SF 4112

as introduced - 91st Legislature (2019 - 2020) Posted on 03/10/2020 08:44am

A bill for an act
relating to human services; modifying the age limit for dialectical behavioral
therapy; correcting terminology related to disability services; modifying provisions
regarding nursing facility rates; amending Minnesota Statutes 2018, sections
256B.0625, subdivision 5l; 256R.02, subdivisions 4, 17, 18, 29, 42a, 48a, by adding
a subdivision; 256R.07, subdivisions 1, 2, 3; 256R.08, subdivision 1; 256R.09,
subdivisions 2, 5; 256R.13, subdivision 4; 256R.16, subdivision 1; 256R.17,
subdivision 3; 256R.37; 256R.39; Minnesota Statutes 2019 Supplement, sections
245A.03, subdivision 7; 256R.02, subdivision 19; 256R.26, subdivision 1; repealing
Minnesota Statutes 2018, sections 256R.08, subdivision 2; 256R.49.

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

Section 1.

Minnesota Statutes 2019 Supplement, section 245A.03, subdivision 7, is
amended to read:

Subd. 7.

Licensing moratorium.

(a) The commissioner shall not issue an initial license
for child foster care licensed under Minnesota Rules, parts 2960.3000 to 2960.3340, or adult
foster care licensed under Minnesota Rules, parts 9555.5105 to 9555.6265, under this chapter
for a physical location that will not be the primary residence of the license holder for the
entire period of licensure. If a license is issued during this moratorium, and the license
holder changes the license holder's primary residence away from the physical location of
the foster care license, the commissioner shall revoke the license according to section
245A.07. The commissioner shall not issue an initial license for a community residential
setting licensed under chapter 245D. When approving an exception under this paragraph,
the commissioner shall consider the resource need determination process in paragraph (h),
the availability of foster care licensed beds in the geographic area in which the licensee
seeks to operate, the results of a person's choices during their annual assessment and service
plan review, and the recommendation of the local county board. The determination by the
commissioner is final and not subject to appeal. Exceptions to the moratorium include:

(1) foster care settings that are required to be registered under chapter 144D;

(2) foster care licenses replacing foster care licenses in existence on May 15, 2009, or
community residential setting licenses replacing adult foster care licenses in existence on
December 31, 2013, and determined to be needed by the commissioner under paragraph
(b);

(3) new foster care licenses or community residential setting licenses determined to be
needed by the commissioner under paragraph (b) for the closure of a nursing facility, ICF/DD,
or regional treatment center; restructuring of state-operated services that limits the capacity
of state-operated facilities; or allowing movement to the community for people who no
longer require the level of care provided in state-operated facilities as provided under section
256B.092, subdivision 13, or 256B.49, subdivision 24;

(4) new foster care licenses or community residential setting licenses determined to be
needed by the commissioner under paragraph (b) for persons requiring hospital level care;

deleted text begin (5) new foster care licenses or community residential setting licenses determined to be
needed by the commissioner for the transition of people from personal care assistance to
the home and community-based services;
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end new foster care licenses or community residential setting licenses determined to
be needed by the commissioner for the transition of people from the residential care waiver
services to foster care services. This exception applies only when:

(i) the person's case manager provided the person with information about the choice of
service, service provider, and location of service to help the person make an informed choice;
and

(ii) the person's foster care services are less than or equal to the cost of the person's
services delivered in the residential care waiver service setting as determined by the lead
agency; or

deleted text begin (7) deleted text end new text begin (6) new text end new foster care licenses or community residential setting licenses for people
receiving services under chapter 245D and residing in an unlicensed setting before May 1,
2017, and for which a license is required. This exception does not apply to people living in
their own home. For purposes of this clause, there is a presumption that a foster care or
community residential setting license is required for services provided to three or more
people in a dwelling unit when the setting is controlled by the provider. A license holder
subject to this exception may rebut the presumption that a license is required by seeking a
reconsideration of the commissioner's determination. The commissioner's disposition of a
request for reconsideration is final and not subject to appeal under chapter 14. The exception
is available until June 30, 2018. This exception is available when:

(i) the person's case manager provided the person with information about the choice of
service, service provider, and location of service, including in the person's home, to help
the person make an informed choice; and

(ii) the person's services provided in the licensed foster care or community residential
setting are less than or equal to the cost of the person's services delivered in the unlicensed
setting as determined by the lead agency.

(b) The commissioner shall determine the need for newly licensed foster care homes or
community residential settings as defined under this subdivision. As part of the determination,
the commissioner shall consider the availability of foster care capacity in the area in which
the licensee seeks to operate, and the recommendation of the local county board. The
determination by the commissioner must be final. A determination of need is not required
for a change in ownership at the same address.

(c) When an adult resident served by the program moves out of a foster home that is not
the primary residence of the license holder according to section 256B.49, subdivision 15,
paragraph (f), or the adult community residential setting, the county shall immediately
inform the Department of Human Services Licensing Division. The department may decrease
the statewide licensed capacity for adult foster care settings.

(d) Residential settings that would otherwise be subject to the decreased license capacity
established in paragraph (c) shall be exempt if the license holder's beds are occupied by
residents whose primary diagnosis is mental illness and the license holder is certified under
the requirements in subdivision 6a or section 245D.33.

(e) A resource need determination process, managed at the state level, using the available
reports required by section 144A.351, and other data and information shall be used to
determine where the reduced capacity determined under section 256B.493 will be
implemented. The commissioner shall consult with the stakeholders described in section
144A.351, and employ a variety of methods to improve the state's capacity to meet the
informed decisions of those people who want to move out of corporate foster care or
community residential settings, long-term service needs within budgetary limits, including
seeking proposals from service providers or lead agencies to change service type, capacity,
or location to improve services, increase the independence of residents, and better meet
needs identified by the long-term services and supports reports and statewide data and
information.

(f) At the time of application and reapplication for licensure, the applicant and the license
holder that are subject to the moratorium or an exclusion established in paragraph (a) are
required to inform the commissioner whether the physical location where the foster care
will be provided is or will be the primary residence of the license holder for the entire period
of licensure. If the primary residence of the applicant or license holder changes, the applicant
or license holder must notify the commissioner immediately. The commissioner shall print
on the foster care license certificate whether or not the physical location is the primary
residence of the license holder.

(g) License holders of foster care homes identified under paragraph (f) that are not the
primary residence of the license holder and that also provide services in the foster care home
that are covered by a federally approved home and community-based services waiver, as
authorized under chapter 256S or section 256B.092 or 256B.49, must inform the human
services licensing division that the license holder provides or intends to provide these
waiver-funded services.

(h) The commissioner may adjust capacity to address needs identified in section
144A.351. Under this authority, the commissioner may approve new licensed settings or
delicense existing settings. Delicensing of settings will be accomplished through a process
identified in section 256B.493. Annually, by August 1, the commissioner shall provide
information and data on capacity of licensed long-term services and supports, actions taken
under the subdivision to manage statewide long-term services and supports resources, and
any recommendations for change to the legislative committees with jurisdiction over the
health and human services budget.

(i) The commissioner must notify a license holder when its corporate foster care or
community residential setting licensed beds are reduced under this section. The notice of
reduction of licensed beds must be in writing and delivered to the license holder by certified
mail or personal service. The notice must state why the licensed beds are reduced and must
inform the license holder of its right to request reconsideration by the commissioner. The
license holder's request for reconsideration must be in writing. If mailed, the request for
reconsideration must be postmarked and sent to the commissioner within 20 calendar days
after the license holder's receipt of the notice of reduction of licensed beds. If a request for
reconsideration is made by personal service, it must be received by the commissioner within
20 calendar days after the license holder's receipt of the notice of reduction of licensed beds.

(j) The commissioner shall not issue an initial license for children's residential treatment
services licensed under Minnesota Rules, parts 2960.0580 to 2960.0700, under this chapter
for a program that Centers for Medicare and Medicaid Services would consider an institution
for mental diseases. Facilities that serve only private pay clients are exempt from the
moratorium described in this paragraph. The commissioner has the authority to manage
existing statewide capacity for children's residential treatment services subject to the
moratorium under this paragraph and may issue an initial license for such facilities if the
initial license would not increase the statewide capacity for children's residential treatment
services subject to the moratorium under this paragraph.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2018, section 256B.0625, subdivision 5l, is amended to read:

Subd. 5l.

Intensive mental health outpatient treatment.

Medical assistance covers
intensive mental health outpatient treatment for dialectical behavioral therapy deleted text begin for adults deleted text end .
The commissioner shall establish:

(1) certification procedures to ensure that providers of these services are qualified; and

(2) treatment protocols including required service components and criteria for admission,
continued treatment, and discharge.

Sec. 3.

Minnesota Statutes 2018, 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, new text begin purchasing and inventory employees, new text end and associated fringe benefits and payroll
taxes, fees, contracts, or purchases related to business office functions, licenses, 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 except insurance that is a fringe benefit under subdivision 22, personnel
recruitment, legal services, accounting services, management or business consultants, data
processing, information technology, website, central or home office costs, business meetings
and seminars, postage, fees for professional organizations, subscriptions, security services,
new text begin nonpromotional new text end advertising, board of directors fees, working capital interest expense, bad
debts, bad debt collection fees, and costs incurred for travel and deleted text begin housing deleted text end new text begin lodging new text end for persons
employed by a new text begin Minnesota-registered new text end supplemental nursing services agency as defined in
section 144A.70, subdivision 6.

Sec. 4.

Minnesota Statutes 2018, 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 new text begin Minnesota-registered
new text end supplemental nursing services agency new text begin up to the maximum allowable charges under section
144A.74, excluding associated lodging and travel costs new text end ; supplies that are stocked at nursing
stations or on the floor and distributed or used individually, including, but not limited to:
new text begin rubbing new text end alcohol new text begin or alcohol swabs new text end , applicators, cotton balls, incontinence pads, disposable
ice bags, dressings, bandages, water pitchers, tongue depressors, disposable gloves, enemas,
enema equipment, new text begin personal hygiene new text end soap, medication cups, diapers, deleted text begin plastic waste bags, deleted text end
sanitary products, new text begin disposable new text end thermometers, hypodermic needles and syringes, deleted text begin clinical
reagents or similar diagnostic agents, deleted text end drugs deleted text begin that are not paid deleted text end new text begin not payable new text end on a separate fee
schedule by the medical assistance program or any other payer, and deleted text begin technology related deleted text end new text begin
clinical software costs specific new text end 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. 5.

Minnesota Statutes 2018, 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 deleted text begin ; deleted text end new text begin and new text end actual expenses incurred for self-insured plans,
including deleted text begin reinsurance; deleted text end new text begin actual claims paid, stop-loss premiums, plan fees, new text end and employer
contributions to employee health reimbursement and health savings accounts. new text begin Actual costs
of self-insurance plans must not include any allowance for future funding unless the plan
meets the Medicare requirements for reporting on a premium basis when the Medicare
regulations define the actual costs. new text end Premium and expense costs and contributions are
allowable for (1) all employees and (2) the spouse and dependents of those employees who
are employed on average at least 30 hours per week.

Sec. 6.

Minnesota Statutes 2019 Supplement, 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, special 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; deleted text begin rate adjustments for
compensation-related costs for minimum wage changes under section 256R.49 provided
on or after January 1, 2018; deleted text end Public Employees Retirement Association employer costs; and
border city rate adjustments under section 256R.481.

Sec. 7.

Minnesota Statutes 2018, section 256R.02, subdivision 29, is amended to read:

Subd. 29.

Maintenance and plant operations costs.

"Maintenance and plant operations
costs" means the costs for the salaries and wages of the maintenance supervisor, engineers,
heating-plant employees, and other maintenance employees and associated fringe benefits
and payroll taxes. It also includes identifiable costs for maintenance and operation of the
building and grounds, including, but not limited to, fuel, electricity, new text begin plastic waste bags,
new text end medical waste and garbage removal, water, sewer, supplies, tools, deleted text begin and deleted text end repairs new text begin , and minor
equipment not requiring capitalization under Medicare guidelines new text end .

Sec. 8.

Minnesota Statutes 2018, section 256R.02, is amended by adding a subdivision to
read:

new text begin Subd. 32a. new text end

new text begin Minor equipment. new text end

new text begin "Minor equipment" means equipment that does not qualify
as either fixed equipment or depreciable moveable equipment defined in section 256R.261.
new text end

Sec. 9.

Minnesota Statutes 2018, section 256R.02, subdivision 42a, is amended to read:

Subd. 42a.

Real estate taxes.

"Real estate taxes" means the real estate tax liability shown
on the annual property tax deleted text begin statement deleted text end new text begin statements new text end of the nursing facility for the reporting
period. The term does not include personnel costs or fees for late payment.

Sec. 10.

Minnesota Statutes 2018, section 256R.02, subdivision 48a, is amended to read:

Subd. 48a.

Special assessments.

"Special assessments" means the actual special
assessments and related interest paid during the reporting period new text begin that are not voluntary costs new text end .
The term does not include personnel costs deleted text begin or deleted text end new text begin , new text end fees for late payment new text begin , or special assessments
for projects that are reimbursed in the property rate new text end .

Sec. 11.

Minnesota Statutes 2018, section 256R.07, subdivision 1, is amended to read:

Subdivision 1.

Criteria.

A nursing facility deleted text begin shall deleted text end new text begin must new text end 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 deleted text begin shall deleted text end new text begin must new text end 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; deleted text begin and
deleted text end

(5) new text begin include signed and dated position descriptions; and
new text end

new text begin (6) new text end 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, 6, and 7; 256R.08, subdivisions 1 deleted text begin to deleted text end new text begin and new text end 3; and 256R.09, subdivisions 3 and
4.

Sec. 12.

Minnesota Statutes 2018, section 256R.07, subdivision 2, is amended to read:

Subd. 2.

Documentation of compensation.

Compensation for personal services,
regardless of whether treated as identifiable costs or costs that are not identifiable, must be
documented on payroll records. Payrolls must be supported by time and attendance or
equivalent records for individual employees. Salaries and wages of employees which are
allocated to more than one cost category must be supported by time distribution records.
deleted text begin The method used must produce a proportional distribution of actual time spent, or an accurate
estimate of time spent performing assigned duties. The nursing facility that chooses to
estimate time spent must use a statistically valid method. The compensation must reflect
an amount proportionate to a full-time basis if the services are rendered on less than a
full-time basis. deleted text end new text begin Salary allocations are allowable using the Medicare-approved allocation
basis and methodology only if the salary costs cannot be directly determined, including
when employees provide shared services to noncovered operations.
new text end

Sec. 13.

Minnesota Statutes 2018, section 256R.07, subdivision 3, is amended to read:

Subd. 3.

Adequate documentation supporting nursing facility payrolls.

Payroll
records supporting compensation costs claimed by nursing facilities must be supported by
affirmative time and attendance records prepared by each individual at intervals of not more
than one month. The requirements of this subdivision are met when documentation is
provided under either clause (1) or (2) as follows:

(1) the affirmative time and attendance record must identify the individual's name; the
days worked during each pay period; the number of hours worked each day; and the number
of hours taken each day by the individual for vacation, sick, and other leave. The affirmative
time and attendance record must include a signed verification by the individual and the
individual's supervisor, if any, that the entries reported on the record are correct; or

(2) if the affirmative time and attendance records identifying the individual's name, the
days worked each pay period, the number of hours worked each day, and the number of
hours taken each day by the individual for vacation, sick, and other leave are deleted text begin placed on
microfilm deleted text end new text begin stored electronically new text end , equipment must be made available for viewing and printing
deleted text begin them, or if the records are stored as automated data, summary data must be available for
viewing and printing deleted text end new text begin the records new text end .

Sec. 14.

Minnesota Statutes 2018, section 256R.08, subdivision 1, is amended to read:

Subdivision 1.

Reporting of financial statements.

(a) No later than February 1 of each
year, a nursing facility deleted text begin shall deleted text end new text begin must new text end :

(1) provide the state agency with a copy of its audited financial statements or its working
trial balance;

(2) provide the state agency with a statement of ownership for the facility;

(3) provide the state agency with separate, audited financial statements or working trial
balances for every other facility owned in whole or in part by an individual or entity that
has an ownership interest in the facility;

(4) upon request, provide the state agency with separate, audited financial statements or
working trial balances for every organization with which the facility conducts business and
which is owned in whole or in part by an individual or entity which has an ownership interest
in the facility;

(5) provide the state agency with copies of leases, purchase agreements, and other
documents related to the lease or purchase of the nursing facility; and

(6) upon request, provide the state agency with copies of leases, purchase agreements,
and other documents related to the acquisition of equipment, goods, and services which are
claimed as allowable costs.

(b) Audited financial statements submitted under paragraph (a) must include a balance
sheet, income statement, statement of the rate or rates charged to private paying residents,
statement of retained earnings, statement of cash flows, notes to the financial statements,
audited applicable supplemental information, and the public accountant's report. Public
accountants must conduct audits in accordance with chapter 326A. The cost of an audit
deleted text begin shall deleted text end new text begin must new text end not be an allowable cost unless the nursing facility submits its audited financial
statements in the manner otherwise specified in this subdivision. A nursing facility must
permit access by the state agency to the public accountant's audit work papers that support
the audited financial statements submitted under paragraph (a).

(c) Documents or information provided to the state agency pursuant to this subdivision
deleted text begin shall deleted text end new text begin must new text end be public new text begin unless prohibited by the Health Insurance Portability and Accountability
Act or any other federal or state regulation. Data, notes, and preliminary drafts of reports
created, collected, and maintained by the audit offices of government entities, or persons
performing audits for government entities, and relating to an audit or investigation are
confidential data on individuals or protected nonpublic data until the final report has been
published or the audit or investigation is no longer being pursued actively, except that the
data must be disclosed as required to comply with section 6.67 or 609.456 new text end .

(d) If the requirements of paragraphs (a) and (b) are not met, the reimbursement rate
may be reduced to 80 percent of the rate in effect on the first day of the fourth calendar
month after the close of the reporting period and the reduction deleted text begin shall deleted text end new text begin must new text end continue until the
requirements are met.

Sec. 15.

Minnesota Statutes 2018, section 256R.09, subdivision 2, is amended to read:

Subd. 2.

Reporting of statistical and cost information.

All nursing facilities deleted text begin shall deleted text end new text begin must new text end
provide information annually to the commissioner on a form and in a manner determined
by the commissioner. The commissioner may separately require facilities to submit in a
manner specified by the commissioner documentation of statistical and cost information
included in the report to ensure accuracy in establishing payment rates and to perform audit
and appeal review functions under this chapter. The commissioner may also require nursing
facilities to provide statistical and cost information for a subset of the items in the annual
report on a semiannual basis. Nursing facilities deleted text begin shall deleted text end new text begin must new text end report only costs directly related
to the operation of the nursing facility. The facility deleted text begin shall deleted text end new text begin must new text end not include costs which are
separately reimbursed new text begin or reimbursable new text end by residents, medical assistance, or other payors.
Allocations of costs from central, affiliated, or corporate office and related organization
transactions shall be reported according to sections 256R.07, subdivision 3, and 256R.12,
subdivisions 1 to 7. The commissioner deleted text begin shall deleted text end new text begin must new text end not grant facilities extensions to the filing
deadline.

Sec. 16.

Minnesota Statutes 2018, section 256R.09, subdivision 5, is amended to read:

Subd. 5.

Method of accounting.

The accrual method of accounting in accordance with
generally accepted accounting principles is the only method acceptable for purposes of
satisfying the reporting requirements of this chapter. If a governmentally owned nursing
facility demonstrates that the accrual method of accounting is not applicable to its accounts
and that a cash or modified accrual method of accounting more accurately reports the nursing
facility's financial operations, the commissioner deleted text begin shall deleted text end new text begin must new text end permit the governmentally owned
nursing facility to use a cash or modified accrual method of accounting. new text begin For reimbursement
purposes, the accrued expense must be paid within 90 days following the end of the reporting
period. An expense disallowed under this section in any cost report period may not be
claimed on a subsequent cost report. Specific exemptions to the 90-day rule may be granted
by the commissioner for documented contractual arrangements such as receivership, property
tax installment payments, and pension contributions.
new text end

Sec. 17.

Minnesota Statutes 2018, section 256R.13, subdivision 4, is amended to read:

Subd. 4.

Extended record retention requirements.

The commissioner deleted text begin shall deleted text end new text begin must new text end 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, 6, and 7; 256R.08, subdivisions 1 deleted text begin to deleted text end new text begin and new text end 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. 18.

Minnesota Statutes 2018, section 256R.16, subdivision 1, is amended to read:

Subdivision 1.

Calculation of a quality score.

(a) The commissioner deleted text begin shall deleted text end new text begin must new text end
determine a quality score for each nursing facility using quality measures established in
section 256B.439, according to methods determined by the commissioner in consultation
with stakeholders and experts, and using the most recently available data as provided in the
Minnesota Nursing Home Report Card. These methods deleted text begin shall deleted text end new text begin must new text end be exempt from the
rulemaking requirements under chapter 14.

(b) For each quality measure, a score deleted text begin shall deleted text end new text begin must new text end be determined with the number of points
assigned as determined by the commissioner using the methodology established according
to this subdivision. The determination of the quality measures to be used and the methods
of calculating scores may be revised annually by the commissioner.

(c) The quality score deleted text begin shall deleted text end new text begin must new text end include up to 50 points related to the Minnesota quality
indicators score derived from the minimum data set, up to 40 points related to the resident
quality of life score derived from the consumer survey conducted under section 256B.439,
subdivision 3, and up to ten points related to the state inspection results score.

(d) The commissioner, in cooperation with the commissioner of health, may adjust the
formula in paragraph (c), or the methodology for computing the total quality score, deleted text begin effective
July 1 of any year, deleted text end with five months advance public notice. In changing the formula, the
commissioner deleted text begin shall deleted text end new text begin must new text end consider quality measure priorities registered by report card users,
advice of stakeholders, and available research.

Sec. 19.

Minnesota Statutes 2018, section 256R.17, subdivision 3, is amended to read:

Subd. 3.

Resident assessment schedule.

(a) Nursing facilities deleted text begin shall deleted text end new text begin must new text end conduct and
submit case mix classification assessments according to the schedule established by the
commissioner of health under section 144.0724, subdivisions 4 and 5.

(b) The case mix classifications established under section 144.0724, subdivision 3a,
deleted text begin shall deleted text end new text begin must new text end be effective the day of admission for new admission assessments. The effective
date for significant change assessments deleted text begin shall deleted text end new text begin and significant correction assessments must new text end
be the assessment reference date. The effective date for annual and quarterly assessments
deleted text begin shall deleted text end new text begin must new text end be the first day of the month following assessment reference date.

Sec. 20.

Minnesota Statutes 2019 Supplement, section 256R.26, subdivision 1, is amended
to read:

Subdivision 1.

Determination of limited undepreciated replacement cost.

A facility's
limited URC is the lesser of:

(1) the facility's new text begin recognized new text end URC from the appraisal; or

(2) the product of (i) the number of the facility's licensed beds three months prior to the
beginning of the rate year, (ii) the construction cost per square foot value, and (iii) 1,000
square feet.

Sec. 21.

Minnesota Statutes 2018, section 256R.37, is amended to read:

256R.37 SCHOLARSHIPS.

deleted text begin (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:
deleted text end

deleted text begin (1) for employee scholarships that satisfy the following requirements:
deleted text end

deleted text begin (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 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
deleted text end

deleted text begin (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
deleted text end

deleted text begin (2) to provide job-related training in English as a second language.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (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.
deleted text end

deleted text begin (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.
deleted text end

new text begin (a) The commissioner must provide to each facility the scholarship per diem determined
in paragraph (b). This per diem must be in the external fixed payment rate and must be
based on the allowable costs of the following for facility employees who work an average
of at least ten hours per week in the licensed nursing facility building:
new text end

new text begin (1) course of study that is expected to lead to career advancement with the facility or in
long-term care;
new text end

new text begin (2) job-related training in English as a second language;
new text end

new text begin (3) reimbursement of allowable student loan expenses for newly hired registered nurses
and licensed practical nurses, as determined by the commissioner; and
new text end

new text begin (4) training expenses as specified in section 144A.611, subdivisions 2 and 4. The ten
hour per week work requirement does not apply to nursing assistants for scholarships granted
for the training expenses specified in section 144A.611, subdivisions 2 and 4.
new text end

new text begin (b) This scholarship per diem must be equal to the allowable reported scholarship costs
divided by resident days.
new text end

new text begin (c) Allowable scholarship costs include the following: tuition, other direct educational
expenses, reasonable costs for child care and transportation expenses directly related to
education, as defined by the commissioner, and allowable student loan expenses.
new text end

new text begin (d) 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.
new text end

new text begin (e) Facility administrators are not eligible for this program.
new text end

Sec. 22.

Minnesota Statutes 2018, section 256R.39, is amended to read:

256R.39 QUALITY IMPROVEMENT INCENTIVE PROGRAM.

The commissioner deleted text begin shall deleted text end new text begin must new text end develop a quality improvement incentive program in
consultation with stakeholders. The annual funding pool available for quality improvement
incentive payments deleted text begin shall deleted text end new text begin must new text end be equal to 0.8 percent of all operating payments, not including
any rate components resulting from equitable cost-sharing for publicly owned nursing
facility program participation under section 256R.48, critical access nursing facility program
participation under section 256R.47, or performance-based incentive payment program
participation under section 256R.38. deleted text begin For the period from October 1, 2015, to December 31,
2016, rate adjustments provided under this section shall be effective for 15 months. Beginning
January 1, 2017, deleted text end new text begin An new text end annual rate deleted text begin adjustments deleted text end new text begin adjustment new text end provided under this section deleted text begin shall deleted text end new text begin
must new text end be effective for one rate year.

Sec. 23. new text begin REVISOR INSTRUCTION; CORRECTING TERMINOLOGY.
new text end

new text begin In Minnesota Statutes, sections 256.01, subdivisions 2 and 24; 256.975, subdivision 7;
256B.0911, subdivisions 1a, 3b, and 4d; and 256B.439, subdivision 4, the revisor of statutes
must substitute the term "Disability Linkage Line" or similar terms for "Disability Hub" or
similar terms. The revisor must also make grammatical changes related to the changes in
terms.
new text end

Sec. 24. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, sections 256R.08, subdivision 2; and 256R.49, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 20-7408

256R.08 REPORTING OF FINANCIAL STATEMENTS.

Subd. 2.

Extensions.

The commissioner may grant up to a 15-day extension of the reporting deadline to a nursing facility for good cause. To receive such an extension, a nursing facility shall submit a written request by January 1. The commissioner shall notify the nursing facility of the decision by January 15. Between January 1 and February 1, the nursing facility may request a reporting extension for good cause by telephone and followed by a written request.

256R.49 RATE ADJUSTMENTS FOR COMPENSATION-RELATED COSTS FOR MINIMUM WAGE CHANGES.

Subdivision 1.

Rate adjustments for compensation-related costs.

(a) Rate increases provided under this section before October 1, 2016, expire effective January 1, 2018, and rate increases provided on or after October 1, 2016, expire effective January 1, 2019.

(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), (2), and (3). The result must be divided by the standardized or resident days from the most recently available cost report to determine per day amounts, which must be included in the operating portion 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), and any hourly wage less than that indexed value for rate years beginning on and after October 1, 2017; multiplied by the number of compensated hours at that wage rate;

(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) 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 (1) and (2).