to prevent access to care issues.

(g) Home infusion therapy services provided by home infusion therapy pharmacies must
be paid at rates according to subdivision 8d.

(h) Effective for prescriptions filled on or after April 1, 2017, or upon federal approval,
whichever is later, the commissioner shall increase the ingredient cost reimbursement
calculated in paragraphs (a) and (f) by two percent for prescription and nonprescription
drugs subject to the wholesale drug distributor tax under section 295.52.

EFFECTIVE DATE.

This section is effective retroactively from April 1, 2017, or from
the effective date of federal approval, whichever is later. The commissioner of human
services shall notify the revisor of statutes when federal approval is obtained.

Sec. 17.

Minnesota Statutes 2016, section 256B.0625, subdivision 17, is amended to read:


Subd. 17.

Transportation costs.

(a) "Nonemergency medical transportation service"
means motor vehicle transportation provided by a public or private person that serves
Minnesota health care program beneficiaries who do not require emergency ambulance
service, as defined in section 144E.001, subdivision 3, to obtain covered medical services.

(b) Medical assistance covers medical transportation costs incurred solely for obtaining
emergency medical care or transportation costs incurred by eligible persons in obtaining
emergency or nonemergency medical care when paid directly to an ambulance company,
common carrier nonemergency medical transportation company, or other recognized
providers of transportation services. Medical transportation must be provided by:

(1) nonemergency medical transportation providers who meet the requirements of this
subdivision;

(2) ambulances, as defined in section 144E.001, subdivision 2;

(3) taxicabs that meet the requirements of this subdivision;

(4) public transit, as defined in section 174.22, subdivision 7; or

(5) not-for-hire vehicles, including volunteer drivers.

(c) Medical assistance covers nonemergency medical transportation provided by
nonemergency medical transportation providers enrolled in the Minnesota health care
programs. All nonemergency medical transportation providers must comply with the
operating standards for special transportation service as defined in sections 174.29 to 174.30
and Minnesota Rules, chapter 8840, and in consultation with the Minnesota Department of
Transportation. All nonemergency medical transportation providers shall bill for
nonemergency medical transportation services in accordance with Minnesota health care
programs criteria. Publicly operated transit systems, volunteers, and not-for-hire vehicles
are exempt from the requirements outlined in this paragraph.

(d) An organization may be terminated, denied, or suspended from enrollment if:

(1) the provider has not initiated background studies on the individuals specified in
section 174.30, subdivision 10, paragraph (a), clauses (1) to (3); or

(2) the provider has initiated background studies on the individuals specified in section
174.30, subdivision 10, paragraph (a), clauses (1) to (3), and:

(i) the commissioner has sent the provider a notice that the individual has been
disqualified under section 245C.14; and

(ii) the individual has not received a disqualification set-aside specific to the special
transportation services provider under sections 245C.22 and 245C.23.

(e) The administrative agency of nonemergency medical transportation must:

(1) adhere to the policies defined by the commissioner in consultation with the
Nonemergency Medical Transportation Advisory Committee;

(2) pay nonemergency medical transportation providers for services provided to
Minnesota health care programs beneficiaries to obtain covered medical services;

(3) provide data monthly to the commissioner on appeals, complaints, no-shows, canceled
trips, and number of trips by mode; and

(4) by July 1, 2016, in accordance with subdivision 18e, utilize a Web-based single
administrative structure assessment tool that meets the technical requirements established
by the commissioner, reconciles trip information with claims being submitted by providers,
and ensures prompt payment for nonemergency medical transportation services.

(f) Until the commissioner implements the single administrative structure and delivery
system under subdivision 18e, clients shall obtain their level-of-service certificate from the
commissioner or an entity approved by the commissioner that does not dispatch rides for
clients using modes of transportation under paragraph (i), clauses (4), (5), (6), and (7).

(g) The commissioner may use an order by the recipient's attending physician or a medical
or mental health professional to certify that the recipient requires nonemergency medical
transportation services. Nonemergency medical transportation providers shall perform
driver-assisted services for eligible individuals, when appropriate. Driver-assisted service
includes passenger pickup at and return to the individual's residence or place of business,
assistance with admittance of the individual to the medical facility, and assistance in
passenger securement or in securing of wheelchairs, child seats, or stretchers in the vehicle.

Nonemergency medical transportation providers must take clients to the health care
provider using the most direct route, and must not exceed 30 miles for a trip to a primary
care provider or 60 miles for a trip to a specialty care provider, unless the client receives
authorization from the local agency.

Nonemergency medical transportation providers may not bill for separate base rates for
the continuation of a trip beyond the original destination. Nonemergency medical
transportation providers must maintain trip logs, which include pickup and drop-off times,
signed by the medical provider or client, whichever is deemed most appropriate, attesting
to mileage traveled to obtain covered medical services. Clients requesting client mileage
reimbursement must sign the trip log attesting mileage traveled to obtain covered medical
services.

(h) The administrative agency shall use the level of service process established by the
commissioner in consultation with the Nonemergency Medical Transportation Advisory
Committee to determine the client's most appropriate mode of transportation. If public transit
or a certified transportation provider is not available to provide the appropriate service mode
for the client, the client may receive a onetime service upgrade.

(i) The covered modes of transportation, which may not be implemented without a new
rate structure,
are:

(1) client reimbursement, which includes client mileage reimbursement provided to
clients who have their own transportation, or to family or an acquaintance who provides
transportation to the client;

(2) volunteer transport, which includes transportation by volunteers using their own
vehicle;

(3) unassisted transport, which includes transportation provided to a client by a taxicab
or public transit. If a taxicab or public transit is not available, the client can receive
transportation from another nonemergency medical transportation provider;

(4) assisted transport, which includes transport provided to clients who require assistance
by a nonemergency medical transportation provider;

(5) lift-equipped/ramp transport, which includes transport provided to a client who is
dependent on a device and requires a nonemergency medical transportation provider with
a vehicle containing a lift or ramp;

(6) protected transport, which includes transport provided to a client who has received
a prescreening that has deemed other forms of transportation inappropriate and who requires
a provider: (i) with a protected vehicle that is not an ambulance or police car and has safety
locks, a video recorder, and a transparent thermoplastic partition between the passenger and
the vehicle driver; and (ii) who is certified as a protected transport provider; and

(7) stretcher transport, which includes transport for a client in a prone or supine position
and requires a nonemergency medical transportation provider with a vehicle that can transport
a client in a prone or supine position.

(j) The local agency shall be the single administrative agency and shall administer and
reimburse for modes defined in paragraph (i) according to paragraphs (m) and (n) when the
commissioner has developed, made available, and funded the Web-based single
administrative structure, assessment tool, and level of need assessment under subdivision
18e. The local agency's financial obligation is limited to funds provided by the state or
federal government.

(k) The commissioner shall:

(1) in consultation with the Nonemergency Medical Transportation Advisory Committee,
verify that the mode and use of nonemergency medical transportation is appropriate;

(2) verify that the client is going to an approved medical appointment; and

(3) investigate all complaints and appeals.

(l) The administrative agency shall pay for the services provided in this subdivision and
seek reimbursement from the commissioner, if appropriate. As vendors of medical care,
local agencies are subject to the provisions in section 256B.041, the sanctions and monetary
recovery actions in section 256B.064, and Minnesota Rules, parts 9505.2160 to 9505.2245.

(m) Payments for nonemergency medical transportation must be paid based on the client's
assessed mode under paragraph (h), not the type of vehicle used to provide the service. The
medical assistance reimbursement rates for nonemergency medical transportation services
that are payable by or on behalf of the commissioner for nonemergency medical
transportation services are:

(1) $0.22 per mile for client reimbursement;

(2) up to 100 percent of the Internal Revenue Service business deduction rate for volunteer
transport;

(3) equivalent to the standard fare for unassisted transport when provided by public
transit, and $11 for the base rate and $1.30 per mile when provided by a nonemergency
medical transportation provider;

(4) $13 for the base rate and $1.30 per mile for assisted transport;

(5) $18 for the base rate and $1.55 per mile for lift-equipped/ramp transport;

(6) $75 for the base rate and $2.40 per mile for protected transport; and

(7) $60 for the base rate and $2.40 per mile for stretcher transport, and $9 per trip for
an additional attendant if deemed medically necessary.

(n) The base rate for nonemergency medical transportation services in areas defined
under RUCA to be super rural is equal to 111.3 percent of the respective base rate in
paragraph (m), clauses (1) to (7). The mileage rate for nonemergency medical transportation
services in areas defined under RUCA to be rural or super rural areas is:

(1) for a trip equal to 17 miles or less, equal to 125 percent of the respective mileage
rate in paragraph (m), clauses (1) to (7); and

(2) for a trip between 18 and 50 miles, equal to 112.5 percent of the respective mileage
rate in paragraph (m), clauses (1) to (7).

(o) For purposes of reimbursement rates for nonemergency medical transportation
services under paragraphs (m) and (n), the zip code of the recipient's place of residence
shall determine whether the urban, rural, or super rural reimbursement rate applies.

(p) For purposes of this subdivision, "rural urban commuting area" or "RUCA" means
a census-tract based classification system under which a geographical area is determined
to be urban, rural, or super rural.

(q) The commissioner, when determining reimbursement rates for nonemergency medical
transportation under paragraphs (m) and (n), shall exempt all modes of transportation listed
under paragraph (i) from Minnesota Rules, part 9505.0445, item R, subitem (2).

Sec. 18.

Minnesota Statutes 2016, section 256B.0625, subdivision 17b, is amended to
read:


Subd. 17b.

Documentation required.

(a) As a condition for payment, nonemergency
medical transportation providers must document each occurrence of a service provided to
a recipient according to this subdivision. Providers must maintain odometer and other records
sufficient to distinguish individual trips with specific vehicles and drivers. The documentation
may be collected and maintained using electronic systems or software or in paper form but
must be made available and produced upon request. Program funds paid for transportation
that is not documented according to this subdivision shall be recovered by the department.

(b) A nonemergency medical transportation provider must compile transportation records
that meet the following requirements:

(1) the record must be in English and must be legible according to the standard of a
reasonable person;

(2) the recipient's name must be on each page of the record; and

(3) each entry in the record must document:

(i) the date on which the entry is made;

(ii) the date or dates the service is provided;

(iii) the printed last name, first name, and middle initial of the driver;

(iv) the signature of the driver attesting to the following: "I certify that I have accurately
reported in this record the trip miles I actually drove and the dates and times I actually drove
them. I understand that misreporting the miles driven and hours worked is fraud for which
I could face criminal prosecution or civil proceedings.";

(v) the signature of the recipient or authorized party attesting to the following: "I certify
that I received the reported transportation service.", or the signature of the provider of
medical services certifying that the recipient was delivered to the provider;

(vi) the address, or the description if the address is not available, of both the origin and
destination, and the mileage for the most direct route from the origin to the destination;

(vii) the mode of transportation in which the service is provided;

(viii) the license plate number of the vehicle used to transport the recipient;

(ix) whether the service was ambulatory or nonambulatory until the modes under
subdivision 17 are implemented
;

(x) the time of the pickup and the time of the drop-off with "a.m." and "p.m."
designations;

(xi) the name of the extra attendant when an extra attendant is used to provide special
transportation service; and

(xii) the electronic source documentation used to calculate driving directions and mileage.

Sec. 19.

Minnesota Statutes 2016, section 256B.0625, is amended by adding a subdivision
to read:


Subd. 17c.

Nursing facility transports.

A Minnesota health care program enrollee
residing in, or being discharged from, a licensed nursing facility is exempt from a level of
need determination and is eligible for nonemergency medical transportation services until
the enrollee no longer resides in a licensed nursing facility, as provided in section 256B.04,
subdivision 14a.

Sec. 20.

Minnesota Statutes 2016, section 256B.0625, subdivision 18h, is amended to
read:


Subd. 18h.

Managed care.

(a) The following subdivisions do not apply to managed
care plans and county-based purchasing plans:

(1) subdivision 17, paragraphs (d) to (k) (a), (b), (i), and (n);

(2) subdivision 18e 18; and

(3) subdivision 18g 18a.

(b) A nonemergency medical transportation provider must comply with the operating
standards for special transportation service specified in sections 174.29 to 174.30 and
Minnesota Rules, chapter 8840. Publicly operated transit systems, volunteers, and not-for-hire
vehicles are exempt from the requirements in this paragraph.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 21.

Minnesota Statutes 2016, section 256B.0625, subdivision 30, is amended to read:


Subd. 30.

Other clinic services.

(a) Medical assistance covers rural health clinic services,
federally qualified health center services, nonprofit community health clinic services, and
public health clinic services. Rural health clinic services and federally qualified health center
services mean services defined in United States Code, title 42, section 1396d(a)(2)(B) and
(C). Payment for rural health clinic and federally qualified health center services shall be
made according to applicable federal law and regulation.

(b) A federally qualified health center (FQHC) that is beginning initial operation shall
submit an estimate of budgeted costs and visits for the initial reporting period in the form
and detail required by the commissioner. A federally qualified health center An FQHC that
is already in operation shall submit an initial report using actual costs and visits for the
initial reporting period. Within 90 days of the end of its reporting period, a federally qualified
health center
an FQHC shall submit, in the form and detail required by the commissioner,
a report of its operations, including allowable costs actually incurred for the period and the
actual number of visits for services furnished during the period, and other information
required by the commissioner. Federally qualified health centers FQHCs that file Medicare
cost reports shall provide the commissioner with a copy of the most recent Medicare cost
report filed with the Medicare program intermediary for the reporting year which support
the costs claimed on their cost report to the state.

(c) In order to continue cost-based payment under the medical assistance program
according to paragraphs (a) and (b), a federally qualified health center an FQHC or rural
health clinic must apply for designation as an essential community provider within six
months of final adoption of rules by the Department of Health according to section 62Q.19,
subdivision 7
. For those federally qualified health centers FQHCs and rural health clinics
that have applied for essential community provider status within the six-month time
prescribed, medical assistance payments will continue to be made according to paragraphs
(a) and (b) for the first three years after application. For federally qualified health centers
FQHCs
and rural health clinics that either do not apply within the time specified above or
who have had essential community provider status for three years, medical assistance
payments for health services provided by these entities shall be according to the same rates
and conditions applicable to the same service provided by health care providers that are not
federally qualified health centers FQHCs or rural health clinics.

(d) Effective July 1, 1999, the provisions of paragraph (c) requiring a federally qualified
health center
an FQHC or a rural health clinic to make application for an essential community
provider designation in order to have cost-based payments made according to paragraphs
(a) and (b) no longer apply.

(e) Effective January 1, 2000, payments made according to paragraphs (a) and (b) shall
be limited to the cost phase-out schedule of the Balanced Budget Act of 1997.

(f) Effective January 1, 2001, through December 31, 2018, each federally qualified
health center
FQHC and rural health clinic may elect to be paid either under the prospective
payment system established in United States Code, title 42, section 1396a(aa), or under an
alternative payment methodology consistent with the requirements of United States Code,
title 42, section 1396a(aa), and approved by the Centers for Medicare and Medicaid Services.
The alternative payment methodology shall be 100 percent of cost as determined according
to Medicare cost principles.

(g) Effective for services provided on or after January 1, 2019, all claims for payment
of clinic services provided by FQHCs and rural health clinics shall be paid by the
commissioner, according to an annual election by the FQHC or rural health clinic, under
the current prospective payment system described in paragraph (f), the alternative payment
methodology described in paragraph (f), or the alternative payment methodology described
in paragraph (l).

(g) (h) For purposes of this section, "nonprofit community clinic" is a clinic that:

(1) has nonprofit status as specified in chapter 317A;

(2) has tax exempt status as provided in Internal Revenue Code, section 501(c)(3);

(3) is established to provide health services to low-income population groups, uninsured,
high-risk and special needs populations, underserved and other special needs populations;

(4) employs professional staff at least one-half of which are familiar with the cultural
background of their clients;

(5) charges for services on a sliding fee scale designed to provide assistance to
low-income clients based on current poverty income guidelines and family size; and

(6) does not restrict access or services because of a client's financial limitations or public
assistance status and provides no-cost care as needed.

(h) (i) Effective for services provided on or after January 1, 2015, all claims for payment
of clinic services provided by federally qualified health centers FQHCs and rural health
clinics shall be paid by the commissioner. Effective for services provided on or after January
1, 2015, through July 1, 2017,
the commissioner shall determine the most feasible method
for paying claims from the following options:

(1) federally qualified health centers FQHCs and rural health clinics submit claims
directly to the commissioner for payment, and the commissioner provides claims information
for recipients enrolled in a managed care or county-based purchasing plan to the plan, on
a regular basis; or

(2) federally qualified health centers FQHCs and rural health clinics submit claims for
recipients enrolled in a managed care or county-based purchasing plan to the plan, and those
claims are submitted by the plan to the commissioner for payment to the clinic.

Effective for services provided on or after January 1, 2019, FQHCs and rural health clinics
shall submit claims directly to the commissioner for payment and the commissioner shall
provide claims information for recipients enrolled in a managed care plan or county-based
purchasing plan to the plan on a regular basis to be determined by the commissioner.

(i) (j) For clinic services provided prior to January 1, 2015, the commissioner shall
calculate and pay monthly the proposed managed care supplemental payments to clinics,
and clinics shall conduct a timely review of the payment calculation data in order to finalize
all supplemental payments in accordance with federal law. Any issues arising from a clinic's
review must be reported to the commissioner by January 1, 2017. Upon final agreement
between the commissioner and a clinic on issues identified under this subdivision, and in
accordance with United States Code, title 42, section 1396a(bb), no supplemental payments
for managed care plan or county-based purchasing plan claims for services provided prior
to January 1, 2015, shall be made after June 30, 2017. If the commissioner and clinics are
unable to resolve issues under this subdivision, the parties shall submit the dispute to the
arbitration process under section 14.57.

(j) (k) The commissioner shall seek a federal waiver, authorized under section 1115 of
the Social Security Act, to obtain federal financial participation at the 100 percent federal
matching percentage available to facilities of the Indian Health Service or tribal organization
in accordance with section 1905(b) of the Social Security Act for expenditures made to
organizations dually certified under Title V of the Indian Health Care Improvement Act,
Public Law 94-437, and as a federally qualified health center FQHC under paragraph (a)
that provides services to American Indian and Alaskan Native individuals eligible for
services under this subdivision.

(l) Effective for services provided on or after January 1, 2019, all claims for payment
of clinic services provided by FQHCs and rural health clinics shall be paid by the
commissioner according to the current prospective payment system described in paragraph
(f), or an alternative payment methodology with the following requirements:

(1) each FQHC and rural health clinic must receive a single medical and a single dental
organization rate;

(2) the commissioner shall reimburse FQHCs and rural health clinics for allowable costs,
including direct patient care costs and patient-related support services, based upon Medicare
cost principles that apply at the time the alternative payment methodology is calculated;

(3) the 2019 payment rates for FQHCs and rural health clinics:

(i) must be determined using each FQHC's and rural health clinic's Medicare cost reports
from 2015 and 2016. A provider must submit the required cost reports to the commissioner
within six months of the second base year calendar or fiscal year end. Cost reports must be
submitted six months before the quarter in which the base rate will take effect;

(ii) must be according to current Medicare cost principles applicable to FQHCs and rural
health clinics at the time of the alternative payment rate calculation without the application
of productivity screens and upper payment limits or the Medicare prospective payment
system FQHC aggregate mean upper payment limit; and

(iii) must provide for a 60-day appeals process;

(4) the commissioner shall inflate the base year payment rate for FQHCs and rural health
clinics to the effective date by using the Bureau of Economic Analysis's personal consumption
expenditures medical care inflator;

(5) the commissioner shall establish a statewide trend inflator using 2015-2020 costs
replacing the use of the personal consumption expenditures medical care inflator with the
2023 rate calculation forward;

(6) FQHC and rural health clinic payment rates shall be rebased by the commissioner
every two years using the methodology described in clause (3), using the provider's Medicare
cost reports from the previous third and fourth years. In nonrebasing years, the commissioner
shall adjust using the Medicare economic index until 2023 when the statewide trend inflator
is available;

(7) the commissioner shall increase payments by two percent according to Laws 2003,
First Special Session chapter 14, article 13C, section 2, subdivision 6. This is an add-on to
the rate and must not be included in the base rate calculation;

(8) for FQHCs and rural health clinics seeking a change of scope of services:

(i) the commissioner shall require FQHCs and rural health clinics to submit requests to
the commissioner, if the change of scope would result in the medical or dental payment rate
currently received by the FQHC or rural health clinic increasing or decreasing by at least
2-1/2 percent;

(ii) FQHCs and rural health clinics shall submit the request to the commissioner within
seven business days of submission of the scope change to the federal Health Resources
Services Administration;

(iii) the effective date of the payment change is the date the Health Resources Services
Administration approves the FQHC's or rural health clinic's change of scope request;

(iv) for change of scope requests that do not require Health Resources Services
Administration approval, FQHCs and rural health clinics shall submit the request to the
commissioner before implementing the change, and the effective date of the change is the
date the commissioner receives the request from the FQHC or rural health clinic; and

(v) the commissioner shall provide a response to the FQHC's or rural health clinic's
change of scope request within 45 days of submission and provide a final decision regarding
approval or disapproval within 120 days of submission. If more information is needed to
evaluate the request, this timeline may be waived by mutual agreement of the commissioner
and the FQHC or rural health clinic; and

(9) the commissioner shall establish a payment rate for new FQHC and rural health
clinic organizations, considering the following factors:

(i) a comparison of patient caseload of FQHCs and rural health clinics within a 60-mile
radius for organizations established outside the seven-county metropolitan area and within
a 30-mile radius for organizations within the seven-county metropolitan area; and

(ii) if a comparison is not feasible under item (i), the commissioner may use Medicare
cost reports or audited financial statements to establish the base rate.

Sec. 22.

Minnesota Statutes 2016, section 256B.0625, subdivision 45a, is amended to
read:


Subd. 45a.

Psychiatric residential treatment facility services for persons under 21
years of age.

(a) Medical assistance covers psychiatric residential treatment facility services,
according to section 256B.0941,
for persons under younger than 21 years of age. Individuals
who reach age 21 at the time they are receiving services are eligible to continue receiving
services until they no longer require services or until they reach age 22, whichever occurs
first.

(b) For purposes of this subdivision, "psychiatric residential treatment facility" means
a facility other than a hospital that provides psychiatric services, as described in Code of
Federal Regulations, title 42, sections 441.151 to 441.182, to individuals under age 21 in
an inpatient setting.

(c) The commissioner shall develop admissions and discharge procedures and establish
rates consistent with guidelines from the federal Centers for Medicare and Medicaid Services.

(d) The commissioner shall enroll up to 150 certified psychiatric residential treatment
facility services beds at up to six sites. The commissioner shall select psychiatric residential
treatment facility services providers through a request for proposals process. Providers of
state-operated services may respond to the request for proposals.

Sec. 23.

Minnesota Statutes 2016, section 256B.0625, subdivision 60a, is amended to
read:


Subd. 60a.

Community medical response emergency medical technician services.

(a) Medical assistance covers services provided by a community medical response emergency
medical technician (CEMT) who is certified under section 144E.275, subdivision 7, when
the services are provided in accordance with this subdivision.

(b) A CEMT may provide a posthospital discharge postdischarge visit, after discharge
from a hospital or skilled nursing facility,
when ordered by a treating physician. The
posthospital discharge postdischarge visit includes:

(1) verbal or visual reminders of discharge orders;

(2) recording and reporting of vital signs to the patient's primary care provider;

(3) medication access confirmation;

(4) food access confirmation; and

(5) identification of home hazards.

(c) An individual who has repeat ambulance calls due to falls, has been discharged from
a nursing home,
or has been identified by the individual's primary care provider as at risk
for nursing home placement, may receive a safety evaluation visit from a CEMT when
ordered by a primary care provider in accordance with the individual's care plan. A safety
evaluation visit includes:

(1) medication access confirmation;

(2) food access confirmation; and

(3) identification of home hazards.

(d) A CEMT shall be paid at $9.75 per 15-minute increment. A safety evaluation visit
may not be billed for the same day as a posthospital discharge postdischarge visit for the
same individual.

Sec. 24.

Minnesota Statutes 2016, section 256B.0625, subdivision 64, is amended to read:


Subd. 64.

Investigational drugs, biological products, and devices.

Medical assistance
and the early periodic screening, diagnosis, and treatment (EPSDT) program do not cover
costs incidental to, associated with, or resulting from the use of investigational drugs,
biological products, or devices as defined in section 151.375., except that stiripentol may
be covered by the EPSDT program, only if all of the following conditions are met:

(1) the use of stiripentol is determined to be medically necessary;

(2) stiripentol is covered only for eligible enrollees with a documented diagnosis of
Dravet syndrome, regardless of whether an SCN1A genetic mutation is found, or children
with Malignant Migrating Partial Epilepsy in Infancy due to an SCN2A genetic mutation;

(3) all other available covered prescription medications that are medically necessary for
the patient have been tried without successful outcomes; and

(4) the United States Food and Drug Administration has approved the treating physician's
individual patient investigational new drug application (IND) for the use of stiripentol for
treatment.

This provision related to coverage of stiripentol does not apply to MinnesotaCare
coverage under chapter 256L.

Sec. 25.

Minnesota Statutes 2016, section 256B.0644, is amended to read:


256B.0644 REIMBURSEMENT UNDER OTHER STATE HEALTH CARE
PROGRAMS.

(a) A vendor of medical care, as defined in section 256B.02, subdivision 7, and a health
maintenance organization, as defined in chapter 62D, must participate as a provider or
contractor in the medical assistance program and MinnesotaCare as a condition of
participating as a provider in health insurance plans and programs or contractor for state
employees established under section 43A.18, the public employees insurance program under
section 43A.316, for health insurance plans offered to local statutory or home rule charter
city, county, and school district employees, the workers' compensation system under section
176.135, and insurance plans provided through the Minnesota Comprehensive Health
Association under sections 62E.01 to 62E.19. The limitations on insurance plans offered to
local government employees shall not be applicable in geographic areas where provider
participation is limited by managed care contracts with the Department of Human Services.
This section does not apply to dental service providers providing dental services outside
the seven-county metropolitan area.

(b) For providers other than health maintenance organizations, participation in the medical
assistance program means that:

(1) the provider accepts new medical assistance and MinnesotaCare patients;

(2) for providers other than dental service providers, at least 20 percent of the provider's
patients are covered by medical assistance and MinnesotaCare as their primary source of
coverage; or

(3) for dental service providers providing dental services in the seven-county metropolitan
area
, at least ten percent of the provider's patients are covered by medical assistance and
MinnesotaCare as their primary source of coverage, or the provider accepts new medical
assistance and MinnesotaCare patients who are children with special health care needs. For
purposes of this section, "children with special health care needs" means children up to age
18 who: (i) require health and related services beyond that required by children generally;
and (ii) have or are at risk for a chronic physical, developmental, behavioral, or emotional
condition, including: bleeding and coagulation disorders; immunodeficiency disorders;
cancer; endocrinopathy; developmental disabilities; epilepsy, cerebral palsy, and other
neurological diseases; visual impairment or deafness; Down syndrome and other genetic
disorders; autism; fetal alcohol syndrome; and other conditions designated by the
commissioner after consultation with representatives of pediatric dental providers and
consumers.

(c) Patients seen on a volunteer basis by the provider at a location other than the provider's
usual place of practice may be considered in meeting the participation requirement in this
section. The commissioner shall establish participation requirements for health maintenance
organizations. The commissioner shall provide lists of participating medical assistance
providers on a quarterly basis to the commissioner of management and budget, the
commissioner of labor and industry, and the commissioner of commerce. Each of the
commissioners shall develop and implement procedures to exclude as participating providers
in the program or programs under their jurisdiction those providers who do not participate
in the medical assistance program. The commissioner of management and budget shall
implement this section through contracts with participating health and dental carriers.

(d) A volunteer dentist who has signed a volunteer agreement under section 256B.0625,
subdivision 9a
, shall not be considered to be participating in medical assistance or
MinnesotaCare for the purpose of this section.

EFFECTIVE DATE.

This section is effective upon receipt of any necessary federal
waiver or approval. The commissioner of human services shall notify the revisor of statutes
if a federal waiver or approval is sought and, if sought, when a federal waiver or approval
is obtained.

Sec. 26.

Minnesota Statutes 2016, section 256B.0755, is amended to read:


256B.0755 HEALTH CARE DELIVERY SYSTEMS INTEGRATED HEALTH
PARTNERSHIP
DEMONSTRATION PROJECT.

Subdivision 1.

Implementation.

(a) The commissioner shall develop and authorize a
demonstration project to test alternative and innovative health care delivery systems
integrated health partnerships
, including accountable care organizations that provide services
to a specified patient population for an agreed-upon total cost of care or risk/gain sharing
payment arrangement. The commissioner shall develop a request for proposals for
participation in the demonstration project in consultation with hospitals, primary care
providers, health plans, and other key stakeholders.

(b) In developing the request for proposals, the commissioner shall:

(1) establish uniform statewide methods of forecasting utilization and cost of care for
the appropriate Minnesota public program populations, to be used by the commissioner for
the health care delivery system integrated health partnership projects;

(2) identify key indicators of quality, access, patient satisfaction, and other performance
indicators that will be measured, in addition to indicators for measuring cost savings;

(3) allow maximum flexibility to encourage innovation and variation so that a variety
of provider collaborations are able to become health care delivery systems integrated health
partnerships and they can be customized for the special needs and barriers of patient
populations experiencing health disparities due to social, economic, racial, or ethnic factors
;

(4) encourage and authorize different levels and types of financial risk;

(5) encourage and authorize projects representing a wide variety of geographic locations,
patient populations, provider relationships, and care coordination models;

(6) encourage projects that involve close partnerships between the health care delivery
system
integrated health partnerships and counties and nonprofit agencies that provide
services to patients enrolled with the health care delivery system integrated health
partnerships
, including social services, public health, mental health, community-based
services, and continuing care;

(7) encourage projects established by community hospitals, clinics, and other providers
in rural communities;

(8) identify required covered services for a total cost of care model or services considered
in whole or partially in an analysis of utilization for a risk/gain sharing model;

(9) establish a mechanism to monitor enrollment;

(10) establish quality standards for the delivery system integrated health partnership
demonstrations that are appropriate for the particular patient population to be served; and

(11) encourage participation of privately insured population so as to create sufficient
alignment in demonstration systems integrated health partnerships.

(c) To be eligible to participate in the demonstration project, a health care delivery system
an integrated health partnership
must:

(1) provide required covered services and care coordination to recipients enrolled in the
health care delivery system integrated health partnership;

(2) establish a process to monitor enrollment and ensure the quality of care provided;

(3) in cooperation with counties and community social service agencies, coordinate the
delivery of health care services with existing social services programs;

(4) provide a system for advocacy and consumer protection; and

(5) adopt innovative and cost-effective methods of care delivery and coordination, which
may include the use of allied health professionals, telemedicine, patient educators, care
coordinators, and community health workers.

(d) A health care delivery system An integrated health partnership demonstration may
be formed by the following groups of providers of services and suppliers if they have
established a mechanism for shared governance:

(1) professionals in group practice arrangements;

(2) networks of individual practices of professionals;

(3) partnerships or joint venture arrangements between hospitals and health care
professionals;

(4) hospitals employing professionals; and

(5) other groups of providers of services and suppliers as the commissioner determines
appropriate.

A managed care plan or county-based purchasing plan may participate in this
demonstration in collaboration with one or more of the entities listed in clauses (1) to (5).

A health care delivery system An integrated health partnership may contract with a
managed care plan or a county-based purchasing plan to provide administrative services,
including the administration of a payment system using the payment methods established
by the commissioner for health care delivery systems.

(e) The commissioner may require a health care delivery system an integrated health
partnership
to enter into additional third-party contractual relationships for the assessment
of risk and purchase of stop loss insurance or another form of insurance risk management
related to the delivery of care described in paragraph (c).

Subd. 2.

Enrollment.

(a) Individuals eligible for medical assistance or MinnesotaCare
shall be eligible for enrollment in a health care delivery system an integrated health
partnership
.

(b) Eligible applicants and recipients may enroll in a health care delivery system an
integrated health partnership
if a system an integrated health partnership serves the county
in which the applicant or recipient resides. If more than one health care delivery system
integrated health partnership
serves a county, the applicant or recipient shall be allowed to
choose among the delivery systems integrated health partnerships.

(c) The commissioner may assign an applicant or recipient to a health care delivery
system
an integrated health partnership if a health care delivery system an integrated health
partnership
is available and no choice has been made by the applicant or recipient.

Subd. 3.

Accountability.

(a) Health care delivery systems Integrated health partnerships
must accept responsibility for the quality of care based on standards established under
subdivision 1, paragraph (b), clause (10), and the cost of care or utilization of services
provided to its enrollees under subdivision 1, paragraph (b), clause (1). Accountability
standards must be appropriate to the particular population served.

(b) A health care delivery system An integrated health partnership may contract and
coordinate with providers and clinics for the delivery of services and shall contract with
community health clinics, federally qualified health centers, community mental health
centers or programs, county agencies, and rural clinics to the extent practicable.

(c) A health care delivery system An integrated health partnership must indicate how it
will coordinate with other services affecting its patients' health, quality of care, and cost of
care that are provided by other providers, county agencies, and other organizations in the
local service area. The health care delivery system integrated health partnership must indicate
how it will engage other providers, counties, and organizations, including county-based
purchasing plans, that provide services to patients of the health care delivery system
integrated health partnership
on issues related to local population health, including applicable
local needs, priorities, and public health goals. The health care delivery system integrated
health partnership
must describe how local providers, counties, organizations, including
county-based purchasing plans, and other relevant purchasers were consulted in developing
the application to participate in the demonstration project.

Subd. 4.

Payment system.

(a) In developing a payment system for health care delivery
systems
integrated health partnerships, the commissioner shall establish a total cost of care
benchmark or a risk/gain sharing payment model to be paid for services provided to the
recipients enrolled in a health care delivery system an integrated health partnership.

(b) The payment system may include incentive payments to health care delivery systems
integrated health partnerships
that meet or exceed annual quality and performance targets
realized through the coordination of care.

(c) An amount equal to the savings realized to the general fund as a result of the
demonstration project shall be transferred each fiscal year to the health care access fund.

(d) The payment system shall include a population-based payment that supports care
coordination services for all enrollees served by the integrated health partnerships, and is
risk-adjusted to reflect varying levels of care coordination intensiveness for enrollees with
chronic conditions or limited English skills, or who are homeless or experience health
disparities or other barriers to health care. The population-based payment shall be a
per-member per-month payment paid at least on a quarterly basis. Integrated health
partnerships receiving this payment must continue to meet cost and quality metrics under
the program to maintain eligibility for the population-based payment. An integrated health
partnership is eligible to receive a payment under this paragraph even if the partnership is
not participating in a risk-based or gain-sharing payment model and regardless of the size
of the patient population served by the integrated health partnership. Any integrated health
partnership participant certified as a health care home under section 256B.0751 that agrees
to a payment method that includes population-based payments for care coordination is not
eligible to receive health care home payment or care coordination fee authorized under
section 62U.23 or 256B.0753, subdivision 1, or in-reach care coordination under section
256B.0625, subdivision 56, for any medical assistance or MinnesotaCare recipients enrolled
or attributed to the integrated health partnership under this demonstration.

Subd. 5.

Outpatient prescription drug coverage.

Outpatient prescription drug coverage
may be provided through accountable care organizations only if the delivery method qualifies
for federal prescription drug rebates.

Subd. 6.

Federal approval.

The commissioner shall apply for any federal waivers or
other federal approval required to implement this section. The commissioner shall also apply
for any applicable grant or demonstration under the Patient Protection and Affordable Health
Care Act, Public Law 111-148, or the Health Care and Education Reconciliation Act of
2010, Public Law 111-152, that would further the purposes of or assist in the establishment
of accountable care organizations.

Subd. 7.

Expansion.

The commissioner shall expand the demonstration project to include
additional medical assistance and MinnesotaCare enrollees, and shall seek participation of
Medicare in demonstration projects. The commissioner shall seek to include participation
of privately insured persons and Medicare recipients in the health care delivery
demonstration. As part of the demonstration expansion, the commissioner may procure the
services of the health care delivery systems authorized under this section by geographic
area, to supplement or replace the services provided by managed care plans operating under
section 256B.69.

Sec. 27.

[256B.0759] HEALTH CARE DELIVERY SYSTEMS DEMONSTRATION
PROJECT.

Subdivision 1.

Implementation.

(a) The commissioner shall develop and implement a
demonstration project to test alternative and innovative health care delivery system payment
and care models that provide services to medical assistance and MinnesotaCare enrollees
for an agreed-upon, prospective per capita or total cost of care payment. The commissioner
shall implement this demonstration project in coordination with, and as an expansion of,
the demonstration project authorized under section 256B.0755.

(b) In developing the demonstration project, the commissioner shall:

(1) establish uniform statewide methods of forecasting utilization and cost of care for
the medical assistance and MinnesotaCare populations to be served under the health care
delivery system project;

(2) identify key indicators of quality, access, and patient satisfaction, and identify methods
to measure cost savings;

(3) allow maximum flexibility to encourage innovation and variation so that a variety
of provider collaborations are able to participate as health care delivery systems, and health
care delivery systems can be customized to address the special needs and barriers of patient
populations;

(4) authorize participation by health care delivery systems representing a variety of
geographic locations, patient populations, provider relationships, and care coordination
models;

(5) recognize the close partnerships between health care delivery systems and the counties
and nonprofit agencies that also provide services to patients enrolled in the health care
delivery system, including social services, public health, mental health, community-based
services, and continuing care;

(6) identify services to be included under a prospective per capita payment model, and
project utilization and cost of these services under a total cost of care risk/gain sharing
model;

(7) establish a mechanism to monitor enrollment in each health care delivery system;
and

(8) establish quality standards for delivery systems that are appropriate for the specific
patient populations served.

Subd. 2.

Requirements for health care delivery systems.

(a) To be eligible to participate
in the demonstration project, a health care delivery system must:

(1) provide required services and care coordination to individuals enrolled in the health
care delivery system;

(2) establish a process to monitor enrollment and ensure the quality of care provided;

(3) in cooperation with counties and community social service agencies, coordinate the
delivery of health care services with existing social services programs;

(4) provide a system for advocacy and consumer protection; and

(5) adopt innovative and cost-effective methods of care delivery and coordination, which
may include the use of allied health professionals, telemedicine and patient educators, care
coordinators, community paramedics, and community health workers.

(b) A health care delivery system may be formed by the following types of health care
providers, if they have established, as applicable, a mechanism for shared governance:

(1) health care providers in group practice arrangements;

(2) networks of health care providers in individual practice;

(3) partnerships or joint venture arrangements between hospitals and health care providers;

(4) hospitals employing or contracting with the necessary range of health care providers;
and

(5) other entities, as the commissioner determines appropriate.

(c) A health care delivery system must contract with a third-party administrator to provide
administrative services, including the administration of the payment system established
under the demonstration project. The third-party administrator must conduct an assessment
of risk, and must purchase stop-loss insurance or another form of insurance risk management
related to the delivery of care. The commissioner may waive the requirement for contracting
with a third-party administrator if the health care delivery system can demonstrate to the
commissioner that it can satisfactorily perform all of the duties assigned to the third-party
administrator.

Subd. 3.

Enrollment.

(a) Individuals eligible for medical assistance or MinnesotaCare
shall be eligible for enrollment in a health care delivery system. Individuals required to
enroll in the prepaid medical assistance program or prepaid MinnesotaCare may opt out of
receiving care from a managed care or county-based purchasing plan, and elect to receive
care through a health care delivery system established under this section.

(b) Eligible applicants and recipients may enroll in a health care delivery system if the
system serves the county in which the applicant or recipient resides. If more than one health
care delivery system serves a county, the applicant or recipient may choose among the
delivery systems. Enrollment in a specific health care delivery system shall be for a 12-month
period, except that enrollees who do not maintain eligibility for medical assistance or
MinnesotaCare shall be disenrolled, and enrollees experiencing a qualifying life event, as
specified by the commissioner, may change health care delivery systems, or opt out of
receiving coverage through a health care delivery system, within 60 days of the date of the
qualifying life event.

(c) The commissioner shall assign an applicant or recipient to a health care delivery
system if:

(1) the applicant or recipient is currently or has recently been attributed to the health
care delivery system as part of an integrated health partnership under section 256B.0755;
or

(2) no choice has been made by the applicant or recipient. In this case, the commissioner
shall enroll an applicant or recipient based on geographic criteria or based on the health
care providers from whom the applicant or recipient has received prior care.

Subd. 4.

Accountability.

(a) Health care delivery systems are responsible for the quality
of care based on standards established by the commissioner, and for enrollee cost of care
and utilization of services. The commissioner shall adjust accountability standards including
the quality, cost, and utilization of care to take into account the social, economic, or cultural
barriers experienced by the health care delivery system's patient population.

(b) A health care delivery system must contract with community health clinics, federally
qualified health centers, community mental health centers or programs, county agencies,
and rural health clinics to the extent practicable.

(c) A health care delivery system must indicate to the commissioner how it will coordinate
its services with those delivered by other providers, county agencies, and other organizations
in the local service area. The health care delivery system must indicate how it will engage
other providers, counties, and organizations that provide services to patients of the health
care delivery system on issues related to local population health, including applicable local
needs, priorities, and public health goals. The health care delivery system must describe
how local providers, counties, and organizations were consulted in developing the application
submitted to the commissioner requiring participation in the demonstration project.

Subd. 5.

Payment system.

The commissioner shall develop a payment system for the
health care delivery system project that includes prospective per capita payments, total cost
of care benchmarks, and risk/gain sharing payment options. The payment system may
include incentive payments to health care delivery systems that meet or exceed annual
quality and performance targets through the coordination of care.

Subd. 6.

Federal waiver or approval.

The commissioner shall seek all federal waivers
or approval necessary to implement the health care delivery system demonstration project.
The commissioner shall notify the chairs and ranking minority members of the legislative
committees with jurisdiction over health and human services policy and finance of any
federal action related to the request for waivers and approval.

EFFECTIVE DATE.

This section is effective January 1, 2018, or upon receipt of
federal waivers or approval, whichever is later. The commissioner of human services shall
notify the revisor of statutes when federal approval is obtained.

Sec. 28.

[256B.0941] PSYCHIATRIC RESIDENTIAL TREATMENT FACILITY
FOR PERSONS YOUNGER THAN 21 YEARS OF AGE.

Subdivision 1.

Eligibility.

(a) An individual who is eligible for mental health treatment
services in a psychiatric residential treatment facility must meet all of the following criteria:

(1) before admission, services are determined to be medically necessary by the state's
medical review agent according to Code of Federal Regulations, title 42, section 441.152;

(2) is younger than 21 years of age at the time of admission. Services may continue until
the individual meets criteria for discharge or reaches 22 years of age, whichever occurs
first;

(3) has a mental health diagnosis as defined in the most recent edition of the Diagnostic
and Statistical Manual for Mental Disorders, as well as clinical evidence of severe aggression,
or a finding that the individual is a risk to self or others;

(4) has functional impairment and a history of difficulty in functioning safely and
successfully in the community, school, home, or job; an inability to adequately care for
one's physical needs; or caregivers, guardians, or family members are unable to safely fulfill
the individual's needs;

(5) requires psychiatric residential treatment under the direction of a physician to improve
the individual's condition or prevent further regression so that services will no longer be
needed;

(6) utilized and exhausted other community-based mental health services, or clinical
evidence indicates that such services cannot provide the level of care needed; and

(7) was referred for treatment in a psychiatric residential treatment facility by a qualified
mental health professional licensed as defined in section 245.4871, subdivision 27, clauses
(1) to (6).

(b) A mental health professional making a referral shall submit documentation to the
state's medical review agent containing all information necessary to determine medical
necessity, including a standard diagnostic assessment completed within 180 days of the
individual's admission. Documentation shall include evidence of family participation in the
individual's treatment planning and signed consent for services.

Subd. 2.

Services.

Psychiatric residential treatment facility service providers must offer
and have the capacity to provide the following services:

(1) development of the individual plan of care, review of the individual plan of care
every 30 days, and discharge planning by required members of the treatment team according
to Code of Federal Regulations, title 42, sections 441.155 to 441.156;

(2) any services provided by a psychiatrist or physician for development of an individual
plan of care, conducting a review of the individual plan of care every 30 days, and discharge
planning by required members of the treatment team according to Code of Federal
Regulations, title 42, sections 441.155 to 441.156;

(3) active treatment seven days per week that may include individual, family, or group
therapy as determined by the individual care plan;

(4) individual therapy, provided a minimum of twice per week;

(5) family engagement activities, provided a minimum of once per week;

(6) consultation with other professionals, including case managers, primary care
professionals, community-based mental health providers, school staff, or other support
planners;

(7) coordination of educational services between local and resident school districts and
the facility;

(8) 24-hour nursing; and

(9) direct care and supervision, supportive services for daily living and safety, and
positive behavior management.

Subd. 3.

Per diem rate.

(a) The commissioner shall establish a statewide per diem rate
for psychiatric residential treatment facility services for individuals 21 years of age or
younger. The rate for a provider must not exceed the rate charged by that provider for the
same service to other payers. Payment must not be made to more than one entity for each
individual for services provided under this section on a given day. The commissioner shall
set rates prospectively for the annual rate period. The commissioner shall require providers
to submit annual cost reports on a uniform cost reporting form and shall use submitted cost
reports to inform the rate-setting process. The cost reporting shall be done according to
federal requirements for Medicare cost reports.

(b) The following are included in the rate:

(1) costs necessary for licensure and accreditation, meeting all staffing standards for
participation, meeting all service standards for participation, meeting all requirements for
active treatment, maintaining medical records, conducting utilization review, meeting
inspection of care, and discharge planning. The direct services costs must be determined
using the actual cost of salaries, benefits, payroll taxes, and training of direct services staff
and service-related transportation; and

(2) payment for room and board provided by facilities meeting all accreditation and
licensing requirements for participation.

(c) A facility may submit a claim for payment outside of the per diem for professional
services arranged by and provided at the facility by an appropriately licensed professional
who is enrolled as a provider with Minnesota health care programs. Arranged services must
be billed by the facility on a separate claim, and the facility shall be responsible for payment
to the provider. These services must be included in the individual plan of care and are subject
to prior authorization by the state's medical review agent.

(d) Medicaid shall reimburse for concurrent services as approved by the commissioner
to support continuity of care and successful discharge from the facility. "Concurrent services"
means services provided by another entity or provider while the individual is admitted to a
psychiatric residential treatment facility. Payment for concurrent services may be limited
and these services are subject to prior authorization by the state's medical review agent.
Concurrent services may include targeted case management, assertive community treatment,
clinical care consultation, team consultation, and treatment planning.

(e) Payment rates under this subdivision shall not include the costs of providing the
following services:

(1) educational services;

(2) acute medical care or specialty services for other medical conditions;

(3) dental services; and

(4) pharmacy drug costs.

(f) For purposes of this section, "actual cost" means costs that are allowable, allocable,
reasonable, and consistent with federal reimbursement requirements in Code of Federal
Regulations, title 48, chapter 1, part 31, relating to for-profit entities, and the Office of
Management and Budget Circular Number A-122, relating to nonprofit entities.

Subd. 4.

Leave days.

(a) Medical assistance covers therapeutic and hospital leave days,
provided the recipient was not discharged from the psychiatric residential treatment facility
and is expected to return to the psychiatric residential treatment facility. A reserved bed
must be held for a recipient on hospital leave or therapeutic leave.

(b) A therapeutic leave day to home shall be used to prepare for discharge and
reintegration and shall be included in the individual plan of care. The state shall reimburse
75 percent of the per diem rate for a reserve bed day while the recipient is on therapeutic
leave. A therapeutic leave visit may not exceed three days without prior authorization.

(c) A hospital leave day shall be a day for which a recipient has been admitted to a
hospital for medical or acute psychiatric care and is temporarily absent from the psychiatric
residential treatment facility. The state shall reimburse 50 percent of the per diem rate for
a reserve bed day while the recipient is receiving medical or psychiatric care in a hospital.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 29.

Minnesota Statutes 2016, section 256B.0943, subdivision 13, is amended to read:


Subd. 13.

Exception to excluded services.

Notwithstanding subdivision 12, up to 15
hours of children's therapeutic services and supports provided within a six-month period to
a child with severe emotional disturbance who is residing in a hospital; a group home as
defined in Minnesota Rules, parts 2960.0130 to 2960.0220;
a residential treatment facility
licensed under Minnesota Rules, parts 2960.0580 to 2960.0690; a psychiatric residential
treatment facility under section 256B.0625, subdivision 45a;
a regional treatment center;
or other institutional group setting or who is participating in a program of partial
hospitalization are eligible for medical assistance payment if part of the discharge plan.

Sec. 30.

Minnesota Statutes 2016, section 256B.0945, subdivision 2, is amended to read:


Subd. 2.

Covered services.

All services must be included in a child's individualized
treatment or multiagency plan of care as defined in chapter 245.

For facilities that are not institutions for mental diseases according to federal statute and
regulation, medical assistance covers mental health-related services that are required to be
provided by a residential facility under section 245.4882 and administrative rules promulgated
thereunder, except for room and board. For residential facilities determined by the federal
Centers for Medicare and Medicaid Services to be an institution for mental diseases, medical
assistance covers medically necessary mental health services provided by the facility
according to section 256B.055, subdivision 13, except for room and board.

Sec. 31.

Minnesota Statutes 2016, section 256B.0945, subdivision 4, is amended to read:


Subd. 4.

Payment rates.

(a) Notwithstanding sections 256B.19 and 256B.041, payments
to counties for residential services provided under this section by a residential facility shall:

(1) for services provided by a residential facility that is not an institution for mental
diseases,
only be made of federal earnings for services provided under this section, and the
nonfederal share of costs for services provided under this section shall be paid by the county
from sources other than federal funds or funds used to match other federal funds. Payment
to counties for services provided according to this section shall be a proportion of the per
day contract rate that relates to rehabilitative mental health services and shall not include
payment for costs or services that are billed to the IV-E program as room and board.; and

(2) for services provided by a residential facility that is determined to be an institution
for mental diseases, be equivalent to the federal share of the payment that would have been
made if the residential facility were not an institution for mental diseases. The portion of
the payment representing what would be the nonfederal shares shall be paid by the county.
Payment to counties for services provided according to this section shall be a proportion of
the per day contract rate that relates to rehabilitative mental health services and shall not
include payment for costs or services that are billed to the IV-E program as room and board.

(b) Per diem rates paid to providers under this section by prepaid plans shall be the
proportion of the per-day contract rate that relates to rehabilitative mental health services
and shall not include payment for group foster care costs or services that are billed to the
county of financial responsibility. Services provided in facilities located in bordering states
are eligible for reimbursement on a fee-for-service basis only as described in paragraph (a)
and are not covered under prepaid health plans.

(c) Payment for mental health rehabilitative services provided under this section by or
under contract with an American Indian tribe or tribal organization or by agencies operated
by or under contract with an American Indian tribe or tribal organization must be made
according to section 256B.0625, subdivision 34, or other relevant federally approved
rate-setting methodology.

(d) The commissioner shall set aside a portion not to exceed five percent of the federal
funds earned for county expenditures under this section to cover the state costs of
administering this section. Any unexpended funds from the set-aside shall be distributed to
the counties in proportion to their earnings under this section.

Sec. 32.

Minnesota Statutes 2016, section 256B.15, subdivision 1, is amended to read:


Subdivision 1.

Policy and applicability.

(a) It is the policy of this state that individuals
or couples, either or both of whom participate in the medical assistance program, use their
own assets to pay their share of the cost of their care during or after their enrollment in the
program according to applicable federal law and the laws of this state. The following
provisions apply:

(1) subdivisions 1c to 1k shall not apply to claims arising under this section which are
presented under section 525.313;

(2) the provisions of subdivisions 1c to 1k expanding the interests included in an estate
for purposes of recovery under this section give effect to the provisions of United States
Code, title 42, section 1396p, governing recoveries, but do not give rise to any express or
implied liens in favor of any other parties not named in these provisions;

(3) the continuation of a recipient's life estate or joint tenancy interest in real property
after the recipient's death for the purpose of recovering medical assistance under this section
modifies common law principles holding that these interests terminate on the death of the
holder;

(4) all laws, rules, and regulations governing or involved with a recovery of medical
assistance shall be liberally construed to accomplish their intended purposes;

(5) a deceased recipient's life estate and joint tenancy interests continued under this
section shall be owned by the remainderpersons or surviving joint tenants as their interests
may appear on the date of the recipient's death. They shall not be merged into the remainder
interest or the interests of the surviving joint tenants by reason of ownership. They shall be
subject to the provisions of this section. Any conveyance, transfer, sale, assignment, or
encumbrance by a remainderperson, a surviving joint tenant, or their heirs, successors, and
assigns shall be deemed to include all of their interest in the deceased recipient's life estate
or joint tenancy interest continued under this section; and

(6) the provisions of subdivisions 1c to 1k continuing a recipient's joint tenancy interests
in real property after the recipient's death do not apply to a homestead owned of record, on
the date the recipient dies, by the recipient and the recipient's spouse as joint tenants with
a right of survivorship. Homestead means the real property occupied by the surviving joint
tenant spouse as their sole residence on the date the recipient dies and classified and taxed
to the recipient and surviving joint tenant spouse as homestead property for property tax
purposes in the calendar year in which the recipient dies. For purposes of this exemption,
real property the recipient and their surviving joint tenant spouse purchase solely with the
proceeds from the sale of their prior homestead, own of record as joint tenants, and qualify
as homestead property under section 273.124 in the calendar year in which the recipient
dies and prior to the recipient's death shall be deemed to be real property classified and
taxed to the recipient and their surviving joint tenant spouse as homestead property in the
calendar year in which the recipient dies. The surviving spouse, or any person with personal
knowledge of the facts, may provide an affidavit describing the homestead property affected
by this clause and stating facts showing compliance with this clause. The affidavit shall be
prima facie evidence of the facts it states.

(b) For purposes of this section, "medical assistance" includes the medical assistance
program under this chapter, the general assistance medical care program formerly codified
under chapter 256D, and alternative care for nonmedical assistance recipients under section
256B.0913.

(c) For purposes of this section, beginning January 1, 2010, "medical assistance" does
not include Medicare cost-sharing benefits in accordance with United States Code, title 42,
section 1396p.

(d) All provisions in this subdivision, and subdivisions 1d, 1f, 1g, 1h, 1i, and 1j, related
to the continuation of a recipient's life estate or joint tenancy interests in real property after
the recipient's death for the purpose of recovering medical assistance, are effective only for
life estates and joint tenancy interests established on or after August 1, 2003. For purposes
of this paragraph, medical assistance does not include alternative care.

EFFECTIVE DATE.

This section is effective the day following final enactment and
applies retroactively to estate claims pending on or after July 1, 2016, and to the estates of
people who died on or after July 1, 2016.

Sec. 33.

Minnesota Statutes 2016, section 256B.15, subdivision 1a, is amended to read:


Subd. 1a.

Estates subject to claims.

(a) If a person receives medical assistance hereunder,
on the person's death, if single, or on the death of the survivor of a married couple, either
or both of whom received medical assistance, or as otherwise provided for in this section,
the amount paid for medical assistance as limited under subdivision 2 for the person and
spouse shall be filed as a claim against the estate of the person or the estate of the surviving
spouse in the court having jurisdiction to probate the estate or to issue a decree of descent
according to sections 525.31 to 525.313.

(b) For the purposes of this section, the person's estate must consist of:

(1) the person's probate estate;

(2) all of the person's interests or proceeds of those interests in real property the person
owned as a life tenant or as a joint tenant with a right of survivorship at the time of the
person's death;

(3) all of the person's interests or proceeds of those interests in securities the person
owned in beneficiary form as provided under sections 524.6-301 to 524.6-311 at the time
of the person's death, to the extent the interests or proceeds of those interests become part
of the probate estate under section 524.6-307;

(4) all of the person's interests in joint accounts, multiple-party accounts, and pay-on-death
accounts, brokerage accounts, investment accounts, or the proceeds of those accounts, as
provided under sections 524.6-201 to 524.6-214 at the time of the person's death to the
extent the interests become part of the probate estate under section 524.6-207; and

(5) assets conveyed to a survivor, heir, or assign of the person through survivorship,
living trust, or other arrangements.

(c) For the purpose of this section and recovery in a surviving spouse's estate for medical
assistance paid for a predeceased spouse, the estate must consist of all of the legal title and
interests the deceased individual's predeceased spouse had in jointly owned or marital
property at the time of the spouse's death, as defined in subdivision 2b, and the proceeds of
those interests, that passed to the deceased individual or another individual, a survivor, an
heir, or an assign of the predeceased spouse through a joint tenancy, tenancy in common,
survivorship, life estate, living trust, or other arrangement. A deceased recipient who, at
death, owned the property jointly with the surviving spouse shall have an interest in the
entire property.

(d) For the purpose of recovery in a single person's estate or the estate of a survivor of
a married couple, "other arrangement" includes any other means by which title to all or any
part of the jointly owned or marital property or interest passed from the predeceased spouse
to another including, but not limited to, transfers between spouses which are permitted,
prohibited, or penalized for purposes of medical assistance.

(e) A claim shall be filed if medical assistance was rendered for either or both persons
under one of the following circumstances:

(1) the person was over 55 years of age, and received services under this chapter prior
to January 1, 2014;

(2) (1) the person resided in a medical institution for six months or longer, received
services under this chapter, and, at the time of institutionalization or application for medical
assistance, whichever is later, the person could not have reasonably been expected to be
discharged and returned home, as certified in writing by the person's treating physician. For
purposes of this section only, a "medical institution" means a skilled nursing facility,
intermediate care facility, intermediate care facility for persons with developmental
disabilities, nursing facility, or inpatient hospital;

(3) (2) the person received general assistance medical care services under the program
formerly codified under chapter 256D; or

(4) (3) the person was 55 years of age or older and received medical assistance services
on or after January 1, 2014, that consisted of nursing facility services, home and
community-based services, or related hospital and prescription drug benefits.

(f) The claim shall be considered an expense of the last illness of the decedent for the
purpose of section 524.3-805. Notwithstanding any law or rule to the contrary, a state or
county agency with a claim under this section must be a creditor under section 524.6-307.
Any statute of limitations that purports to limit any county agency or the state agency, or
both, to recover for medical assistance granted hereunder shall not apply to any claim made
hereunder for reimbursement for any medical assistance granted hereunder. Notice of the
claim shall be given to all heirs and devisees of the decedent, and to other persons with an
ownership interest in the real property owned by the decedent at the time of the decedent's
death, whose identity can be ascertained with reasonable diligence. The notice must include
procedures and instructions for making an application for a hardship waiver under subdivision
5; time frames for submitting an application and determination; and information regarding
appeal rights and procedures. Counties are entitled to one-half of the nonfederal share of
medical assistance collections from estates that are directly attributable to county effort.
Counties are entitled to ten percent of the collections for alternative care directly attributable
to county effort.

EFFECTIVE DATE.

This section is effective the day following final enactment and
applies retroactively to estate claims pending on or after July 1, 2016, and to the estates of
people who died on or after July 1, 2016.

Sec. 34.

Minnesota Statutes 2016, section 256B.15, subdivision 2, is amended to read:


Subd. 2.

Limitations on claims.

(a) For services rendered prior to January 1, 2014, the
claim shall include only the total amount of medical assistance rendered after age 55 or
during a period of institutionalization described in subdivision 1a, paragraph (e), and the
total amount of general assistance medical care rendered under the program formerly codified
under chapter 256D, and shall not include interest.

(b) For services rendered on or after January 1, 2014, (a) The claim shall include only:

(1) the amount of medical assistance rendered to recipients 55 years of age or older and
that consisted of nursing facility services, home and community-based services, and related
hospital and prescription drug services; and

(2) the total amount of medical assistance rendered during a period of institutionalization
described in subdivision 1a, paragraph (e), clause (2). (1); and

(3) the total amount of general assistance medical care rendered under the program
formerly codified under chapter 256D.

The claim shall not include interest. For the purposes of this section, "home and
community-based services" has the same meaning it has when used in United States Code,
title 42, section 1396p(b)(1)(B)(i), and includes the alternative care program under section
256B.0913, even for periods when alternative care services receive only state funding.

(c) (b) Claims that have been allowed but not paid shall bear interest according to section
524.3-806, paragraph (d). A claim against the estate of a surviving spouse who did not
receive medical assistance, for medical assistance rendered for the predeceased spouse,
shall be payable from the full value of all of the predeceased spouse's assets and interests
which are part of the surviving spouse's estate under subdivisions 1a and 2b. Recovery of
medical assistance expenses in the nonrecipient surviving spouse's estate is limited to the
value of the assets of the estate that were marital property or jointly owned property at any
time during the marriage. The claim is not payable from the value of assets or proceeds of
assets in the estate attributable to a predeceased spouse whom the individual married after
the death of the predeceased recipient spouse for whom the claim is filed or from assets and
the proceeds of assets in the estate which the nonrecipient decedent spouse acquired with
assets which were not marital property or jointly owned property after the death of the
predeceased recipient spouse. Claims for alternative care shall be net of all premiums paid
under section 256B.0913, subdivision 12, on or after July 1, 2003, and shall be limited to
services provided on or after July 1, 2003. Claims against marital property shall be limited
to claims against recipients who died on or after July 1, 2009.

EFFECTIVE DATE.

This section is effective the day following final enactment and
applies retroactively to estate claims pending on or after July 1, 2016, and to the estates of
people who died on or after July 1, 2016.

Sec. 35.

Minnesota Statutes 2016, section 256B.196, subdivision 2, is amended to read:


Subd. 2.

Commissioner's duties.

(a) For the purposes of this subdivision and subdivision
3, the commissioner shall determine the fee-for-service outpatient hospital services upper
payment limit for nonstate government hospitals. The commissioner shall then determine
the amount of a supplemental payment to Hennepin County Medical Center and Regions
Hospital for these services that would increase medical assistance spending in this category
to the aggregate upper payment limit for all nonstate government hospitals in Minnesota.
In making this determination, the commissioner shall allot the available increases between
Hennepin County Medical Center and Regions Hospital based on the ratio of medical
assistance fee-for-service outpatient hospital payments to the two facilities. The commissioner
shall adjust this allotment as necessary based on federal approvals, the amount of
intergovernmental transfers received from Hennepin and Ramsey Counties, and other factors,
in order to maximize the additional total payments. The commissioner shall inform Hennepin
County and Ramsey County of the periodic intergovernmental transfers necessary to match
federal Medicaid payments available under this subdivision in order to make supplementary
medical assistance payments to Hennepin County Medical Center and Regions Hospital
equal to an amount that when combined with existing medical assistance payments to
nonstate governmental hospitals would increase total payments to hospitals in this category
for outpatient services to the aggregate upper payment limit for all hospitals in this category
in Minnesota. Upon receipt of these periodic transfers, the commissioner shall make
supplementary payments to Hennepin County Medical Center and Regions Hospital.

(b) For the purposes of this subdivision and subdivision 3, the commissioner shall
determine an upper payment limit for physicians and other billing professionals affiliated
with Hennepin County Medical Center and with Regions Hospital. The upper payment limit
shall be based on the average commercial rate or be determined using another method
acceptable to the Centers for Medicare and Medicaid Services. The commissioner shall
inform Hennepin County and Ramsey County of the periodic intergovernmental transfers
necessary to match the federal Medicaid payments available under this subdivision in order
to make supplementary payments to physicians and other billing professionals affiliated
with Hennepin County Medical Center and to make supplementary payments to physicians
and other billing professionals affiliated with Regions Hospital through HealthPartners
Medical Group equal to the difference between the established medical assistance payment
for physician and other billing professional services and the upper payment limit. Upon
receipt of these periodic transfers, the commissioner shall make supplementary payments
to physicians and other billing professionals affiliated with Hennepin County Medical Center
and shall make supplementary payments to physicians and other billing professionals
affiliated with Regions Hospital through HealthPartners Medical Group.

(c) Beginning January 1, 2010, Hennepin County and Ramsey County may make monthly
voluntary intergovernmental transfers to the commissioner in amounts not to exceed
$12,000,000 per year from Hennepin County and $6,000,000 per year from Ramsey County.
The commissioner shall increase the medical assistance capitation payments to any licensed
health plan under contract with the medical assistance program that agrees to make enhanced
payments to Hennepin County Medical Center or Regions Hospital. The increase shall be
in an amount equal to the annual value of the monthly transfers plus federal financial
participation, with each health plan receiving its pro rata share of the increase based on the
pro rata share of medical assistance admissions to Hennepin County Medical Center and
Regions Hospital by those plans. Upon the request of the commissioner, health plans shall
submit individual-level cost data for verification purposes. The commissioner may ratably
reduce these payments on a pro rata basis in order to satisfy federal requirements for actuarial
soundness. If payments are reduced, transfers shall be reduced accordingly. Any licensed
health plan that receives increased medical assistance capitation payments under the
intergovernmental transfer described in this paragraph shall increase its medical assistance
payments to Hennepin County Medical Center and Regions Hospital by the same amount
as the increased payments received in the capitation payment described in this paragraph.

(d) For the purposes of this subdivision and subdivision 3, the commissioner shall
determine an upper payment limit for ambulance services affiliated with Hennepin County
Medical Center and the city of St. Paul, and ambulance services owned and operated by
another governmental entity that chooses to participate by requesting the commissioner to
determine an upper payment limit
. The upper payment limit shall be based on the average
commercial rate or be determined using another method acceptable to the Centers for
Medicare and Medicaid Services. The commissioner shall inform Hennepin County and,
the city of St. Paul, and other participating governmental entities of the periodic
intergovernmental transfers necessary to match the federal Medicaid payments available
under this subdivision in order to make supplementary payments to Hennepin County
Medical Center and, the city of St. Paul, and other participating governmental entities equal
to the difference between the established medical assistance payment for ambulance services
and the upper payment limit. Upon receipt of these periodic transfers, the commissioner
shall make supplementary payments to Hennepin County Medical Center and, the city of
St. Paul., and other participating governmental entities. A tribal government that owns and
operates an ambulance service is not eligible to participate under this subdivision.

(e) For the purposes of this subdivision and subdivision 3, the commissioner shall
determine an upper payment limit for physicians, dentists, and other billing professionals
affiliated with the University of Minnesota and University of Minnesota Physicians. The
upper payment limit shall be based on the average commercial rate or be determined using
another method acceptable to the Centers for Medicare and Medicaid Services. The
commissioner shall inform the University of Minnesota Medical School and University of
Minnesota School of Dentistry of the periodic intergovernmental transfers necessary to
match the federal Medicaid payments available under this subdivision in order to make
supplementary payments to physicians, dentists, and other billing professionals affiliated
with the University of Minnesota and the University of Minnesota Physicians equal to the
difference between the established medical assistance payment for physician, dentist, and
other billing professional services and the upper payment limit. Upon receipt of these periodic
transfers, the commissioner shall make supplementary payments to physicians, dentists,
and other billing professionals affiliated with the University of Minnesota and the University
of Minnesota Physicians.

(f) Beginning January 1, 2018, the University of Minnesota Medical School and the
University of Minnesota School of Dentistry may make monthly voluntary intergovernmental
transfers to the commissioner in amounts not to exceed $20,000,000 per year from the
University of Minnesota Medical School and $6,000,000 per year from the University of
Minnesota School of Dentistry. The commissioner shall increase the medical assistance
capitation payments to any licensed health plan under contract with the medical assistance
program that agrees to make enhanced payments to the University of Minnesota and the
University of Minnesota Physicians. The increase shall be in an amount equal to the annual
value of the monthly transfers plus federal financial participation, with each health plan
receiving its pro rata share of the increase based on the pro rata share of medical assistance
services by physicians, dentists, and other billing professionals affiliated with the University
of Minnesota and the University of Minnesota Physicians. Upon the request of the
commissioner, health plans shall submit individual-level cost data for verification purposes.
The commissioner may ratably reduce these payments on a pro rata basis in order to satisfy
federal requirements for actuarial soundness. If payments are reduced, transfers shall be
reduced accordingly. Any licensed health plan that receives increased medical assistance
capitation payments under the intergovernmental transfer described in this paragraph shall
increase its medical assistance payments to the University of Minnesota and the University
of Minnesota Physicians by the same amount as the increased payments received in the
capitation payment described in this paragraph.

(g) The commissioner shall inform the transferring governmental entities on an ongoing
basis of the need for any changes needed in the intergovernmental transfers in order to
continue the payments under paragraphs (a) to (d) (f), at their maximum level, including
increases in upper payment limits, changes in the federal Medicaid match, and other factors.

(f) (h) The payments in paragraphs (a) to (d) (f) shall be implemented independently of
each other, subject to federal approval and to the receipt of transfers under subdivision 3.

(i) All of the data and funding transactions related to the payments in paragraphs (a) to
(f) shall be between the commissioner and the governmental entities.

EFFECTIVE DATE.

Paragraph (d) is effective July 1, 2017, or upon federal approval,
whichever is later. The commissioner of human services shall notify the revisor of statutes
when federal approval is received.

Sec. 36.

Minnesota Statutes 2016, section 256B.196, subdivision 3, is amended to read:


Subd. 3.

Intergovernmental transfers.

Based on the determination by the commissioner
under subdivision 2, Hennepin County and Ramsey County shall make periodic
intergovernmental transfers to the commissioner for the purposes of subdivision 2, paragraphs
(a) and (b). All of the intergovernmental transfers made by Hennepin County shall be used
to match federal payments to Hennepin County Medical Center under subdivision 2,
paragraph (a), and to physicians and other billing professionals affiliated with Hennepin
County Medical Center under subdivision 2, paragraph (b). All of the intergovernmental
transfers made by Ramsey County shall be used to match federal payments to Regions
Hospital under subdivision 2, paragraph (a), and to physicians and other billing professionals
affiliated with Regions Hospital through HealthPartners Medical Group under subdivision
2, paragraph (b). All of the intergovernmental transfer payments made by the University of
Minnesota Medical School and the University of Minnesota School of Dentistry shall be
used to match federal payments to the University of Minnesota and the University of
Minnesota Physicians under subdivision 2, paragraphs (e) and (f).

Sec. 37.

Minnesota Statutes 2016, section 256B.196, subdivision 4, is amended to read:


Subd. 4.

Adjustments permitted.

(a) The commissioner may adjust the
intergovernmental transfers under subdivision 3 and the payments under subdivision 2,
based on the commissioner's determination of Medicare upper payment limits,
hospital-specific charge limits, hospital-specific limitations on disproportionate share
payments, medical inflation, actuarial certification, average commercial rates for physician
and other professional services,
and cost-effectiveness for purposes of federal waivers. Any
adjustments must be made on a proportional basis. The commissioner may make adjustments
under this subdivision only after consultation with the affected counties, university schools,
and hospitals. All payments under subdivision 2 and all intergovernmental transfers under
subdivision 3 are limited to amounts available after all other base rates, adjustments, and
supplemental payments in chapter 256B are calculated.

(b) The ratio of medical assistance payments specified in subdivision 2 to the voluntary
intergovernmental transfers specified in subdivision 3 shall not be reduced except as provided
under paragraph (a).

Sec. 38.

Minnesota Statutes 2016, section 256B.69, subdivision 5a, is amended to read:


Subd. 5a.

Managed care contracts.

(a) Managed care contracts under this section and
section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner
may issue separate contracts with requirements specific to services to medical assistance
recipients age 65 and older.

(b) A prepaid health plan providing covered health services for eligible persons pursuant
to chapters 256B and 256L is responsible for complying with the terms of its contract with
the commissioner. Requirements applicable to managed care programs under chapters 256B
and 256L established after the effective date of a contract with the commissioner take effect
when the contract is next issued or renewed.

(c) The commissioner shall withhold five percent of managed care plan payments under
this section and county-based purchasing plan payments under section 256B.692 for the
prepaid medical assistance program pending completion of performance targets. Each
performance target must be quantifiable, objective, measurable, and reasonably attainable,
except in the case of a performance target based on a federal or state law or rule. Criteria
for assessment of each performance target must be outlined in writing prior to the contract
effective date. Clinical or utilization performance targets and their related criteria must
consider evidence-based research and reasonable interventions when available or applicable
to the populations served, and must be developed with input from external clinical experts
and stakeholders, including managed care plans, county-based purchasing plans, and
providers. The managed care or county-based purchasing plan must demonstrate, to the
commissioner's satisfaction, that the data submitted regarding attainment of the performance
target is accurate. The commissioner shall periodically change the administrative measures
used as performance targets in order to improve plan performance across a broader range
of administrative services. The performance targets must include measurement of plan
efforts to contain spending on health care services and administrative activities. The
commissioner may adopt plan-specific performance targets that take into account factors
affecting only one plan, including characteristics of the plan's enrollee population. The
withheld funds must be returned no sooner than July of the following year if performance
targets in the contract are achieved. The commissioner may exclude special demonstration
projects under subdivision 23.

(d) The commissioner shall require that managed care plans use the assessment and
authorization processes, forms, timelines, standards, documentation, and data reporting
requirements, protocols, billing processes, and policies consistent with medical assistance
fee-for-service or the Department of Human Services contract requirements consistent with
medical assistance fee-for-service or the Department of Human Services contract
requirements for all personal care assistance services under section 256B.0659.

(e) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the health
plan's emergency department utilization rate for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. For 2012, the reduction shall be based on
the health plan's utilization in 2009. To earn the return of the withhold each subsequent
year, the managed care plan or county-based purchasing plan must achieve a qualifying
reduction of no less than ten percent of the plan's emergency department utilization rate for
medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described
in subdivisions 23 and 28, compared to the previous measurement year until the final
performance target is reached. When measuring performance, the commissioner must
consider the difference in health risk in a managed care or county-based purchasing plan's
membership in the baseline year compared to the measurement year, and work with the
managed care or county-based purchasing plan to account for differences that they agree
are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate
was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue for each consecutive contract
period until the plan's emergency room utilization rate for state health care program enrollees
is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance
and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the
health plans in meeting this performance target and shall accept payment withholds that
may be returned to the hospitals if the performance target is achieved.

(f) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as
determined by the commissioner. To earn the return of the withhold each year, the managed
care plan or county-based purchasing plan must achieve a qualifying reduction of no less
than five percent of the plan's hospital admission rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, compared to the previous calendar year until the final performance target is reached.
When measuring performance, the commissioner must consider the difference in health risk
in a managed care or county-based purchasing plan's membership in the baseline year
compared to the measurement year, and work with the managed care or county-based
purchasing plan to account for differences that they agree are significant.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization
rate was achieved. The commissioner shall structure the withhold so that the commissioner
returns a portion of the withheld funds in amounts commensurate with achieved reductions
in utilization less than the targeted amount.

The withhold described in this paragraph shall continue until there is a 25 percent
reduction in the hospital admission rate compared to the hospital admission rates in calendar
year 2011, as determined by the commissioner. The hospital admissions in this performance
target do not include the admissions applicable to the subsequent hospital admission
performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting
this performance target and shall accept payment withholds that may be returned to the
hospitals if the performance target is achieved.

(g) Effective for services rendered on or after January 1, 2012, the commissioner shall
include as part of the performance targets described in paragraph (c) a reduction in the plan's
hospitalization admission rates for subsequent hospitalizations within 30 days of a previous
hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare
enrollees, as determined by the commissioner. To earn the return of the withhold each year,
the managed care plan or county-based purchasing plan must achieve a qualifying reduction
of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees,
excluding enrollees in programs described in subdivisions 23 and 28, of no less than five
percent compared to the previous calendar year until the final performance target is reached.

The withheld funds must be returned no sooner than July 1 and no later than July 31 of
the following calendar year if the managed care plan or county-based purchasing plan
demonstrates to the satisfaction of the commissioner that a qualifying reduction in the
subsequent hospitalization rate was achieved. The commissioner shall structure the withhold
so that the commissioner returns a portion of the withheld funds in amounts commensurate
with achieved reductions in utilization less than the targeted amount.

The withhold described in this paragraph must continue for each consecutive contract
period until the plan's subsequent hospitalization rate for medical assistance and
MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and
28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year
2011. Hospitals shall cooperate with the plans in meeting this performance target and shall
accept payment withholds that must be returned to the hospitals if the performance target
is achieved.

(h) Effective for services rendered on or after January 1, 2013, through December 31,
2013, the commissioner shall withhold 4.5 percent of managed care plan payments under
this section and county-based purchasing plan payments under section 256B.692 for the
prepaid medical assistance program. The withheld funds must be returned no sooner than
July 1 and no later than July 31 of the following year. The commissioner may exclude
special demonstration projects under subdivision 23.

(i) Effective for services rendered on or after January 1, 2014, the commissioner shall
withhold three percent of managed care plan payments under this section and county-based
purchasing plan payments under section 256B.692 for the prepaid medical assistance
program. The withheld funds must be returned no sooner than July 1 and no later than July
31 of the following year. The commissioner may exclude special demonstration projects
under subdivision 23.

(j) A managed care plan or a county-based purchasing plan under section 256B.692 may
include as admitted assets under section 62D.044 any amount withheld under this section
that is reasonably expected to be returned.

(k) Contracts between the commissioner and a prepaid health plan are exempt from the
set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph (a), and
7.

(l) The return of the withhold under paragraphs (h) and (i) is not subject to the
requirements of paragraph (c).

(m) Managed care plans and county-based purchasing plans shall maintain current and
fully executed agreements for all subcontractors, including bargaining groups, for
administrative services that are expensed to the state's public health care programs.
Subcontractor agreements determined to be material, as defined by the commissioner after
taking into account state contracting and relevant statutory requirements, must be in the
form of a written instrument or electronic document containing the elements of offer,
acceptance, consideration, payment terms, scope, duration of the contract, and how the
subcontractor services relate to state public health care programs. Upon request, the
commissioner shall have access to all subcontractor documentation under this paragraph.
Nothing in this paragraph shall allow release of information that is nonpublic data pursuant
to section 13.02.

(n) Effective for services provided on or after January 1, 2018, through December 31,
2018, the commissioner shall withhold two percent of the capitation payment provided to
managed care plans under this section, and county-based purchasing plans under section
256B.692, for each medical assistance enrollee. The withheld funds must be returned no
sooner than July 1 and no later than July 31 of the following year, for capitation payments
for enrollees for whom the plan has submitted to the commissioner a verification of coverage
form completed and signed by the enrollee. The verification of coverage form must be
developed by the commissioner and made available to managed care and county-based
purchasing plans. The form must require the enrollee to provide the enrollee's name, street
address, and the name of the managed care or county-based purchasing plan selected by or
assigned to the enrollee, and must include a signature block that allows the enrollee to attest
that the information provided is accurate. A plan shall request that all enrollees complete
the verification of coverage form, and shall submit all completed forms to the commissioner
by February 28, 2018. If a completed form for an enrollee is not received by the commissioner
by that date:

(1) the commissioner shall not return to the plan funds withheld for that enrollee;

(2) the commissioner shall cease making capitation payments to the plan for that enrollee,
effective with the April 2018 coverage month; and

(3) the commissioner shall disenroll the enrollee from medical assistance, subject to any
enrollee appeal.

Sec. 39.

Minnesota Statutes 2016, section 256B.69, is amended by adding a subdivision
to read:


Subd. 36.

Competitive bidding and procurement.

(a) For managed care organization
contracts effective on or after January 1, 2019, the commissioner shall utilize a competitive
price and technical bidding program on a regional basis for nonelderly adults and children
who are not eligible on the basis of a disability and are enrolled in medical assistance and
MinnesotaCare. If the commissioner utilizes a competitive price bidding program, the
commissioner shall establish geographic regions for the purposes of competitive price
bidding. The commissioner shall not implement a competitive price bidding program for
more than 40 percent of the regions during each procurement. The commissioner shall
ensure that there is an adequate choice of managed care organizations based on the potential
enrollment, in a manner that is consistent with the requirements of section 256B.694. The
commissioner shall operate the competitive bidding program by region, but shall award
contracts by county and shall allow managed care organizations with a service area consisting
of only a portion of a region to bid on those counties within their service area only. For
purposes of this subdivision, "managed care organization" means a demonstration provider
as defined in subdivision 2, paragraph (b).

(b) The commissioner shall provide the scoring weight of selection criteria to be assigned
in the procurement process and include the scoring weight in the request for proposals.
Substantial weight shall be given to county board resolutions and priority areas identified
by counties.

(c) If a best and final offer is requested, each responding managed care organization
must be offered the opportunity to submit a best and final offer.

(d) The commissioner, when evaluating proposals, shall consider network adequacy for
dental and other services.

(e) Notwithstanding sections 13.591 and 13.599, after the managed care organizations
are notified about the award determination, but before contracts are signed, the commissioner
shall provide each managed care organization with its own scoring sheet and supporting
information. The scoring sheet shall not be made available to other managed care
organizations until final contracts are signed.

(f) A managed care organization that is aggrieved by the commissioner's decision related
to the selection of managed care organizations to deliver services in a county or counties
may appeal the commissioner's decision using the process outlined in section 256B.69,
subdivision 3a, paragraph (d), except that the recommendation of the three-person mediation
panel shall be binding on the commissioner.

(g) The commissioner shall contract for an independent evaluation of the competitive
price bidding process. The contractor must solicit recommendations from all parties
participating in the competitive price bidding process for service delivery in calendar year
2019 on how the competitive price bidding process may be improved for service delivery
in calendar year 2020 and annually thereafter. The commissioner shall make evaluation
results available to the public on the department's Web site.

Sec. 40.

Minnesota Statutes 2016, section 256B.75, is amended to read:


256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.

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

(b) Notwithstanding paragraph (a), payment for outpatient, emergency, and ambulatory
surgery hospital facility fee services for critical access hospitals designated under section
144.1483, clause (9), shall be paid on a cost-based payment system that is based on the
cost-finding methods and allowable costs of the Medicare program. Effective for services
provided on or after July 1, 2015, rates established for critical access hospitals under this
paragraph for the applicable payment year shall be the final payment and shall not be settled
to actual costs. Effective for services delivered on or after the first day of the hospital's fiscal
year ending in 2016, the rate for outpatient hospital services shall be computed using
information from each hospital's Medicare cost report as filed with Medicare for the year
that is two years before the year that the rate is being computed. Rates shall be computed
using information from Worksheet C series until the department finalizes the medical
assistance cost reporting process for critical access hospitals. After the cost reporting process
is finalized, rates shall be computed using information from Title XIX Worksheet D series.
The outpatient rate shall be equal to ancillary cost plus outpatient cost, excluding costs
related to rural health clinics and federally qualified health clinics, divided by ancillary
charges plus outpatient charges, excluding charges related to rural health clinics and federally
qualified health clinics.

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

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

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

(f) In addition to the reductions in paragraphs (d) and (e), the total payment for
fee-for-service services provided on or after July 1, 2008, made to hospitals for outpatient
hospital facility services before third-party liability and spenddown, is reduced three percent
from the current statutory rates. Mental health services and facilities defined under section
256.969, subdivision 16, are excluded from this paragraph.

EFFECTIVE DATE.

This section is effective July 1, 2017.

Sec. 41.

[256B.7635] REIMBURSEMENT FOR EVIDENCE-BASED PUBLIC
HEALTH NURSE HOME VISITS.

Effective for services provided on or after January 1, 2018, prenatal and postpartum
follow-up home visits provided by public health nurses or registered nurses supervised by
a public health nurse using evidence-based models shall be paid a minimum of $140 per
visit. Evidence-based postpartum follow-up home visits must be administered by home
visiting programs that meet the United States Department of Health and Human Services
criteria for evidence-based models and are identified by the commissioner of health as
eligible to be implemented under the Maternal, Infant, and Early Childhood Home Visiting
program. Home visits must target mothers and their children beginning with prenatal visits
through age three for the child.

Sec. 42.

Minnesota Statutes 2016, section 256B.766, is amended to read:


256B.766 REIMBURSEMENT FOR BASIC CARE SERVICES.

(a) Effective for services provided on or after July 1, 2009, total payments for basic care
services, shall be reduced by three percent, except that for the period July 1, 2009, through
June 30, 2011, total payments shall be reduced by 4.5 percent for the medical assistance
and general assistance medical care programs, prior to third-party liability and spenddown
calculation. Effective July 1, 2010, the commissioner shall classify physical therapy services,
occupational therapy services, and speech-language pathology and related services as basic
care services. The reduction in this paragraph shall apply to physical therapy services,
occupational therapy services, and speech-language pathology and related services provided
on or after July 1, 2010.

(b) Payments made to managed care plans and county-based purchasing plans shall be
reduced for services provided on or after October 1, 2009, to reflect the reduction effective
July 1, 2009, and payments made to the plans shall be reduced effective October 1, 2010,
to reflect the reduction effective July 1, 2010.

(c) Effective for services provided on or after September 1, 2011, through June 30, 2013,
total payments for outpatient hospital facility fees shall be reduced by five percent from the
rates in effect on August 31, 2011.

(d) Effective for services provided on or after September 1, 2011, through June 30, 2013,
total payments for ambulatory surgery centers facility fees, medical supplies and durable
medical equipment not subject to a volume purchase contract, prosthetics and orthotics,
renal dialysis services, laboratory services, public health nursing services, physical therapy
services, occupational therapy services, speech therapy services, eyeglasses not subject to
a volume purchase contract, hearing aids not subject to a volume purchase contract, and
anesthesia services shall be reduced by three percent from the rates in effect on August 31,
2011.

(e) Effective for services provided on or after September 1, 2014, payments for
ambulatory surgery centers facility fees, hospice services, renal dialysis services, laboratory
services, public health nursing services, eyeglasses not subject to a volume purchase contract,
and hearing aids not subject to a volume purchase contract shall be increased by three percent
and payments for outpatient hospital facility fees shall be increased by three percent.
Payments made to managed care plans and county-based purchasing plans shall not be
adjusted to reflect payments under this paragraph.

(f) Payments for medical supplies and durable medical equipment not subject to a volume
purchase contract, and prosthetics and orthotics, provided on or after July 1, 2014, through
June 30, 2015, shall be decreased by .33 percent. Payments for medical supplies and durable
medical equipment not subject to a volume purchase contract, and prosthetics and orthotics,
provided on or after July 1, 2015, shall be increased by three percent from the rates as
determined under paragraphs (i) and (j).

(g) Effective for services provided on or after July 1, 2015, payments for outpatient
hospital facility fees, medical supplies and durable medical equipment not subject to a
volume purchase contract, prosthetics and orthotics, and laboratory services to a hospital
meeting the criteria specified in section 62Q.19, subdivision 1, paragraph (a), clause (4),
shall be increased by 90 percent from the rates in effect on June 30, 2015. Payments made
to managed care plans and county-based purchasing plans shall not be adjusted to reflect
payments under this paragraph.

(h) This section does not apply to physician and professional services, inpatient hospital
services, family planning services, mental health services, dental services, prescription
drugs, medical transportation, federally qualified health centers, rural health centers, Indian
health services, and Medicare cost-sharing.

(i) Effective for services provided on or after July 1, 2015, the following categories of
medical supplies and
durable medical equipment shall be individually priced items: enteral
nutrition and supplies, customized and other specialized tracheostomy tubes and supplies,
electric patient lifts, and durable medical equipment repair and service. This paragraph does
not apply to medical supplies and durable medical equipment subject to a volume purchase
contract, products subject to the preferred diabetic testing supply program, and items provided
to dually eligible recipients when Medicare is the primary payer for the item. The
commissioner shall not apply any medical assistance rate reductions to durable medical
equipment as a result of Medicare competitive bidding.

(j) Effective for services provided on or after July 1, 2015, medical assistance payment
rates for durable medical equipment, prosthetics, orthotics, or supplies shall be increased
as follows:

(1) payment rates for durable medical equipment, prosthetics, orthotics, or supplies that
were subject to the Medicare competitive bid that took effect in January of 2009 shall be
increased by 9.5 percent; and

(2) payment rates for durable medical equipment, prosthetics, orthotics, or supplies on
the medical assistance fee schedule, whether or not subject to the Medicare competitive bid
that took effect in January of 2009, shall be increased by 2.94 percent, with this increase
being applied after calculation of any increased payment rate under clause (1).

This paragraph does not apply to medical supplies and durable medical equipment subject
to a volume purchase contract, products subject to the preferred diabetic testing supply
program, items provided to dually eligible recipients when Medicare is the primary payer
for the item, and individually priced items identified in paragraph (i). Payments made to
managed care plans and county-based purchasing plans shall not be adjusted to reflect the
rate increases in this paragraph.

(k) Effective for nonpressure support ventilators provided on or after January 1, 2016,
the rate shall be the lower of the submitted charge or the Medicare fee schedule rate. Effective
for pressure support ventilators provided on or after January 1, 2016, the rate shall be the
lower of the submitted charge or 47 percent above the Medicare fee schedule rate.

EFFECTIVE DATE.

This section is effective retroactively from January 1, 2016.

Sec. 43.

[256B.90] DEFINITIONS.

Subdivision 1.

Generally.

For the purposes of sections 256B.90 to 256B.92, the following
terms have the meanings given.

Subd. 2.

Commissioner.

"Commissioner" means the commissioner of human services.

Subd. 3.

Department.

"Department" means the Department of Human Services.

Subd. 4.

Hospital.

"Hospital" means a public or private institution licensed as a hospital
under section 144.50 that participates in medical assistance.

Subd. 5.

Medical assistance.

"Medical assistance" means the state's Medicaid program
under title XIX of the Social Security Act and administered according to this chapter.

Subd. 6.

Potentially avoidable complication.

"Potentially avoidable complication"
means a harmful event or negative outcome with respect to an individual, including an
infection or surgical complication, that: (1) occurs during the individual's transportation to
a hospital or long-term care facility or after the individual's admission to a hospital or
long-term care facility; and (2) may have resulted from the care caused by insufficient
staffing due to nurses' union strikes in the hospital or long-term care facility by licensed
practical nurses or registered nurses, lack of care, or treatment provided during the hospital
or long-term care facility stay or during the individual's transportation to the hospital or
long-term care facility rather than from a natural progression of an underlying disease.

Subd. 7.

Potentially avoidable event.

"Potentially avoidable event" means a potentially
avoidable complication, potentially avoidable readmission, or a combination of those events.

Subd. 8.

Potentially avoidable readmission.

"Potentially avoidable readmission" means
a return hospitalization of an individual within a period specified by the commissioner that
may have resulted from deficiencies in the care or treatment provided to the individual
during a previous hospital stay or from deficiencies in posthospital discharge follow-up.
Potentially avoidable readmission does not include a hospital readmission necessitated by
the occurrence of unrelated events after the discharge. Potentially avoidable readmission
includes the readmission of an individual to a hospital for: (1) the same condition or
procedure for which the individual was previously admitted; (2) an infection or other
complication resulting from care previously provided; or (3) a condition or procedure that
indicates that a surgical intervention performed during a previous admission was unsuccessful
in achieving the anticipated outcome.

Sec. 44.

[256B.91] MEDICAL ASSISTANCE OUTCOMES-BASED PAYMENT
PROGRAM.

Subdivision 1.

Generally.

The commissioner must establish and implement a medical
assistance outcomes-based payment program as a hospital outcomes program under section
256B.92 to provide hospitals with information and incentives to reduce potentially avoidable
events.

Subd. 2.

Potentially avoidable event methodology.

(a) The commissioner shall issue
a request for proposals to select a methodology for identifying potentially avoidable events
and for the costs associated with these events, and for measuring hospital performance with
respect to these events.

(b) The commissioner shall develop definitions for each potentially avoidable event
according to the selected methodology.

(c) To the extent possible, the methodology shall be one that has been used by other title
XIX programs under the Social Security Act or by commercial payers in health care outcomes
performance measurement and in outcome-based payment programs. The methodology
shall be open, transparent, and available for review by the public.

Subd. 3.

Medical assistance system waste.

(a) The commissioner must conduct a
comprehensive analysis of relevant state databases to identify waste in the medical assistance
system.

(b) The analysis must identify instances of potentially avoidable events in medical
assistance, and the costs associated with these events. The overall estimate of waste must
be broken down into actionable categories including but not limited to regions, hospitals,
MCOs, physicians, licensed practical nurses and registered nurses, other unlicensed health
care personnel, service lines, diagnosis-related groups, medical conditions and procedures,
patient characteristics, provider characteristics, and medical assistance program type.

(c) Information collected from this analysis must be utilized in hospital outcomes
programs described in this section.

Sec. 45.

[256B.92] HOSPITAL OUTCOMES PROGRAM.

Subdivision 1.

Generally.

The hospital outcomes program shall:

(1) target reduction of potentially avoidable readmissions and complications;

(2) apply to all state acute care hospitals participating in medical assistance. Program
adjustments may be made for certain types of hospitals; and

(3) be implemented in two phases: performance reporting and outcomes-based financial
incentives.

Subd. 2.

Phase 1; performance reporting.

(a) The commissioner shall develop and
maintain a reporting system to provide each hospital in Minnesota with regular confidential
reports regarding the hospital's performance for potentially avoidable readmissions and
potentially avoidable complications.

(b) The commissioner shall:

(1) conduct ongoing analyses of relevant state claims databases to identify instances of
potentially avoidable readmissions and potentially avoidable complications, and the
expenditures associated with these events;

(2) create or locate state readmission and complications norms;

(3) measure actual-to-expected hospital performance compared to state norms;

(4) compare hospitals with peers using risk adjustment procedures that account for the
severity of illness of each hospital's patients;

(5) distribute reports to hospitals to provide actionable information to create policies,
contracts, or programs designed to improve target outcomes; and

(6) foster collaboration among hospitals to share best practices.

(c) A hospital may share the information contained in the outcome performance reports
with physicians and other health care providers providing services at the hospital to foster
coordination and cooperation in the hospital's outcome improvement and waste reduction
initiatives.

Subd. 3.

Phase 2; outcomes-based financial incentives.

Twelve months after
implementation of performance reporting under subdivision 2, the commissioner must
establish financial incentives for a hospital to reduce potentially avoidable readmissions
and potentially avoidable complications.

Subd. 4.

Rate adjustment methodology.

(a) The commissioner must adjust the
reimbursement that a hospital receives under the All Patients Refined Diagnosis-Related
Group inpatient prospective payment system based on the hospital's performance exceeding,
or failing to achieve, outcome results based on the rates of potentially avoidable readmissions
and potentially avoidable complications.

(b) The rate adjustment methodology must:

(1) apply to each hospital discharge;

(2) determine a hospital-specific potentially avoidable outcome adjustment factor based
on the hospital's actual versus expected risk-adjusted performance compared to the state
norm;

(3) be based on a retrospective analysis of performance prospectively applied;

(4) include both rewards and penalties; and

(5) be communicated to a hospital in a clear and transparent manner.

Subd. 5.

Amendment of contracts.

The commissioner must amend contracts with
participating hospitals as necessary to incorporate the financial incentives established under
this section.

Subd. 6.

Budget neutrality.

The hospital outcomes program shall be implemented in a
budget-neutral manner with respect to aggregate Medicaid hospital expenditures.

Sec. 46.

Minnesota Statutes 2016, section 256L.15, subdivision 2, is amended to read:


Subd. 2.

Sliding fee scale; monthly individual or family income.

(a) The commissioner
shall establish a sliding fee scale to determine the percentage of monthly individual or family
income that households at different income levels must pay to obtain coverage through the
MinnesotaCare program. The sliding fee scale must be based on the enrollee's monthly
individual or family income.

(b) Beginning January 1, 2014 October 1, 2017, MinnesotaCare enrollees shall pay
premiums according to the premium scale specified in paragraph (d).

(c) Paragraph (b) does not apply to:

(1) children 20 years of age or younger; and

(2) individuals with household incomes below 35 percent of the federal poverty
guidelines.

(d) The following premium scale is established for each individual in the household who
is 21 years of age or older and enrolled in MinnesotaCare:

Federal Poverty Guideline
Greater than or Equal to
Less than
Individual Premium
Amount
35%
55%
$4
$5
55%
80%
$6
$7
80%
90%
$8
$11
90%
100%
$10
$12
100%
110%
$12
$13
110%
120%
$14
$15
120%
130%
$15
$16
130%
140%
$16
$18
140%
150%
$25
$32
150%
160%
$29
$40
160%
170%
$33
$48
170%
180%
$38
$56
180%
190%
$43
$65
190%
$50
$75
200%
$85

Sec. 47.

Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, article
6, section 9, Laws 2000, chapter 490, article 6, section 15, Laws 2008, chapter 154, article
2, section 30, and Laws 2013, chapter 143, article 4, section 33, is amended to read:


Sec. 3. TAX; PAYMENT OF EXPENSES.

(a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, must
not be levied at a rate that exceeds the amount authorized to be levied under that section.
The proceeds of the tax may be used for all purposes of the hospital district, except as
provided in paragraph (b).

(b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used by the
Cook ambulance service and the Orr ambulance service for the purpose of:

(1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
service;

(2) attached and portable equipment for use in and for the ambulances; and

(3) parts and replacement parts for maintenance and repair of the ambulances, and
administrative, operation, or salary expenses for the Cook ambulance service and the Orr
ambulance service
.

The money may not be used for administrative, operation, or salary expenses.

(c) The part of the levy referred to in paragraph (b) must be administered by the Cook
Hospital and passed on in equal amounts directly to the Cook area ambulance service board
and the city of Orr to be used for the purposes in paragraph (b).

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 48. CAPITATION PAYMENT DELAY.

(a) The commissioner of human services shall delay $135,000,000 of the medical
assistance and MinnesotaCare capitation payment to managed care plans and county-based
purchasing plans due in May 2019 and the payment due in April 2019 for special needs
basic care until July 1, 2019. The payment shall be made no earlier than July 1, 2019, and
no later than July 31, 2019.

(b) The commissioner of human services shall delay $135,000,000 of the medical
assistance and MinnesotaCare capitation payment to managed care plans and county-based
purchasing plans due in the second quarter of calendar year 2021 and the April 2021 payment
for special needs basic care until July 1, 2021. The payment shall be made no earlier than
July 1, 2021, and no later than July 31, 2021.

Sec. 49. CHILDREN'S MENTAL HEALTH REPORT AND RECOMMENDATIONS.

The commissioner of human services shall conduct a comprehensive analysis of
Minnesota's continuum of intensive mental health services and shall develop
recommendations for a sustainable and community-driven continuum of care for children
with serious mental health needs, including children currently being served in residential
treatment. The commissioner's analysis shall include, but not be limited to:

(1) data related to access, utilization, efficacy, and outcomes for Minnesota's current
system of residential mental health treatment for a child with a severe emotional disturbance;

(2) potential expansion of the state's psychiatric residential treatment facility (PRTF)
capacity, including increasing the number of PRTF beds and conversion of existing children's
mental health residential treatment programs into PRTFs;

(3) the capacity need for PRTF and other group settings within the state if adequate
community-based alternatives are accessible, equitable, and effective statewide;

(4) recommendations for expanding alternative community-based service models to
meet the needs of a child with a serious mental health disorder who would otherwise require
residential treatment and potential service models that could be utilized, including data
related to access, utilization, efficacy, and outcomes;

(5) models of care used in other states; and

(6) analysis and specific recommendations for the design and implementation of new
service models, including analysis to inform rate setting as necessary.

The analysis shall be supported and informed by extensive stakeholder engagement.
Stakeholders include individuals who receive services, family members of individuals who
receive services, providers, counties, health plans, advocates, and others. Stakeholder
engagement shall include interviews with key stakeholders, intentional outreach to individuals
who receive services and the individual's family members, and regional listening sessions.

The commissioner shall provide a report with specific recommendations and timelines
for implementation to the legislative committees with jurisdiction over children's mental
health policy and finance by November 15, 2018.

Sec. 50. ENCOUNTER REPORTING OF 340B ELIGIBLE DRUGS.

(a) The commissioner of human services, in consultation with federally qualified health
centers, managed care organizations, and contract pharmacies shall develop a report on the
feasibility of a process to identify and report at point of sale the 340B drugs that are dispensed
to enrollees of managed care organizations who are patients of a federally qualified health
center to exclude these claims from the Medicaid drug rebate program and ensure that
duplicate discounts for drugs do not occur.

(b) By January 1, 2018, the commissioner shall present the report to the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over medical assistance.

Sec. 51. RATE-SETTING ANALYSIS REPORT.

The commissioner of human services shall conduct a comprehensive analysis report of
the current rate-setting methodology for outpatient, professional, and physician services
that do not have a cost-based, federally mandated, or contracted rate. The report shall include
recommendations for changes to the existing fee schedule that utilizes the Resource-Based
Relative Value System (RBRVS), and alternate payment methodologies for services that
do not have relative values, to simplify the fee for service medical assistance rate structure
and to improve consistency and transparency. In developing the report, the commissioner
shall consult with outside experts in Medicaid financing. The commissioner shall provide
a report on the analysis to the chairs and ranking minority members of the legislative
committees with jurisdiction over health and human services finance by November 1, 2019.

Sec. 52. STUDY OF PAYMENT RATES FOR DURABLE MEDICAL EQUIPMENT
AND SUPPLIES.

The commissioner of human services shall study the impact of basing medical assistance
payment for durable medical equipment and medical supplies on Medicare payment rates,
as limited by the payment provisions in the 21st Century Cures Act, Public Law 114-255,
on access by medical assistance enrollees to these items. The study must include
recommendations for ensuring and improving access by medical assistance enrollees to
durable medical equipment and medical supplies. The commissioner shall report study
results and recommendations to the chairs and ranking minority members of the legislative
committees with jurisdiction over health and human services policy and finance by February
1, 2018.

Sec. 53. FEDERAL APPROVAL.

The commissioner of human services shall request any federal waivers and approvals
necessary to allow the state to retain federal funds accruing in the state's basic health program
trust fund, and expend those funds for purposes other than those specified in Code of Federal
Regulations, title 42, part 600.705. The commissioner shall report any federal action regarding
this request to the chairs and ranking minority members of the legislative committees with
jurisdiction over health and human services policy and finance.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 54. FEDERAL WAIVER OR APPROVAL.

The commissioner of human services shall seek any federal waiver or approval necessary
to implement Minnesota Statutes, section 256B.0644.

ARTICLE 2

CONTINUING CARE

Section 1.

Minnesota Statutes 2016, section 144.0724, subdivision 6, is amended to read:


Subd. 6.

Penalties for late or nonsubmission.

(a) A facility that fails to complete or
submit an assessment according to subdivisions 4 and 5 for a RUG-IV classification within
seven days of the time requirements listed in the Long-Term Care Facility Resident
Assessment Instrument User's Manual is subject to a reduced rate for that resident. The
reduced rate shall be the lowest rate for that facility. The reduced rate is effective on the
day of admission for new admission assessments, on the ARD for significant change in
status assessments, or on the day that the assessment was due for all other assessments and
continues in effect until the first day of the month following the date of submission and
acceptance of the resident's assessment.

(b) If loss of revenue due to penalties incurred by a facility for any period of 92 days
are equal to or greater than 1.0 0.1 percent of the total operating costs on the facility's most
recent annual statistical and cost report, a facility may apply to the commissioner of human
services for a reduction in the total penalty amount. The commissioner of human services,
in consultation with the commissioner of health, may, at the sole discretion of the
commissioner of human services, limit the penalty for residents covered by medical assistance
to 15 ten days.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2016, section 144.562, subdivision 2, is amended to read:


Subd. 2.

Eligibility for license condition.

(a) A hospital is not eligible to receive a
license condition for swing beds unless (1) it either has a licensed bed capacity of less than
50 beds defined in the federal Medicare regulations, Code of Federal Regulations, title 42,
section 482.66, or it has a licensed bed capacity of 50 beds or more and has swing beds that
were approved for Medicare reimbursement before May 1, 1985, or it has a licensed bed
capacity of less than 65 beds and the available nursing homes within 50 miles have had, in
the aggregate, an average occupancy rate of 96 percent or higher in the most recent two
years as documented on the statistical reports to the Department of Health; and (2) it is
located in a rural area as defined in the federal Medicare regulations, Code of Federal
Regulations, title 42, section 482.66.

(b) Except for those critical access hospitals established under section 144.1483, clause
(9), and section 1820 of the federal Social Security Act, United States Code, title 42, section
1395i-4, that have an attached nursing home or that owned a nursing home located in the
same municipality as of May 1, 2005, eligible hospitals are allowed a total of 2,000 days
of swing bed use per year. Critical access hospitals that have an attached nursing home or
that owned a nursing home located in the same municipality as of May 1, 2005, are allowed
swing bed use as provided in federal law.

(c) Except for critical access hospitals that have an attached nursing home or that owned
a nursing home located in the same municipality as of May 1, 2005, the commissioner of
health may approve swing bed use beyond 2,000 days as long as there are no Medicare
certified skilled nursing facility beds available within 25 miles of that hospital that are
willing to admit the patient and the patient agrees to the referral being sent to the skilled
nursing facility
. Critical access hospitals exceeding 2,000 swing bed days must maintain
documentation that they have contacted skilled nursing facilities within 25 miles to determine
if any skilled nursing facility beds are available that are willing to admit the patient and the
patient agrees to the referral being sent to the skilled nursing facility
.

(d) After reaching 2,000 days of swing bed use in a year, an eligible hospital to which
this limit applies may admit six additional patients to swing beds each year without seeking
approval from the commissioner or being in violation of this subdivision. These six swing
bed admissions are exempt from the limit of 2,000 annual swing bed days for hospitals
subject to this limit.

(e) A health care system that is in full compliance with this subdivision may allocate its
total limit of swing bed days among the hospitals within the system, provided that no hospital
in the system without an attached nursing home may exceed 2,000 swing bed days per year.

Sec. 3.

Minnesota Statutes 2016, section 144A.74, is amended to read:


144A.74 MAXIMUM CHARGES.

A supplemental nursing services agency must not bill or receive payments from a nursing
home licensed under this chapter at a rate higher than 150 percent of the sum of the weighted
average wage rate, plus a factor determined by the commissioner to incorporate payroll
taxes as defined in Minnesota Rules, part 9549.0020, subpart 33 section 256R.02, subdivision
37
, for the applicable employee classification for the geographic group to which the nursing
home is assigned under Minnesota Rules, part 9549.0052. The weighted average wage rates
must be determined by the commissioner of human services and reported to the commissioner
of health on an annual basis. Wages are defined as hourly rate of pay and shift differential,
including weekend shift differential and overtime. Facilities shall provide information
necessary to determine weighted average wage rates to the commissioner of human services
in a format requested by the commissioner. The maximum rate must include all charges for
administrative fees, contract fees, or other special charges in addition to the hourly rates for
the temporary nursing pool personnel supplied to a nursing home. A nursing home that pays
for the actual travel and housing costs for supplemental nursing services agency staff working
at the facility and that pays these costs to the employee, the agency, or another vendor, is
not violating the limitation on charges described in this section.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2016, section 245D.03, subdivision 1, is amended to read:


Subdivision 1.

Applicability.

(a) The commissioner shall regulate the provision of home
and community-based services to persons with disabilities and persons age 65 and older
pursuant to this chapter. The licensing standards in this chapter govern the provision of
basic support services and intensive support services.

(b) Basic support services provide the level of assistance, supervision, and care that is
necessary to ensure the health and welfare of the person and do not include services that
are specifically directed toward the training, treatment, habilitation, or rehabilitation of the
person. Basic support services include:

(1) in-home and out-of-home respite care services as defined in section 245A.02,
subdivision 15, and under the brain injury, community alternative care, community access
for disability inclusion, developmental disability, and elderly waiver plans, excluding
out-of-home respite care provided to children in a family child foster care home licensed
under Minnesota Rules, parts 2960.3000 to 2960.3100, when the child foster care license
holder complies with the requirements under section 245D.06, subdivisions 5, 6, 7, and 8,
or successor provisions; and section 245D.061 or successor provisions, which must be
stipulated in the statement of intended use required under Minnesota Rules, part 2960.3000,
subpart 4;

(2) adult companion services as defined under the brain injury, community access for
disability inclusion, and elderly waiver plans, excluding adult companion services provided
under the Corporation for National and Community Services Senior Companion Program
established under the Domestic Volunteer Service Act of 1973, Public Law 98-288;

(3) personal support as defined under the developmental disability waiver plan;

(4) 24-hour emergency assistance, personal emergency response as defined under the
community access for disability inclusion and developmental disability waiver plans;

(5) night supervision services as defined under the brain injury waiver plan; and

(6) homemaker services as defined under the community access for disability inclusion,
brain injury, community alternative care, developmental disability, and elderly waiver plans,
excluding providers licensed by the Department of Health under chapter 144A and those
providers providing cleaning services only.

(c) Intensive support services provide assistance, supervision, and care that is necessary
to ensure the health and welfare of the person and services specifically directed toward the
training, habilitation, or rehabilitation of the person. Intensive support services include:

(1) intervention services, including:

(i) behavioral support services as defined under the brain injury and community access
for disability inclusion waiver plans;

(ii) in-home or out-of-home crisis respite services as defined under the developmental
disability waiver plan; and

(iii) specialist services as defined under the current developmental disability waiver
plan;

(2) in-home support services, including:

(i) in-home family support and supported living services as defined under the
developmental disability waiver plan;

(ii) independent living services training as defined under the brain injury and community
access for disability inclusion waiver plans; and

(iii) semi-independent living services;

(3) residential supports and services, including:

(i) supported living services as defined under the developmental disability waiver plan
provided in a family or corporate child foster care residence, a family adult foster care
residence, a community residential setting, or a supervised living facility;

(ii) foster care services as defined in the brain injury, community alternative care, and
community access for disability inclusion waiver plans provided in a family or corporate
child foster care residence, a family adult foster care residence, or a community residential
setting; and

(iii) residential services provided to more than four persons with developmental
disabilities in a supervised living facility, including ICFs/DD;

(4) day services, including:

(i) structured day services as defined under the brain injury waiver plan;

(ii) day training and habilitation services under sections 252.41 to 252.46, and as defined
under the developmental disability waiver plan; and

(iii) prevocational services as defined under the brain injury and community access for
disability inclusion waiver plans; and

(5) supported employment as defined under the brain injury, developmental disability,
and community access for disability inclusion waiver plans.
employment exploration services
as defined under the brain injury, community alternative care, community access for disability
inclusion, and developmental disability waiver plans;

(6) employment development services as defined under the brain injury, community
alternative care, community access for disability inclusion, and developmental disability
waiver plans; and

(7) employment support services as defined under the brain injury, community alternative
care, community access for disability inclusion, and developmental disability waiver plans.

EFFECTIVE DATE.

This section is effective upon federal approval. The commissioner
of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 5.

Minnesota Statutes 2016, section 252.27, subdivision 2a, is amended to read:


Subd. 2a.

Contribution amount.

(a) The natural or adoptive parents of a minor child,
including a child determined eligible for medical assistance without consideration of parental
income, must contribute to the cost of services used by making monthly payments on a
sliding scale based on income, unless the child is married or has been married, parental
rights have been terminated, or the child's adoption is subsidized according to chapter 259A
or through title IV-E of the Social Security Act. The parental contribution is a partial or full
payment for medical services provided for diagnostic, therapeutic, curing, treating, mitigating,
rehabilitation, maintenance, and personal care services as defined in United States Code,
title 26, section 213, needed by the child with a chronic illness or disability.

(b) For households with adjusted gross income equal to or greater than 275 percent of
federal poverty guidelines, the parental contribution shall be computed by applying the
following schedule of rates to the adjusted gross income of the natural or adoptive parents:

(1) if the adjusted gross income is equal to or greater than 275 percent of federal poverty
guidelines and less than or equal to 545 percent of federal poverty guidelines, the parental
contribution shall be determined using a sliding fee scale established by the commissioner
of human services which begins at 2.23 1.6725 percent of adjusted gross income at 275
percent of federal poverty guidelines and increases to 6.08 4.56 percent of adjusted gross
income for those with adjusted gross income up to 545 percent of federal poverty guidelines;

(2) if the adjusted gross income is greater than 545 percent of federal poverty guidelines
and less than 675 percent of federal poverty guidelines, the parental contribution shall be
6.08 4.56 percent of adjusted gross income;

(3) if the adjusted gross income is equal to or greater than 675 percent of federal poverty
guidelines and less than 975 percent of federal poverty guidelines, the parental contribution
shall be determined using a sliding fee scale established by the commissioner of human
services which begins at 6.08 4.56 percent of adjusted gross income at 675 percent of federal
poverty guidelines and increases to 8.1 6.075 percent of adjusted gross income for those
with adjusted gross income up to 975 percent of federal poverty guidelines; and

(4) if the adjusted gross income is equal to or greater than 975 percent of federal poverty
guidelines, the parental contribution shall be 10.13 7.5975 percent of adjusted gross income.

If the child lives with the parent, the annual adjusted gross income is reduced by $2,400
prior to calculating the parental contribution. If the child resides in an institution specified
in section 256B.35, the parent is responsible for the personal needs allowance specified
under that section in addition to the parental contribution determined under this section.
The parental contribution is reduced by any amount required to be paid directly to the child
pursuant to a court order, but only if actually paid.

(c) The household size to be used in determining the amount of contribution under
paragraph (b) includes natural and adoptive parents and their dependents, including the
child receiving services. Adjustments in the contribution amount due to annual changes in
the federal poverty guidelines shall be implemented on the first day of July following
publication of the changes.

(d) For purposes of paragraph (b), "income" means the adjusted gross income of the
natural or adoptive parents determined according to the previous year's federal tax form,
except, effective retroactive to July 1, 2003, taxable capital gains to the extent the funds
have been used to purchase a home shall not be counted as income.

(e) The contribution shall be explained in writing to the parents at the time eligibility
for services is being determined. The contribution shall be made on a monthly basis effective
with the first month in which the child receives services. Annually upon redetermination
or at termination of eligibility, if the contribution exceeded the cost of services provided,
the local agency or the state shall reimburse that excess amount to the parents, either by
direct reimbursement if the parent is no longer required to pay a contribution, or by a
reduction in or waiver of parental fees until the excess amount is exhausted. All
reimbursements must include a notice that the amount reimbursed may be taxable income
if the parent paid for the parent's fees through an employer's health care flexible spending
account under the Internal Revenue Code, section 125, and that the parent is responsible
for paying the taxes owed on the amount reimbursed.

(f) The monthly contribution amount must be reviewed at least every 12 months; when
there is a change in household size; and when there is a loss of or gain in income from one
month to another in excess of ten percent. The local agency shall mail a written notice 30
days in advance of the effective date of a change in the contribution amount. A decrease in
the contribution amount is effective in the month that the parent verifies a reduction in
income or change in household size.

(g) Parents of a minor child who do not live with each other shall each pay the
contribution required under paragraph (a). An amount equal to the annual court-ordered
child support payment actually paid on behalf of the child receiving services shall be deducted
from the adjusted gross income of the parent making the payment prior to calculating the
parental contribution under paragraph (b).

(h) The contribution under paragraph (b) shall be increased by an additional five percent
if the local agency determines that insurance coverage is available but not obtained for the
child. For purposes of this section, "available" means the insurance is a benefit of employment
for a family member at an annual cost of no more than five percent of the family's annual
income. For purposes of this section, "insurance" means health and accident insurance
coverage, enrollment in a nonprofit health service plan, health maintenance organization,
self-insured plan, or preferred provider organization.

Parents who have more than one child receiving services shall not be required to pay
more than the amount for the child with the highest expenditures. There shall be no resource
contribution from the parents. The parent shall not be required to pay a contribution in
excess of the cost of the services provided to the child, not counting payments made to
school districts for education-related services. Notice of an increase in fee payment must
be given at least 30 days before the increased fee is due.

(i) The contribution under paragraph (b) shall be reduced by $300 per fiscal year if, in
the 12 months prior to July 1:

(1) the parent applied for insurance for the child;

(2) the insurer denied insurance;

(3) the parents submitted a complaint or appeal, in writing to the insurer, submitted a
complaint or appeal, in writing, to the commissioner of health or the commissioner of
commerce, or litigated the complaint or appeal; and

(4) as a result of the dispute, the insurer reversed its decision and granted insurance.

For purposes of this section, "insurance" has the meaning given in paragraph (h).

A parent who has requested a reduction in the contribution amount under this paragraph
shall submit proof in the form and manner prescribed by the commissioner or county agency,
including, but not limited to, the insurer's denial of insurance, the written letter or complaint
of the parents, court documents, and the written response of the insurer approving insurance.
The determinations of the commissioner or county agency under this paragraph are not rules
subject to chapter 14.

Sec. 6.

Minnesota Statutes 2016, section 252.41, subdivision 3, is amended to read:


Subd. 3.

Day training and habilitation services for adults with developmental
disabilities.

(a) "Day training and habilitation services for adults with developmental
disabilities" means services that:

(1) include supervision, training, assistance, and supported employment, center-based
work-related activities, or other community-integrated activities designed and implemented
in accordance with the individual service and individual habilitation plans required under
Minnesota Rules, parts 9525.0004 to 9525.0036, to help an adult reach and maintain the
highest possible level of independence, productivity, and integration into the community;
and

(2) are provided by a vendor licensed under sections 245A.01 to 245A.16 and 252.28,
subdivision 2
, to provide day training and habilitation services.

(b) Day training and habilitation services reimbursable under this section do not include
special education and related services as defined in the Education of the Individuals with
Disabilities Act, United States Code, title 20, chapter 33, section 1401, clauses (6) and (17),
or vocational services funded under section 110 of the Rehabilitation Act of 1973, United
States Code, title 29, section 720, as amended.

(c) Day training and habilitation services do not include employment exploration,
employment development, or employment supports services as defined in the home and
community-based services waivers for people with disabilities authorized under sections
256B.092 and 256B.49.

EFFECTIVE DATE.

This section is effective upon federal approval. The commissioner
of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 7.

[256.9755] CAREGIVER SUPPORT PROGRAMS.

Subdivision 1.

Program goals.

It is the goal of all area agencies on aging and caregiver
support programs to support family caregivers of persons with Alzheimer's disease or other
related dementias who are living in the community by:

(1) promoting caregiver support programs that serve Minnesotans in their homes and
communities; and

(2) providing, within the limits of available funds, the caregiver support services that
will enable the family caregiver to access caregiver support programs in the most
cost-effective and efficient manner.

Subd. 2.

Authority.

The Minnesota Board on Aging shall allocate to area agencies on
aging the state and federal funds which are received for the caregiver support program in a
manner consistent with federal requirements.

Subd. 3.

Caregiver support services.

Funds allocated to an area agency on aging for
caregiver support services must be used in a manner consistent with the National Family
Caregiver Support Program to reach family caregivers of persons with Alzheimer's disease
or related dementias. The funds must be used to provide social, nonmedical,
community-based services and activities that provide respite for caregivers and social
interaction for participants.

Sec. 8.

Minnesota Statutes 2016, section 256B.0625, subdivision 6a, is amended to read:


Subd. 6a.

Home health services.

Home health services are those services specified in
Minnesota Rules, part 9505.0295 and sections 256B.0651 and 256B.0653. Medical assistance
covers home health services at a recipient's home residence or in the community where
normal life activities take the recipient
. Medical assistance does not cover home health
services for residents of a hospital, nursing facility, or intermediate care facility, unless the
commissioner of human services has authorized skilled nurse visits for less than 90 days
for a resident at an intermediate care facility for persons with developmental disabilities,
to prevent an admission to a hospital or nursing facility or unless a resident who is otherwise
eligible is on leave from the facility and the facility either pays for the home health services
or forgoes the facility per diem for the leave days that home health services are used. Home
health services must be provided by a Medicare certified home health agency. All nursing
and home health aide services must be provided according to sections 256B.0651 to
256B.0653.

Sec. 9.

Minnesota Statutes 2016, section 256B.0653, subdivision 2, is amended to read:


Subd. 2.

Definitions.

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

(a) "Assessment" means an evaluation of the recipient's medical need for home health
agency services by a registered nurse or appropriate therapist that is conducted within 30
days of a request.

(b) "Home care therapies" means occupational, physical, and respiratory therapy and
speech-language pathology services provided in the home by a Medicare certified home
health agency.

(c) "Home health agency services" means services delivered in the recipient's home
residence, except as specified in section 256B.0625,
by a home health agency to a recipient
with medical needs due to illness, disability, or physical conditions in settings permitted
under section 256B.0625, subdivision 6a
.

(d) "Home health aide" means an employee of a home health agency who completes
medically oriented tasks written in the plan of care for a recipient.

(e) "Home health agency" means a home care provider agency that is Medicare-certified.

(f) "Occupational therapy services" mean the services defined in Minnesota Rules, part
9505.0390.

(g) "Physical therapy services" mean the services defined in Minnesota Rules, part
9505.0390.

(h) "Respiratory therapy services" mean the services defined in chapter 147C.

(i) "Speech-language pathology services" mean the services defined in Minnesota Rules,
part 9505.0390.

(j) "Skilled nurse visit" means a professional nursing visit to complete nursing tasks
required due to a recipient's medical condition that can only be safely provided by a
professional nurse to restore and maintain optimal health.

(k) "Store-and-forward technology" means telehomecare services that do not occur in
real time via synchronous transmissions such as diabetic and vital sign monitoring.

(l) "Telehomecare" means the use of telecommunications technology via live, two-way
interactive audiovisual technology which may be augmented by store-and-forward
technology.

(m) "Telehomecare skilled nurse visit" means a visit by a professional nurse to deliver
a skilled nurse visit to a recipient located at a site other than the site where the nurse is
located and is used in combination with face-to-face skilled nurse visits to adequately meet
the recipient's needs.

Sec. 10.

Minnesota Statutes 2016, section 256B.0653, subdivision 3, is amended to read:


Subd. 3.

Home health aide visits.

(a) Home health aide visits must be provided by a
certified home health aide using a written plan of care that is updated in compliance with
Medicare regulations. A home health aide shall provide hands-on personal care, perform
simple procedures as an extension of therapy or nursing services, and assist in instrumental
activities of daily living as defined in section 256B.0659, including assuring that the person
gets to medical appointments if identified in the written plan of care. Home health aide
visits must may be provided in the recipient's home or in the community where normal life
activities take the recipient
.

(b) All home health aide visits must have authorization under section 256B.0652. The
commissioner shall limit home health aide visits to no more than one visit per day per
recipient.

(c) Home health aides must be supervised by a registered nurse or an appropriate therapist
when providing services that are an extension of therapy.

Sec. 11.

Minnesota Statutes 2016, section 256B.0653, subdivision 4, is amended to read:


Subd. 4.

Skilled nurse visit services.

(a) Skilled nurse visit services must be provided
by a registered nurse or a licensed practical nurse under the supervision of a registered nurse,
according to the written plan of care and accepted standards of medical and nursing practice
according to chapter 148. Skilled nurse visit services must be ordered by a physician and
documented in a plan of care that is reviewed and approved by the ordering physician at
least once every 60 days. All skilled nurse visits must be medically necessary and provided
in the recipient's home residence or in the community where normal life activities take the
recipient,
except as allowed under section 256B.0625, subdivision 6a.

(b) Skilled nurse visits include face-to-face and telehomecare visits with a limit of up
to two visits per day per recipient. All visits must be based on assessed needs.

(c) Telehomecare skilled nurse visits are allowed when the recipient's health status can
be accurately measured and assessed without a need for a face-to-face, hands-on encounter.
All telehomecare skilled nurse visits must have authorization and are paid at the same
allowable rates as face-to-face skilled nurse visits.

(d) The provision of telehomecare must be made via live, two-way interactive audiovisual
technology and may be augmented by utilizing store-and-forward technologies. Individually
identifiable patient data obtained through real-time or store-and-forward technology must
be maintained as health records according to sections 144.291 to 144.298. If the video is
used for research, training, or other purposes unrelated to the care of the patient, the identity
of the patient must be concealed.

(e) Authorization for skilled nurse visits must be completed under section 256B.0652.
A total of nine face-to-face skilled nurse visits per calendar year do not require authorization.
All telehomecare skilled nurse visits require authorization.

Sec. 12.

Minnesota Statutes 2016, section 256B.0653, subdivision 5, is amended to read:


Subd. 5.

Home care therapies.

(a) Home care therapies include the following: physical
therapy, occupational therapy, respiratory therapy, and speech and language pathology
therapy services.

(b) Home care therapies must be:

(1) provided in the recipient's residence or in the community where normal life activities
take the recipient
after it has been determined the recipient is unable to access outpatient
therapy;

(2) prescribed, ordered, or referred by a physician and documented in a plan of care and
reviewed, according to Minnesota Rules, part 9505.0390;

(3) assessed by an appropriate therapist; and

(4) provided by a Medicare-certified home health agency enrolled as a Medicaid provider
agency.

(c) Restorative and specialized maintenance therapies must be provided according to
Minnesota Rules, part 9505.0390. Physical and occupational therapy assistants may be used
as allowed under Minnesota Rules, part 9505.0390, subpart 1, item B.

(d) For both physical and occupational therapies, the therapist and the therapist's assistant
may not both bill for services provided to a recipient on the same day.

Sec. 13.

Minnesota Statutes 2016, section 256B.0653, subdivision 6, is amended to read:


Subd. 6.

Noncovered home health agency services.

The following are not eligible for
payment under medical assistance as a home health agency service:

(1) telehomecare skilled nurses services that is communication between the home care
nurse and recipient that consists solely of a telephone conversation, facsimile, electronic
mail, or a consultation between two health care practitioners;

(2) the following skilled nurse visits:

(i) for the purpose of monitoring medication compliance with an established medication
program for a recipient;

(ii) administering or assisting with medication administration, including injections,
prefilling syringes for injections, or oral medication setup of an adult recipient, when, as
determined and documented by the registered nurse, the need can be met by an available
pharmacy or the recipient or a family member is physically and mentally able to
self-administer or prefill a medication;

(iii) services done for the sole purpose of supervision of the home health aide or personal
care assistant;

(iv) services done for the sole purpose to train other home health agency workers;

(v) services done for the sole purpose of blood samples or lab draw when the recipient
is able to access these services outside the home; and

(vi) Medicare evaluation or administrative nursing visits required by Medicare;

(3) home health aide visits when the following activities are the sole purpose for the
visit: companionship, socialization, household tasks, transportation, and education; and

(4) home care therapies provided in other settings such as a clinic, day program, or as
an inpatient or when the recipient can access therapy outside of the recipient's residence;
and

(5) home health agency services without qualifying documentation of a face-to-face
encounter as specified in subdivision 7
.

Sec. 14.

Minnesota Statutes 2016, section 256B.0653, is amended by adding a subdivision
to read:


Subd. 7.

Face-to-face encounter.

(a) A face-to-face encounter by a qualifying provider
must be completed for all home health services regardless of the need for prior authorization,
except when providing a onetime perinatal visit by skilled nursing. The face-to-face encounter
may occur through telemedicine as defined in section 256B.0625, subdivision 3b. The
encounter must be related to the primary reason the recipient requires home health services
and must occur within the 90 days before or the 30 days after the start of services. The
face-to-face encounter may be conducted by one of the following practitioners, licensed in
Minnesota:

(1) a physician;

(2) a nurse practitioner or clinical nurse specialist;

(3) a certified nurse midwife; or

(4) a physician assistant.

(b) The allowed nonphysician practitioner, as described in this subdivision, performing
the face-to-face encounter must communicate the clinical findings of that face-to-face
encounter to the ordering physician. Those clinical findings must be incorporated into a
written or electronic document included in the recipient's medical record. To assure clinical
correlation between the face-to-face encounter and the associated home health services, the
physician responsible for ordering the services must:

(1) document that the face-to-face encounter, which is related to the primary reason the
recipient requires home health services, occurred within the required time period; and

(2) indicate the practitioner who conducted the encounter and the date of the encounter.

(c) For home health services requiring authorization, including prior authorization, home
health agencies must retain the qualifying documentation of a face-to-face encounter as part
of the recipient health service record, and submit the qualifying documentation to the
commissioner or the commissioner's designee upon request.

Sec. 15.

Minnesota Statutes 2016, section 256B.431, subdivision 30, is amended to read:


Subd. 30.

Bed layaway and delicensure.

(a) For rate years beginning on or after July
1, 2000, a nursing facility reimbursed under this section which has placed beds on layaway
shall, for purposes of application of the downsizing incentive in subdivision 3a, paragraph
(c), and calculation of the rental per diem, have those beds given the same effect as if the
beds had been delicensed so long as the beds remain on layaway. At the time of a layaway,
a facility may change its single bed election for use in calculating capacity days under
Minnesota Rules, part 9549.0060, subpart 11. The property payment rate increase shall be
effective the first day of the month of January or July, whichever occurs first following the
month date in which the layaway of the beds becomes effective under section 144A.071,
subdivision 4b
.

(b) For rate years beginning on or after July 1, 2000, notwithstanding any provision to
the contrary under section 256B.434, a nursing facility reimbursed under that section which
has placed beds on layaway shall, for so long as the beds remain on layaway, be allowed
to:

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

(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and

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

The commissioner shall increase the facility's property payment rate by the incremental
increase in the rental per diem resulting from the recalculation of the facility's rental per
diem applying only the changes resulting from the layaway of beds and clauses (1), (2), and
(3). If a facility reimbursed under section 256B.434 completes a moratorium exception
project after its base year, the base year property rate shall be the moratorium project property
rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4,
paragraph (c). The property payment rate increase shall be effective the first day of the
month of January or July, whichever occurs first following the month date in which the
layaway of the beds becomes effective.

(c) If a nursing facility removes a bed from layaway status in accordance with section
144A.071, subdivision 4b, the commissioner shall establish capacity days based on the
number of licensed and certified beds in the facility not on layaway and shall reduce the
nursing facility's property payment rate in accordance with paragraph (b).

(d) For the rate years beginning on or after July 1, 2000, notwithstanding any provision
to the contrary under section 256B.434, a nursing facility reimbursed under that section,
which has delicensed beds after July 1, 2000, by giving notice of the delicensure to the
commissioner of health according to the notice requirements in section 144A.071, subdivision
4b
, shall be allowed to:

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

(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and

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

The commissioner shall increase the facility's property payment rate by the incremental
increase in the rental per diem resulting from the recalculation of the facility's rental per
diem applying only the changes resulting from the delicensure of beds and clauses (1), (2),
and (3). If a facility reimbursed under section 256B.434 completes a moratorium exception
project after its base year, the base year property rate shall be the moratorium project property
rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4,
paragraph (c). The property payment rate increase shall be effective the first day of the
month of January or July, whichever occurs first following the month date in which the
delicensure of the beds becomes effective.

(e) For nursing facilities reimbursed under this section or section 256B.434, any beds
placed on layaway shall not be included in calculating facility occupancy as it pertains to
leave days defined in Minnesota Rules, part 9505.0415.

(f) For nursing facilities reimbursed under this section or section 256B.434, the rental
rate calculated after placing beds on layaway may not be less than the rental rate prior to
placing beds on layaway.

(g) A nursing facility receiving a rate adjustment as a result of this section shall comply
with section 256B.47 256R.06, subdivision 2 5.

(h) A facility that does not utilize the space made available as a result of bed layaway
or delicensure under this subdivision to reduce the number of beds per room or provide
more common space for nursing facility uses or perform other activities related to the
operation of the nursing facility shall have its property rate increase calculated under this
subdivision reduced by the ratio of the square footage made available that is not used for
these purposes to the total square footage made available as a result of bed layaway or
delicensure.

Sec. 16.

Minnesota Statutes 2016, section 256B.434, subdivision 4, is amended to read:


Subd. 4.

Alternate rates for nursing facilities.

Effective for the rate years beginning
on and after January 1, 2018,
a nursing facility's case mix property payment rates rate for
the second and subsequent years of a facility's contract under this section are the previous
rate year's contract property payment rates rate 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 management and budget's national economic consultant
Reports and Forecasts Division
of the Department of Human Services
, 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, July
1, 2008, October 1, 2009, and October 1, 2010, this paragraph shall apply only to the
property-related payment rate. For the rate years beginning on October 1, 2011, October 1,
2012, October 1, 2013, October 1, 2014, October 1, 2015, January 1, 2016, and January 1,
2017, the rate adjustment under this paragraph shall be suspended. 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.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 17.

Minnesota Statutes 2016, section 256B.4913, subdivision 4a, is amended to read:


Subd. 4a.

Rate stabilization adjustment.

(a) For purposes of this subdivision,
"implementation period" means the period beginning January 1, 2014, and ending on the
last day of the month in which the rate management system is populated with the data
necessary to calculate rates for substantially all individuals receiving home and
community-based waiver services under sections 256B.092 and 256B.49. "Banding period"
means the time period beginning on January 1, 2014, and ending upon the expiration of the
12-month period defined in paragraph (c), clause (5).

(b) For purposes of this subdivision, the historical rate for all service recipients means
the individual reimbursement rate for a recipient in effect on December 1, 2013, except
that:

(1) for a day service recipient who was not authorized to receive these waiver services
prior to January 1, 2014; added a new service or services on or after January 1, 2014; or
changed providers on or after January 1, 2014, the historical rate must be the weighted
average
authorized rate for the provider number in the county of service, effective December
1, 2013; or

(2) for a unit-based service with programming or a unit-based service without
programming recipient who was not authorized to receive these waiver services prior to
January 1, 2014; added a new service or services on or after January 1, 2014; or changed
providers on or after January 1, 2014, the historical rate must be the weighted average
authorized rate for each provider number in the county of service, effective December 1,
2013; or

(3) for residential service recipients who change providers on or after January 1, 2014,
the historical rate must be set by each lead agency within their county aggregate budget
using their respective methodology for residential services effective December 1, 2013, for
determining the provider rate for a similarly situated recipient being served by that provider.

(c) The commissioner shall adjust individual reimbursement rates determined under this
section so that the unit rate is no higher or lower than:

(1) 0.5 percent from the historical rate for the implementation period;

(2) 0.5 percent from the rate in effect in clause (1), for the 12-month period immediately
following the time period of clause (1);

(3) 0.5 percent from the rate in effect in clause (2), for the 12-month period immediately
following the time period of clause (2);

(4) 1.0 percent from the rate in effect in clause (3), for the 12-month period immediately
following the time period of clause (3);

(5) 1.0 percent from the rate in effect in clause (4), for the 12-month period immediately
following the time period of clause (4); and

(6) no adjustment to the rate in effect in clause (5) for the 12-month period immediately
following the time period of clause (5). During this banding rate period, the commissioner
shall not enforce any rate decrease or increase that would otherwise result from the end of
the banding period. The commissioner shall, upon enactment, seek federal approval for the
addition of this banding period.

(d) The commissioner shall review all changes to rates that were in effect on December
1, 2013, to verify that the rates in effect produce the equivalent level of spending and service
unit utilization on an annual basis as those in effect on October 31, 2013.

(e) By December 31, 2014, the commissioner shall complete the review in paragraph
(d), adjust rates to provide equivalent annual spending, and make appropriate adjustments.

(f) During the banding period, the Medicaid Management Information System (MMIS)
service agreement rate must be adjusted to account for change in an individual's need. The
commissioner shall adjust the Medicaid Management Information System (MMIS) service
agreement rate by:

(1) calculating a service rate under section 256B.4914, subdivision 6, 7, 8, or 9, for the
individual with variables reflecting the level of service in effect on December 1, 2013;

(2) calculating a service rate under section 256B.4914, subdivision 6, 7, 8, or 9, for the
individual with variables reflecting the updated level of service at the time of application;
and

(3) adding to or subtracting from the Medicaid Management Information System (MMIS)
service agreement rate, the difference between the values in clauses (1) and (2).

(g) This subdivision must not apply to rates for recipients served by providers new to a
given county after January 1, 2014. Providers of personal supports services who also acted
as fiscal support entities must be treated as new providers as of January 1, 2014.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18.

Minnesota Statutes 2016, section 256B.4913, is amended by adding a subdivision
to read:


Subd. 7.

New services.

(a) A service added to section 256B.4914 after January 1, 2014,
is not subject to rate stabilization adjustment in this section.

(b) Employment support services authorized after January 1, 2018, under the new
employment support services definition according to the home and community-based services
waivers for people with disabilities under sections 256B.092 and 256B.49 are not subject
to rate stabilization adjustment in this section.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 19.

Minnesota Statutes 2016, section 256B.4914, subdivision 2, is amended to read:


Subd. 2.

Definitions.

(a) For purposes of this section, the following terms have the
meanings given them, unless the context clearly indicates otherwise.

(b) "Commissioner" means the commissioner of human services.

(c) "Component value" means underlying factors that are part of the cost of providing
services that are built into the waiver rates methodology to calculate service rates.

(d) "Customized living tool" means a methodology for setting service rates that delineates
and documents the amount of each component service included in a recipient's customized
living service plan.

(e) "Disability waiver rates system" means a statewide system that establishes rates that
are based on uniform processes and captures the individualized nature of waiver services
and recipient needs.

(f) "Individual staffing" means the time spent as a one-to-one interaction specific to an
individual recipient by staff to provide direct support and assistance with activities of daily
living, instrumental activities of daily living, and training to participants, and is based on
the requirements in each individual's coordinated service and support plan under section
245D.02, subdivision 4b; any coordinated service and support plan addendum under section
245D.02, subdivision 4c; and an assessment tool. Provider observation of an individual's
needs must also be considered.

(g) "Lead agency" means a county, partnership of counties, or tribal agency charged
with administering waivered services under sections 256B.092 and 256B.49.

(h) "Median" means the amount that divides distribution into two equal groups, one-half
above the median and one-half below the median.

(i) "Payment or rate" means reimbursement to an eligible provider for services provided
to a qualified individual based on an approved service authorization.

(j) "Rates management system" means a Web-based software application that uses a
framework and component values, as determined by the commissioner, to establish service
rates.

(k) "Recipient" means a person receiving home and community-based services funded
under any of the disability waivers.

(l) "Shared staffing" means time spent by employees, not defined under paragraph (f),
providing or available to provide more than one individual with direct support and assistance
with activities of daily living as defined under section 256B.0659, subdivision 1, paragraph
(b); instrumental activities of daily living as defined under section 256B.0659, subdivision
1, paragraph (i); ancillary activities needed to support individual services; and training to
participants, and is based on the requirements in each individual's coordinated service and
support plan under section 245D.02, subdivision 4b; any coordinated service and support
plan addendum under section 245D.02, subdivision 4c; an assessment tool; and provider
observation of an individual's service need. Total shared staffing hours are divided
proportionally by the number of individuals who receive the shared service provisions.

(m) "Staffing ratio" means the number of recipients a service provider employee supports
during a unit of service based on a uniform assessment tool, provider observation, case
history, and the recipient's services of choice, and not based on the staffing ratios under
section 245D.31.

(n) "Unit of service" means the following:

(1) for residential support services under subdivision 6, a unit of service is a day. Any
portion of any calendar day, within allowable Medicaid rules, where an individual spends
time in a residential setting is billable as a day;

(2) for day services under subdivision 7:

(i) for day training and habilitation services, a unit of service is either:

(A) a day unit of service is defined as six or more hours of time spent providing direct
services and transportation; or

(B) a partial day unit of service is defined as fewer than six hours of time spent providing
direct services and transportation; and

(C) for new day service recipients after January 1, 2014, 15 minute units of service must
be used for fewer than six hours of time spent providing direct services and transportation;

(ii) for adult day and structured day services, a unit of service is a day or 15 minutes. A
day unit of service is six or more hours of time spent providing direct services;

(iii) for prevocational services, a unit of service is a day or an hour. A day unit of service
is six or more hours of time spent providing direct service;

(3) for unit-based services with programming under subdivision 8:

(i) for supported living services, a unit of service is a day or 15 minutes. When a day
rate is authorized, any portion of a calendar day where an individual receives services is
billable as a day; and

(ii) for all other services, a unit of service is 15 minutes; and

(4) for unit-based services without programming under subdivision 9:

(i) for respite services, a unit of service is a day or 15 minutes. When a day rate is
authorized, any portion of a calendar day when an individual receives services is billable
as a day; and

(ii) for all other services, a unit of service is 15 minutes.

EFFECTIVE DATE.

This section is effective upon federal approval. The commissioner
of human services shall notify the revisor of statutes when federal approval is obtained.

Sec. 20.

Minnesota Statutes 2016, section 256B.4914, subdivision 3, is amended to read:


Subd. 3.

Applicable services.

Applicable services are those authorized under the state's
home and community-based services waivers under sections 256B.092 and 256B.49,
including the following, as defined in the federally approved home and community-based
services plan:

(1) 24-hour customized living;

(2) adult day care;

(3) adult day care bath;

(4) behavioral programming;

(5) companion services;

(6) customized living;

(7) day training and habilitation;

(8) housing access coordination;

(9) independent living skills;

(10) in-home family support;

(11) night supervision;

(12) personal support;

(13) prevocational services;

(14) residential care services;

(15) residential support services;

(16) respite services;

(17) structured day services;

(18) supported employment services;

(19) (18) supported living services;

(20) (19) transportation services; and

(20) independent living skills specialist services;

(21) employment exploration services;

(22) employment development services;

(23) employment support services; and

(21) (24) other services as approved by the federal government in the state home and
community-based services plan.

EFFECTIVE DATE.

This section is effective upon federal approval, except clause
(20) is effective January 1, 2020. The commissioner of human services shall notify the
revisor of statutes when federal approval is obtained.

Sec. 21.

Minnesota Statutes 2016, section 256B.4914, subdivision 5, is amended to read:


Subd. 5.

Base wage index and standard component values.

(a) The base wage index
is established to determine staffing costs associated with providing services to individuals
receiving home and community-based services. For purposes of developing and calculating
the proposed base wage, Minnesota-specific wages taken from job descriptions and standard
occupational classification (SOC) codes from the Bureau of Labor Statistics as defined in
the most recent edition of the Occupational Handbook must be used. The base wage index
must be calculated as follows:

(1) for residential direct care staff, the sum of:

(i) 15 percent of the subtotal of 50 percent of the median wage for personal and home
health aide (SOC code 39-9021); 30 percent of the median wage for nursing aide assistant
(SOC code 31-1012 31-1014); and 20 percent of the median wage for social and human
services aide (SOC code 21-1093); and

(ii) 85 percent of the subtotal of 20 percent of the median wage for home health aide
(SOC code 31-1011); 20 percent of the median wage for personal and home health aide
(SOC code 39-9021); 20 percent of the median wage for nursing aide assistant (SOC code
31-1012 31-1014); 20 percent of the median wage for psychiatric technician (SOC code
29-2053); and 20 percent of the median wage for social and human services aide (SOC code
21-1093);

(2) for day services, 20 percent of the median wage for nursing aide assistant (SOC code
31-1012 31-1014); 20 percent of the median wage for psychiatric technician (SOC code
29-2053); and 60 percent of the median wage for social and human services aide (SOC code
21-1093);

(3) for residential asleep-overnight staff, the wage will be $7.66 per hour is the minimum
wage in Minnesota for large employers
, except in a family foster care setting, the wage is
$2.80 per hour 36 percent of the minimum wage in Minnesota for large employers;

(4) for behavior program analyst staff, 100 percent of the median wage for mental health
counselors (SOC code 21-1014);

(5) for behavior program professional staff, 100 percent of the median wage for clinical
counseling and school psychologist (SOC code 19-3031);

(6) for behavior program specialist staff, 100 percent of the median wage for psychiatric
technicians (SOC code 29-2053);

(7) for supportive living services staff, 20 percent of the median wage for nursing aide
assistant
(SOC code 31-1012 31-1014); 20 percent of the median wage for psychiatric
technician (SOC code 29-2053); and 60 percent of the median wage for social and human
services aide (SOC code 21-1093);

(8) for housing access coordination staff, 50 100 percent of the median wage for
community and social services specialist (SOC code 21-1099); and 50 percent of the median
wage for social and human services aide (SOC code 21-1093);

(9) for in-home family support staff, 20 percent of the median wage for nursing aide
(SOC code 31-1012); 30 percent of the median wage for community social service specialist
(SOC code 21-1099); 40 percent of the median wage for social and human services aide
(SOC code 21-1093); and ten percent of the median wage for psychiatric technician (SOC
code 29-2053);

(10) for independent living skills staff, 40 percent of the median wage for community
social service specialist (SOC code 21-1099); 50 percent of the median wage for social and
human services aide (SOC code 21-1093); and ten percent of the median wage for psychiatric
technician (SOC code 29-2053);

(11) for independent living skills specialist staff, 100 percent of mental health and
substance abuse social worker (SOC code 21-1023);

(11) (12) for supported employment supports services staff, 20 50 percent of the median
wage for nursing aide rehabilitation counselor (SOC code 31-1012 21-1015); 20 percent of
the median wage for psychiatric technician (SOC code 29-2053);
and 60 50 percent of the
median wage for community and social and human services aide specialist (SOC code
21-1093 21-1099);

(13) for employment exploration services staff, 50 percent of the median wage for
rehabilitation counselor (SOC code 21-1015); and 50 percent of the median wage for
community and social services specialist (SOC code 21-1099);

(14) for employment development services staff, 50 percent of the median wage for
education, guidance, school, and vocational counselors (SOC code 21-1012); and 50 percent
of the median wage for community and social services specialist (SOC code 21-1099);

(12) (15) for adult companion staff, 50 percent of the median wage for personal and
home care aide (SOC code 39-9021); and 50 percent of the median wage for nursing aides,
orderlies, and attendants
assistant (SOC code 31-1012 31-1014);

(13) (16) for night supervision staff, 20 percent of the median wage for home health
aide (SOC code 31-1011); 20 percent of the median wage for personal and home health
aide (SOC code 39-9021); 20 percent of the median wage for nursing aide assistant (SOC
code 31-1012 31-1014); 20 percent of the median wage for psychiatric technician (SOC
code 29-2053); and 20 percent of the median wage for social and human services aide (SOC
code 21-1093);

(14) (17) for respite staff, 50 percent of the median wage for personal and home care
aide (SOC code 39-9021); and 50 percent of the median wage for nursing aides, orderlies,
and attendants
assistant (SOC code 31-1012 31-1014);

(15) (18) for personal support staff, 50 percent of the median wage for personal and
home care aide (SOC code 39-9021); and 50 percent of the median wage for nursing aides,
orderlies, and attendants
assistant (SOC code 31-1012 31-1014);

(16) (19) for supervisory staff, the basic wage is $17.43 per hour with exception of the
supervisor of behavior analyst and behavior specialists, which must be $30.75 per hour;

(17) (20) for registered nurse, the basic wage is $30.82 per hour; and

(18) (21) for licensed practical nurse staff, the basic wage is $18.64 per hour 100 percent
of the median wage for licensed practical nurses (SOC code 29-2061)
.

(b) Component values for residential support services are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) general administrative support ratio: 13.25 percent;

(5) program-related expense ratio: 1.3 percent; and

(6) absence and utilization factor ratio: 3.9 percent.

(c) Component values for family foster care are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) general administrative support ratio: 3.3 percent;

(5) program-related expense ratio: 1.3 percent; and

(6) absence factor: 1.7 percent.

(d) Component values for day services for all services are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) program plan support ratio: 5.6 percent;

(5) client programming and support ratio: ten percent;

(6) general administrative support ratio: 13.25 percent;

(7) program-related expense ratio: 1.8 percent; and

(8) absence and utilization factor ratio: 3.9 5.9 percent.

(e) Component values for unit-based services with programming are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) program plan supports ratio: 3.1 15.5 percent;

(5) client programming and supports ratio: 8.6 4.7 percent;

(6) general administrative support ratio: 13.25 percent;

(7) program-related expense ratio: 6.1 percent; and

(8) absence and utilization factor ratio: 3.9 percent.

(f) Component values for unit-based services without programming except respite are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) program plan support ratio: 3.1 7.0 percent;

(5) client programming and support ratio: 8.6 2.3 percent;

(6) general administrative support ratio: 13.25 percent;

(7) program-related expense ratio: 6.1 2.9 percent; and

(8) absence and utilization factor ratio: 3.9 percent.

(g) Component values for unit-based services without programming for respite are:

(1) supervisory span of control ratio: 11 percent;

(2) employee vacation, sick, and training allowance ratio: 8.71 percent;

(3) employee-related cost ratio: 23.6 percent;

(4) general administrative support ratio: 13.25 percent;

(5) program-related expense ratio: 6.1 2.9 percent; and

(6) absence and utilization factor ratio: 3.9 percent.

(h) On July 1, 2017, the commissioner shall update the base wage index in paragraph
(a) based on the wage data by standard occupational code (SOC) from the Bureau of Labor
Statistics available on December 31, 2016. The commissioner shall publish these updated
values and load them into the rate management system. This adjustment occurs every five
years. For adjustments in 2021 and beyond, the commissioner shall use the data available
on December 31 of the calendar year five years prior.
On January 1, 2022, and every two
years thereafter, the commissioner shall update the base wage index in paragraph (a) based
on the most recently available wage data by standard occupational code (SOC) from the
Bureau of Labor Statistics. The commissioner shall publish these updated values and load
them into the rate management system.

(i) On July 1, 2017, the commissioner shall update the framework components in
paragraphs (b) to (g) paragraph (d), clause (5); paragraph (e), clause (5); and paragraph (f),
clause (5)
; subdivision 6, clauses (8) and (9); and subdivision 7, clauses (10), (16), and (17),
for changes in the Consumer Price Index. The commissioner will adjust these values higher
or lower by the percentage change in the Consumer Price Index-All Items, United States
city average (CPI-U) from January 1, 2014, to January 1, 2017. The commissioner shall
publish these updated values and load them into the rate management system. This adjustment
occurs every five years. For adjustments in 2021 and beyond, the commissioner shall use
the data available on January 1 of the calendar year four years prior and January 1 of the
current calendar year.
On January 1, 2022, and every two years thereafter, the commissioner
shall update the framework components in paragraph (d), clause (5); paragraph (e), clause
(5); and paragraph (f), clause (5); subdivision 6, clauses (8) and (9); and subdivision 7,
clauses (10), (16), and (17), for changes in the Consumer Price Index. The commissioner
shall adjust these values higher or lower by the percentage change in the Consumer Price
Index-All Items, United States city average (CPI-U) from the date of the previous update
to the date of the data most recently available prior to the scheduled update. The
commissioner shall publish these updated values and load them into the rate management
system.

(j) In this subdivision, if Bureau of Labor Statistics occupational codes or Consumer
Price Index items are unavailable in the future, the commissioner shall recommend to the
legislature codes or items to update and replace missing component values.

(k) The commissioner must ensure that wage values and component values in subdivisions
5 to 9 reflect the cost to provide the service. As determined by the commissioner, in
consultation with stakeholders identified in section 256B.4913, subdivision 5, a provider
enrolled to provide services with rates determined under this section must submit business
cost data to the commissioner to support research on the cost of providing services that have
rates determined by the disability waiver rates system. Required business cost data includes,
but is not limited to:

(1) worker wage costs;

(2) benefits paid;

(3) supervisor wage costs;

(4) executive wage costs;

(5) vacation, sick, and training time paid;

(6) taxes, workers' compensation, and unemployment insurance costs paid;

(7) administrative costs paid;

(8) program costs paid;

(9) transportation costs paid;

(10) vacancy rates; and

(11) other data relating to costs required to provide services requested by the
commissioner.

(l) A provider must submit cost component data at least once in any five-year period,
on a schedule determined by the commissioner, in consultation with stakeholders identified
in section 256B.4913, subdivision 5. If a provider fails to submit required reporting data,
the commissioner shall provide notice to providers that have not provided required data 30
days after the required submission date, and a second notice for providers who have not
provided required data 60 days after the required submission date. The commissioner shall
temporarily suspend payments to the provider if cost component data is not received 90
days after the required submission date. Withheld payments shall be made once data is
received by the commissioner.

(m) The commissioner shall conduct a random audit of data submitted under paragraph
(k) to ensure data accuracy. The commissioner shall analyze cost documentation in paragraph
(k) and provide recommendations for adjustments to cost components.

(n) The commissioner shall analyze cost documentation in paragraph (k) and, in
consultation with stakeholders identified in section 256B.4913, subdivision 5, may submit
recommendations on component values and inflationary factor adjustments to the chairs
and ranking minority members of the legislative committees with jurisdiction over human
services every four years beginning January 1, 2020. The commissioner shall make
recommendations in conjunction with reports submitted to the legislature according to
subdivision 10, paragraph (e). The commissioner shall release business cost data in an
aggregate form, and business cost data from individual providers shall not be released except
as provided for in current law.

(o) The commissioner, in consultation with stakeholders identified in section 256B.4913,
subdivision 5, shall develop and implement a process for providing training and technical
assistance necessary to support provider submission of cost documentation required under
paragraph (k).

EFFECTIVE DATE.

(a) The amendments to paragraphs (a) to (g) are effective January
1, 2018, except paragraph (d), clause (8), is effective January 1, 2019.

(b) The amendments to paragraphs (h) to (o) are effective the day following final
enactment.

Sec. 22.

Minnesota Statutes 2016, section 256B.4914, subdivision 6, is amended to read:


Subd. 6.

Payments for residential support services.

(a) Payments for residential support
services, as defined in sections 256B.092, subdivision 11, and 256B.49, subdivision 22,
must be calculated as follows:

(1) determine the number of shared staffing and individual direct staff hours to meet a
recipient's needs provided on site or through monitoring technology;

(2) personnel hourly wage rate must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision
5. This is defined as the direct-care rate;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of shared and individual direct staff hours provided on site or
through monitoring technology and nursing hours by the appropriate staff wages in
subdivision 5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of shared and individual direct staff hours provided on site or
through monitoring technology and nursing hours by the product of the supervision span
of control ratio in subdivision 5, paragraph (b), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16) (19);

(6) combine the results of clauses (4) and (5), excluding any shared and individual direct
staff hours provided through monitoring technology, and multiply the result by one plus
the employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (b),
clause (2). This is defined as the direct staffing cost;

(7) for employee-related expenses, multiply the direct staffing cost, excluding any shared
and individual direct staff hours provided through monitoring technology, by one plus the
employee-related cost ratio in subdivision 5, paragraph (b), clause (3);

(8) for client programming and supports, the commissioner shall add $2,179; and

(9) for transportation, if provided, the commissioner shall add $1,680, or $3,000 if
customized for adapted transport, based on the resident with the highest assessed need.

(b) The total rate must be calculated using the following steps:

(1) subtotal paragraph (a), clauses (7) to (9), and the direct staffing cost of any shared
and individual direct staff hours provided through monitoring technology that was excluded
in clause (7);

(2) sum the standard general and administrative rate, the program-related expense ratio,
and the absence and utilization ratio;

(3) divide the result of clause (1) by one minus the result of clause (2). This is the total
payment amount; and

(4) adjust the result of clause (3) by a factor to be determined by the commissioner to
adjust for regional differences in the cost of providing services.

(c) The payment methodology for customized living, 24-hour customized living, and
residential care services must be the customized living tool. Revisions to the customized
living tool must be made to reflect the services and activities unique to disability-related
recipient needs.

(d) For individuals enrolled prior to January 1, 2014, the days of service authorized must
meet or exceed the days of service used to convert service agreements in effect on December
1, 2013, and must not result in a reduction in spending or service utilization due to conversion
during the implementation period under section 256B.4913, subdivision 4a. If during the
implementation period, an individual's historical rate, including adjustments required under
section 256B.4913, subdivision 4a, paragraph (c), is equal to or greater than the rate
determined in this subdivision, the number of days authorized for the individual is 365.

(e) The number of days authorized for all individuals enrolling after January 1, 2014,
in residential services must include every day that services start and end.

Sec. 23.

Minnesota Statutes 2016, section 256B.4914, subdivision 7, is amended to read:


Subd. 7.

Payments for day programs.

Payments for services with day programs
including adult day care, day treatment and habilitation, prevocational services, and structured
day services must be calculated as follows:

(1) determine the number of units of service and staffing ratio to meet a recipient's needs:

(i) the staffing ratios for the units of service provided to a recipient in a typical week
must be averaged to determine an individual's staffing ratio; and

(ii) the commissioner, in consultation with service providers, shall develop a uniform
staffing ratio worksheet to be used to determine staffing ratios under this subdivision;

(2) personnel hourly wage rates must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision
5;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of day program direct staff hours and nursing hours by the
appropriate staff wage in subdivision 5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of day direct staff hours by the product of the supervision span
of control ratio in subdivision 5, paragraph (d), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16) (19);

(6) combine the results of clauses (4) and (5), and multiply the result by one plus the
employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (d), clause
(2). This is defined as the direct staffing rate;

(7) for program plan support, multiply the result of clause (6) by one plus the program
plan support ratio in subdivision 5, paragraph (d), clause (4);

(8) for employee-related expenses, multiply the result of clause (7) by one plus the
employee-related cost ratio in subdivision 5, paragraph (d), clause (3);

(9) for client programming and supports, multiply the result of clause (8) by one plus
the client programming and support ratio in subdivision 5, paragraph (d), clause (5);

(10) for program facility costs, add $19.30 per week with consideration of staffing ratios
to meet individual needs;

(11) for adult day bath services, add $7.01 per 15 minute unit;

(12) this is the subtotal rate;

(13) sum the standard general and administrative rate, the program-related expense ratio,
and the absence and utilization factor ratio;

(14) divide the result of clause (12) by one minus the result of clause (13). This is the
total payment amount;

(15) adjust the result of clause (14) by a factor to be determined by the commissioner
to adjust for regional differences in the cost of providing services;

(16) for transportation provided as part of day training and habilitation for an individual
who does not require a lift, add:

(i) $10.50 for a trip between zero and ten miles for a nonshared ride in a vehicle without
a lift, $8.83 for a shared ride in a vehicle without a lift, and $9.25 for a shared ride in a
vehicle with a lift;

(ii) $15.75 for a trip between 11 and 20 miles for a nonshared ride in a vehicle without
a lift, $10.58 for a shared ride in a vehicle without a lift, and $11.88 for a shared ride in a
vehicle with a lift;

(iii) $25.75 for a trip between 21 and 50 miles for a nonshared ride in a vehicle without
a lift, $13.92 for a shared ride in a vehicle without a lift, and $16.88 for a shared ride in a
vehicle with a lift; or

(iv) $33.50 for a trip of 51 miles or more for a nonshared ride in a vehicle without a lift,
$16.50 for a shared ride in a vehicle without a lift, and $20.75 for a shared ride in a vehicle
with a lift;

(17) for transportation provided as part of day training and habilitation for an individual
who does require a lift, add:

(i) $19.05 for a trip between zero and ten miles for a nonshared ride in a vehicle with a
lift, and $15.05 for a shared ride in a vehicle with a lift;

(ii) $32.16 for a trip between 11 and 20 miles for a nonshared ride in a vehicle with a
lift, and $28.16 for a shared ride in a vehicle with a lift;

(iii) $58.76 for a trip between 21 and 50 miles for a nonshared ride in a vehicle with a
lift, and $58.76 for a shared ride in a vehicle with a lift; or

(iv) $80.93 for a trip of 51 miles or more for a nonshared ride in a vehicle with a lift,
and $80.93 for a shared ride in a vehicle with a lift.

Sec. 24.

Minnesota Statutes 2016, section 256B.4914, subdivision 8, is amended to read:


Subd. 8.

Payments for unit-based services with programming.

Payments for unit-based
services with programming, including behavior programming, housing access coordination,
in-home family support, independent living skills training, independent living skills specialist
services,
hourly supported living services, employment exploration services, employment
development services,
and supported employment support services provided to an individual
outside of any day or residential service plan must be calculated as follows, unless the
services are authorized separately under subdivision 6 or 7:

(1) determine the number of units of service to meet a recipient's needs;

(2) personnel hourly wage rate must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rates or rates derived by the commissioner as provided in subdivision
5;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct-care rate;

(4) multiply the number of direct staff hours by the appropriate staff wage in subdivision
5, paragraph (a), or the customized direct-care rate;

(5) multiply the number of direct staff hours by the product of the supervision span of
control ratio in subdivision 5, paragraph (e), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16) (19);

(6) combine the results of clauses (4) and (5), and multiply the result by one plus the
employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (e), clause
(2). This is defined as the direct staffing rate;

(7) for program plan support, multiply the result of clause (6) by one plus the program
plan supports ratio in subdivision 5, paragraph (e), clause (4);

(8) for employee-related expenses, multiply the result of clause (7) by one plus the
employee-related cost ratio in subdivision 5, paragraph (e), clause (3);

(9) for client programming and supports, multiply the result of clause (8) by one plus
the client programming and supports ratio in subdivision 5, paragraph (e), clause (5);

(10) this is the subtotal rate;

(11) sum the standard general and administrative rate, the program-related expense ratio,
and the absence and utilization factor ratio;

(12) divide the result of clause (10) by one minus the result of clause (11). This is the
total payment amount;

(13) for supported employment support services provided in a shared manner, divide
the total payment amount in clause (12) by the number of service recipients, not to exceed
three six. For independent living skills training provided in a shared manner, divide the total
payment amount in clause (12) by the number of service recipients, not to exceed two; and

(14) adjust the result of clause (13) by a factor to be determined by the commissioner
to adjust for regional differences in the cost of providing services.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 25.

Minnesota Statutes 2016, section 256B.4914, subdivision 9, is amended to read:


Subd. 9.

Payments for unit-based services without programming.

Payments for
unit-based services without programming, including night supervision, personal support,
respite, and companion care provided to an individual outside of any day or residential
service plan must be calculated as follows unless the services are authorized separately
under subdivision 6 or 7:

(1) for all services except respite, determine the number of units of service to meet a
recipient's needs;

(2) personnel hourly wage rates must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rate or rates derived by the commissioner as provided in subdivision 5;

(3) for a recipient requiring customization for deaf and hard-of-hearing language
accessibility under subdivision 12, add the customization rate provided in subdivision 12
to the result of clause (2). This is defined as the customized direct care rate;

(4) multiply the number of direct staff hours by the appropriate staff wage in subdivision
5 or the customized direct care rate;

(5) multiply the number of direct staff hours by the product of the supervision span of
control ratio in subdivision 5, paragraph (f), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16) (19);

(6) combine the results of clauses (4) and (5), and multiply the result by one plus the
employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (f), clause
(2). This is defined as the direct staffing rate;

(7) for program plan support, multiply the result of clause (6) by one plus the program
plan support ratio in subdivision 5, paragraph (f), clause (4);

(8) for employee-related expenses, multiply the result of clause (7) by one plus the
employee-related cost ratio in subdivision 5, paragraph (f), clause (3);

(9) for client programming and supports, multiply the result of clause (8) by one plus
the client programming and support ratio in subdivision 5, paragraph (f), clause (5);

(10) this is the subtotal rate;

(11) sum the standard general and administrative rate, the program-related expense ratio,
and the absence and utilization factor ratio;

(12) divide the result of clause (10) by one minus the result of clause (11). This is the
total payment amount;

(13) for respite services, determine the number of day units of service to meet an
individual's needs;

(14) personnel hourly wage rates must be based on the 2009 Bureau of Labor Statistics
Minnesota-specific rate or rates derived by the commissioner as provided in subdivision 5;

(15) for a recipient requiring deaf and hard-of-hearing customization under subdivision
12, add the customization rate provided in subdivision 12 to the result of clause (14). This
is defined as the customized direct care rate;

(16) multiply the number of direct staff hours by the appropriate staff wage in subdivision
5, paragraph (a);

(17) multiply the number of direct staff hours by the product of the supervisory span of
control ratio in subdivision 5, paragraph (g), clause (1), and the appropriate supervision
wage in subdivision 5, paragraph (a), clause (16) (19);

(18) combine the results of clauses (16) and (17), and multiply the result by one plus
the employee vacation, sick, and training allowance ratio in subdivision 5, paragraph (g),
clause (2). This is defined as the direct staffing rate;

(19) for employee-related expenses, multiply the result of clause (18) by one plus the
employee-related cost ratio in subdivision 5, paragraph (g), clause (3);

(20) this is the subtotal rate;

(21) sum the standard general and administrative rate, the program-related expense ratio,
and the absence and utilization factor ratio;

(22) divide the result of clause (20) by one minus the result of clause (21). This is the
total payment amount; and

(23) adjust the result of clauses (12) and (22) by a factor to be determined by the
commissioner to adjust for regional differences in the cost of providing services.

Sec. 26.

Minnesota Statutes 2016, section 256B.4914, subdivision 10, is amended to read:


Subd. 10.

Updating payment values and additional information.

(a) From January
1, 2014, through December 31, 2017, the commissioner shall develop and implement uniform
procedures to refine terms and adjust values used to calculate payment rates in this section.

(b) No later than July 1, 2014, the commissioner shall, within available resources, begin
to conduct research and gather data and information from existing state systems or other
outside sources on the following items:

(1) differences in the underlying cost to provide services and care across the state; and

(2) mileage, vehicle type, lift requirements, incidents of individual and shared rides, and
units of transportation for all day services, which must be collected from providers using
the rate management worksheet and entered into the rates management system; and

(3) the distinct underlying costs for services provided by a license holder under sections
245D.05, 245D.06, 245D.07, 245D.071, 245D.081, and 245D.09, and for services provided
by a license holder certified under section 245D.33.

(c) Beginning January 1, 2014, through December 31, 2018, using a statistically valid
set of rates management system data, the commissioner, in consultation with stakeholders,
shall analyze for each service the average difference in the rate on December 31, 2013, and
the framework rate at the individual, provider, lead agency, and state levels. The
commissioner shall issue semiannual reports to the stakeholders on the difference in rates
by service and by county during the banding period under section 256B.4913, subdivision
4a
. The commissioner shall issue the first report by October 1, 2014, and the final report
shall be issued by December 31, 2018
.

(d) No later than July 1, 2014, the commissioner, in consultation with stakeholders, shall
begin the review and evaluation of the following values already in subdivisions 6 to 9, or
issues that impact all services, including, but not limited to:

(1) values for transportation rates for day services;

(2) values for transportation rates in residential services;

(3) (2) values for services where monitoring technology replaces staff time;

(4) (3) values for indirect services;

(5) (4) values for nursing;

(6) component values for independent living skills;

(7) component values for family foster care that reflect licensing requirements;

(8) adjustments to other components to replace the budget neutrality factor;

(9) remote monitoring technology for nonresidential services;

(10) values for basic and intensive services in residential services;

(11) (5) values for the facility use rate in day services, and the weightings used in the
day service ratios and adjustments to those weightings;

(12) (6) values for workers' compensation as part of employee-related expenses;

(13) (7) values for unemployment insurance as part of employee-related expenses;

(14) a component value to reflect costs for individuals with rates previously adjusted
for the inclusion of group residential housing rate 3 costs, only for any individual enrolled
as of December 31, 2013; and

(15) (8) any changes in state or federal law with an a direct impact on the underlying
cost of providing home and community-based services.; and

(9) outcome measures, determined by the commissioner, for home and community-based
services rates determined under this section.

(e) The commissioner shall report to the chairs and the ranking minority members of
the legislative committees and divisions with jurisdiction over health and human services
policy and finance with the information and data gathered under paragraphs (b) to (d) on
the following dates:

(1) January 15, 2015, with preliminary results and data;

(2) January 15, 2016, with a status implementation update, and additional data and
summary information;

(3) January 15, 2017, with the full report; and

(4) January 15, 2019 2020, with another full report, and a full report once every four
years thereafter.

(f) Based on the commissioner's evaluation of the information and data collected in
paragraphs (b) to (d), the commissioner shall make recommendations to the legislature by
January 15, 2015, to address any issues identified during the first year of implementation.
After January 15, 2015, the commissioner may make recommendations to the legislature
to address potential issues.

(g) (f) The commissioner shall implement a regional adjustment factor to all rate
calculations in subdivisions 6 to 9, effective no later than January 1, 2015. Beginning July
1, 2017, the commissioner shall renew analysis and implement changes to the regional
adjustment factors when adjustments required under subdivision 5, paragraph (h), occur.
Prior to implementation, the commissioner shall consult with stakeholders on the
methodology to calculate the adjustment.

(h) (g) The commissioner shall provide a public notice via LISTSERV in October of
each year beginning October 1, 2014, containing information detailing legislatively approved
changes in:

(1) calculation values including derived wage rates and related employee and
administrative factors;

(2) service utilization;

(3) county and tribal allocation changes; and

(4) information on adjustments made to calculation values and the timing of those
adjustments.

The information in this notice must be effective January 1 of the following year.

(i) No later than July 1, 2016, the commissioner shall develop and implement, in
consultation with stakeholders, a methodology sufficient to determine the shared staffing
levels necessary to meet, at a minimum, health and welfare needs of individuals who will
be living together in shared residential settings, and the required shared staffing activities
described in subdivision 2, paragraph (l). This determination methodology must ensure
staffing levels are adaptable to meet the needs and desired outcomes for current and
prospective residents in shared residential settings.

(j) (h) When the available shared staffing hours in a residential setting are insufficient
to meet the needs of an individual who enrolled in residential services after January 1, 2014,
or insufficient to meet the needs of an individual with a service agreement adjustment
described in section 256B.4913, subdivision 4a, paragraph (f), then individual staffing hours
shall be used.

(i) The commissioner shall study the underlying cost of absence and utilization for day
services. Based on the commissioner's evaluation of the data collected under this paragraph,
the commissioner shall make recommendations to the legislature by January 15, 2018, for
changes, if any, to the absence and utilization factor ratio component value for day services.

(j) Beginning July 1, 2017, the commissioner shall collect transportation and trip
information for all day services through the rates management system.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 27.

Minnesota Statutes 2016, section 256B.50, subdivision 1b, is amended to read:


Subd. 1b.

Filing an appeal.

To appeal, the provider shall file with the commissioner a
written notice of appeal; the appeal must be postmarked or received by the commissioner
within 60 days of the publication date the determination of the payment rate was mailed or
personally received by a provider, whichever is earlier
printed on the rate notice. The notice
of appeal must specify each disputed item; the reason for the dispute; the total dollar amount
in dispute for each separate disallowance, allocation, or adjustment of each cost item or part
of a cost item; the computation that the provider believes is correct; the authority in statute
or rule upon which the provider relies for each disputed item; the name and address of the
person or firm with whom contacts may be made regarding the appeal; and other information
required by the commissioner.

Sec. 28.

Minnesota Statutes 2016, section 256B.5012, is amended by adding a subdivision
to read:


Subd. 3a.

Therapeutic leave days.

Notwithstanding Minnesota Rules, part 9505.0415,
subpart 7, a vacant bed in an intermediate care facility for persons with developmental
disabilities shall be counted as a reserved bed when determining occupancy rates and
eligibility for payment of a therapeutic leave day.

Sec. 29.

Minnesota Statutes 2016, section 256B.5012, is amended by adding a subdivision
to read:


Subd. 17.

ICF/DD rate increase effective July 1, 2017; Murray County.

Effective
July 1, 2017, the daily rate for an intermediate care facility for persons with developmental
disabilities located in Murray County that is classified as a class B facility and licensed for
14 beds is $400. This increase is in addition to any other increase that is effective on July
1, 2017.

Sec. 30.

Minnesota Statutes 2016, section 256C.23, is amended by adding a subdivision
to read:


Subd. 1a.

Culturally affirmative.

"Culturally affirmative" describes services that are
designed and delivered within the context of the culture, language, and life experiences of
a person who is deaf, a person who is deafblind, and a person who is hard-of-hearing.

Sec. 31.

Minnesota Statutes 2016, section 256C.23, subdivision 2, is amended to read:


Subd. 2.

Deaf.

"Deaf" means a hearing loss of such severity that the individual must
depend primarily on visual communication such as American Sign Language or other signed
language, visual and manual means of communication such as signing systems in English
or Cued Speech,
writing, lip speech reading, manual communication, and gestures.

Sec. 32.

Minnesota Statutes 2016, section 256C.23, is amended by adding a subdivision
to read:


Subd. 2c.

Interpreting services.

"Interpreting services" means services that include:

(1) interpreting between a spoken language, such as English, and a visual language, such
as American Sign Language;

(2) interpreting between a spoken language and a visual representation of a spoken
language, such as Cued Speech and signing systems in English;

(3) interpreting within one language where the interpreter uses natural gestures and
silently repeats the spoken message, replacing some words or phrases to give higher visibility
on the lips;

(4) interpreting using low vision or tactile methods for persons who have a combined
hearing and vision loss or are deafblind; and

(5) interpreting from one communication mode or language into another communication
mode or language that is linguistically and culturally appropriate for the participants in the
communication exchange.

Sec. 33.

Minnesota Statutes 2016, section 256C.23, is amended by adding a subdivision
to read:


Subd. 6.

Real-time captioning.

"Real-time captioning" means a method of captioning
in which a caption is simultaneously prepared and displayed or transmitted at the time of
origination by specially trained real-time captioners.

Sec. 34.

Minnesota Statutes 2016, section 256C.233, subdivision 1, is amended to read:


Subdivision 1.

Deaf and Hard-of-Hearing Services Division.

The commissioners of
human services, education, employment and economic development, and health shall create
a distinct and separate organizational unit to be known as
advise the commissioner of human
services on the activities of
the Deaf and Hard-of-Hearing Services Division to address.
This division addresses
the developmental, social, educational, and occupational and
social-emotional
needs of persons who are deaf, persons who are deafblind, and persons
who are
hard-of-hearing persons through a statewide network of collaborative services and
by coordinating the promulgation of public policies, regulations, legislation, and programs
affecting
advocates on behalf of and provides information and training about how to best
serve persons who are
deaf, persons who are deafblind, and persons who are hard-of-hearing
persons. An interdepartmental management team shall advise the activities of the Deaf and
Hard-of-Hearing Services Division.
The commissioner of human services shall coordinate
the work of the interagency management team advisers and receive legislative appropriations
for the division.

Sec. 35.

Minnesota Statutes 2016, section 256C.233, subdivision 2, is amended to read:


Subd. 2.

Responsibilities.

The Deaf and Hard-of-Hearing Services Division shall:

(1) establish and maintain a statewide network of regional service centers culturally
affirmative services
for Minnesotans who are deaf, Minnesotans who are deafblind, and
Minnesotans who are
hard-of-hearing Minnesotans;

(2) assist work across divisions within the Departments Department of Human Services,
Education, and Employment and Economic Development to coordinate the promulgation
and implementation of public policies, regulations, legislation, programs, and services
affecting
as well as with other agencies and counties, to ensure that there is an understanding
of:

(i) the communication challenges faced by persons who are deaf, persons who are
deafblind, and persons who are hard-of-hearing persons;

(ii) the best practices for accommodating and mitigating communication challenges;
and

(iii) the legal requirements for providing access to and effective communication with
persons who are deaf, persons who are deafblind, and persons who are hard-of-hearing
; and

(3) provide a coordinated system of assess the supply and demand statewide interpreting
or
for interpreter referral services. and real-time captioning services, implement strategies
to provide greater access to these services in areas without sufficient supply, and build the
base of service providers across the state;

(4) maintain a statewide information resource that includes contact information and
professional certification credentials of interpreting service providers and real-time captioning
service providers;

(5) provide culturally affirmative mental health services to persons who are deaf, persons
who are deafblind, and persons who are hard-of-hearing who:

(i) use a visual language such as American Sign Language or a tactile form of a language;
or

(ii) otherwise need culturally affirmative therapeutic services;

(6) research and develop best practices and recommendations for emerging issues;

(7) provide as much information as practicable on the division's stand-alone Web site
in American Sign Language; and

(8) report to the chairs and ranking minority members of the legislative committees with
jurisdiction over human services biennially, beginning on January 1, 2019, on the following:

(i) the number of regional service center staff, the location of the office of each staff
person, other service providers with which they are colocated, the number of people served
by each staff person and a breakdown of whether each person was served on-site or off-site,
and for those served off-site, a list of locations where services were delivered and the number
who were served in-person and the number who were served via technology;

(ii) the amount and percentage of the division budget spent on reasonable
accommodations for staff;

(iii) the number of people who use demonstration equipment and consumer evaluations
of the experience;

(iv) the number of training sessions provided by division staff, the topics covered, the
number of participants, and consumer evaluations, including a breakdown by delivery
method such as in-person or via technology;

(v) the number of training sessions hosted at a division location provided by another
service provider, the topics covered, the number of participants, and consumer evaluations,
including a breakdown by delivery method such as in-person or via technology;

(vi) for each grant awarded, the amount awarded to the grantee and a summary of the
grantee's results, including consumer evaluations of the services or products provided;

(vii) the number of people on waiting lists for any services provided by division staff
or for services or equipment funded through grants awarded by the division;

(viii) the amount of time staff spent driving to appointments to deliver direct one-to-one
client services in locations outside of the regional service centers;

(ix) the amount spent on mileage reimbursement and the number of clients who received
mileage reimbursement for traveling to the regional service centers for services; and

(x) the regional needs and feedback on addressing service gaps identified by the advisory
committees.

Sec. 36.

Minnesota Statutes 2016, section 256C.24, subdivision 1, is amended to read:


Subdivision 1.

Location.

The Deaf and Hard-of-Hearing Services Division shall establish
up to eight at least six regional service centers for persons who are deaf and persons who
are
hard-of-hearing persons. The centers shall be distributed regionally to provide access
for persons who are deaf, persons who are deafblind, and persons who are hard-of-hearing
persons in all parts of the state.

Sec. 37.

Minnesota Statutes 2016, section 256C.24, subdivision 2, is amended to read:


Subd. 2.

Responsibilities.

(a) Each regional service center shall:

(1) serve as a central entry point for establish connections and collaborations and explore
co-locating with other public and private entities providing services to persons who are

deaf, persons who are deafblind, and persons who are hard-of-hearing persons in need of
services and make referrals to the services needed
in the region;

(2) for those in need of services, assist in coordinating services between service providers
and persons who are deaf, persons who are deafblind, and persons who are hard-of-hearing,
and the persons' families, and make referrals to the services needed;

(2) (3) employ staff trained to work with persons who are deaf, persons who are deafblind,
and persons who are hard-of-hearing persons;

(3) (4) if adequate services are not available from another public or private service
provider in the region,
provide to all individual assistance to persons who are deaf, persons
who are
deafblind, and persons who are hard-of-hearing persons access to interpreter services
which are necessary to help them obtain services
, and the persons' families. Individually
culturally affirmative assistance may be provided using technology only in areas of the state
where a person has access to sufficient quality telecommunications or broadband services
to allow effective communication. When a person who is deaf, a person who is deafblind,
or a person who is hard-of-hearing does not have access to sufficient telecommunications
or broadband service, individual assistance shall be available in person
;

(5) identify regional training needs, work with deaf and hard-of-hearing services training
staff, and collaborate with others to deliver training for persons who are deaf, persons who
are deafblind, and persons who are hard-of-hearing, and the persons' families, and other
service providers about subjects including the persons' rights under the law, American Sign
Language, and the impact of hearing loss and options for accommodating it;

(4) implement a plan to provide loaned equipment and resource materials to deaf,
deafblind, and hard-of-hearing
(6) have a mobile or permanent lab where persons who are
deaf, persons who are deafblind, and persons who are hard-of-hearing can try a selection
of modern assistive technology and equipment to determine what would best meet the
persons' needs
;

(5) cooperate with responsible departments and administrative authorities to provide
access for deaf, deafblind, and hard-of-hearing persons to services provided by state, county,
and regional agencies;

(6) (7) collaborate with the Resource Center for the Deaf and Hard-of-Hearing Persons,
other divisions of the Department of Education, and local school districts to develop and
deliver programs and services for families with children who are deaf, children who are
deafblind, or children who are hard-of-hearing children and to support school personnel
serving these children;

(7) when possible, (8) provide training to the social service or income maintenance staff
employed by counties or by organizations with whom counties contract for services to
ensure that communication barriers which prevent persons who are deaf, persons who are
deafblind, and persons who are hard-of-hearing persons from using services are removed;

(8) when possible, (9) provide training to state and regional human service agencies in
the region
regarding program access for persons who are deaf, persons who are deafblind,
and persons who are hard-of-hearing persons; and

(9) (10) assess the ongoing need and supply of services for persons who are deaf, persons
who are
deafblind, and persons who are hard-of-hearing persons in all parts of the state,
annually consult with the division's advisory committees to identify regional needs and
solicit feedback on addressing service gaps,
and cooperate with public and private service
providers to develop these services.;

(11) provide culturally affirmative mental health services to persons who are deaf,
persons who are deafblind, and persons who are hard-of-hearing who:

(i) use a visual language such as American Sign Language or a tactile form of a language;
or

(ii) otherwise need culturally affirmative therapeutic services; and

(12) establish partnerships with state and regional entities statewide that have the
technological capacity to provide Minnesotans with virtual access to the division's services
and division-sponsored training via technology.

(b) Persons who are deaf, persons who are deafblind, and persons who are
hard-of-hearing, and the persons' family members who travel more than 50 miles round-trip
from the persons' home or work location to receive services at the regional service center
may be reimbursed for mileage at the reimbursement rate established by the Internal Revenue
Service.

Sec. 38.

Minnesota Statutes 2016, section 256C.261, is amended to read:


256C.261 SERVICES FOR PERSONS WHO ARE DEAFBLIND PERSONS.

(a) The commissioner of human services shall combine the existing biennial base level
funding for deafblind services into a single grant program. At least 35 percent of the total
funding is awarded for services and other supports to deafblind children and their families
and at least 25 percent is awarded for services and other supports to deafblind adults.
use
at least 35 percent of the deafblind services biennial base level grant funding for services
and other supports for a child who is deafblind and the child's family. The commissioner
shall use at least 25 percent of the deafblind services biennial base level grant funding for
services and other supports for an adult who is deafblind.

The commissioner shall award grants for the purposes of:

(1) providing services and supports to individuals persons who are deafblind; and

(2) developing and providing training to counties and the network of senior citizen
service providers. The purpose of the training grants is to teach counties how to use existing
programs that capture federal financial participation to meet the needs of eligible persons
who are
deafblind persons and to build capacity of senior service programs to meet the
needs of seniors with a dual sensory hearing and vision loss.

(b) The commissioner may make grants:

(1) for services and training provided by organizations; and

(2) to develop and administer consumer-directed services.

(c) Consumer-directed services shall be provided in whole by grant-funded providers.
The deaf and hard-of-hearing regional service centers shall not provide any aspect of a
grant-funded consumer-directed services program.

(c) (d) Any entity that is able to satisfy the grant criteria is eligible to receive a grant
under paragraph (a).

(d) (e) Deafblind service providers may, but are not required to, provide intervenor
services as part of the service package provided with grant funds under this section.

Sec. 39.

Minnesota Statutes 2016, section 256R.02, subdivision 4, is amended to read:


Subd. 4.

Administrative costs.

"Administrative costs" means the identifiable costs for
administering the overall activities of the nursing home. These costs include salaries and
wages of the administrator, assistant administrator, business office employees, security
guards, and associated fringe benefits and payroll taxes, fees, contracts, or purchases related
to business office functions, licenses, and permits except as provided in the external fixed
costs category, employee recognition, travel including meals and lodging, all training except
as specified in subdivision 17, voice and data communication or transmission, office supplies,
property and liability insurance and other forms of insurance not designated to other areas
including insurance that is an employee benefit
, personnel recruitment, legal services,
accounting services, management or business consultants, data processing, information
technology, Web site, central or home office costs, business meetings and seminars, postage,
fees for professional organizations, subscriptions, security services, advertising, board of
directors fees, working capital interest expense, and bad debts and bad debt collection fees,
and costs incurred for travel and housing for persons employed by a supplemental nursing
services agency as defined in section 144A.70, subdivision 6
.

EFFECTIVE DATE.

This section is effective October 1, 2017.

Sec. 40.

Minnesota Statutes 2016, section 256R.02, subdivision 17, is amended to read:


Subd. 17.

Direct care costs.

"Direct care costs" means costs for the wages of nursing
administration, direct care registered nurses, licensed practical nurses, certified nursing
assistants, trained medication aides, employees conducting training in resident care topics
and associated fringe benefits and payroll taxes; services from a supplemental nursing
services agency; supplies that are stocked at nursing stations or on the floor and distributed
or used individually, including, but not limited to: alcohol, applicators, cotton balls,
incontinence pads, disposable ice bags, dressings, bandages, water pitchers, tongue
depressors, disposable gloves, enemas, enema equipment, soap, medication cups, diapers,
plastic waste bags, sanitary products, thermometers, hypodermic needles and syringes,
clinical reagents or similar diagnostic agents, drugs that are not paid on a separate fee
schedule by the medical assistance program or any other payer, and technology related to
the provision of nursing care to residents, such as electronic charting systems; costs of
materials used for resident care training, and training courses outside of the facility attended
by direct care staff on resident care topics; and costs for nurse consultants, pharmacy
consultants, and medical directors. Salaries and payroll taxes for nurse consultants who
work out of a central office must be allocated proportionately by total resident days or by
direct identification to the nursing facilities served by those consultants
.

Sec. 41.

Minnesota Statutes 2016, section 256R.02, subdivision 18, is amended to read:


Subd. 18.

Employer health insurance costs.

"Employer health insurance costs" means
premium expenses for group coverage and reinsurance, actual expenses incurred for
self-insured plans including reinsurance and administrative costs, and employer contributions
to employee health reimbursement and health savings accounts. Premium and expense costs
and contributions are allowable for (1) all employees and (2) the spouse and dependents of
those employees who meet the definition of full-time employees under the federal Affordable
Care Act, Public Law 111-148
are employed on average at least 30 hours of service per
week, or 130 hours of service per month
.

Sec. 42.

Minnesota Statutes 2016, section 256R.02, subdivision 19, is amended to read:


Subd. 19.

External fixed costs.

"External fixed costs" means costs related to the nursing
home surcharge under section 256.9657, subdivision 1; licensure fees under section 144.122;
family advisory council fee under section 144A.33; scholarships under section 256R.37;
planned closure rate adjustments under section 256R.40; consolidation rate adjustments
under section 144A.071, subdivisions 4c, paragraph (a), clauses (5) and (6), and 4d;
single-bed room incentives under section 256R.41; property taxes, assessments, and payments
in lieu of taxes; employer health insurance costs; quality improvement incentive payment
rate adjustments under section 256R.39; performance-based incentive payments under
section 256R.38; special dietary needs under section 256R.51; rate adjustments for
compensation-related costs for minimum wage changes under section 256R.49 provided
on or after January 1, 2018;
and Public Employees Retirement Association employer costs.

Sec. 43.

Minnesota Statutes 2016, section 256R.02, subdivision 22, is amended to read:


Subd. 22.

Fringe benefit costs.

"Fringe benefit costs" means the costs for group life,
dental, workers' compensation, and other employee insurances and short- and long-term
disability, long-term care insurance, accident insurance, supplemental insurance, legal
assistance insurance, profit sharing, health insurance costs not covered under subdivision
18, including costs associated with part-time employee family members or retirees, and

pension and retirement plan contributions, except for the Public Employees Retirement
Association and employer health insurance costs; profit sharing; and retirement plans for
which the employer pays all or a portion of the
costs.

Sec. 44.

Minnesota Statutes 2016, section 256R.02, subdivision 42, is amended to read:


Subd. 42.

Raw food costs.

"Raw food costs" means the cost of food provided to nursing
facility residents and the allocation of dietary credits. Also included are special dietary
supplements used for tube feeding or oral feeding, such as elemental high nitrogen diet.

Sec. 45.

Minnesota Statutes 2016, section 256R.02, is amended by adding a subdivision
to read:


Subd. 42a.

Real estate taxes.

"Real estate taxes" means the real estate tax liability shown
on the annual property tax statement of the nursing facility for the reporting period. The
term does not include personnel costs or fees for late payment.

Sec. 46.

Minnesota Statutes 2016, section 256R.02, is amended by adding a subdivision
to read:


Subd. 48a.

Special assessments.

"Special assessments" means the actual special
assessments and related interest paid during the reporting period. The term does not include
personnel costs or fees for late payment.

Sec. 47.

Minnesota Statutes 2016, section 256R.02, subdivision 52, is amended to read:


Subd. 52.

Therapy costs.

"Therapy costs" means any costs related to medical assistance
therapy services provided to residents that are not billed separately billable from the daily
operating rate.

Sec. 48.

Minnesota Statutes 2016, section 256R.06, subdivision 5, is amended to read:


Subd. 5.

Notice to residents.

(a) No increase in nursing facility rates for private paying
residents shall be effective unless the nursing facility notifies the resident or person
responsible for payment of the increase in writing 30 days before the increase takes effect.
The notice must include the amount of the rate increase, the new payment rate, and the date
the rate increase takes effect.

A nursing facility may adjust its rates without giving the notice required by this
subdivision when the purpose of the rate adjustment is to reflect a change in the case mix
classification of the resident. The nursing facility shall notify private pay residents of any
rate increase related to a change in case mix classifications in a timely manner after
confirmation of the case mix classification change is received from the Department of
Health.

If the state fails to set rates as required by section 256R.09, subdivision 1, the time
required for giving notice is decreased by the number of days by which the state was late
in setting the rates.

(b) If the state does not set rates by the date required in section 256R.09, subdivision 1,
or otherwise provides nursing facilities with retroactive notification of the amount of a rate
increase,
nursing facilities shall meet the requirement for advance notice by informing the
resident or person responsible for payments, on or before the effective date of the increase,
that a rate increase will be effective on that date. The requirements of paragraph (a) do not
apply to situations described in this paragraph.

If the exact amount has not yet been determined, the nursing facility may raise the rates
by the amount anticipated to be allowed. Any amounts collected from private pay residents
in excess of the allowable rate must be repaid to private pay residents with interest at the
rate used by the commissioner of revenue for the late payment of taxes and in effect on the
date the rate increase is effective.

Sec. 49.

Minnesota Statutes 2016, section 256R.07, subdivision 1, is amended to read:


Subdivision 1.

Criteria.

A nursing facility shall keep adequate documentation. In order
to be adequate, documentation must:

(1) be maintained in orderly, well-organized files;

(2) not include documentation of more than one nursing facility in one set of files unless
transactions may be traced by the commissioner to the nursing facility's annual cost report;

(3) include a paid invoice or copy of a paid invoice with date of purchase, vendor name
and address, purchaser name and delivery destination address, listing of items or services
purchased, cost of items purchased, account number to which the cost is posted, and a
breakdown of any allocation of costs between accounts or nursing facilities. If any of the
information is not available, the nursing facility shall document its good faith attempt to
obtain the information;

(4) include contracts, agreements, amortization schedules, mortgages, other debt
instruments, and all other documents necessary to explain the nursing facility's costs or
revenues; and

(5) be retained by the nursing facility to support the five most recent annual cost reports.
The commissioner may extend the period of retention if the field audit was postponed
because of inadequate record keeping or accounting practices as in section 256R.13,
subdivisions 2
and 4, the records are necessary to resolve a pending appeal, or the records
are required for the enforcement of sections 256R.04; 256R.05, subdivision 2; 256R.06,
subdivisions 2
, and 6, and 7; 256R.08, subdivisions 1 to 3; and 256R.09, subdivisions 3 and
4.

Sec. 50.

Minnesota Statutes 2016, section 256R.07, is amended by adding a subdivision
to read:


Subd. 6.

Electronic signature.

For documentation requiring a signature under this
chapter or section 256B.431 or 256B.434, use of an electronic signature as defined under
section 325L.02, paragraph (h), is allowed.

Sec. 51.

Minnesota Statutes 2016, section 256R.13, subdivision 4, is amended to read:


Subd. 4.

Extended record retention requirements.

The commissioner shall extend the
period for retention of records under section 256R.09, subdivision 3, for purposes of
performing field audits as necessary to enforce sections 256R.04; 256R.05, subdivision 2;
256R.06, subdivisions 2, and 6, and 7; 256R.08, subdivisions 1 to 3; and 256R.09,
subdivisions 3 and 4, with written notice to the facility postmarked no later than 90 days
prior to the expiration of the record retention requirement.

Sec. 52.

[256R.18] BIENNIAL REPORT.

The commissioner shall provide to the legislative committees with jurisdiction over
nursing facility payment rates a biennial report including:

(1) the impact of using cost report data to set rates without updating the cost report data
by the change in the Consumer Price Index for all urban consumers from the mid-point of
the cost report to the mid-point of the rate year;

(2) the impact of the quality adjusted care limits;

(3) the ability of nursing facilities to retain employees, including whether rate increases
are passed through to employees;

(4) the efficacy of the critical access nursing facility program under section 256R.47;
and

(5) the impact of payment rate limit reduction under section 256R.23, subdivision 6.

EFFECTIVE DATE.

This section is effective January 1, 2019.

Sec. 53.

Minnesota Statutes 2016, section 256R.37, is amended to read:


256R.37 SCHOLARSHIPS.

(a) For the 27-month period beginning October 1, 2015, through December 31, 2017,
the commissioner shall allow a scholarship per diem of up to 25 cents for each nursing
facility with no scholarship per diem that is requesting a scholarship per diem to be added
to the external fixed payment rate to be used:

(1) for employee scholarships that satisfy the following requirements:

(i) scholarships are available to all employees who work an average of at least ten hours
per week at the facility except the administrator, and to reimburse student loan expenses
for newly hired and recently graduated registered nurses and licensed practical nurses, and
training expenses for nursing assistants as specified in section 144A.611, subdivisions 2
and 4, who are newly hired and have graduated within the last 12 months; and

(ii) the course of study is expected to lead to career advancement with the facility or in
long-term care, including medical care interpreter services and social work; and

(2) to provide job-related training in English as a second language.

(b) All facilities may annually request a rate adjustment under this section by submitting
information to the commissioner on a schedule and in a form supplied by the commissioner.
The commissioner shall allow a scholarship payment rate equal to the reported and allowable
costs divided by resident days.

(c) In calculating the per diem under paragraph (b), the commissioner shall allow costs
related to tuition, direct educational expenses, and reasonable costs as defined by the
commissioner for child care costs and transportation expenses related to direct educational
expenses.

(d) The rate increase under this section is an optional rate add-on that the facility must
request from the commissioner in a manner prescribed by the commissioner. The rate
increase must be used for scholarships as specified in this section.

(e) For instances in which a rate adjustment will be 15 cents or greater, nursing facilities
that close beds during a rate year may request to have their scholarship adjustment under
paragraph (b) recalculated by the commissioner for the remainder of the rate year to reflect
the reduction in resident days compared to the cost report year.

Sec. 54.

Minnesota Statutes 2016, section 256R.40, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

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

(c) "Closure plan" means a plan to close a nursing facility and reallocate a portion of
the resulting savings to provide planned closure rate adjustments at other facilities.

(d) "Commencement of closure" means the date on which residents and designated
representatives are notified of a planned closure as provided in section 144A.161, subdivision
5a, as part of an approved closure plan.

(e) "Completion of closure" means the date on which the final resident of the nursing
facility designated for closure in an approved closure plan is discharged from the facility
or the date that beds from a partial closure are delicensed and decertified
.

(f) "Partial closure" means the delicensure and decertification of a portion of the beds
within the facility.

(g) "Planned closure rate adjustment" means an increase in a nursing facility's operating
rates resulting from a planned closure or a planned partial closure of another facility.

Sec. 55.

Minnesota Statutes 2016, section 256R.40, subdivision 5, is amended to read:


Subd. 5.

Planned closure rate adjustment.

(a) The commissioner shall calculate the
amount of the planned closure rate adjustment available under subdivision 6 according to
clauses (1) to (4):

(1) the amount available is the net reduction of nursing facility beds multiplied by $2,080;

(2) the total number of beds in the nursing facility or facilities receiving the planned
closure rate adjustment must be identified;

(3) capacity days are determined by multiplying the number determined under clause
(2) by 365; and

(4) the planned closure rate adjustment is the amount available in clause (1), divided by
capacity days determined under clause (3).

(b) A planned closure rate adjustment under this section is effective on the first day of
the month of January or July, whichever occurs first following completion of closure of the
facility designated for closure in the application and becomes part of the nursing facility's
external fixed payment rate.

(c) Upon the request of a closing facility, the commissioner must allow the facility a
closure rate adjustment as provided under section 144A.161, subdivision 10.

(d) A facility that has received a planned closure rate adjustment may reassign it to
another facility that is under the same ownership at any time within three years of its effective
date. The amount of the adjustment is computed according to paragraph (a).

(e) If the per bed dollar amount specified in paragraph (a), clause (1), is increased, the
commissioner shall recalculate planned closure rate adjustments for facilities that delicense
beds under this section on or after July 1, 2001, to reflect the increase in the per bed dollar
amount. The recalculated planned closure rate adjustment is effective from the date the per
bed dollar amount is increased.

(f) For a nursing facility that is ceasing operations through delicensure and decertification
of all beds within the facility, the planned closure rate adjustment under this section is
effective on the first day of the month following completion of closure of the facility
designated for closure in the application and becomes part of any assigned nursing facility's
external fixed payment rate.

Sec. 56.

Minnesota Statutes 2016, section 256R.41, is amended to read:


256R.41 SINGLE-BED ROOM INCENTIVE.

(a) Beginning July 1, 2005, the operating payment rate for nursing facilities reimbursed
under this chapter shall be increased by 20 percent multiplied by the ratio of the number of
new single-bed rooms created divided by the number of active beds on July 1, 2005, for
each bed closure that results in the creation of a single-bed room after July 1, 2005. The
commissioner may implement rate adjustments for up to 3,000 new single-bed rooms each
year. For eligible bed closures for which the commissioner receives a notice from a facility
during a calendar quarter that a bed has been delicensed and a new single-bed room has
been established, the rate adjustment in this paragraph shall be effective on either the first
day of the second month of January or July, whichever occurs first following that calendar
quarter
the date of the bed delicensure.

(b) A nursing facility is prohibited from discharging residents for purposes of establishing
single-bed rooms. A nursing facility must submit documentation to the commissioner in a
form prescribed by the commissioner, certifying the occupancy status of beds closed to
create single-bed rooms. In the event that the commissioner determines that a facility has
discharged a resident for purposes of establishing a single-bed room, the commissioner shall
not provide a rate adjustment under paragraph (a).

Sec. 57.

Minnesota Statutes 2016, section 256R.47, is amended to read:


256R.47 RATE ADJUSTMENT FOR CRITICAL ACCESS NURSING
FACILITIES.

(a) The commissioner, in consultation with the commissioner of health, may designate
certain nursing facilities as critical access nursing facilities. The designation shall be granted
on a competitive basis, within the limits of funds appropriated for this purpose.

(b) The commissioner shall request proposals from nursing facilities every two years.
Proposals must be submitted in the form and according to the timelines established by the
commissioner. In selecting applicants to designate, the commissioner, in consultation with
the commissioner of health, and with input from stakeholders, shall develop criteria designed
to preserve access to nursing facility services in isolated areas, rebalance long-term care,
and improve quality. To the extent practicable, the commissioner shall ensure an even
distribution of designations across the state.

(c) The commissioner shall allow the benefits in clauses (1) to (5) for nursing facilities
designated as critical access nursing facilities:

(1) partial rebasing, with the commissioner allowing a designated facility operating
payment rates being the sum of up to 60 percent of the operating payment rate determined
in accordance with section 256R.21, subdivision 3, and at least 40 percent, with the sum of
the two portions being equal to 100 percent, of the operating payment rate that would have
been allowed had the facility not been designated. The commissioner may adjust these
percentages by up to 20 percent and may approve a request for less than the amount allowed;

(2) enhanced payments for leave days. Notwithstanding section 256R.43, upon
designation as a critical access nursing facility, the commissioner shall limit payment for
leave days to 60 percent of that nursing facility's total payment rate for the involved resident,
and shall allow this payment only when the occupancy of the nursing facility, inclusive of
bed hold days, is equal to or greater than 90 percent;

(3) two designated critical access nursing facilities, with up to 100 beds in active service,
may jointly apply to the commissioner of health for a waiver of Minnesota Rules, part
4658.0500, subpart 2, in order to jointly employ a director of nursing. The commissioner
of health shall consider each waiver request independently based on the criteria under
Minnesota Rules, part 4658.0040;

(4) the minimum threshold under section 256B.431, subdivision 15, paragraph (e), shall
be 40 percent of the amount that would otherwise apply; and

(5) the quality-based rate limits under section 256R.23, subdivisions 5 to 7, apply to
designated critical access nursing facilities.

(d) Designation of a critical access nursing facility is for a period of two years, after
which the benefits allowed under paragraph (c) shall be removed. Designated facilities may
apply for continued designation.

(e) This section is suspended and no state or federal funding shall be appropriated or
allocated for the purposes of this section from January 1, 2016, to December 31, 2017 2019.

Sec. 58.

Minnesota Statutes 2016, section 256R.49, is amended to read:


256R.49 RATE ADJUSTMENTS FOR COMPENSATION-RELATED COSTS
FOR MINIMUM WAGE CHANGES.

Subdivision 1.

Rate adjustments for compensation-related costs.

(a) Operating
Payment rates of all nursing facilities that are reimbursed under this chapter shall be increased
effective for rate years beginning on and after October 1, 2014, to address changes in
compensation costs for nursing facility employees paid less than $14 per hour in accordance
with this section. Rate increases provided under this section before October 1, 2016, expire
effective January 1, 2018. Rate increases provided on or after October 1, 2016, expire two
years after the effective date of the rate increases.

(b) Nursing facilities that receive approval of the applications in subdivision 2 must
receive rate adjustments according to subdivision 4. The rate adjustments must be used to
pay compensation costs for nursing facility employees paid less than $14 per hour.

Subd. 2.

Application process.

To receive a rate adjustment, nursing facilities must
submit applications to the commissioner in a form and manner determined by the
commissioner. The applications for the rate adjustments shall include specified data, and
spending plans that describe how the funds from the rate adjustments will be allocated for
compensation to employees paid less than $14 per hour. The applications must be submitted
within three months of the effective date of any operating payment rate adjustment under
this section. The commissioner may request any additional information needed to determine
the rate adjustment within three weeks of receiving a complete application. The nursing
facility must provide any additional information requested by the commissioner within six
months of the effective date of any operating payment rate adjustment under this section.
The commissioner may waive the deadlines in this section under extraordinary circumstances.

Subd. 3.

Additional application requirements for facilities with employees
represented by an exclusive bargaining representative.

For nursing facilities in which
employees are represented by an exclusive bargaining representative, the commissioner
shall approve the applications submitted under subdivision 2 only upon receipt of a letter
or letters of acceptance of the spending plans in regard to members of the bargaining unit,
signed by the exclusive bargaining agent and dated after May 31, 2014. Upon receipt of the
letter or letters of acceptance, the commissioner shall deem all requirements of this section
as having been met in regard to the members of the bargaining unit.

Subd. 4.

Determination of the rate adjustments for compensation-related costs.

Based on the application in subdivision 2, the commissioner shall calculate the allowable
annualized compensation costs by adding the totals of clauses (1), and (2), and (3). The
result must be divided by the standardized or sum of the facility's resident days from the
most recently available cost report to determine per day amounts, which must be included
in the operating portion external fixed costs payment rate of the total payment rate and
allocated to direct care or other operating as determined by the commissioner
:

(1) the sum of the difference between $9.50 and any hourly wage rate less than $9.50
for October 1, 2016; and between the indexed value of the minimum wage, as defined in
section 177.24, subdivision 1, paragraph (f), or any other minimum wage implemented in
statute or by any local ordinance,
and any hourly wage less than that indexed value for rate
years beginning on and after October 1, 2017 January 1, 2018; multiplied by the number
of compensated hours at that wage rate; and

(2) using wages and hours in effect during the first three months of calendar year 2014,
beginning with the first pay period beginning on or after January 1, 2014; 22.2 percent of
the sum of items (i) to (viii) for October 1, 2016;

(i) for all compensated hours from $8 to $8.49 per hour, the number of compensated
hours is multiplied by $0.13;

(ii) for all compensated hours from $8.50 to $8.99 per hour, the number of compensated
hours is multiplied by $0.25;

(iii) for all compensated hours from $9 to $9.49 per hour, the number of compensated
hours is multiplied by $0.38;

(iv) for all compensated hours from $9.50 to $10.49 per hour, the number of compensated
hours is multiplied by $0.50;

(v) for all compensated hours from $10.50 to $10.99 per hour, the number of compensated
hours is multiplied by $0.40;

(vi) for all compensated hours from $11 to $11.49 per hour, the number of compensated
hours is multiplied by $0.30;

(vii) for all compensated hours from $11.50 to $11.99 per hour, the number of
compensated hours is multiplied by $0.20; and

(viii) for all compensated hours from $12 to $13 per hour, the number of compensated
hours is multiplied by $0.10; and

(3) (2) the sum of the employer's share of FICA taxes, Medicare taxes, state and federal
unemployment taxes, workers' compensation, pensions, and contributions to employee
retirement accounts attributable to the amounts in clauses clause (1) and (2).

Sec. 59.

Minnesota Statutes 2016, section 256R.53, subdivision 2, is amended to read:


Subd. 2.

Nursing facility facilities in Breckenridge border cities.

The operating
payment rate of a nonprofit nursing facility that exists on January 1, 2015, is located within
the boundaries of the city cities of Breckenridge or Moorhead, and is reimbursed under this
chapter, is equal to the greater of:

(1) the operating payment rate determined under section 256R.21, subdivision 3; or

(2) the median case mix adjusted rates, including comparable rate components as
determined by the median case mix adjusted rates, including comparable rate components
as determined by the commissioner, for the equivalent case mix indices of the nonprofit
nursing facility or facilities located in an adjacent city in another state and in cities contiguous
to the adjacent city. The commissioner shall make the comparison required in this subdivision
on November 1 of each year and shall apply it to the rates to be effective on the following
January 1.
The Minnesota facility's operating payment rate with a case mix index of 1.0 is
computed by dividing the adjacent city's nursing facility or facilities' median operating
payment rate with an index of 1.02 by 1.02. If the adjustments under this subdivision result
in a rate that exceeds the limits in section 256R.23, subdivision 5, and whose costs exceed
the rate in section 256R.24, subdivision 3, in a given rate year, the facility's rate shall not
be subject to the limits in section 256R.23, subdivision 5, and shall not be limited to the
rate established in section 256R.24, subdivision 3, for that rate year.

EFFECTIVE DATE.

The rate increases for a facility located in Moorhead are effective
for the rate year beginning January 1, 2020, and annually thereafter.

Sec. 60.

Laws 2015, chapter 71, article 7, section 54, is amended to read:


Sec. 54. EXPANSION OF CONSUMER-DIRECTED COMMUNITY SUPPORTS
BUDGET METHODOLOGY EXCEPTION.

(a) No later than September 30, 2015 2017, if necessary, the commissioner of human
services shall submit an amendment to the Centers for Medicare and Medicaid Services for
the home and community-based services waivers authorized under Minnesota Statutes,
sections 256B.092 and 256B.49, to establish an expand the 2015 exception to the
consumer-directed community supports budget methodology to provide up to 20 30 percent
more funds for both:

(1) consumer-directed community supports participants who have graduated from high
school and
have a coordinated service and support plan which identifies the need for more
services under consumer-directed community supports, either prior to graduation or in order
to increase the amount of time a person works or to improve their employment opportunities,

an increased amount of services or supports under consumer-directed community supports

than the amount they are eligible to receive currently receiving under the current
consumer-directed community supports budget methodology; and:

(i) to increase the amount of time a person works or otherwise improves employment
opportunities;

(ii) to plan a transition to, move to, or live in a setting as described in Minnesota Statutes,
section 256D.44, subdivision 5, paragraph (f), clause (1), item (ii), or (g); or

(iii) to develop and implement a positive behavior support plan;

(2) home and community-based waiver participants who are currently using licensed
services providers for employment supports or services during the day or residential services,
either of
which cost more annually than the person would spend under a consumer-directed
community supports plan for individualized employment supports or services during the
day
any or all of the supports needed to meet the goals identified in paragraph (a), clause
(1)
.

(b) The exception under paragraph (a) is limited to those persons who can demonstrate
either that they will have to leave discontinue using consumer-directed community supports
and use accept other non-self-directed waiver services because their need for day or
employment
supports needed for the goals described in paragraph (a), clause (1), cannot be
met within the consumer-directed community supports budget limits or they will move to
consumer-directed community supports and their services will cost less than services
currently being used
.

(c) The exception under paragraph (a), clause (2), is limited to those persons who can
demonstrate that, upon choosing to become a consumer-directed community support
participant, the total cost of services, including the exception, will be less than the cost of
current waiver services.

EFFECTIVE DATE.

The exception under this section is effective October 1, 2017, or
upon federal approval, whichever is later. The commissioner of human services shall notify
the revisor of statutes when federal approval is obtained.

Sec. 61.

ALZHEIMER'S DISEASE WORKING GROUP.

Subdivision 1.

Members.

(a) The Minnesota Board on Aging must appoint 16 members
to an Alzheimer's disease working group, as follows:

(1) a caregiver of a person who has been diagnosed with Alzheimer's disease;

(2) a person who has been diagnosed with Alzheimer's disease;

(3) two representatives from the nursing facility or senior housing profession;

(4) a representative of the home care or adult day services profession;

(5) two geriatricians, one of whom serves a diverse or underserved community;

(6) a psychologist who specializes in dementia care;

(7) an Alzheimer's researcher;

(8) a representative of the Alzheimer's Association;

(9) two members from community-based organizations serving one or more diverse or
underserved communities;

(10) the commissioner of human services or a designee;

(11) the commissioner of health or a designee;

(12) the ombudsman for long-term care or a designee; and

(13) one member of the Minnesota Board on Aging, selected by the board.

(b) The executive director of the Minnesota Board on Aging serves on the working group
as a nonvoting member.

(c) The appointing authorities under this subdivision must complete their appointments
no later than December 15, 2017.

(d) To the extent practicable, the membership of the working group must reflect the
diversity in Minnesota, and must include representatives from rural and metropolitan areas
and representatives of different ethnicities, races, genders, ages, cultural groups, and abilities.

Subd. 2.

Duties; recommendations.

The Alzheimer's disease working group must
review and revise the 2011 report, Preparing Minnesota for Alzheimer's: the Budgetary,
Social and Personal Impacts. The working group shall consider and make recommendations
and findings on the following issues as related to Alzheimer's disease or other dementias:

(1) analysis and assessment of public health and health care data to accurately determine
trends and disparities in cognitive decline;

(2) public awareness, knowledge, and attitudes, including knowledge gaps, stigma,
availability of information, and supportive community environments;

(3) risk reduction, including health education and health promotion on risk factors,
safety, and potentially avoidable hospitalizations;

(4) diagnosis and treatment, including early detection, access to diagnosis, quality of
dementia care, and cost of treatment;

(5) professional education and training, including geriatric education for licensed health
care professionals and dementia-specific training for direct care workers, first responders,
and other professionals in communities;

(6) residential services, including cost to families as well as regulation and licensing
gaps; and

(7) cultural competence and responsiveness to reduce health disparities and improve
access to high-quality dementia care.

Subd. 3.

Meetings.

The Board on Aging must convene the first meeting of the working
group no later than January 15, 2018. Before the first meeting, the Board on Aging must
designate one member to serve as chair. Meetings of the working group must be open to
the public, and to the extent practicable, technological means, such as Web casts, shall be
used to reach the greatest number of people throughout the state. The working group may
not meet more than five times.

Subd. 4.

Compensation.

Members of the working group serve without compensation,
but may be reimbursed for allowed actual and necessary expenses incurred in the performance
of the member's duties for the working group in the same manner and amount as authorized
by the commissioner's plan adopted under Minnesota Statutes, section 43A.18, subdivision
2.

Subd. 5.

Administrative support.

The Minnesota Board on Aging shall provide
administrative support and arrange meeting space for the working group.

Subd. 6.

Report.

The Board on Aging must submit a report providing the findings and
recommendations of the working group, including any draft legislation necessary to
implement the recommendations, to the governor and chairs and ranking minority members
of the legislative committees with jurisdiction over health care by January 15, 2019.

Subd. 7.

Expiration.

The working group expires June 30, 2019, or the day after the
working group submits the report required in subdivision 6, whichever is earlier.

Sec. 62. CONSUMER-DIRECTED COMMUNITY SUPPORTS REVISED BUDGET
METHODOLOGY REPORT.

(a) The commissioner of human services, in consultation with stakeholders and others
including representatives of lead agencies, home and community-based services waiver
participants using consumer-directed community supports, advocacy groups, state agencies,
the Institute on Community Integration at the University of Minnesota, and service and
financial management providers, shall develop a revised consumer-directed community
supports budget methodology. The new methodology shall be based on (1) the costs of
providing services as reflected by the wage and other relevant components incorporated in
the disability waiver rate formulas under chapter 256B, and (2) state-to-county
waiver-funding methodologies. The new methodology should develop individual
consumer-directed community supports budgets comparable to those provided for similar
needs individuals if paying for non-consumer-directed community supports waiver services.

(b) By December 15, 2018, the commissioner shall report a revised consumer-directed
community supports budget methodology, including proposed legislation and funding
necessary to implement the new methodology, to the chairs and ranking minority members
of the house of representatives and senate committees with jurisdiction over health and
human services.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 63. DIRECTION TO COMMISSIONER; TELECOMMUNICATION
EQUIPMENT PROGRAM.

The commissioner of human services shall work in consultation with the Commission
of Deaf, Deafblind, and Hard-of-Hearing Minnesotans to provide recommendations by
January 15, 2018, to the chairs and ranking minority members of the house of representatives
and senate committees with jurisdiction over human services to modernize the
telecommunication equipment program. The recommendations must address:

(1) types of equipment and supports the program should provide to ensure people with
communication difficulties have equitable access to telecommunications services;

(2) additional services the program should provide, such as education about technology
options that can improve a person's access to telecommunications services; and

(3) how the current program's service delivery structure might be improved to better
meet the needs of people with communication disabilities.

The commissioner shall also provide draft legislative language to accomplish the
recommendations. Final recommendations, the final report, and draft legislative language
must be approved by both the commissioner and the chair of the Commission of Deaf,
Deafblind, and Hard-of-Hearing Minnesotans.

Sec. 64. DIRECTION TO COMMISSIONER; BILLING FOR MENTAL HEALTH
SERVICES.

By January 1, 2018, the commissioner of human services shall report to the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over deaf and hard-of-hearing services on the potential costs and benefits of the
Deaf and Hard-of-Hearing Services Division billing for the cost of providing mental health
services.

Sec. 65. ELECTRONIC SERVICE DELIVERY DOCUMENTATION SYSTEM.

Subdivision 1.

Documentation; establishment.

The commissioner of human services
shall establish implementation requirements and standards for an electronic service delivery
documentation system to comply with the 21st Century Cures Act, Public Law 114-255.

Subd. 2.

Definitions.

(a) For purposes of this section, the terms in this subdivision have
the meanings given them.

(b) "Electronic service delivery documentation" means the electronic documentation of
the:

(1) type of service performed;

(2) individual receiving the service;

(3) date of the service;

(4) location of the service delivery;

(5) individual providing the service; and

(6) time the service begins and ends.

(c) "Electronic service delivery documentation system" means a system that provides
electronic service delivery documentation that complies with the 21st Century Cures Act,
Public Law 114-255, and the requirements of subdivision 3.

(d) "Service" means one of the following:

(1) personal care assistance services as defined in Minnesota Statutes, section 256B.0625,
subdivision 19a, and provided according to Minnesota Statutes, section 256B.0659; or

(2) community first services and supports under Minnesota Statutes, section 256B.85.

Subd. 3.

Requirements.

(a) In developing implementation requirements for an electronic
service delivery documentation system, the commissioner shall consider electronic visit
verification systems and other electronic service delivery documentation methods. The
commissioner shall convene stakeholders that will be impacted by an electronic service
delivery system, including service providers and their representatives, service recipients
and their representatives, and, as appropriate, those with expertise in the development and
operation of an electronic service delivery documentation system, to ensure that the
requirements:

(1) are minimally administratively and financially burdensome to a provider;

(2) are minimally burdensome to the service recipient and the least disruptive to the
service recipient in receiving and maintaining allowed services;

(3) consider existing best practices and use of electronic service delivery documentation;

(4) are conducted according to all state and federal laws;

(5) are effective methods for preventing fraud when balanced against the requirements
of clauses (1) and (2); and

(6) are consistent with the Department of Human Services' policies related to covered
services, flexibility of service use, and quality assurance.

(b) The commissioner shall make training available to providers on the electronic service
delivery documentation system requirements.

(c) The commissioner shall establish baseline measurements related to preventing fraud
and establish measures to determine the effect of electronic service delivery documentation
requirements on program integrity.

Subd. 4.

Legislative report.

(a) The commissioner shall submit a report by January 15,
2018, to the chairs and ranking minority members of the legislative committees with
jurisdiction over human services with recommendations, based on the requirements of
subdivision 3, to establish electronic service delivery documentation system requirements
and standards. The report shall identify:

(1) the essential elements necessary to operationalize a base-level electronic service
delivery documentation system to be implemented by January 1, 2019; and

(2) enhancements to the base-level electronic service delivery documentation system to
be implemented by January 1, 2019, or after, with projected operational costs and the costs
and benefits for system enhancements.

(b) The report must also identify current regulations on service providers that are either
inefficient, minimally effective, or will be unnecessary with the implementation of an
electronic service delivery documentation system.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 66. TRANSPORTATION STUDY.

The commissioner of human services, with cooperation from lead agencies and in
consultation with stakeholders, shall conduct a study to identify opportunities to increase
access to transportation services for an individual who receives home and community-based
services. The commissioner shall submit a report with recommendations to the chairs and
ranking minority members of the legislative committees with jurisdiction over human
services by January 15, 2019. The report shall:

(1) study all aspects of the current transportation service network, including the fleet
available, the different rate-setting methods currently used, methods that an individual uses
to access transportation, and the diversity of available provider agencies;

(2) identify current barriers for an individual accessing transportation and for a provider
providing waiver services transportation in the marketplace;

(3) identify efficiencies and collaboration opportunities to increase available
transportation, including transportation funded by medical assistance, and available regional
transportation and transit options;

(4) study transportation solutions in other states for delivering home and community-based
services;

(5) study provider costs required to administer transportation services;

(6) make recommendations for coordinating and increasing transportation accessibility
across the state; and

(7) make recommendations for the rate setting of waivered transportation.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 67. DIRECTION TO COMMISSIONER; ICF/DD PAYMENT RATE STUDY.

Within available appropriations, the commissioner of human services shall study the
intermediate care facility for persons with developmental disabilities payment rates under
Minnesota Statutes, sections 256B.5011 to 256B.5013, and make recommendations on the
rate structure to the chairs and ranking minority members of the legislative committees with
jurisdiction over human services policy and finance by January 15, 2018.

Sec. 68. FEDERAL WAIVER AMENDMENTS.

The commissioner of human services shall submit necessary waiver amendments to the
Centers for Medicare and Medicaid Services to add employment exploration services,
employment development services, and employment support services to the home and
community-based services waivers authorized under Minnesota Statutes, sections 256B.092
and 256B.49. The commissioner shall also submit necessary waiver amendments to remove
community-based employment services from day training and habilitation and prevocational
services. The commissioner shall submit all necessary waiver amendments by October 1,
2017.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 69.

EXCEPTION TO THE BUDGET METHODOLOGY FOR PERSONS
LEAVING INSTITUTIONS AND CRISIS RESIDENTIAL SETTINGS.

(a) By September 30, 2017, the commissioner shall establish an institutional and crisis
bed consumer-directed community supports budget exception process as described in the
home and community-based services waivers under sections 256B.092 and 256B.49. This
budget exception process shall be available for any individual who:

(1) is not offered available and appropriate services within 60 days since approval for
discharge from the individual's current institutional setting; or

(2) requires services that are more expensive than appropriate less-restrictive services
using the consumer-directed community supports option.

(b) Institutional settings for purposes of this exception include intermediate care facilities
for persons with developmental disabilities, nursing facilities, acute care hospitals, Anoka
Metro Regional Treatment Center, Minnesota Security Hospital, and crisis beds. The budget
exception shall be limited to no more than the amount of appropriate less-restrictive available
services determined by the lead agency managing the individual's home and community-based
services waiver. The lead agency shall notify the Department of Human Services of the
budget exception.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 70. REPEALER.

(a) Minnesota Statutes 2016, sections 256C.23, subdivision 3; 256C.233, subdivision
4; and 256C.25, subdivisions 1 and 2,
are repealed.

(b) Minnesota Statutes 2016, section 256B.4914, subdivision 16, is repealed effective
January 1, 2018.

ARTICLE 3

HEALTH DEPARTMENT AND PUBLIC HEALTH

Section 1.

[144.059] PALLIATIVE CARE ADVISORY COUNCIL.

Subdivision 1.

Establishment.

The Palliative Care Advisory Council is established to
advise and assist the commissioner of health regarding improving the quality and delivery
of patient-centered and family-focused palliative care.

Subd. 2.

Membership.

(a) The council shall consist of 18 public members and four
members of the legislature.

(b) The commissioner shall appoint 18 public members, including at least the following:

(1) two physicians, of which one is certified by the American Board of Hospice and
Palliative Medicine;

(2) two registered nurses or advanced practice registered nurses, of which one is certified
by the National Board for Certification of Hospice and Palliative Nurses;

(3) one care coordinator experienced in working with people with serious or chronic
illness and their families;

(4) one spiritual counselor experienced in working with people with serious or chronic
illness and their families;

(5) three licensed health professionals, such as complementary and alternative health
care practitioners, dietitians or nutritionists, pharmacists, or physical therapists, who are
neither physicians nor nurses, but who have experience as members of a palliative care
interdisciplinary team working with people with serious or chronic illness and their families;

(6) one licensed social worker experienced in working with people with serious or chronic
illness and their families;

(7) four patients or personal caregivers experienced with serious or chronic illness;

(8) one representative of a health plan company; and

(9) one physician assistant that is a member of the American Academy of Hospice and
Palliative Medicine.

(c) The Subcommittee on Committees of the Committee on Rules and Administration
shall appoint one member of the senate, the minority leader in the senate shall appoint one
member of the senate, the speaker of the house shall appoint one member of the house of
representatives, and the minority leader in the house of representatives shall appoint one
member of the house of representatives.

(d) Council membership must include, where possible, representation that is racially,
culturally, linguistically, geographically, and economically diverse.

(e) The council must include at least six members who reside outside Anoka, Carver,
Chisago, Dakota, Hennepin, Isanti, Mille Lacs, Ramsey, Scott, Sherburne, Sibley, Stearns,
Washington, or Wright Counties.

(f) Council membership must include health professionals who have palliative care work
experience or expertise in palliative care delivery models in a variety of inpatient, outpatient,
and community settings, including acute care, long-term care, or hospice, with a variety of
populations, including pediatric, youth, and adult patients.

(g) To the extent possible, council membership must include persons who have experience
in palliative care research, palliative care instruction in a medical or nursing school setting,
palliative care services for veterans as a provider or recipient, or pediatric care.

Subd. 3.

Term.

Members of the council shall serve for a term of three years and may
be reappointed. Members shall serve until their successors have been appointed.

Subd. 4.

Administration.

The commissioner or the commissioner's designee shall
provide meeting space and administrative services for the council.

Subd. 5.

Initial appointments and first meeting.

The appointing authorities shall
appoint the first members of the council by July 1, 2017. The commissioner shall convene
the first meeting by September 15, 2017, and the commissioner or the commissioner's
designee shall act as chair until the council elects a chair at its first meeting.

Subd. 6.

Chairs.

At the council's first meeting, and biannually thereafter, the members
shall elect a chair and a vice-chair whose duties shall be established by the council.

Subd. 7.

Meeting.

The council chair shall fix a time and place for regular meetings of
the council, which shall meet at least twice yearly.

Subd. 8.

No compensation.

Public members of the council serve without compensation,
except for reimbursement from the commissioner for allowed actual and necessary expenses
incurred in the performance of the public member's council duties.

Subd. 9.

Duties.

(a) The council shall consult with and advise the commissioner on
matters related to the establishment, maintenance, operation, and outcomes evaluation of
palliative care initiatives in the state.

(b) By February 15 of each year, the council shall prepare and submit to the chairs and
ranking minority members of the committees of the senate and the house of representatives
with primary jurisdiction over health care a report containing a description of:

(1) the advisory committee's assessment of the availability of palliative care in the state;

(2) the advisory committee's analysis of barriers to greater access to palliative care; and

(3) recommendations for legislative action.

(c) The Department of Health shall publish the report each year on the department's Web
site.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

[144.1215] AUTHORIZATION TO USE HANDHELD DENTAL X-RAY
EQUIPMENT.

Subdivision 1.

Definition; handheld dental x-ray equipment.

For purposes of this
section, "handheld dental x-ray equipment" means x-ray equipment that is used to take
dental radiographs, is designed to be handheld during operation, and is operated by an
individual authorized to take dental radiographs under chapter 150A.

Subd. 2.

Use authorized.

(a) Handheld dental x-ray equipment may be used if the
equipment:

(1) has been approved for human use by the United States Food and Drug Administration
and is being used in a manner consistent with that approval; and

(2) utilizes a backscatter shield that:

(i) is composed of a leaded polymer or a substance with a substantially equivalent
protective capacity;

(ii) has at least 0.25 millimeters of lead or lead-shielding equivalent; and

(iii) is permanently affixed to the handheld dental x-ray equipment.

(b) The use of handheld dental x-ray equipment is prohibited if the equipment's
backscatter shield is broken or not permanently affixed to the system.

(c) The use of handheld dental x-ray equipment shall not be limited to situations in which
it is impractical to transfer the patient to a stationary x-ray system.

(d) Handheld dental x-ray equipment must be stored when not in use, by being secured
in a restricted, locked area of the facility.

(e) Handheld dental x-ray equipment must be calibrated initially and at intervals that
must not exceed 24 months. Calibration must include the test specified in Minnesota Rules,
part 4732.1100, subpart 11.

(f) Notwithstanding Minnesota Rules, part 4732.0880, subpart 2, item C, the tube housing
and the position-indicating device of handheld dental x-ray equipment may be handheld
during an exposure.

Subd. 3.

Exemptions from certain shielding requirements.

Handheld dental x-ray
equipment used according to this section and according to manufacturer instructions is
exempt from the following requirements for the equipment:

(1) shielding requirements in Minnesota Rules, part 4732.0365, item B; and

(2) requirements for the location of the x-ray control console or utilization of a protective
barrier in Minnesota Rules, part 4732.0800, subpart 2, item B, subitems (2) and (3), provided
the equipment utilizes a backscatter shield that satisfies the requirements in subdivision 2,
paragraph (a), clause (2).

Subd. 4.

Compliance with rules.

A registrant using handheld dental x-ray equipment
shall otherwise comply with Minnesota Rules, chapter 4732.

Sec. 3.

Minnesota Statutes 2016, section 144.1501, subdivision 2, is amended to read:


Subd. 2.

Creation of account.

(a) A health professional education loan forgiveness
program account is established. The commissioner of health shall use money from the
account to establish a loan forgiveness program:

(1) for medical residents and mental health professionals agreeing to practice in designated
rural areas or underserved urban communities or specializing in the area of pediatric
psychiatry;

(2) for midlevel practitioners agreeing to practice in designated rural areas or to teach
at least 12 credit hours, or 720 hours per year in the nursing field in a postsecondary program
at the undergraduate level or the equivalent at the graduate level;

(3) for nurses who agree to practice in a Minnesota nursing home; an intermediate care
facility for persons with developmental disability; or a hospital if the hospital owns and
operates a Minnesota nursing home and a minimum of 50 percent of the hours worked by
the nurse is in the nursing home; a housing with services establishment as defined in section
144D.01, subdivision 4; or a home care provider as defined in section 144A.43, subdivision
4;
or agree to teach at least 12 credit hours, or 720 hours per year in the nursing field in a
postsecondary program at the undergraduate level or the equivalent at the graduate level;

(4) for other health care technicians agreeing to teach at least 12 credit hours, or 720
hours per year in their designated field in a postsecondary program at the undergraduate
level or the equivalent at the graduate level. The commissioner, in consultation with the
Healthcare Education-Industry Partnership, shall determine the health care fields where the
need is the greatest, including, but not limited to, respiratory therapy, clinical laboratory
technology, radiologic technology, and surgical technology;

(5) for pharmacists, advanced dental therapists, dental therapists, and public health nurses
who agree to practice in designated rural areas; and

(6) for dentists agreeing to deliver at least 25 percent of the dentist's yearly patient
encounters to state public program enrollees or patients receiving sliding fee schedule
discounts through a formal sliding fee schedule meeting the standards established by the
United States Department of Health and Human Services under Code of Federal Regulations,
title 42, section 51, chapter 303.

(b) Appropriations made to the account do not cancel and are available until expended,
except that at the end of each biennium, any remaining balance in the account that is not
committed by contract and not needed to fulfill existing commitments shall cancel to the
fund.

Sec. 4.

[144.1504] SENIOR CARE WORKFORCE INNOVATION GRANT
PROGRAM.

Subdivision 1.

Establishment.

The senior care workforce innovation grant program is
established to assist eligible applicants to fund pilot programs or expand existing programs
that increase the pool of caregivers working in the field of senior care services.

Subd. 2.

Competitive grants.

The commissioner shall make competitive grants available
to eligible applicants to expand the workforce for senior care services.

Subd. 3.

Eligibility.

(a) Eligible applicants must recruit and train individuals to work
with individuals who are primarily 65 years of age or older and receiving services through:

(1) a home and community-based setting, including housing with services establishments
as defined in section 144D.01, subdivision 4;

(2) adult day care as defined in section 245A.02, subdivision 2a;

(3) home care services as defined in section 144A.43, subdivision 3; or

(4) a nursing home as defined in section 144A.01, subdivision 5.

(b) Applicants must apply for a senior care workforce innovation grant as specified in
subdivision 4.

Subd. 4.

Application.

(a) Eligible applicants must apply for a grant on the forms and
according to the timelines established by the commissioner.

(b) Each applicant must propose a project or initiative to expand the number of workers
in the field of senior care services. At a minimum, a proposal must include:

(1) a description of the senior care workforce innovation project or initiative being
proposed, including the process by which the applicant will expand the senior care workforce;

(2) whether the applicant is proposing to target the proposed project or initiative to any
of the groups described in paragraph (c);

(3) information describing the applicant's current senior care workforce project or
initiative, if applicable;

(4) the amount of funding the applicant is seeking through the grant program;

(5) any other sources of funding the applicant has for the project or initiative;

(6) a proposed budget detailing how the grant funds will be spent; and

(7) outcomes established by the applicant to measure the success of the project or
initiative.

Subd. 5.

Commissioner's duties; requests for proposals; grantee selections.

(a) By
September 1, 2017, and annually thereafter, the commissioner shall publish a request for
proposals in the State Register specifying applicant eligibility requirements, qualifying
senior care workforce innovation program criteria, applicant selection criteria, documentation
required for program participation, maximum award amount, and methods of evaluation.

(b) Priority must be given to proposals that target employment of individuals who have
multiple barriers to employment, individuals who have been unemployed long-term, and
veterans.

(c) The commissioner shall determine the maximum award for grants and make grant
selections based on the information provided in the grant application, including the targeted
employment population, the applicant's proposed budget, the proposed measurable outcomes,
and other criteria as determined by the commissioner.

Subd. 6.

Grant funding.

Notwithstanding any law or rule to the contrary, funds awarded
to grantees in a grant agreement under this section do not lapse until the grant agreement
expires.

Subd. 7.

Reporting requirements.

(a) Grant recipients shall report to the commissioner
on the forms and according to the timelines established by the commissioner.

(b) The commissioner shall report to the chairs and ranking minority members of the
house of representatives and senate committees with jurisdiction over health by January 15,
2019, and annually thereafter, on the grant program. The report must include:

(1) information on each grant recipient;

(2) a summary of all projects or initiatives undertaken with each grant;

(3) the measurable outcomes established by each grantee, an explanation of the evaluation
process used to determine whether the outcomes were met, and the results of the evaluation;
and

(4) an accounting of how the grant funds were spent.

(c) During the grant period, the commissioner may require and collect from grant
recipients additional information necessary to evaluate the grant program.

Sec. 5.

[144.1505] PRIMARY CARE AND MENTAL HEALTH PROFESSIONS
CLINICAL TRAINING EXPANSION GRANT PROGRAM.

Subdivision 1.

Definitions.

For purposes of this section, the following definitions apply:

(1) "eligible advanced practice registered nurse program" means a program that is located
in Minnesota and is currently accredited as a master's, doctoral, or postgraduate level
advanced practice registered nurse program by the Commission on Collegiate Nursing
Education or by the Accreditation Commission for Education in Nursing, or is a candidate
for accreditation;

(2) "eligible dental therapy program" means a dental therapy education program or
advanced dental therapy education program that is located in Minnesota and is either:

(i) approved by the Board of Dentistry; or

(ii) currently accredited by the Commission on Dental Accreditation;

(3) "eligible mental health professional program" means a program that is located in
Minnesota and is listed as a mental health professional training program by the appropriate
accrediting body for clinical social work, psychology, marriage and family therapy, or
licensed professional clinical counseling, or is a candidate for accreditation;

(4) "eligible physician assistant program" means a program that is located in Minnesota
and is currently accredited as a physician assistant program by the Accreditation Review
Commission on Education for the Physician Assistant, or is a candidate for accreditation;

(5) "eligible pharmacy program" means a program that is located in Minnesota and is
currently accredited as a doctor of pharmacy program by the Accreditation Council on
Pharmacy Education;

(6) "mental health professional" means an individual providing clinical services in the
treatment of mental illness who meets one of the definitions in section 245.462, subdivision
18; and

(7) "project" means a project to establish or expand clinical training for physician
assistants, advanced practice registered nurses, pharmacists, dental therapists, advanced
dental therapists, or mental health professionals in Minnesota.

Subd. 2.

Program.

(a) The commissioner of health shall award health professional
training site grants to eligible physician assistant, advanced practice registered nurse,
pharmacy, dental therapy, and mental health professional programs to plan and implement
expanded clinical training. A planning grant shall not exceed $75,000, and a training grant
shall not exceed $150,000 for the first year, $100,000 for the second year, and $50,000 for
the third year per program.

(b) Funds may be used for:

(1) establishing or expanding clinical training for physician assistants, advanced practice
registered nurses, pharmacists, dental therapists, advanced dental therapists, and mental
health professionals in Minnesota;

(2) recruitment, training, and retention of students and faculty;

(3) connecting students with appropriate clinical training sites, internships, practicums,
or externship activities;

(4) travel and lodging for students;

(5) faculty, student, and preceptor salaries, incentives, or other financial support;

(6) development and implementation of cultural competency training;

(7) evaluations;

(8) training site improvements, fees, equipment, and supplies required to establish,
maintain, or expand a physician assistant, advanced practice registered nurse, pharmacy,
dental therapy, or mental health professional training program; and

(9) supporting clinical education in which trainees are part of a primary care team model.

Subd. 3.

Applications.

Eligible physician assistant, advanced practice registered nurse,
pharmacy, dental therapy, and mental health professional programs seeking a grant shall
apply to the commissioner. Applications must include a description of the number of
additional students who will be trained using grant funds; attestation that funding will be
used to support an increase in the number of clinical training slots; a description of the
problem that the proposed project will address; a description of the project, including all
costs associated with the project, sources of funds for the project, detailed uses of all funds
for the project, and the results expected; and a plan to maintain or operate any component
included in the project after the grant period. The applicant must describe achievable
objectives, a timetable, and roles and capabilities of responsible individuals in the
organization.

Subd. 4.

Consideration of applications.

The commissioner shall review each application
to determine whether or not the application is complete and whether the program and the
project are eligible for a grant. In evaluating applications, the commissioner shall score each
application based on factors including, but not limited to, the applicant's clarity and
thoroughness in describing the project and the problems to be addressed, the extent to which
the applicant has demonstrated that the applicant has made adequate provisions to ensure
proper and efficient operation of the training program once the grant project is completed,
the extent to which the proposed project is consistent with the goal of increasing access to
primary care and mental health services for rural and underserved urban communities, the
extent to which the proposed project incorporates team-based primary care, and project
costs and use of funds.

Subd. 5.

Program oversight.

The commissioner shall determine the amount of a grant
to be given to an eligible program based on the relative score of each eligible program's
application, other relevant factors discussed during the review, and the funds available to
the commissioner. Appropriations made to the program do not cancel and are available until
expended. During the grant period, the commissioner may require and collect from programs
receiving grants any information necessary to evaluate the program.

Sec. 6.

Minnesota Statutes 2016, section 144.1506, is amended to read:


144.1506 PRIMARY CARE PHYSICIAN RESIDENCY EXPANSION GRANT
PROGRAM.

Subdivision 1.

Definitions.

For purposes of this section, the following definitions apply:

(1) "eligible primary care physician residency program" means a program that meets
the following criteria:

(i) is located in Minnesota;

(ii) trains medical residents in the specialties of family medicine, general internal
medicine, general pediatrics, psychiatry, geriatrics, or general surgery, obstetrics and
gynecology, or other physician specialties with training programs that incorporate rural
training components
; and

(iii) is accredited by the Accreditation Council for Graduate Medical Education or
presents a credible plan to obtain accreditation;

(2) "eligible project" means a project to establish a new eligible primary care physician
residency program or create at least one new residency slot in an existing eligible primary
care
physician residency program; and

(3) "new residency slot" means the creation of a new residency position and the execution
of a contract with a new resident in a residency program.

Subd. 2.

Expansion grant program.

(a) The commissioner of health shall award primary
care
physician residency expansion grants to eligible primary care physician residency
programs to plan and implement new residency slots. A planning grant shall not exceed
$75,000, and a training grant shall not exceed $150,000 per new residency slot for the first
year, $100,000 for the second year, and $50,000 for the third year of the new residency slot.

(b) Funds may be spent to cover the costs of:

(1) planning related to establishing an accredited primary care physician residency
program;

(2) obtaining accreditation by the Accreditation Council for Graduate Medical Education
or another national body that accredits residency programs;

(3) establishing new residency programs or new resident training slots;

(4) recruitment, training, and retention of new residents and faculty;

(5) travel and lodging for new residents;

(6) faculty, new resident, and preceptor salaries related to new residency slots;

(7) training site improvements, fees, equipment, and supplies required for new primary
care
physician resident training slots; and

(8) supporting clinical education in which trainees are part of a primary care team model.

Subd. 3.

Applications for expansion grants.

Eligible primary care physician residency
programs seeking a grant shall apply to the commissioner. Applications must include the
number of new primary care physician residency slots planned or under contract; attestation
that funding will be used to support an increase in the number of available residency slots;
a description of the training to be received by the new residents, including the location of
training; a description of the project, including all costs associated with the project; all
sources of funds for the project; detailed uses of all funds for the project; the results expected;
and a plan to maintain the new residency slot after the grant period. The applicant must
describe achievable objectives, a timetable, and roles and capabilities of responsible
individuals in the organization.

Subd. 4.

Consideration of expansion grant applications.

The commissioner shall
review each application to determine whether or not the residency program application is
complete and whether the proposed new residency program and any new residency slots
are eligible for a grant. The commissioner shall award grants to support up to six family
medicine, general internal medicine, or general pediatrics residents; four psychiatry residents;
two geriatrics residents; and two four general surgery residents; two obstetrics and
gynecology residents; and four specialty physician residents participating in training programs
that incorporate rural training components
. If insufficient applications are received from
any eligible specialty, funds may be redistributed to applications from other eligible
specialties.

Subd. 5.

Program oversight.

During the grant period, the commissioner may require
and collect from grantees any information necessary to evaluate the program. Appropriations
made to the program do not cancel and are available until expended.

Sec. 7.

[144.397] STATEWIDE TOBACCO QUITLINE SERVICES.

(a) The commissioner of health shall administer, or contract for the administration of,
a statewide tobacco quitline service to assist Minnesotans who are seeking advice or services
to help them quit using tobacco products. The commissioner shall establish statewide public
awareness activities to inform the public of the availability of the service and encourage
the public to utilize the services because of the dangers and harm of tobacco use and
dependence.

(b) Services to be provided include, but are not limited to:

(1) telephone-based coaching and counseling;

(2) referrals;

(3) written materials mailed upon request;

(4) Web-based texting or e-mail services; and

(5) free Food and Drug Administration-approved tobacco cessation medications.

(c) Services provided must be consistent with evidence-based best practices in tobacco
cessation services. Services provided must be coordinated with employer, health plan
company, and private sector tobacco prevention and cessation services that may be available
to individuals depending on their employment or health coverage.

Sec. 8.

Minnesota Statutes 2016, section 144.551, subdivision 1, is amended to read:


Subdivision 1.

Restricted construction or modification.

(a) The following construction
or modification may not be commenced:

(1) any erection, building, alteration, reconstruction, modernization, improvement,
extension, lease, or other acquisition by or on behalf of a hospital that increases the bed
capacity of a hospital, relocates hospital beds from one physical facility, complex, or site
to another, or otherwise results in an increase or redistribution of hospital beds within the
state; and

(2) the establishment of a new hospital.

(b) This section does not apply to:

(1) construction or relocation within a county by a hospital, clinic, or other health care
facility that is a national referral center engaged in substantial programs of patient care,
medical research, and medical education meeting state and national needs that receives more
than 40 percent of its patients from outside the state of Minnesota;

(2) a project for construction or modification for which a health care facility held an
approved certificate of need on May 1, 1984, regardless of the date of expiration of the
certificate;

(3) a project for which a certificate of need was denied before July 1, 1990, if a timely
appeal results in an order reversing the denial;

(4) a project exempted from certificate of need requirements by Laws 1981, chapter 200,
section 2;

(5) a project involving consolidation of pediatric specialty hospital services within the
Minneapolis-St. Paul metropolitan area that would not result in a net increase in the number
of pediatric specialty hospital beds among the hospitals being consolidated;

(6) a project involving the temporary relocation of pediatric-orthopedic hospital beds to
an existing licensed hospital that will allow for the reconstruction of a new philanthropic,
pediatric-orthopedic hospital on an existing site and that will not result in a net increase in
the number of hospital beds. Upon completion of the reconstruction, the licenses of both
hospitals must be reinstated at the capacity that existed on each site before the relocation;

(7) the relocation or redistribution of hospital beds within a hospital building or
identifiable complex of buildings provided the relocation or redistribution does not result
in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds from
one physical site or complex to another; or (iii) redistribution of hospital beds within the
state or a region of the state;

(8) relocation or redistribution of hospital beds within a hospital corporate system that
involves the transfer of beds from a closed facility site or complex to an existing site or
complex provided that: (i) no more than 50 percent of the capacity of the closed facility is
transferred; (ii) the capacity of the site or complex to which the beds are transferred does
not increase by more than 50 percent; (iii) the beds are not transferred outside of a federal
health systems agency boundary in place on July 1, 1983; and (iv) the relocation or
redistribution does not involve the construction of a new hospital building;

(9) a construction project involving up to 35 new beds in a psychiatric hospital in Rice
County that primarily serves adolescents and that receives more than 70 percent of its
patients from outside the state of Minnesota;

(10) a project to replace a hospital or hospitals with a combined licensed capacity of
130 beds or less if: (i) the new hospital site is located within five miles of the current site;
and (ii) the total licensed capacity of the replacement hospital, either at the time of
construction of the initial building or as the result of future expansion, will not exceed 70
licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is less;

(11) the relocation of licensed hospital beds from an existing state facility operated by
the commissioner of human services to a new or existing facility, building, or complex
operated by the commissioner of human services; from one regional treatment center site
to another; or from one building or site to a new or existing building or site on the same
campus;

(12) the construction or relocation of hospital beds operated by a hospital having a
statutory obligation to provide hospital and medical services for the indigent that does not
result in a net increase in the number of hospital beds, notwithstanding section 144.552, 27
beds, of which 12 serve mental health needs, may be transferred from Hennepin County
Medical Center to Regions Hospital under this clause;

(13) a construction project involving the addition of up to 31 new beds in an existing
nonfederal hospital in Beltrami County;

(14) a construction project involving the addition of up to eight new beds in an existing
nonfederal hospital in Otter Tail County with 100 licensed acute care beds;

(15) a construction project involving the addition of 20 new hospital beds used for
rehabilitation services in an existing hospital in Carver County serving the southwest
suburban metropolitan area. Beds constructed under this clause shall not be eligible for
reimbursement under medical assistance or MinnesotaCare;

(16) a project for the construction or relocation of up to 20 hospital beds for the operation
of up to two psychiatric facilities or units for children provided that the operation of the
facilities or units have received the approval of the commissioner of human services;

(17) a project involving the addition of 14 new hospital beds to be used for rehabilitation
services in an existing hospital in Itasca County;

(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin County
that closed 20 rehabilitation beds in 2002, provided that the beds are used only for
rehabilitation in the hospital's current rehabilitation building. If the beds are used for another
purpose or moved to another location, the hospital's licensed capacity is reduced by 20 beds;

(19) a critical access hospital established under section 144.1483, clause (9), and section
1820 of the federal Social Security Act, United States Code, title 42, section 1395i-4, that
delicensed beds since enactment of the Balanced Budget Act of 1997, Public Law 105-33,
to the extent that the critical access hospital does not seek to exceed the maximum number
of beds permitted such hospital under federal law;

(20) notwithstanding section 144.552, a project for the construction of a new hospital
in the city of Maple Grove with a licensed capacity of up to 300 beds provided that:

(i) the project, including each hospital or health system that will own or control the entity
that will hold the new hospital license, is approved by a resolution of the Maple Grove City
Council as of March 1, 2006;

(ii) the entity that will hold the new hospital license will be owned or controlled by one
or more not-for-profit hospitals or health systems that have previously submitted a plan or
plans for a project in Maple Grove as required under section 144.552, and the plan or plans
have been found to be in the public interest by the commissioner of health as of April 1,
2005;

(iii) the new hospital's initial inpatient services must include, but are not limited to,
medical and surgical services, obstetrical and gynecological services, intensive care services,
orthopedic services, pediatric services, noninvasive cardiac diagnostics, behavioral health
services, and emergency room services;

(iv) the new hospital:

(A) will have the ability to provide and staff sufficient new beds to meet the growing
needs of the Maple Grove service area and the surrounding communities currently being
served by the hospital or health system that will own or control the entity that will hold the
new hospital license;

(B) will provide uncompensated care;

(C) will provide mental health services, including inpatient beds;

(D) will be a site for workforce development for a broad spectrum of health-care-related
occupations and have a commitment to providing clinical training programs for physicians
and other health care providers;

(E) will demonstrate a commitment to quality care and patient safety;

(F) will have an electronic medical records system, including physician order entry;

(G) will provide a broad range of senior services;

(H) will provide emergency medical services that will coordinate care with regional
providers of trauma services and licensed emergency ambulance services in order to enhance
the continuity of care for emergency medical patients; and

(I) will be completed by December 31, 2009, unless delayed by circumstances beyond
the control of the entity holding the new hospital license; and

(v) as of 30 days following submission of a written plan, the commissioner of health
has not determined that the hospitals or health systems that will own or control the entity
that will hold the new hospital license are unable to meet the criteria of this clause;

(21) a project approved under section 144.553;

(22) a project for the construction of a hospital with up to 25 beds in Cass County within
a 20-mile radius of the state Ah-Gwah-Ching facility, provided the hospital's license holder
is approved by the Cass County Board;

(23) a project for an acute care hospital in Fergus Falls that will increase the bed capacity
from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 and closing
a separately licensed 13-bed skilled nursing facility;

(24) notwithstanding section 144.552, a project for the construction and expansion of a
specialty psychiatric hospital in Hennepin County for up to 50 beds, exclusively for patients
who are under 21 years of age on the date of admission. The commissioner conducted a
public interest review of the mental health needs of Minnesota and the Twin Cities
metropolitan area in 2008. No further public interest review shall be conducted for the
construction or expansion project under this clause;

(25) a project for a 16-bed psychiatric hospital in the city of Thief River Falls, if the
commissioner finds the project is in the public interest after the public interest review
conducted under section 144.552 is complete; or

(26)(i) a project for a 20-bed psychiatric hospital, within an existing facility in the city
of Maple Grove, exclusively for patients who are under 21 years of age on the date of
admission, if the commissioner finds the project is in the public interest after the public
interest review conducted under section 144.552 is complete;

(ii) this project shall serve patients in the continuing care benefit program under section
256.9693. The project may also serve patients not in the continuing care benefit program;
and

(iii) if the project ceases to participate in the continuing care benefit program, the
commissioner must complete a subsequent public interest review under section 144.552. If
the project is found not to be in the public interest, the license must be terminated six months
from the date of that finding. If the commissioner of human services terminates the contract
without cause or reduces per diem payment rates for patients under the continuing care
benefit program below the rates in effect for services provided on December 31, 2015, the
project may cease to participate in the continuing care benefit program and continue to
operate without a subsequent public interest review; or

(27) a project involving the addition of 21 new beds in an existing psychiatric hospital
in Hennepin County that is exclusively for patients who are under 21 years of age on the
date of admission
.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 9.

[144.88] MINNESOTA BIOMEDICINE AND BIOETHICS INNOVATION
GRANTS.

Subdivision 1.

Grants.

(a) The commissioner of health, in consultation with interested
parties with relevant knowledge and expertise as specified in subdivision 2, shall award
grants to entities that apply for a grant under this subdivision to fund innovations and research
in biomedicine and bioethics. Grant funds must be used to fund biomedical and bioethical
research, and related clinical translation and commercialization activities in this state. Entities
applying for a grant must do so in a form and manner specified by the commissioner. The
commissioner and interested parties shall use the following criteria to award grants under
this subdivision:

(1) the likelihood that the research will lead to a new discovery;

(2) the prospects for commercialization of the research;

(3) the likelihood that the research will strengthen Minnesota's economy through the
creation of new businesses, increased public or private funding for research in Minnesota,
or attracting additional clinicians and researchers to Minnesota; and

(4) whether the proposed research includes a bioethics research plan to ensure the research
is conducted using ethical research practices.

(b) Projects that include the acquisition or use of human fetal tissue are not eligible for
grants under this subdivision. For purposes of this paragraph, "human fetal tissue" has the
meaning given in United States Code, title 42, section 289g-1(f).

Subd. 2.

Consultation.

In awarding grants under subdivision 1, the commissioner must
consult with interested parties who are able to provide the commissioner with technical
information, advice, and recommendations on grant projects and awards. Interested parties
with whom the commissioner must consult include but are not limited to representatives of
the University of Minnesota, Mayo Clinic, and private industries who have expertise in
biomedical research, bioethical research, clinical translation, commercialization, and medical
venture financing.

Sec. 10.

Minnesota Statutes 2016, section 144.99, subdivision 1, is amended to read:


Subdivision 1.

Remedies available.

The provisions of chapters 103I and 157 and sections
115.71 to 115.77; 144.12, subdivision 1, paragraphs (1), (2), (5), (6), (10), (12), (13), (14),
and (15)
; 144.1201 to 144.1204; 144.121; 144.1215; 144.1222; 144.35; 144.381 to 144.385;
144.411 to 144.417; 144.495; 144.71 to 144.74; 144.9501 to 144.9512; 144.97 to 144.98;
144.992; 326.70 to 326.785; 327.10 to 327.131; and 327.14 to 327.28 and all rules, orders,
stipulation agreements, settlements, compliance agreements, licenses, registrations,
certificates, and permits adopted or issued by the department or under any other law now
in force or later enacted for the preservation of public health may, in addition to provisions
in other statutes, be enforced under this section.

Sec. 11.

Minnesota Statutes 2016, section 144A.474, subdivision 11, is amended to read:


Subd. 11.

Fines.

(a) Fines and enforcement actions under this subdivision may be assessed
based on the level and scope of the violations described in paragraph (c) as follows:

(1) Level 1, no fines or enforcement;

(2) Level 2, fines ranging from $0 to $500, in addition to any of the enforcement
mechanisms authorized in section 144A.475 for widespread violations;

(3) Level 3, fines ranging from $500 to $1,000, in addition to any of the enforcement
mechanisms authorized in section 144A.475; and

(4) Level 4, fines ranging from $1,000 to $5,000, in addition to any of the enforcement
mechanisms authorized in section 144A.475.

(b) Correction orders for violations are categorized by both level and scope and fines
shall be assessed as follows:

(1) level of violation:

(i) Level 1 is a violation that has no potential to cause more than a minimal impact on
the client and does not affect health or safety;

(ii) Level 2 is a violation that did not harm a client's health or safety but had the potential
to have harmed a client's health or safety, but was not likely to cause serious injury,
impairment, or death;

(iii) Level 3 is a violation that harmed a client's health or safety, not including serious
injury, impairment, or death, or a violation that has the potential to lead to serious injury,
impairment, or death; and

(iv) Level 4 is a violation that results in serious injury, impairment, or death.

(2) scope of violation:

(i) isolated, when one or a limited number of clients are affected or one or a limited
number of staff are involved or the situation has occurred only occasionally;

(ii) pattern, when more than a limited number of clients are affected, more than a limited
number of staff are involved, or the situation has occurred repeatedly but is not found to be
pervasive; and

(iii) widespread, when problems are pervasive or represent a systemic failure that has
affected or has the potential to affect a large portion or all of the clients.

(c) If the commissioner finds that the applicant or a home care provider required to be
licensed under sections 144A.43 to 144A.482 has not corrected violations by the date
specified in the correction order or conditional license resulting from a survey or complaint
investigation, the commissioner may impose a fine. A notice of noncompliance with a
correction order must be mailed to the applicant's or provider's last known address. The
noncompliance notice must list the violations not corrected.

(d) The license holder must pay the fines assessed on or before the payment date specified.
If the license holder fails to fully comply with the order, the commissioner may issue a
second fine or suspend the license until the license holder complies by paying the fine. A
timely appeal shall stay payment of the fine until the commissioner issues a final order.

(e) A license holder shall promptly notify the commissioner in writing when a violation
specified in the order is corrected. If upon reinspection the commissioner determines that
a violation has not been corrected as indicated by the order, the commissioner may issue a
second fine. The commissioner shall notify the license holder by mail to the last known
address in the licensing record that a second fine has been assessed. The license holder may
appeal the second fine as provided under this subdivision.

(f) A home care provider that has been assessed a fine under this subdivision has a right
to a reconsideration or a hearing under this section and chapter 14.

(g) When a fine has been assessed, the license holder may not avoid payment by closing,
selling, or otherwise transferring the licensed program to a third party. In such an event, the
license holder shall be liable for payment of the fine.

(h) In addition to any fine imposed under this section, the commissioner may assess
costs related to an investigation that results in a final order assessing a fine or other
enforcement action authorized by this chapter.

(i) Fines collected under this subdivision shall be deposited in the state government
special revenue fund and credited to an account separate from the revenue collected under
section 144A.472. Subject to an appropriation by the legislature, the revenue from the fines
collected may must be used by the commissioner for special projects to improve home care
in Minnesota as recommended by the advisory council established in section 144A.4799.

Sec. 12.

Minnesota Statutes 2016, section 144A.4799, subdivision 3, is amended to read:


Subd. 3.

Duties.

(a) At the commissioner's request, the advisory council shall provide
advice regarding regulations of Department of Health licensed home care providers in this
chapter, including advice on the following:

(1) community standards for home care practices;

(2) enforcement of licensing standards and whether certain disciplinary actions are
appropriate;

(3) ways of distributing information to licensees and consumers of home care;

(4) training standards;

(5) identifying emerging issues and opportunities in the home care field, including the
use of technology in home and telehealth capabilities;

(6) allowable home care licensing modifications and exemptions, including a method
for an integrated license with an existing license for rural licensed nursing homes to provide
limited home care services in an adjacent independent living apartment building owned by
the licensed nursing home; and

(7) recommendations for studies using the data in section 62U.04, subdivision 4, including
but not limited to studies concerning costs related to dementia and chronic disease among
an elderly population over 60 and additional long-term care costs, as described in section
62U.10, subdivision 6.

(b) The advisory council shall perform other duties as directed by the commissioner.

(c) The advisory council shall annually review the balance of the account in the state
government special revenue fund described in section 144A.474, subdivision 11, paragraph
(i), and make annual recommendations by January 15 directly to the chairs and ranking
minority members of the legislative committees with jurisdiction over health and human
services regarding appropriations to the commissioner for the purposes in section 144A.474,
subdivision 11, paragraph (i).

Sec. 13.

Minnesota Statutes 2016, section 144A.70, is amended by adding a subdivision
to read:


Subd. 4a.

Nurse.

"Nurse" means a licensed practical nurse as defined in section 148.171,
subdivision 8, or a registered nurse as defined in section 148.171, subdivision 20.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 14.

Minnesota Statutes 2016, section 144A.70, subdivision 6, is amended to read:


Subd. 6.

Supplemental nursing services agency.

"Supplemental nursing services
agency" means a person, firm, corporation, partnership, or association engaged for hire in
the business of providing or procuring temporary employment in health care facilities for
nurses, nursing assistants, nurse aides, and orderlies, and other licensed health professionals.
Supplemental nursing services agency does not include an individual who only engages in
providing the individual's services on a temporary basis to health care facilities. Supplemental
nursing services agency does not include a professional home care agency licensed under
section 144A.471 that only provides staff to other home care providers.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 15.

[144H.01] DEFINITIONS.

Subdivision 1.

Application.

The terms defined in this section apply to this chapter.

Subd. 2.

Basic services.

"Basic services" includes but is not limited to:

(1) the development, implementation, and monitoring of a comprehensive protocol of
care that is developed in conjunction with the parent or guardian of a medically complex
or technologically dependent child and that specifies the medical, nursing, psychosocial,
and developmental therapies required by the medically complex or technologically dependent
child; and

(2) the caregiver training needs of the child's parent or guardian.

Subd. 3.

Commissioner.

"Commissioner" means the commissioner of health.

Subd. 4.

Licensee.

"Licensee" means an owner of a prescribed pediatric extended care
(PPEC) center licensed under this chapter.

Subd. 5.

Medically complex or technologically dependent child.

"Medically complex
or technologically dependent child" means a child under 21 years of age who, because of
a medical condition, requires continuous therapeutic interventions or skilled nursing
supervision which must be prescribed by a licensed physician and administered by, or under
the direct supervision of, a licensed registered nurse.

Subd. 6.

Owner.

"Owner" means an individual whose ownership interest provides
sufficient authority or control to affect or change decisions regarding the operation of the
PPEC center. An owner includes a sole proprietor, a general partner, or any other individual
whose ownership interest has the ability to affect the management and direction of the PPEC
center's policies.

Subd. 7.

Prescribed pediatric extended care center, PPEC center, or center.

"Prescribed pediatric extended care center," "PPEC center," or "center" means any facility
that provides nonresidential basic services to three or more medically complex or
technologically dependent children who require such services and who are not related to
the owner by blood, marriage, or adoption.

Subd. 8.

Supportive services or contracted services.

"Supportive services or contracted
services" include but are not limited to speech therapy, occupational therapy, physical
therapy, social work services, developmental services, child life services, and psychology
services.

Sec. 16.

[144H.02] LICENSURE REQUIRED.

A person may not own or operate a prescribed pediatric extended care center in this state
unless the person holds a temporary or current license issued under this chapter. A separate
license must be obtained for each PPEC center maintained on separate premises, even if
the same management operates the PPEC centers. Separate licenses are not required for
separate buildings on the same grounds. A center shall not be operated on the same grounds
as a child care center licensed under Minnesota Rules, chapter 9503.

Sec. 17.

[144H.03] EXEMPTIONS.

This chapter does not apply to:

(1) a facility operated by the United States government or a federal agency; or

(2) a health care facility licensed under chapter 144 or 144A.

Sec. 18.

[144H.04] LICENSE APPLICATION AND RENEWAL.

Subdivision 1.

Licenses.

A person seeking licensure for a PPEC center must submit a
completed application for licensure to the commissioner, in a form and manner determined
by the commissioner. The applicant must also submit the application fee, in the amount
specified in section 144H.05, subdivision 1. Effective January 1, 2018, the commissioner
shall issue a license for a PPEC center if the commissioner determines that the applicant
and center meet the requirements of this chapter and rules that apply to PPEC centers. A
license issued under this subdivision is valid for two years.

Subd. 2.

License renewal.

A license issued under subdivision 1 may be renewed for a
period of two years if the licensee:

(1) submits an application for renewal in a form and manner determined by the
commissioner, at least 30 days before the license expires. An application for renewal
submitted after the renewal deadline date must be accompanied by a late fee in the amount
specified in section 144H.05, subdivision 3;

(2) submits the renewal fee in the amount specified in section 144H.05, subdivision 2;

(3) demonstrates that the licensee has provided basic services at the PPEC center within
the past two years;

(4) provides evidence that the applicant meets the requirements for licensure; and

(5) provides other information required by the commissioner.

Subd. 3.

License not transferable.

A PPEC center license issued under this section is
not transferable to another party. Before acquiring ownership of a PPEC center, a prospective
applicant must apply to the commissioner for a new license.

Sec. 19.

[144H.05] FEES.

Subdivision 1.

Initial application fee.

The initial application fee for PPEC center
licensure is $3,820.

Subd. 2.

License renewal.

The fee for renewal of a PPEC center license is $1,800.

Subd. 3.

Late fee.

The fee for late submission of an application to renew a PPEC center
license is $25.

Subd. 4.

Change of ownership.

The fee for change of ownership of a PPEC center is
$4,200.

Subd. 4.

Nonrefundable; state government special revenue fund.

All fees collected
under this chapter are nonrefundable and must be deposited in the state treasury and credited
to the state government special revenue fund.

Sec. 20.

[144H.06] APPLICATION OF RULES FOR HOSPICE SERVICES AND
RESIDENTIAL HOSPICE FACILITIES.

Minnesota Rules, chapter 4664, shall apply to PPEC centers licensed under this chapter,
except that the following parts, subparts, items, and subitems do not apply:

(1) Minnesota Rules, part 4664.0003, subparts 2, 6, 7, 11, 12, 13, 14, and 38;

(2) Minnesota Rules, part 4664.0008;

(3) Minnesota Rules, part 4664.0010, subparts 3; 4, items A, subitem (6), and B; and 8;

(4) Minnesota Rules, part 4664.0020, subpart 13;

(5) Minnesota Rules, part 4664.0370, subpart 1;

(6) Minnesota Rules, part 4664.0390, subpart 1, items A, C, and E;

(7) Minnesota Rules, part 4664.0420;

(8) Minnesota Rules, part 4664.0425, subparts 3, item A; 4; and 6;

(9) Minnesota Rules, part 4664.0430, subparts 3, 4, 5, 7, 8, 9, 10, 11, and 12;

(10) Minnesota Rules, part 4664.0490; and

(11) Minnesota Rules, part 4664.0520.

Sec. 21.

[144H.07] SERVICES; LIMITATIONS.

Subdivision 1.

Services.

A PPEC center must provide basic services to medically complex
or technologically dependent children, based on a protocol of care established for each child.
A PPEC center may provide services up to 14 hours a day and up to six days a week.

Subd. 2.

Limitations.

A PPEC center must comply with the following standards related
to services:

(1) a child is prohibited from attending a PPEC center for more than 14 hours within a
24-hour period;

(2) a PPEC center is prohibited from providing services other than those provided to
medically complex or technologically dependent children; and

(3) the maximum capacity for medically complex or technologically dependent children
at a center shall not exceed 45 children.

Sec. 22.

[144H.08] ADMINISTRATION AND MANAGEMENT.

Subdivision 1.

Duties of owner.

(a) The owner of a PPEC center shall have full legal
authority and responsibility for the operation of the center. A PPEC center must be organized
according to a written table of organization, describing the lines of authority and
communication to the child care level. The organizational structure must be designed to
ensure an integrated continuum of services for the children served.

(b) The owner must designate one person as a center administrator, who is responsible
and accountable for overall management of the center.

Subd. 2.

Duties of administrator.

The center administrator is responsible and accountable
for overall management of the center. The administrator must:

(1) designate in writing a person to be responsible for the center when the administrator
is absent from the center for more than 24 hours;

(2) maintain the following written records, in a place and form and using a system that
allows for inspection of the records by the commissioner during normal business hours:

(i) a daily census record, which indicates the number of children currently receiving
services at the center;

(ii) a record of all accidents or unusual incidents involving any child or staff member
that caused, or had the potential to cause, injury or harm to a person at the center or to center
property;

(iii) copies of all current agreements with providers of supportive services or contracted
services;

(iv) copies of all current agreements with consultants employed by the center,
documentation of each consultant's visits, and written, dated reports; and

(v) a personnel record for each employee, which must include an application for
employment, references, employment history for the preceding five years, and copies of all
performance evaluations;

(3) develop and maintain a current job description for each employee;

(4) provide necessary qualified personnel and ancillary services to ensure the health,
safety, and proper care for each child; and

(5) develop and implement infection control policies that comply with rules adopted by
the commissioner regarding infection control.

Sec. 23.

[144H.09] ADMISSION, TRANSFER, AND DISCHARGE POLICIES;
CONSENT FORM.

Subdivision 1.

Written policies.

A PPEC center must have written policies and
procedures governing the admission, transfer, and discharge of children.