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Key: (1) language to be deleted (2) new language

                            CHAPTER 375-S.F.No. 3099 
                  An act relating to human services; modifying 
                  provisions for certain government data; modifying the 
                  Human Services Licensing Act; modifying certain 
                  hearing provisions; modifying provisions for reporting 
                  maltreatment of minors and vulnerable adults; 
                  modifying continuing care provisions; modifying 
                  moratorium provisions on certification of nursing home 
                  beds; modifying eligibility for transition planning 
                  grants; providing for optional registration as housing 
                  with services establishment; modifying case manager 
                  continuing education requirements; modifying 
                  provisions for interstate contracts for mental health 
                  services; modifying commissioner's authority to 
                  administer a supplemental drug rebate program; 
                  designating state agent to carry out responsibilities 
                  under the Ryan White Comprehensive AIDS Resources 
                  Emergency Act; allowing certain nursing homes to elect 
                  to participate in the medical assistance program; 
                  modifying medical assistance provisions; modifying 
                  group residential housing provisions; modifying 
                  MinnesotaCare provisions; modifying prior 
                  appropriations; providing for the use of certain 
                  grants to develop certain housing options; providing 
                  for deaf-blind services; modifying provisions for 
                  funding medical education; providing for special 
                  education; providing for identification of certain 
                  deceased individuals; modifying provisions for rural 
                  hospital capital improvement grants; modifying 
                  provisions for costs associated with patient records; 
                  requiring legislative approval of Clean Indoor Air Act 
                  rules; modifying acupuncture provisions; modifying 
                  provisions for county relief of the poor; requiring 
                  studies, reports, and recommendations; appropriating 
                  money; amending Minnesota Statutes 2000, sections 
                  13.41, subdivision 1; 13.46, subdivision 3; 62J.692, 
                  subdivision 4, as amended; 125A.76, subdivision 5; 
                  144.05, by adding a subdivision; 144.335, subdivision 
                  5; 144.417, subdivision 1; 144D.01, subdivision 4; 
                  147B.02, subdivision 9; 245.462, subdivision 4; 
                  245.4871, subdivision 4; 245.50, subdivisions 1, 2, 5; 
                  245A.02, by adding subdivisions; 245A.035, subdivision 
                  3; 245A.04, by adding a subdivision; 256.01, by adding 
                  a subdivision; 256.9657, subdivision 1, as amended; 
                  256B.0625, subdivisions 26, as amended, 35, by adding 
                  a subdivision; 256B.0915, subdivisions 4, 6, by adding 
                  a subdivision; 256B.19, subdivision 1, as amended; 
                  256B.431, subdivisions 14, 30; 256B.5012, subdivision 
                  2; 256B.69, subdivision 5a, as amended; 256I.04, 
                  subdivision 2a; 256L.12, subdivision 9, as amended; 
                  261.063; 626.557, subdivision 3a; Minnesota Statutes 
                  2001 Supplement, sections 13.46, subdivisions 1, 4; 
                  125A.515; 144.148, subdivision 2; 144A.071, 
                  subdivision 1a; 144A.36, subdivision 1; 149A.90, 
                  subdivision 1; 245A.03, subdivision 2; 245A.04, 
                  subdivisions 3, 3a, 3b; 245A.07, subdivisions 2a, 3; 
                  245A.144; 245A.16, subdivision 1; 256.01, subdivision 
                  2, as amended; 256.045, subdivisions 3b, 4; 256B.0625, 
                  subdivision 13, as amended; 256B.0627, subdivision 10; 
                  256B.0911, subdivisions 4b, 4d; 256B.0913, 
                  subdivisions 4, 5, 8, 10, 12, 14; 256B.0915, 
                  subdivisions 3, 5; 256B.0924, subdivision 6; 
                  256B.0951, subdivisions 7, 8; 256B.431, subdivisions 
                  2e, 33; 256B.437, subdivisions 3, 6; 256B.438, 
                  subdivision 1; 256B.76; 626.556, subdivision 10i; 
                  626.557, subdivision 9d; Laws 2002, chapter 220, 
                  article 17, section 2, subdivision 6; proposing coding 
                  for new law in Minnesota Statutes, chapters 144D; 
                  245A; repealing Minnesota Statutes 2000, section 
                  147B.01, subdivisions 8, 15; Minnesota Statutes 2001 
                  Supplement, section 256B.0621, subdivision 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                                   LICENSING 
           Section 1.  Minnesota Statutes 2000, section 13.41, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] As used in this section 
        "licensing agency" means any board, department or agency of this 
        state which is given the statutory authority to issue 
        professional or other types of licenses, except the various 
        agencies primarily administered by the commissioner of human 
        services.  Data pertaining to persons or agencies licensed or 
        registered under authority of the commissioner of human services 
        shall be administered pursuant to section 13.46, subdivision 4. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 13.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] As used in this section: 
           (a) "Individual" means an individual according to section 
        13.02, subdivision 8, but does not include a vendor of services. 
           (b) "Program" includes all programs for which authority is 
        vested in a component of the welfare system according to statute 
        or federal law, including, but not limited to, the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, Minnesota Family Investment Program, 
        medical assistance, general assistance, general assistance 
        medical care, and child support collections.  
           (c) "Welfare system" includes the department of human 
        services, local social services agencies, county welfare 
        agencies, private licensing agencies, the public authority 
        responsible for child support enforcement, human services 
        boards, community mental health center boards, state hospitals, 
        state nursing homes, the ombudsman for mental health and mental 
        retardation, and persons, agencies, institutions, organizations, 
        and other entities under contract to any of the above agencies 
        to the extent specified in the contract. 
           (d) "Mental health data" means data on individual clients 
        and patients of community mental health centers, established 
        under section 245.62, mental health divisions of counties and 
        other providers under contract to deliver mental health 
        services, or the ombudsman for mental health and mental 
        retardation. 
           (e) "Fugitive felon" means a person who has been convicted 
        of a felony and who has escaped from confinement or violated the 
        terms of probation or parole for that offense. 
           (f) "Private licensing agency" means an agency licensed by 
        the commissioner of human services under chapter 245A to perform 
        the duties under section 245A.16. 
           Sec. 3.  Minnesota Statutes 2000, section 13.46, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INVESTIGATIVE DATA.] (a) Data on persons, 
        including data on vendors of services and data on licensees, 
        that is collected, maintained, used, or disseminated by the 
        welfare system in an investigation, authorized by statute and 
        relating to the enforcement of rules or law, is confidential 
        data on individuals pursuant to section 13.02, subdivision 3, or 
        protected nonpublic data not on individuals pursuant to section 
        13.02, subdivision 13, and shall not be disclosed except: 
           (a) (1) pursuant to section 13.05; 
           (b) (2) pursuant to statute or valid court order; 
           (c) (3) to a party named in a civil or criminal proceeding, 
        administrative or judicial, for preparation of defense; or 
           (d) (4) to provide notices required or permitted by statute.
           The data referred to in this subdivision shall be 
        classified as public data upon its submission to an 
        administrative law judge or court in an administrative or 
        judicial proceeding.  Inactive welfare investigative data shall 
        be treated as provided in section 13.39, subdivision 3.  
           (b) Notwithstanding any other provision in law, the 
        commissioner of human services shall provide all active and 
        inactive investigative data, including the name of the reporter 
        of alleged maltreatment under section 626.556 or 626.557, to the 
        ombudsman for mental health and retardation upon the request of 
        the ombudsman. 
           Sec. 4.  Minnesota Statutes 2001 Supplement, section 13.46, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LICENSING DATA.] (a) As used in this subdivision:
           (1) "licensing data" means all data collected, maintained, 
        used, or disseminated by the welfare system pertaining to 
        persons licensed or registered or who apply for licensure or 
        registration or who formerly were licensed or registered under 
        the authority of the commissioner of human services; 
           (2) "client" means a person who is receiving services from 
        a licensee or from an applicant for licensure; and 
           (3) "personal and personal financial data" means social 
        security numbers, identity of and letters of reference, 
        insurance information, reports from the bureau of criminal 
        apprehension, health examination reports, and social/home 
        studies. 
           (b)(1) Except as provided in paragraph (c), the following 
        data on current and former licensees are public:  name, address, 
        telephone number of licensees, date of receipt of a completed 
        application, dates of licensure, licensed capacity, type of 
        client preferred, variances granted, type of dwelling, name and 
        relationship of other family members, previous license history, 
        class of license, and the existence and status of complaints.  
        When a correction order or fine has been issued, a license is 
        suspended, immediately suspended, revoked, denied, or made 
        conditional, or a complaint is resolved, the following data on 
        current and former licensees are public:  the substance and 
        investigative findings of the complaint, licensing violation, or 
        substantiated maltreatment; the record of informal resolution of 
        a licensing violation; orders of hearing; findings of fact; 
        conclusions of law; specifications of the final correction 
        order, fine, suspension, immediate suspension, revocation, 
        denial, or conditional license contained in the record of 
        licensing action; and the status of any appeal of these 
        actions.  When an individual licensee is a substantiated 
        perpetrator of maltreatment, and the substantiated maltreatment 
        is a reason for the licensing action, the identity of the 
        licensee as a perpetrator is public data.  For purposes of this 
        clause, a person is a substantiated perpetrator if the 
        maltreatment determination has been upheld under section 
        626.556, subdivision 10i, 626.557, subdivision 9d, or 256.045, 
        or an individual or facility has not timely exercised appeal 
        rights under these sections. 
           (2) For applicants who withdraw their application prior to 
        licensure or denial of a license, the following data are 
        public:  the name of the applicant, the city and county in which 
        the applicant was seeking licensure, the dates of the 
        commissioner's receipt of the initial application and completed 
        application, the type of license sought, and the date of 
        withdrawal of the application. 
           (3) For applicants who are denied a license, the following 
        data are public:  the name of the applicant, the city and county 
        in which the applicant was seeking licensure, the dates of the 
        commissioner's receipt of the initial application and completed 
        application, the type of license sought, the date of denial of 
        the application, the nature of the basis for the denial, and the 
        status of any appeal of the denial. 
           (4) The following data on persons subject to 
        disqualification under section 245A.04 in connection with a 
        license to provide family day care for children, child care 
        center services, foster care for children in the provider's 
        home, or foster care or day care services for adults in the 
        provider's home, are public:  the nature of any disqualification 
        set aside under section 245A.04, subdivision 3b, and the reasons 
        for setting aside the disqualification; and the reasons for 
        granting any variance under section 245A.04, subdivision 9. 
           (5) When maltreatment is substantiated under section 
        626.556 or 626.557 and the victim and the substantiated 
        perpetrator are affiliated with a program licensed under chapter 
        245A, the commissioner of human services, local social services 
        agency, or county welfare agency may inform the license holder 
        where the maltreatment occurred of the identity of the 
        substantiated perpetrator and the victim. 
           (c) The following are private data on individuals under 
        section 13.02, subdivision 12, or nonpublic data under section 
        13.02, subdivision 9:  personal and personal financial data on 
        family day care program and family foster care program 
        applicants and licensees and their family members who provide 
        services under the license. 
           (d) The following are private data on individuals:  the 
        identity of persons who have made reports concerning licensees 
        or applicants that appear in inactive investigative data, and 
        the records of clients or employees of the licensee or applicant 
        for licensure whose records are received by the licensing agency 
        for purposes of review or in anticipation of a contested 
        matter.  The names of reporters under sections 626.556 and 
        626.557 may be disclosed only as provided in section 626.556, 
        subdivision 11, or 626.557, subdivision 12b. 
           (e) Data classified as private, confidential, nonpublic, or 
        protected nonpublic under this subdivision become public data if 
        submitted to a court or administrative law judge as part of a 
        disciplinary proceeding in which there is a public hearing 
        concerning a license which has been suspended, immediately 
        suspended, revoked, or denied. 
           (f) Data generated in the course of licensing 
        investigations that relate to an alleged violation of law are 
        investigative data under subdivision 3. 
           (g) Data that are not public data collected, maintained, 
        used, or disseminated under this subdivision that relate to or 
        are derived from a report as defined in section 626.556, 
        subdivision 2, or 626.5572, subdivision 18, are subject to the 
        destruction provisions of sections 626.556, subdivision 11c, and 
        626.557, subdivision 12b.  
           (h) Upon request, not public data collected, maintained, 
        used, or disseminated under this subdivision that relate to or 
        are derived from a report of substantiated maltreatment as 
        defined in section 626.556 or 626.557 may be exchanged with the 
        department of health for purposes of completing background 
        studies pursuant to section 144.057 and with the department of 
        corrections for purposes of completing background studies 
        pursuant to section 241.021. 
           (i) Data on individuals collected according to licensing 
        activities under chapter 245A, and data on individuals collected 
        by the commissioner of human services according to maltreatment 
        investigations under sections 626.556 and 626.557, may be shared 
        with the department of human rights, the department of health, 
        the department of corrections, the ombudsman for mental health 
        and retardation, and the individual's professional regulatory 
        board when there is reason to believe that laws or standards 
        under the jurisdiction of those agencies may have been violated. 
           (j) In addition to the notice of determinations required 
        under section 626.556, subdivision 10f, if the commissioner or 
        the local social services agency has determined that an 
        individual is a substantiated perpetrator of maltreatment of a 
        child based on sexual abuse, as defined in section 626.556, 
        subdivision 2, and the commissioner or local social services 
        agency knows that the individual is a person responsible for a 
        child's care in another facility, the commissioner or local 
        social services agency shall notify the head of that facility of 
        this determination.  The notification must include an 
        explanation of the individual's available appeal rights and the 
        status of any appeal.  If a notice is given under this 
        paragraph, the government entity making the notification shall 
        provide a copy of the notice to the individual who is the 
        subject of the notice. 
           Sec. 5.  Minnesota Statutes 2000, section 245A.02, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [ADULT DAY CARE.] "Adult day care" means a 
        program operating less than 24 hours per day that provides 
        functionally impaired adults with an individualized and 
        coordinated set of services including health services, social 
        services, and nutritional services that are directed at 
        maintaining or improving the participants' capabilities for 
        self-care.  Adult day care does not include programs where 
        adults gather or congregate primarily for purposes of 
        socialization, education, supervision, caregiver respite, 
        religious expression, exercise, or nutritious meals. 
           Sec. 6.  Minnesota Statutes 2000, section 245A.02, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [ANNUAL OR ANNUALLY.] "Annual" or "annually" 
        means prior to or within the same month of the subsequent 
        calendar year. 
           Sec. 7.  Minnesota Statutes 2001 Supplement, section 
        245A.03, subdivision 2, is amended to read: 
           Subd. 2.  [EXCLUSION FROM LICENSURE.] (a) This chapter does 
        not apply to: 
           (1) residential or nonresidential programs that are 
        provided to a person by an individual who is related unless the 
        residential program is a child foster care placement made by a 
        local social services agency or a licensed child-placing agency, 
        except as provided in subdivision 2a; 
           (2) nonresidential programs that are provided by an 
        unrelated individual to persons from a single related family; 
           (3) residential or nonresidential programs that are 
        provided to adults who do not abuse chemicals or who do not have 
        a chemical dependency, a mental illness, mental retardation or a 
        related condition, a functional impairment, or a physical 
        handicap; 
           (4) sheltered workshops or work activity programs that are 
        certified by the commissioner of economic security; 
           (5) programs for children enrolled in kindergarten to the 
        12th grade and prekindergarten special education in a school as 
        defined in section 120A.22, subdivision 4, and programs serving 
        children in combined special education and regular 
        prekindergarten programs that are operated or assisted by the 
        commissioner of children, families, and learning; 
           (6) nonresidential programs primarily for children that 
        provide care or supervision, without charge for ten or fewer 
        days a year, and for periods of less than three hours a day 
        while the child's parent or legal guardian is in the same 
        building as the nonresidential program or present within another 
        building that is directly contiguous to the building in which 
        the nonresidential program is located; 
           (7) nursing homes or hospitals licensed by the commissioner 
        of health except as specified under section 245A.02; 
           (8) board and lodge facilities licensed by the commissioner 
        of health that provide services for five or more persons whose 
        primary diagnosis is mental illness who have refused an 
        appropriate residential program offered by a county agency.  
        This exclusion expires on July 1, 1990; 
           (9) homes providing programs for persons placed there by a 
        licensed agency for legal adoption, unless the adoption is not 
        completed within two years; 
           (10) programs licensed by the commissioner of corrections; 
           (11) recreation programs for children or adults that 
        operate for fewer than 40 calendar days in a calendar year or 
        programs operated by a park and recreation board of a city of 
        the first class whose primary purpose is to provide social and 
        recreational activities to school age children, provided the 
        program is approved by the park and recreation board; 
           (12) programs operated by a school as defined in section 
        120A.22, subdivision 4, whose primary purpose is to provide 
        child care to school-age children, provided the program is 
        approved by the district's school board; 
           (13) Head Start nonresidential programs which operate for 
        less than 31 days in each calendar year; 
           (14) noncertified boarding care homes unless they provide 
        services for five or more persons whose primary diagnosis is 
        mental illness or mental retardation; 
           (15) nonresidential programs for nonhandicapped children 
        provided for a cumulative total of less than 30 days in any 
        12-month period; 
           (16) residential programs for persons with mental illness, 
        that are located in hospitals, until the commissioner adopts 
        appropriate rules; 
           (17) the religious instruction of school-age children; 
        Sabbath or Sunday schools; or the congregate care of children by 
        a church, congregation, or religious society during the period 
        used by the church, congregation, or religious society for its 
        regular worship; 
           (18) camps licensed by the commissioner of health under 
        Minnesota Rules, chapter 4630; 
           (19) mental health outpatient services for adults with 
        mental illness or children with emotional disturbance; 
           (20) residential programs serving school-age children whose 
        sole purpose is cultural or educational exchange, until the 
        commissioner adopts appropriate rules; 
           (21) unrelated individuals who provide out-of-home respite 
        care services to persons with mental retardation or related 
        conditions from a single related family for no more than 90 days 
        in a 12-month period and the respite care services are for the 
        temporary relief of the person's family or legal representative; 
           (22) respite care services provided as a home and 
        community-based service to a person with mental retardation or a 
        related condition, in the person's primary residence; 
           (23) community support services programs as defined in 
        section 245.462, subdivision 6, and family community support 
        services as defined in section 245.4871, subdivision 17; 
           (24) the placement of a child by a birth parent or legal 
        guardian in a preadoptive home for purposes of adoption as 
        authorized by section 259.47; 
           (25) settings registered under chapter 144D which provide 
        home care services licensed by the commissioner of health to 
        fewer than seven adults; or 
           (26) consumer-directed community support service funded 
        under the Medicaid waiver for persons with mental retardation 
        and related conditions when the individual who provided the 
        service is:  
           (i) the same individual who is the direct payee of these 
        specific waiver funds or paid by a fiscal agent, fiscal 
        intermediary, or employer of record; and 
           (ii) not otherwise under the control of a residential or 
        nonresidential program that is required to be licensed under 
        this chapter when providing the service. 
           (b) For purposes of paragraph (a), clause (6), a building 
        is directly contiguous to a building in which a nonresidential 
        program is located if it shares a common wall with the building 
        in which the nonresidential program is located or is attached to 
        that building by skyway, tunnel, atrium, or common roof. 
           (c) Nothing in this chapter shall be construed to require 
        licensure for any services provided and funded according to an 
        approved federal waiver plan where licensure is specifically 
        identified as not being a condition for the services and funding.
           Sec. 8.  Minnesota Statutes 2000, section 245A.035, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REQUIREMENTS FOR EMERGENCY LICENSE.] Before an 
        emergency license may be issued, the following requirements must 
        be met: 
           (1) the county agency must conduct an initial inspection of 
        the premises where the foster care is to be provided to ensure 
        the health and safety of any child placed in the home.  The 
        county agency shall conduct the inspection using a form 
        developed by the commissioner; 
           (2) at the time of the inspection or placement, whichever 
        is earlier, the relative being considered for an emergency 
        license shall receive an application form for a child foster 
        care license; and 
           (3) whenever possible, prior to placing the child in the 
        relative's home, the relative being considered for an emergency 
        license shall provide the information required by section 
        245A.04, subdivision 3, paragraph (b); and 
           (4) if the county determines, prior to the issuance of an 
        emergency license, that anyone requiring a background study may 
        be disqualified under section 245A.04, and the disqualification 
        is one which the commissioner cannot set aside, an emergency 
        license shall not be issued. 
           Sec. 9.  Minnesota Statutes 2001 Supplement, section 
        245A.04, subdivision 3, is amended to read: 
           Subd. 3.  [BACKGROUND STUDY OF THE APPLICANT; DEFINITIONS.] 
        (a) Individuals and organizations that are required in statute 
        to initiate background studies under this section shall comply 
        with the following requirements: 
           (1) Applicants for licensure, license holders, and other 
        entities as provided in this section must submit completed 
        background study forms to the commissioner before individuals 
        specified in paragraph (c), clauses (1) to (4), (6), and (7), 
        begin positions allowing direct contact in any licensed program. 
           (2) Applicants and license holders under the jurisdiction 
        of other state agencies who are required in other statutory 
        sections to initiate background studies under this section must 
        submit completed background study forms to the commissioner 
        prior to the background study subject beginning in a position 
        allowing direct contact in the licensed program, or where 
        applicable, prior to being employed. 
           (3) Organizations required to initiate background studies 
        under section 256B.0627 for individuals described in paragraph 
        (c), clause (5), must submit a completed background study form 
        to the commissioner before those individuals begin a position 
        allowing direct contact with persons served by the 
        organization.  The commissioner shall recover the cost of these 
        background studies through a fee of no more than $12 per study 
        charged to the organization responsible for submitting the 
        background study form.  The fees collected under this paragraph 
        are appropriated to the commissioner for the purpose of 
        conducting background studies.  
           Upon receipt of the background study forms from the 
        entities in clauses (1) to (3), the commissioner shall complete 
        the background study as specified under this section and provide 
        notices required in subdivision 3a.  Unless otherwise specified, 
        the subject of a background study may have direct contact with 
        persons served by a program after the background study form is 
        mailed or submitted to the commissioner pending notification of 
        the study results under subdivision 3a.  A county agency may 
        accept a background study completed by the commissioner under 
        this section in place of the background study required under 
        section 245A.16, subdivision 3, in programs with joint licensure 
        as home and community-based services and adult foster care for 
        people with developmental disabilities when the license holder 
        does not reside in the foster care residence and the subject of 
        the study has been continuously affiliated with the license 
        holder since the date of the commissioner's study. 
           (b) The definitions in this paragraph apply only to 
        subdivisions 3 to 3e. 
           (1) "Background study" means the review of records 
        conducted by the commissioner to determine whether a subject is 
        disqualified from direct contact with persons served by a 
        program, and where specifically provided in statutes, whether a 
        subject is disqualified from having access to persons served by 
        a program. 
           (2) "Continuous, direct supervision" means an individual is 
        within sight or hearing of the supervising person to the extent 
        that supervising person is capable at all times of intervening 
        to protect the health and safety of the persons served by the 
        program. 
           (3) "Contractor" means any person, regardless of employer, 
        who is providing program services for hire under the control of 
        the provider. 
           (4) "Direct contact" means providing face-to-face care, 
        training, supervision, counseling, consultation, or medication 
        assistance to persons served by the program. 
           (5) "Reasonable cause" means information or circumstances 
        exist which provide the commissioner with articulable suspicion 
        that further pertinent information may exist concerning a 
        subject.  The commissioner has reasonable cause when, but not 
        limited to, the commissioner has received a report from the 
        subject, the license holder, or a third party indicating that 
        the subject has a history that would disqualify the person or 
        that may pose a risk to the health or safety of persons 
        receiving services. 
           (6) "Subject of a background study" means an individual on 
        whom a background study is required or completed. 
           (c) The applicant, license holder, registrant under section 
        144A.71, subdivision 1, bureau of criminal apprehension, 
        commissioner of health, and county agencies, after written 
        notice to the individual who is the subject of the study, shall 
        help with the study by giving the commissioner criminal 
        conviction data and reports about the maltreatment of adults 
        substantiated under section 626.557 and the maltreatment of 
        minors in licensed programs substantiated under section 
        626.556.  If a background study is initiated by an applicant or 
        license holder and the applicant or license holder receives 
        information about the possible criminal or maltreatment history 
        of an individual who is the subject of the background study, the 
        applicant or license holder must immediately provide the 
        information to the commissioner.  The individuals to be studied 
        shall include: 
           (1) the applicant; 
           (2) persons age 13 and over living in the household where 
        the licensed program will be provided; 
           (3) current employees or contractors of the applicant who 
        will have direct contact with persons served by the facility, 
        agency, or program; 
           (4) volunteers or student volunteers who have direct 
        contact with persons served by the program to provide program 
        services, if the contact is not directly supervised by the 
        individuals under the continuous, direct supervision by an 
        individual listed in clause (1) or (3); 
           (5) any person required under section 256B.0627 to have a 
        background study completed under this section; 
           (6) persons ages 10 to 12 living in the household where the 
        licensed services will be provided when the commissioner has 
        reasonable cause; and 
           (7) persons who, without providing direct contact services 
        at a licensed program, may have unsupervised access to children 
        or vulnerable adults receiving services from the program 
        licensed to provide family child care for children, foster care 
        for children in the provider's own home, or foster care or day 
        care services for adults in the provider's own home when the 
        commissioner has reasonable cause. 
           (d) According to paragraph (c), clauses (2) and (6), the 
        commissioner shall review records from the juvenile courts.  For 
        persons under paragraph (c), clauses (1), (3), (4), (5), and 
        (7), who are ages 13 to 17, the commissioner shall review 
        records from the juvenile courts when the commissioner has 
        reasonable cause.  The juvenile courts shall help with the study 
        by giving the commissioner existing juvenile court records on 
        individuals described in paragraph (c), clauses (2), (6), and 
        (7), relating to delinquency proceedings held within either the 
        five years immediately preceding the background study or the 
        five years immediately preceding the individual's 18th birthday, 
        whichever time period is longer.  The commissioner shall destroy 
        juvenile records obtained pursuant to this subdivision when the 
        subject of the records reaches age 23. 
           (e) Beginning August 1, 2001, the commissioner shall 
        conduct all background studies required under this chapter and 
        initiated by supplemental nursing services agencies registered 
        under section 144A.71, subdivision 1.  Studies for the agencies 
        must be initiated annually by each agency.  The commissioner 
        shall conduct the background studies according to this chapter.  
        The commissioner shall recover the cost of the background 
        studies through a fee of no more than $8 per study, charged to 
        the supplemental nursing services agency.  The fees collected 
        under this paragraph are appropriated to the commissioner for 
        the purpose of conducting background studies. 
           (f) For purposes of this section, a finding that a 
        delinquency petition is proven in juvenile court shall be 
        considered a conviction in state district court. 
           (g) A study of an individual in paragraph (c), clauses (1) 
        to (7), shall be conducted at least upon application for initial 
        license for all license types or registration under section 
        144A.71, subdivision 1, and at reapplication for a license or 
        registration for family child care, child foster care, and adult 
        foster care.  The commissioner is not required to conduct a 
        study of an individual at the time of reapplication for a 
        license or if the individual has been continuously affiliated 
        with a foster care provider licensed by the commissioner of 
        human services and registered under chapter 144D, other than a 
        family day care or foster care license, if:  (i) a study of the 
        individual was conducted either at the time of initial licensure 
        or when the individual became affiliated with the license 
        holder; (ii) the individual has been continuously affiliated 
        with the license holder since the last study was conducted; and 
        (iii) the procedure described in paragraph (j) has been 
        implemented and was in effect continuously since the last study 
        was conducted.  For the purposes of this section, a physician 
        licensed under chapter 147 is considered to be continuously 
        affiliated upon the license holder's receipt from the 
        commissioner of health or human services of the physician's 
        background study results.  For individuals who are required to 
        have background studies under paragraph (c) and who have been 
        continuously affiliated with a foster care provider that is 
        licensed in more than one county, criminal conviction data may 
        be shared among those counties in which the foster care programs 
        are licensed.  A county agency's receipt of criminal conviction 
        data from another county agency shall meet the criminal data 
        background study requirements of this section. 
           (h) The commissioner may also conduct studies on 
        individuals specified in paragraph (c), clauses (3) and (4), 
        when the studies are initiated by: 
           (i) personnel pool agencies; 
           (ii) temporary personnel agencies; 
           (iii) educational programs that train persons by providing 
        direct contact services in licensed programs; and 
           (iv) professional services agencies that are not licensed 
        and which contract with licensed programs to provide direct 
        contact services or individuals who provide direct contact 
        services. 
           (i) Studies on individuals in paragraph (h), items (i) to 
        (iv), must be initiated annually by these agencies, programs, 
        and individuals.  Except as provided in paragraph (a), clause 
        (3), no applicant, license holder, or individual who is the 
        subject of the study shall pay any fees required to conduct the 
        study. 
           (1) At the option of the licensed facility, rather than 
        initiating another background study on an individual required to 
        be studied who has indicated to the licensed facility that a 
        background study by the commissioner was previously completed, 
        the facility may make a request to the commissioner for 
        documentation of the individual's background study status, 
        provided that: 
           (i) the facility makes this request using a form provided 
        by the commissioner; 
           (ii) in making the request the facility informs the 
        commissioner that either: 
           (A) the individual has been continuously affiliated with a 
        licensed facility since the individual's previous background 
        study was completed, or since October 1, 1995, whichever is 
        shorter; or 
           (B) the individual is affiliated only with a personnel pool 
        agency, a temporary personnel agency, an educational program 
        that trains persons by providing direct contact services in 
        licensed programs, or a professional services agency that is not 
        licensed and which contracts with licensed programs to provide 
        direct contact services or individuals who provide direct 
        contact services; and 
           (iii) the facility provides notices to the individual as 
        required in paragraphs (a) to (j), and that the facility is 
        requesting written notification of the individual's background 
        study status from the commissioner.  
           (2) The commissioner shall respond to each request under 
        paragraph (1) with a written or electronic notice to the 
        facility and the study subject.  If the commissioner determines 
        that a background study is necessary, the study shall be 
        completed without further request from a licensed agency or 
        notifications to the study subject.  
           (3) When a background study is being initiated by a 
        licensed facility or a foster care provider that is also 
        registered under chapter 144D, a study subject affiliated with 
        multiple licensed facilities may attach to the background study 
        form a cover letter indicating the additional facilities' names, 
        addresses, and background study identification numbers.  When 
        the commissioner receives such notices, each facility identified 
        by the background study subject shall be notified of the study 
        results.  The background study notice sent to the subsequent 
        agencies shall satisfy those facilities' responsibilities for 
        initiating a background study on that individual. 
           (j) If an individual who is affiliated with a program or 
        facility regulated by the department of human services or 
        department of health or who is affiliated with any type of home 
        care agency or provider of personal care assistance services, is 
        convicted of a crime constituting a disqualification under 
        subdivision 3d, the probation officer or corrections agent shall 
        notify the commissioner of the conviction.  For the purpose of 
        this paragraph, "conviction" has the meaning given it in section 
        609.02, subdivision 5.  The commissioner, in consultation with 
        the commissioner of corrections, shall develop forms and 
        information necessary to implement this paragraph and shall 
        provide the forms and information to the commissioner of 
        corrections for distribution to local probation officers and 
        corrections agents.  The commissioner shall inform individuals 
        subject to a background study that criminal convictions for 
        disqualifying crimes will be reported to the commissioner by the 
        corrections system.  A probation officer, corrections agent, or 
        corrections agency is not civilly or criminally liable for 
        disclosing or failing to disclose the information required by 
        this paragraph.  Upon receipt of disqualifying information, the 
        commissioner shall provide the notifications required in 
        subdivision 3a, as appropriate to agencies on record as having 
        initiated a background study or making a request for 
        documentation of the background study status of the individual.  
        This paragraph does not apply to family day care and child 
        foster care programs. 
           (k) The individual who is the subject of the study must 
        provide the applicant or license holder with sufficient 
        information to ensure an accurate study including the 
        individual's first, middle, and last name and all other names by 
        which the individual has been known; home address, city, county, 
        and state of residence for the past five years; zip code; sex; 
        date of birth; and driver's license number or state 
        identification number.  The applicant or license holder shall 
        provide this information about an individual in paragraph (c), 
        clauses (1) to (7), on forms prescribed by the commissioner.  By 
        January 1, 2000, for background studies conducted by the 
        department of human services, the commissioner shall implement a 
        system for the electronic transmission of:  (1) background study 
        information to the commissioner; and (2) background study 
        results to the license holder.  The commissioner may request 
        additional information of the individual, which shall be 
        optional for the individual to provide, such as the individual's 
        social security number or race. 
           (l) For programs directly licensed by the commissioner, a 
        study must include information related to names of substantiated 
        perpetrators of maltreatment of vulnerable adults that has been 
        received by the commissioner as required under section 626.557, 
        subdivision 9c, paragraph (i), and the commissioner's records 
        relating to the maltreatment of minors in licensed programs, 
        information from juvenile courts as required in paragraph (c) 
        for persons listed in paragraph (c), clauses (2), (6), and (7), 
        and information from the bureau of criminal apprehension.  For 
        child foster care, adult foster care, and family day care homes, 
        the study must include information from the county agency's 
        record of substantiated maltreatment of adults, and the 
        maltreatment of minors, information from juvenile courts as 
        required in paragraph (c) for persons listed in paragraph (c), 
        clauses (2), (6), and (7), and information from the bureau of 
        criminal apprehension.  The commissioner may also review arrest 
        and investigative information from the bureau of criminal 
        apprehension, the commissioner of health, a county attorney, 
        county sheriff, county agency, local chief of police, other 
        states, the courts, or the Federal Bureau of Investigation if 
        the commissioner has reasonable cause to believe the information 
        is pertinent to the disqualification of an individual listed in 
        paragraph (c), clauses (1) to (7).  The commissioner is not 
        required to conduct more than one review of a subject's records 
        from the Federal Bureau of Investigation if a review of the 
        subject's criminal history with the Federal Bureau of 
        Investigation has already been completed by the commissioner and 
        there has been no break in the subject's affiliation with the 
        license holder who initiated the background study. 
           (m) When the commissioner has reasonable cause to believe 
        that further pertinent information may exist on the subject, the 
        subject shall provide a set of classifiable fingerprints 
        obtained from an authorized law enforcement agency.  For 
        purposes of requiring fingerprints, the commissioner shall be 
        considered to have reasonable cause under, but not limited to, 
        the following circumstances: 
           (1) information from the bureau of criminal apprehension 
        indicates that the subject is a multistate offender; 
           (2) information from the bureau of criminal apprehension 
        indicates that multistate offender status is undetermined; or 
           (3) the commissioner has received a report from the subject 
        or a third party indicating that the subject has a criminal 
        history in a jurisdiction other than Minnesota. 
           (n) The failure or refusal of an applicant, license holder, 
        or registrant under section 144A.71, subdivision 1, to cooperate 
        with the commissioner is reasonable cause to disqualify a 
        subject, deny a license application or immediately suspend, 
        suspend, or revoke a license or registration.  Failure or 
        refusal of an individual to cooperate with the study is just 
        cause for denying or terminating employment of the individual if 
        the individual's failure or refusal to cooperate could cause the 
        applicant's application to be denied or the license holder's 
        license to be immediately suspended, suspended, or revoked. 
           (o) The commissioner shall not consider an application to 
        be complete until all of the information required to be provided 
        under this subdivision has been received.  
           (p) No person in paragraph (c), clauses (1) to (7), who is 
        disqualified as a result of this section may be retained by the 
        agency in a position involving direct contact with persons 
        served by the program or in a position allowing and no person in 
        paragraph (c), clauses (2), (6), and (7), or as provided 
        elsewhere in statute who is disqualified as a result of this 
        section may be allowed access to persons served by the 
        program as provided for in statutes, unless the commissioner has 
        provided written notice to the agency stating that: 
           (1) the individual may remain in direct contact during the 
        period in which the individual may request reconsideration as 
        provided in subdivision 3a, paragraph (b), clause (2) or (3); 
           (2) the individual's disqualification has been set aside 
        for that agency as provided in subdivision 3b, paragraph (b); or 
           (3) the license holder has been granted a variance for the 
        disqualified individual under subdivision 3e. 
           (q) Termination of affiliation with persons in paragraph 
        (c), clauses (1) to (7), made in good faith reliance on a notice 
        of disqualification provided by the commissioner shall not 
        subject the applicant or license holder to civil liability. 
           (r) The commissioner may establish records to fulfill the 
        requirements of this section. 
           (s) The commissioner may not disqualify an individual 
        subject to a study under this section because that person has, 
        or has had, a mental illness as defined in section 245.462, 
        subdivision 20. 
           (t) An individual subject to disqualification under this 
        subdivision has the applicable rights in subdivision 3a, 3b, or 
        3c. 
           (u) For the purposes of background studies completed by 
        tribal organizations performing licensing activities otherwise 
        required of the commissioner under this chapter, after obtaining 
        consent from the background study subject, tribal licensing 
        agencies shall have access to criminal history data in the same 
        manner as county licensing agencies and private licensing 
        agencies under this chapter. 
           (v) County agencies shall have access to the criminal 
        history data in the same manner as county licensing agencies 
        under this chapter for purposes of background studies completed 
        by county agencies on legal nonlicensed child care providers to 
        determine eligibility for child care funds under chapter 119B. 
           Sec. 10.  Minnesota Statutes 2001 Supplement, section 
        245A.04, subdivision 3a, is amended to read: 
           Subd. 3a.  [NOTIFICATION TO SUBJECT AND LICENSE HOLDER OF 
        STUDY RESULTS; DETERMINATION OF RISK OF HARM.] (a) Within 15 
        working days, the commissioner shall notify the applicant, 
        license holder, or registrant under section 144A.71, subdivision 
        1, and the individual who is the subject of the study, in 
        writing or by electronic transmission, of the results of the 
        study or that more time is needed to complete the study.  When 
        the study is completed, a notice that the study was undertaken 
        and completed shall be maintained in the personnel files of the 
        program.  For studies on individuals pertaining to a license to 
        provide family day care or group family day care, foster care 
        for children in the provider's own home, or foster care or day 
        care services for adults in the provider's own home, the 
        commissioner is not required to provide a separate notice of the 
        background study results to the individual who is the subject of 
        the study unless the study results in a disqualification of the 
        individual. 
           The commissioner shall notify the individual studied if the 
        information in the study indicates the individual is 
        disqualified from direct contact with persons served by the 
        program.  The commissioner shall disclose the information 
        causing disqualification and instructions on how to request a 
        reconsideration of the disqualification to the individual 
        studied.  An applicant or license holder who is not the subject 
        of the study shall be informed that the commissioner has found 
        information that disqualifies the subject from direct contact 
        with persons served by the program.  However, only the 
        individual studied must be informed of the information contained 
        in the subject's background study unless the basis for the 
        disqualification is failure to cooperate, substantiated 
        maltreatment under section 626.556 or 626.557, the Data 
        Practices Act provides for release of the information, or the 
        individual studied authorizes the release of the information.  
        When a disqualification is based on the subject's failure to 
        cooperate with the background study or substantiated 
        maltreatment under section 626.556 or 626.557, the agency that 
        initiated the study shall be informed by the commissioner of the 
        reason for the disqualification. 
           (b) Except as provided in subdivision 3d, paragraph (b), if 
        the commissioner determines that the individual studied has a 
        disqualifying characteristic, the commissioner shall review the 
        information immediately available and make a determination as to 
        the subject's immediate risk of harm to persons served by the 
        program where the individual studied will have direct contact.  
        The commissioner shall consider all relevant information 
        available, including the following factors in determining the 
        immediate risk of harm:  the recency of the disqualifying 
        characteristic; the recency of discharge from probation for the 
        crimes; the number of disqualifying characteristics; the 
        intrusiveness or violence of the disqualifying characteristic; 
        the vulnerability of the victim involved in the disqualifying 
        characteristic; and the similarity of the victim to the persons 
        served by the program where the individual studied will have 
        direct contact.  The commissioner may determine that the 
        evaluation of the information immediately available gives the 
        commissioner reason to believe one of the following: 
           (1) The individual poses an imminent risk of harm to 
        persons served by the program where the individual studied will 
        have direct contact.  If the commissioner determines that an 
        individual studied poses an imminent risk of harm to persons 
        served by the program where the individual studied will have 
        direct contact, the individual and the license holder must be 
        sent a notice of disqualification.  The commissioner shall order 
        the license holder to immediately remove the individual studied 
        from direct contact.  The notice to the individual studied must 
        include an explanation of the basis of this determination. 
           (2) The individual poses a risk of harm requiring 
        continuous, direct supervision while providing direct contact 
        services during the period in which the subject may request a 
        reconsideration.  If the commissioner determines that an 
        individual studied poses a risk of harm that requires 
        continuous, direct supervision, the individual and the license 
        holder must be sent a notice of disqualification.  The 
        commissioner shall order the license holder to immediately 
        remove the individual studied from direct contact services or 
        assure that the individual studied is within sight or hearing 
        under the continuous, direct supervision of another staff person 
        when providing direct contact services during the period in 
        which the individual may request a reconsideration of the 
        disqualification.  If the individual studied does not submit a 
        timely request for reconsideration, or the individual submits a 
        timely request for reconsideration, but the disqualification is 
        not set aside for that license holder, the license holder will 
        be notified of the disqualification and ordered to immediately 
        remove the individual from any position allowing direct contact 
        with persons receiving services from the license holder. 
           (3) The individual does not pose an imminent risk of harm 
        or a risk of harm requiring continuous, direct supervision while 
        providing direct contact services during the period in which the 
        subject may request a reconsideration.  If the commissioner 
        determines that an individual studied does not pose a risk of 
        harm that requires continuous, direct supervision, only the 
        individual must be sent a notice of disqualification.  The 
        license holder must be sent a notice that more time is needed to 
        complete the individual's background study.  If the individual 
        studied submits a timely request for reconsideration, and if the 
        disqualification is set aside for that license holder, the 
        license holder will receive the same notification received by 
        license holders in cases where the individual studied has no 
        disqualifying characteristic.  If the individual studied does 
        not submit a timely request for reconsideration, or the 
        individual submits a timely request for reconsideration, but the 
        disqualification is not set aside for that license holder, the 
        license holder will be notified of the disqualification and 
        ordered to immediately remove the individual from any position 
        allowing direct contact with persons receiving services from the 
        license holder.  
           (c) County licensing agencies performing duties under this 
        subdivision may develop an alternative system for determining 
        the subject's immediate risk of harm to persons served by the 
        program, providing the notices under paragraph (b), and 
        documenting the action taken by the county licensing agency.  
        Each county licensing agency's implementation of the alternative 
        system is subject to approval by the commissioner.  
        Notwithstanding this alternative system, county licensing 
        agencies shall complete the requirements of paragraph (a). 
           Sec. 11.  Minnesota Statutes 2001 Supplement, section 
        245A.04, subdivision 3b, is amended to read: 
           Subd. 3b.  [RECONSIDERATION OF DISQUALIFICATION.] (a) The 
        individual who is the subject of the disqualification may 
        request a reconsideration of the disqualification.  
           The individual must submit the request for reconsideration 
        to the commissioner in writing.  A request for reconsideration 
        for an individual who has been sent a notice of disqualification 
        under subdivision 3a, paragraph (b), clause (1) or (2), must be 
        submitted within 30 calendar days of the disqualified 
        individual's receipt of the notice of disqualification.  Upon 
        showing that the information in clause (1) or (2) cannot be 
        obtained within 30 days, the disqualified individual may request 
        additional time, not to exceed 30 days, to obtain that 
        information.  A request for reconsideration for an individual 
        who has been sent a notice of disqualification under subdivision 
        3a, paragraph (b), clause (3), must be submitted within 15 
        calendar days of the disqualified individual's receipt of the 
        notice of disqualification.  An individual who was determined to 
        have maltreated a child under section 626.556 or a vulnerable 
        adult under section 626.557, and who was disqualified under this 
        section on the basis of serious or recurring maltreatment, may 
        request reconsideration of both the maltreatment and the 
        disqualification determinations.  The request for 
        reconsideration of the maltreatment determination and the 
        disqualification must be submitted within 30 calendar days of 
        the individual's receipt of the notice of disqualification.  
        Removal of a disqualified individual from direct contact shall 
        be ordered if the individual does not request reconsideration 
        within the prescribed time, and for an individual who submits a 
        timely request for reconsideration, if the disqualification is 
        not set aside.  The individual must present information showing 
        that: 
           (1) the information the commissioner relied upon in 
        determining that the underlying conduct giving rise to the 
        disqualification occurred, and for maltreatment, that the 
        maltreatment was serious or recurring, is incorrect or 
        inaccurate.  If the basis of a reconsideration request is that a 
        maltreatment determination or disposition under section 626.556 
        or 626.557 is incorrect, and the commissioner has issued a final 
        order in an appeal of that determination or disposition under 
        section 256.045 or 245A.08, subdivision 5, the commissioner's 
        order is conclusive on the issue of maltreatment.  If the 
        individual did not request reconsideration of the maltreatment 
        determination, the maltreatment determination is deemed 
        conclusive; or 
           (2) the subject of the study does not pose a risk of harm 
        to any person served by the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1. 
           (b) The commissioner shall rescind the disqualification if 
        the commissioner finds that the information relied on to 
        disqualify the subject is incorrect.  The commissioner may set 
        aside the disqualification under this section if the 
        commissioner finds that the individual does not pose a risk of 
        harm to any person served by the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1.  In determining 
        that an individual does not pose a risk of harm, the 
        commissioner shall consider the nature, severity, and 
        consequences of the event or events that lead to 
        disqualification, whether there is more than one disqualifying 
        event, the age and vulnerability of the victim at the time of 
        the event, the harm suffered by the victim, the similarity 
        between the victim and persons served by the program, the time 
        elapsed without a repeat of the same or similar event, 
        documentation of successful completion by the individual studied 
        of training or rehabilitation pertinent to the event, and any 
        other information relevant to reconsideration.  In reviewing a 
        disqualification under this section, the commissioner shall give 
        preeminent weight to the safety of each person to be served by 
        the license holder, applicant, or registrant under section 
        144A.71, subdivision 1, over the interests of the license 
        holder, applicant, or registrant under section 144A.71, 
        subdivision 1. 
           (c) Unless the information the commissioner relied on in 
        disqualifying an individual is incorrect, the commissioner may 
        not set aside the disqualification of an individual in 
        connection with a license to provide family day care for 
        children, foster care for children in the provider's own home, 
        or foster care or day care services for adults in the provider's 
        own home if: 
           (1) less than ten years have passed since the discharge of 
        the sentence imposed for the offense; and the individual has 
        been convicted of a violation of any offense listed in sections 
        609.20 (manslaughter in the first degree), 609.205 (manslaughter 
        in the second degree), criminal vehicular homicide under 609.21 
        (criminal vehicular homicide and injury), 609.215 (aiding 
        suicide or aiding attempted suicide), felony violations under 
        609.221 to 609.2231 (assault in the first, second, third, or 
        fourth degree), 609.713 (terroristic threats), 609.235 (use of 
        drugs to injure or to facilitate crime), 609.24 (simple 
        robbery), 609.245 (aggravated robbery), 609.25 (kidnapping), 
        609.255 (false imprisonment), 609.561 or 609.562 (arson in the 
        first or second degree), 609.71 (riot), burglary in the first or 
        second degree under 609.582 (burglary), 609.66 (dangerous 
        weapon), 609.665 (spring guns), 609.67 (machine guns and 
        short-barreled shotguns), 609.749 (harassment; stalking), 
        152.021 or 152.022 (controlled substance crime in the first or 
        second degree), 152.023, subdivision 1, clause (3) or (4), or 
        subdivision 2, clause (4) (controlled substance crime in the 
        third degree), 152.024, subdivision 1, clause (2), (3), or (4) 
        (controlled substance crime in the fourth degree), 609.224, 
        subdivision 2, paragraph (c) (fifth-degree assault by a 
        caregiver against a vulnerable adult), 609.228 (great bodily 
        harm caused by distribution of drugs), 609.23 (mistreatment of 
        persons confined), 609.231 (mistreatment of residents or 
        patients), 609.2325 (criminal abuse of a vulnerable adult), 
        609.233 (criminal neglect of a vulnerable adult), 609.2335 
        (financial exploitation of a vulnerable adult), 609.234 (failure 
        to report), 609.265 (abduction), 609.2664 to 609.2665 
        (manslaughter of an unborn child in the first or second degree), 
        609.267 to 609.2672 (assault of an unborn child in the first, 
        second, or third degree), 609.268 (injury or death of an unborn 
        child in the commission of a crime), 617.293 (disseminating or 
        displaying harmful material to minors), a felony level 
        conviction involving alcohol or drug use, a gross misdemeanor 
        offense under 609.324, subdivision 1 (other prohibited acts), a 
        gross misdemeanor offense under 609.378 (neglect or endangerment 
        of a child), a gross misdemeanor offense under 609.377 
        (malicious punishment of a child), 609.72, subdivision 3 
        (disorderly conduct against a vulnerable adult); or an attempt 
        or conspiracy to commit any of these offenses, as each of these 
        offenses is defined in Minnesota Statutes; or an offense in any 
        other state, the elements of which are substantially similar to 
        the elements of any of the foregoing offenses; 
           (2) regardless of how much time has passed since the 
        involuntary termination of parental rights under section 
        260C.301 or the discharge of the sentence imposed for the 
        offense, the individual was convicted of a violation of any 
        offense listed in sections 609.185 to 609.195 (murder in the 
        first, second, or third degree), 609.2661 to 609.2663 (murder of 
        an unborn child in the first, second, or third degree), a felony 
        offense under 609.377 (malicious punishment of a child), a 
        felony offense under 609.324, subdivision 1 (other prohibited 
        acts), a felony offense under 609.378 (neglect or endangerment 
        of a child), 609.322 (solicitation, inducement, and promotion of 
        prostitution), 609.342 to 609.345 (criminal sexual conduct in 
        the first, second, third, or fourth degree), 609.352 
        (solicitation of children to engage in sexual conduct), 617.246 
        (use of minors in a sexual performance), 617.247 (possession of 
        pictorial representations of a minor), 609.365 (incest), a 
        felony offense under sections 609.2242 and 609.2243 (domestic 
        assault), a felony offense of spousal abuse, a felony offense of 
        child abuse or neglect, a felony offense of a crime against 
        children, or an attempt or conspiracy to commit any of these 
        offenses as defined in Minnesota Statutes, or an offense in any 
        other state, the elements of which are substantially similar to 
        any of the foregoing offenses; 
           (3) within the seven years preceding the study, the 
        individual committed an act that constitutes maltreatment of a 
        child under section 626.556, subdivision 10e, and that resulted 
        in substantial bodily harm as defined in section 609.02, 
        subdivision 7a, or substantial mental or emotional harm as 
        supported by competent psychological or psychiatric evidence; or 
           (4) within the seven years preceding the study, the 
        individual was determined under section 626.557 to be the 
        perpetrator of a substantiated incident of maltreatment of a 
        vulnerable adult that resulted in substantial bodily harm as 
        defined in section 609.02, subdivision 7a, or substantial mental 
        or emotional harm as supported by competent psychological or 
        psychiatric evidence. 
           In the case of any ground for disqualification under 
        clauses (1) to (4), if the act was committed by an individual 
        other than the applicant, license holder, or registrant under 
        section 144A.71, subdivision 1, residing in the applicant's or 
        license holder's home, or the home of a registrant under section 
        144A.71, subdivision 1, the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1, may seek 
        reconsideration when the individual who committed the act no 
        longer resides in the home.  
           The disqualification periods provided under clauses (1), 
        (3), and (4) are the minimum applicable disqualification 
        periods.  The commissioner may determine that an individual 
        should continue to be disqualified from licensure or 
        registration under section 144A.71, subdivision 1, because the 
        license holder, applicant, or registrant under section 144A.71, 
        subdivision 1, poses a risk of harm to a person served by that 
        individual after the minimum disqualification period has passed. 
           (d) The commissioner shall respond in writing or by 
        electronic transmission to all reconsideration requests for 
        which the basis for the request is that the information relied 
        upon by the commissioner to disqualify is incorrect or 
        inaccurate within 30 working days of receipt of a request and 
        all relevant information.  If the basis for the request is that 
        the individual does not pose a risk of harm, the commissioner 
        shall respond to the request within 15 working days after 
        receiving the request for reconsideration and all relevant 
        information.  If the request is based on both the correctness or 
        accuracy of the information relied on to disqualify the 
        individual and the risk of harm, the commissioner shall respond 
        to the request within 45 working days after receiving the 
        request for reconsideration and all relevant information.  If 
        the disqualification is set aside, the commissioner shall notify 
        the applicant or license holder in writing or by electronic 
        transmission of the decision. 
           (e) Except as provided in subdivision 3c, if a 
        disqualification for which reconsideration was requested is not 
        set aside or is not rescinded, an individual who was 
        disqualified on the basis of a preponderance of evidence that 
        the individual committed an act or acts that meet the definition 
        of any of the crimes lists listed in subdivision 3d, paragraph 
        (a), clauses (1) to (4); or for failure to make required reports 
        under section 626.556, subdivision 3, or 626.557, subdivision 3, 
        pursuant to subdivision 3d, paragraph (a), clause (4), may 
        request a fair hearing under section 256.045.  Except as 
        provided under subdivision 3c, the commissioner's final order 
        for an individual under this paragraph is conclusive on the 
        issue of maltreatment and disqualification, including for 
        purposes of subsequent studies conducted under subdivision 3, 
        and fair hearing is the only administrative appeal of the final 
        agency determination, specifically, including a challenge to the 
        accuracy and completeness of data under section 13.04.  
           (f) Except as provided under subdivision 3c, if an 
        individual was disqualified on the basis of a determination of 
        maltreatment under section 626.556 or 626.557, which was serious 
        or recurring, and the individual has requested reconsideration 
        of the maltreatment determination under section 626.556, 
        subdivision 10i, or 626.557, subdivision 9d, and also requested 
        reconsideration of the disqualification under this subdivision, 
        reconsideration of the maltreatment determination and 
        reconsideration of the disqualification shall be consolidated 
        into a single reconsideration.  For maltreatment and 
        disqualification determinations made by county agencies, the 
        consolidated reconsideration shall be conducted by the county 
        agency.  If the county agency has disqualified an individual on 
        multiple bases, one of which is a county maltreatment 
        determination for which the individual has a right to request 
        reconsideration, the county shall conduct the reconsideration of 
        all disqualifications.  Except as provided under subdivision 3c, 
        if an individual who was disqualified on the basis of serious or 
        recurring maltreatment requests a fair hearing on the 
        maltreatment determination under section 626.556, subdivision 
        10i, or 626.557, subdivision 9d, and requests a fair hearing on 
        the disqualification, which has not been set aside or rescinded 
        under this subdivision, the scope of the fair hearing under 
        section 256.045 shall include the maltreatment determination and 
        the disqualification.  Except as provided under subdivision 
        3c, the commissioner's final order for an individual under this 
        paragraph is conclusive on the issue of maltreatment and 
        disqualification, including for purposes of subsequent studies 
        conducted under subdivision 3, and a fair hearing is the only 
        administrative appeal of the final agency determination, 
        specifically, including a challenge to the accuracy and 
        completeness of data under section 13.04. 
           Sec. 12.  Minnesota Statutes 2000, section 245A.04, is 
        amended by adding a subdivision to read: 
           Subd. 3f.  [CONCLUSIVE DETERMINATIONS OR DISPOSITIONS.] 
        Unless otherwise specified in statute, the following 
        determinations or dispositions are deemed conclusive: 
           (1) a maltreatment determination or disposition under 
        section 626.556 or 626.557, if: 
           (i) the commissioner has issued a final order in an appeal 
        of that determination or disposition under section 245A.08, 
        subdivision 5, or 256.045; 
           (ii) the individual did not request reconsideration of the 
        maltreatment determination or disposition under section 626.556 
        or 626.557; or 
           (iii) the individual did not request a hearing of the 
        maltreatment determination or disposition under section 256.045; 
        and 
           (2) a determination that the information relied upon to 
        disqualify an individual under subdivision 3d, was correct based 
        on serious or recurring maltreatment; or 
           (3) a preponderance of evidence shows that the individual 
        committed an act or acts that meet the definition of any of the 
        crimes listed in subdivision 3d, paragraph (a), clauses (1) to 
        (4); or the individual's failure to make required reports under 
        section 626.556, subdivision 3, or 626.557, subdivision 3, if: 
           (i) the commissioner has issued a final order in an appeal 
        of that determination under section 245A.08, subdivision 5, or 
        256.045, or a court has issued a final decision; 
           (ii) the individual did not request reconsideration of the 
        disqualification under this section; or 
           (iii) the individual did not request a hearing on the 
        disqualification under section 256.045. 
           Sec. 13.  Minnesota Statutes 2001 Supplement, section 
        245A.07, subdivision 2a, is amended to read: 
           Subd. 2a.  [IMMEDIATE SUSPENSION EXPEDITED HEARING.] (a) 
        Within five working days of receipt of the license holder's 
        timely appeal, the commissioner shall request assignment of an 
        administrative law judge.  The request must include a proposed 
        date, time, and place of a hearing.  A hearing must be conducted 
        by an administrative law judge within 30 calendar days of the 
        request for assignment, unless an extension is requested by 
        either party and granted by the administrative law judge for 
        good cause.  The commissioner shall issue a notice of hearing by 
        certified mail at least ten working days before the hearing.  
        The scope of the hearing shall be limited solely to the issue of 
        whether the temporary immediate suspension should remain in 
        effect pending the commissioner's final order under section 
        245A.08, regarding a licensing sanction issued under subdivision 
        3 following the immediate suspension.  The burden of proof in 
        expedited hearings under this subdivision shall be limited to 
        the commissioner's demonstration that reasonable cause exists to 
        believe that the license holder's actions or failure to comply 
        with applicable law or rule poses an imminent risk of harm to 
        the health, safety, or rights of persons served by the program.  
           (b) The administrative law judge shall issue findings of 
        fact, conclusions, and a recommendation within ten working days 
        from the date of hearing.  The commissioner's final order shall 
        be issued within ten working days from receipt of the 
        recommendation of the administrative law judge.  Within 90 
        calendar days after a final order affirming an immediate 
        suspension, the commissioner shall make a determination 
        regarding whether a final licensing sanction shall be issued 
        under subdivision 3.  The license holder shall continue to be 
        prohibited from operation of the program during this 90-day 
        period.  
           (c) When the final order under paragraph (b) affirms an 
        immediate suspension, and a final licensing sanction is issued 
        under subdivision 3, and the license holder appeals that 
        sanction, the license holder continues to be prohibited from 
        operation of the program pending a final commissioner's order 
        under section 245A.08, subdivision 5, regarding the final 
        licensing sanction. 
           Sec. 14.  Minnesota Statutes 2001 Supplement, section 
        245A.07, subdivision 3, is amended to read: 
           Subd. 3.  [LICENSE SUSPENSION, REVOCATION, OR FINE.] The 
        commissioner may suspend or revoke a license, or impose a fine 
        if a license holder fails to comply fully with applicable laws 
        or rules, or knowingly withholds relevant information from or 
        gives false or misleading information to the commissioner in 
        connection with an application for a license, in connection with 
        the background study status of an individual, or during an 
        investigation.  A license holder who has had a license 
        suspended, revoked, or has been ordered to pay a fine must be 
        given notice of the action by certified mail.  The notice must 
        be mailed to the address shown on the application or the last 
        known address of the license holder.  The notice must state the 
        reasons the license was suspended, revoked, or a fine was 
        ordered. 
           (a) If the license was suspended or revoked, the notice 
        must inform the license holder of the right to a contested case 
        hearing under chapter 14 and Minnesota Rules, parts 1400.8510 to 
        1400.8612 and successor rules.  The license holder may appeal an 
        order suspending or revoking a license.  The appeal of an order 
        suspending or revoking a license must be made in writing by 
        certified mail and must be received by the commissioner within 
        ten calendar days after the license holder receives notice that 
        the license has been suspended or revoked.  Except as provided 
        in subdivision 2a, paragraph (c), a timely appeal of an order 
        suspending or revoking a license shall stay the suspension or 
        revocation until the commissioner issues a final order.  
           (b)(1) If the license holder was ordered to pay a fine, the 
        notice must inform the license holder of the responsibility for 
        payment of fines and the right to a contested case hearing under 
        chapter 14 and Minnesota Rules, parts 1400.8510 to 1400.8612 and 
        successor rules.  The appeal of an order to pay a fine must be 
        made in writing by certified mail and must be received by the 
        commissioner within ten calendar days after the license holder 
        receives notice that the fine has been ordered.  
           (2) The license holder shall 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.  If the license holder receives state funds, the 
        state, county, or municipal agencies or departments responsible 
        for administering the funds shall withhold payments and recover 
        any payments made while the license is suspended for failure to 
        pay a fine.  A timely appeal shall stay payment of the fine 
        until the commissioner issues a final order.  
           (3) A license holder shall promptly notify the commissioner 
        of human services, in writing, when a violation specified in the 
        order to forfeit a fine is corrected.  If upon reinspection the 
        commissioner determines that a violation has not been corrected 
        as indicated by the order to forfeit a fine, the commissioner 
        may issue a second fine.  The commissioner shall notify the 
        license holder by certified mail that a second fine has been 
        assessed.  The license holder may appeal the second fine as 
        provided under this subdivision. 
           (4) Fines shall be assessed as follows:  the license holder 
        shall forfeit $1,000 for each determination of maltreatment of a 
        child under section 626.556 or the maltreatment of a vulnerable 
        adult under section 626.557; the license holder shall forfeit 
        $200 for each occurrence of a violation of law or rule governing 
        matters of health, safety, or supervision, including but not 
        limited to the provision of adequate staff-to-child or adult 
        ratios, and failure to submit a background study; and the 
        license holder shall forfeit $100 for each occurrence of a 
        violation of law or rule other than those subject to a $1,000 or 
        $200 fine above.  For purposes of this section, "occurrence" 
        means each violation identified in the commissioner's fine order.
           (5) 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 will be personally liable for payment.  In the 
        case of a corporation, each controlling individual is personally 
        and jointly liable for payment.  
           Sec. 15.  [245A.085] [CONSOLIDATION OF HEARINGS; 
        RECONSIDERATION.] 
           Hearings authorized under this chapter and sections 
        256.045, 626.556, and 626.557, shall be consolidated if feasible 
        and in accordance with other applicable statutes and rules.  
        Reconsideration under sections 245A.04, subdivision 3c; 626.556, 
        subdivision 10i; and 626.557, subdivision 9d, shall also be 
        consolidated if feasible. 
           Sec. 16.  Minnesota Statutes 2001 Supplement, section 
        245A.144, is amended to read: 
           245A.144 [REDUCTION OF RISK OF SUDDEN INFANT DEATH SYNDROME 
        IN CHILD CARE PROGRAMS.] 
           License holders must ensure that before staff persons, 
        caregivers, and helpers assist in the care of infants, they 
        receive training on reducing the risk of sudden infant death 
        syndrome.  The training on reducing the risk of sudden infant 
        death syndrome may be provided as orientation training under 
        Minnesota Rules, part 9503.0035, subpart 1, as initial training 
        under Minnesota Rules, part 9502.0385, subpart 2, as in-service 
        training under Minnesota Rules, part 9503.0035, subpart 4, or as 
        ongoing training under Minnesota Rules, part 9502.0385, subpart 
        3.  Training required under this section must be at least one 
        hour in length and must be completed at least once every five 
        years.  At a minimum, the training must address the risk factors 
        related to sudden infant death syndrome, means of reducing the 
        risk of sudden infant death syndrome in child care, and license 
        holder communication with parents regarding reducing the risk of 
        sudden infant death syndrome.  Training for family and group 
        family child care providers must be approved by the county 
        licensing agency according to Minnesota Rules, part 9502.0385. 
           Sec. 17.  [245A.151] [FIRE MARSHAL INSPECTION.] 
           When licensure under this chapter requires an inspection by 
        a fire marshal to determine compliance with the Minnesota 
        Uniform Fire Code under section 299F.011, a local fire code 
        inspector approved by the state fire marshal may conduct the 
        inspection.  If a community does not have a local fire code 
        inspector or if the local fire code inspector does not perform 
        the inspection, the state fire marshal must conduct the 
        inspection.  A local fire code inspector or the state fire 
        marshal may recover the cost of these inspections through a fee 
        of no more than $50 per inspection charged to the applicant or 
        license holder.  The fees collected by the state fire marshal 
        under this section are appropriated to the commissioner of 
        public safety for the purpose of conducting the inspections. 
           Sec. 18.  Minnesota Statutes 2001 Supplement, section 
        245A.16, subdivision 1, is amended to read: 
           Subdivision 1.  [DELEGATION OF AUTHORITY TO AGENCIES.] (a) 
        County agencies and private agencies that have been designated 
        or licensed by the commissioner to perform licensing functions 
        and activities under section 245A.04, to recommend denial of 
        applicants under section 245A.05, to issue correction orders, to 
        issue variances, and recommend a conditional license under 
        section 245A.06, or to recommend suspending or revoking a 
        license or issuing a fine under section 245A.07, shall comply 
        with rules and directives of the commissioner governing those 
        functions and with this section.  The following variances are 
        excluded from the delegation of variance authority and may be 
        issued only by the commissioner: 
           (1) dual licensure of family child care and child foster 
        care, dual licensure of child and adult foster care, and adult 
        foster care and family child care; 
           (2) adult foster care maximum capacity; 
           (3) adult foster care minimum age requirement; 
           (4) child foster care maximum age requirement; 
           (5) variances regarding disqualified individuals except 
        that county agencies may issue variances under section 245A.04, 
        subdivision 3e, regarding disqualified individuals when the 
        county is responsible for conducting a consolidated 
        reconsideration according to section 245A.04, subdivision 3b, 
        paragraph (f), of a county maltreatment determination and a 
        disqualification based on serious or recurring maltreatment; and 
           (6) the required presence of a caregiver in the adult 
        foster care residence during normal sleeping hours. 
           (b) County agencies must report information about 
        disqualification reconsiderations under section 245A.04, 
        subdivision 3b, paragraph (f), and variances granted under 
        paragraph (a), clause (5), to the commissioner at least monthly 
        in a format prescribed by the commissioner. 
           (c) For family day care programs, the commissioner may 
        authorize licensing reviews every two years after a licensee has 
        had at least one annual review. 
           Sec. 19.  Minnesota Statutes 2001 Supplement, section 
        256.045, subdivision 3b, is amended to read: 
           Subd. 3b.  [STANDARD OF EVIDENCE FOR MALTREATMENT AND 
        DISQUALIFICATION HEARINGS.] (a) The state human services referee 
        shall determine that maltreatment has occurred if a 
        preponderance of evidence exists to support the final 
        disposition under sections 626.556 and 626.557.  For purposes of 
        hearings regarding disqualification, the state human services 
        referee shall affirm the proposed disqualification in an appeal 
        under subdivision 3, paragraph (a), clause (9), if a 
        preponderance of the evidence shows the individual has:  
           (1) committed maltreatment under section 626.556 or 
        626.557, which is serious or recurring; 
           (2) committed an act or acts meeting the definition of any 
        of the crimes listed in section 245A.04, subdivision 3d, 
        paragraph (a), clauses (1) to (4); or 
           (3) failed to make required reports under section 626.556 
        or 626.557, for incidents in which:  
           (i) the final disposition under section 626.556 or 626.557 
        was substantiated maltreatment; and 
           (ii) the maltreatment was recurring or serious; or 
        substantiated serious or recurring maltreatment of a minor under 
        section 626.556 or of a vulnerable adult under section 626.557 
        for which there is a preponderance of evidence that the 
        maltreatment occurred, and that the subject was responsible for 
        the maltreatment that was serious or recurring.  
           (b) If the disqualification is affirmed, the state human 
        services referee shall determine whether the individual poses a 
        risk of harm in accordance with the requirements of section 
        245A.04, subdivision 3b. 
           (c) The state human services referee shall recommend an 
        order to the commissioner of health, children, families, and 
        learning, or human services, as applicable, who shall issue a 
        final order.  The commissioner shall affirm, reverse, or modify 
        the final disposition.  Any order of the commissioner issued in 
        accordance with this subdivision is conclusive upon the parties 
        unless appeal is taken in the manner provided in subdivision 7.  
        Except as provided under section 245A.04, subdivisions 3b, 
        paragraphs (e) and (f), and 3c, In any licensing appeal under 
        chapter 245A and sections 144.50 to 144.58 and 144A.02 to 
        144A.46, the commissioner's determination as to maltreatment is 
        conclusive, as provided under section 245A.04, subdivision 3f. 
           Sec. 20.  Minnesota Statutes 2001 Supplement, section 
        256.045, subdivision 4, is amended to read: 
           Subd. 4.  [CONDUCT OF HEARINGS.] (a) All hearings held 
        pursuant to subdivision 3, 3a, 3b, or 4a shall be conducted 
        according to the provisions of the federal Social Security Act 
        and the regulations implemented in accordance with that act to 
        enable this state to qualify for federal grants-in-aid, and 
        according to the rules and written policies of the commissioner 
        of human services.  County agencies shall install equipment 
        necessary to conduct telephone hearings.  A state human services 
        referee may schedule a telephone conference hearing when the 
        distance or time required to travel to the county agency offices 
        will cause a delay in the issuance of an order, or to promote 
        efficiency, or at the mutual request of the parties.  Hearings 
        may be conducted by telephone conferences unless the applicant, 
        recipient, former recipient, person, or facility contesting 
        maltreatment objects.  The hearing shall not be held earlier 
        than five days after filing of the required notice with the 
        county or state agency.  The state human services referee shall 
        notify all interested persons of the time, date, and location of 
        the hearing at least five days before the date of the hearing.  
        Interested persons may be represented by legal counsel or other 
        representative of their choice, including a provider of therapy 
        services, at the hearing and may appear personally, testify and 
        offer evidence, and examine and cross-examine witnesses.  The 
        applicant, recipient, former recipient, person, or facility 
        contesting maltreatment shall have the opportunity to examine 
        the contents of the case file and all documents and records to 
        be used by the county or state agency at the hearing at a 
        reasonable time before the date of the hearing and during the 
        hearing.  In hearings under subdivision 3, paragraph (a), 
        clauses (4), (8), and (9), either party may subpoena the private 
        data relating to the investigation prepared by the agency under 
        section 626.556 or 626.557 that is not otherwise accessible 
        under section 13.04, provided the identity of the reporter may 
        not be disclosed. 
           (b) The private data obtained by subpoena in a hearing 
        under subdivision 3, paragraph (a), clause (4), (8), or (9), 
        must be subject to a protective order which prohibits its 
        disclosure for any other purpose outside the hearing provided 
        for in this section without prior order of the district court.  
        Disclosure without court order is punishable by a sentence of 
        not more than 90 days imprisonment or a fine of not more than 
        $700, or both.  These restrictions on the use of private data do 
        not prohibit access to the data under section 13.03, subdivision 
        6.  Except for appeals under subdivision 3, paragraph (a), 
        clauses (4), (5), (8), and (9), upon request, the county agency 
        shall provide reimbursement for transportation, child care, 
        photocopying, medical assessment, witness fee, and other 
        necessary and reasonable costs incurred by the applicant, 
        recipient, or former recipient in connection with the appeal.  
        All evidence, except that privileged by law, commonly accepted 
        by reasonable people in the conduct of their affairs as having 
        probative value with respect to the issues shall be submitted at 
        the hearing and such hearing shall not be "a contested case" 
        within the meaning of section 14.02, subdivision 3.  The agency 
        must present its evidence prior to or at the hearing, and may 
        not submit evidence after the hearing except by agreement of the 
        parties at the hearing, provided the petitioner has the 
        opportunity to respond. 
           (c) In hearings under subdivision 3, paragraph (a), clauses 
        (4), (8), and (9), involving determinations of maltreatment or 
        disqualification made by more than one county agency, by a 
        county agency and a state agency, or by more than one state 
        agency, the hearings may be consolidated into a single fair 
        hearing upon the consent of all parties and the state human 
        services referee. 
           Sec. 21.  Minnesota Statutes 2001 Supplement, section 
        626.556, subdivision 10i, is amended to read: 
           Subd. 10i.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DETERMINATION OF MALTREATMENT AND DISQUALIFICATION BASED ON 
        SERIOUS OR RECURRING MALTREATMENT; REVIEW PANEL.] (a) Except as 
        provided under paragraph (e), an individual or facility that the 
        commissioner of human services, a local social service agency, 
        or the commissioner of children, families, and learning 
        determines has maltreated a child, an interested person acting 
        on behalf of the child, regardless of the determination, who 
        contests the investigating agency's final determination 
        regarding maltreatment, may request the investigating agency to 
        reconsider its final determination regarding maltreatment.  The 
        request for reconsideration must be submitted in writing to the 
        investigating agency within 15 calendar days after receipt of 
        notice of the final determination regarding maltreatment or, if 
        the request is made by an interested person who is not entitled 
        to notice, within 15 days after receipt of the notice by the 
        parent or guardian of the child.  Effective January 1, 2002, an 
        individual who was determined to have maltreated a child under 
        this section and who was disqualified on the basis of serious or 
        recurring maltreatment under section 245A.04, subdivision 3d, 
        may request reconsideration of the maltreatment determination 
        and the disqualification.  The request for reconsideration of 
        the maltreatment determination and the disqualification must be 
        submitted within 30 calendar days of the individual's receipt of 
        the notice of disqualification under section 245A.04, 
        subdivision 3a. 
           (b) Except as provided under paragraphs (e) and (f), if the 
        investigating agency denies the request or fails to act upon the 
        request within 15 calendar days after receiving the request for 
        reconsideration, the person or facility entitled to a fair 
        hearing under section 256.045 may submit to the commissioner of 
        human services or the commissioner of children, families, and 
        learning a written request for a hearing under that section.  
        Section 256.045 also governs hearings requested to contest a 
        final determination of the commissioner of children, families, 
        and learning.  For reports involving maltreatment of a child in 
        a facility, an interested person acting on behalf of the child 
        may request a review by the child maltreatment review panel 
        under section 256.022 if the investigating agency denies the 
        request or fails to act upon the request or if the interested 
        person contests a reconsidered determination.  The investigating 
        agency shall notify persons who request reconsideration of their 
        rights under this paragraph.  The request must be submitted in 
        writing to the review panel and a copy sent to the investigating 
        agency within 30 calendar days of receipt of notice of a denial 
        of a request for reconsideration or of a reconsidered 
        determination.  The request must specifically identify the 
        aspects of the agency determination with which the person is 
        dissatisfied. 
           (c) If, as a result of a reconsideration or review, the 
        investigating agency changes the final determination of 
        maltreatment, that agency shall notify the parties specified in 
        subdivisions 10b, 10d, and 10f. 
           (d) Except as provided under paragraph (f), if an 
        individual or facility contests the investigating agency's final 
        determination regarding maltreatment by requesting a fair 
        hearing under section 256.045, the commissioner of human 
        services shall assure that the hearing is conducted and a 
        decision is reached within 90 days of receipt of the request for 
        a hearing.  The time for action on the decision may be extended 
        for as many days as the hearing is postponed or the record is 
        held open for the benefit of either party. 
           (e) Effective January 1, 2002, if an individual was 
        disqualified under section 245A.04, subdivision 3d, on the basis 
        of a determination of maltreatment, which was serious or 
        recurring, and the individual has requested reconsideration of 
        the maltreatment determination under paragraph (a) and requested 
        reconsideration of the disqualification under section 245A.04, 
        subdivision 3b, reconsideration of the maltreatment 
        determination and reconsideration of the disqualification shall 
        be consolidated into a single reconsideration.  If 
        reconsideration of the maltreatment determination is denied or 
        the disqualification is not set aside or rescinded under section 
        245A.04, subdivision 3b, the individual may request a fair 
        hearing under section 256.045.  If an individual disqualified on 
        the basis of a determination of maltreatment, which was serious 
        or recurring requests a fair hearing under paragraph (b) on the 
        maltreatment determination and the disqualification, the scope 
        of the fair hearing shall include both the maltreatment 
        determination and the disqualification. 
           (f) Effective January 1, 2002, if a maltreatment 
        determination or a disqualification based on serious or 
        recurring maltreatment is the basis for a denial of a license 
        under section 245A.05 or a licensing sanction under section 
        245A.07, the license holder has the right to a contested case 
        hearing under chapter 14 and Minnesota Rules, parts 1400.8510 to 
        1400.8612 and successor rules.  As provided for under section 
        245A.08, subdivision 2a, the scope of the contested case hearing 
        shall include the maltreatment determination, disqualification, 
        and licensing sanction or denial of a license.  In such cases, a 
        fair hearing regarding the maltreatment determination shall not 
        be conducted under paragraph (b).  If the disqualified subject 
        is an individual other than the license holder and upon whom a 
        background study must be conducted under section 245A.04, 
        subdivision 3, the hearings of all parties may be consolidated 
        into a single contested case hearing upon consent of all parties 
        and the administrative law judge. 
           (g) For purposes of this subdivision, "interested person 
        acting on behalf of the child" means a parent or legal guardian; 
        stepparent; grandparent; guardian ad litem; adult stepbrother, 
        stepsister, or sibling; or adult aunt or uncle; unless the 
        person has been determined to be the perpetrator of the 
        maltreatment. 
           Sec. 22.  Minnesota Statutes 2000, section 626.557, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [REPORT NOT REQUIRED.] The following events are 
        not required to be reported under this section:  
           (a) A circumstance where federal law specifically prohibits 
        a person from disclosing patient identifying information in 
        connection with a report of suspected maltreatment, unless the 
        vulnerable adult, or the vulnerable adult's guardian, 
        conservator, or legal representative, has consented to 
        disclosure in a manner which conforms to federal requirements.  
        Facilities whose patients or residents are covered by such a 
        federal law shall seek consent to the disclosure of suspected 
        maltreatment from each patient or resident, or a guardian, 
        conservator, or legal representative, upon the patient's or 
        resident's admission to the facility.  Persons who are 
        prohibited by federal law from reporting an incident of 
        suspected maltreatment shall immediately seek consent to make a 
        report.  
           (b) Verbal or physical aggression occurring between 
        patients, residents, or clients of a facility, or self-abusive 
        behavior by these persons does not constitute abuse unless the 
        behavior causes serious harm.  The operator of the facility or a 
        designee shall record incidents of aggression and self-abusive 
        behavior to facilitate review by licensing agencies and county 
        and local welfare agencies. 
           (c) Accidents as defined in section 626.5572, subdivision 3.
           (d) Events occurring in a facility that result from an 
        individual's single mistake error in the provision of 
        therapeutic conduct to a vulnerable adult, as defined provided 
        in section 626.5572, subdivision 17, paragraph (c), clause (4). 
           (e) Nothing in this section shall be construed to require a 
        report of financial exploitation, as defined in section 
        626.5572, subdivision 9, solely on the basis of the transfer of 
        money or property by gift or as compensation for services 
        rendered. 
           Sec. 23.  Minnesota Statutes 2001 Supplement, section 
        626.557, subdivision 9d, is amended to read: 
           Subd. 9d.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DISPOSITION OF MALTREATMENT AND DISQUALIFICATION BASED ON 
        SERIOUS OR RECURRING MALTREATMENT; REVIEW PANEL.] (a) Except as 
        provided under paragraph (e), any individual or facility which a 
        lead agency determines has maltreated a vulnerable adult, or the 
        vulnerable adult or an interested person acting on behalf of the 
        vulnerable adult, regardless of the lead agency's determination, 
        who contests the lead agency's final disposition of an 
        allegation of maltreatment, may request the lead agency to 
        reconsider its final disposition.  The request for 
        reconsideration must be submitted in writing to the lead agency 
        within 15 calendar days after receipt of notice of final 
        disposition or, if the request is made by an interested person 
        who is not entitled to notice, within 15 days after receipt of 
        the notice by the vulnerable adult or the vulnerable adult's 
        legal guardian.  An individual who was determined to have 
        maltreated a vulnerable adult under this section and who was 
        disqualified on the basis of serious or recurring maltreatment 
        under section 245A.04, subdivision 3d, may request 
        reconsideration of the maltreatment determination and the 
        disqualification.  The request for reconsideration of the 
        maltreatment determination and the disqualification must be 
        submitted within 30 calendar days of the individual's receipt of 
        the notice of disqualification under section 245A.04, 
        subdivision 3a. 
           (b) Except as provided under paragraphs (e) and (f), if the 
        lead agency denies the request or fails to act upon the request 
        within 15 calendar days after receiving the request for 
        reconsideration, the person or facility entitled to a fair 
        hearing under section 256.045, may submit to the commissioner of 
        human services a written request for a hearing under that 
        statute.  The vulnerable adult, or an interested person acting 
        on behalf of the vulnerable adult, may request a review by the 
        vulnerable adult maltreatment review panel under section 256.021 
        if the lead agency denies the request or fails to act upon the 
        request, or if the vulnerable adult or interested person 
        contests a reconsidered disposition.  The lead agency shall 
        notify persons who request reconsideration of their rights under 
        this paragraph.  The request must be submitted in writing to the 
        review panel and a copy sent to the lead agency within 30 
        calendar days of receipt of notice of a denial of a request for 
        reconsideration or of a reconsidered disposition.  The request 
        must specifically identify the aspects of the agency 
        determination with which the person is dissatisfied.  
           (c) If, as a result of a reconsideration or review, the 
        lead agency changes the final disposition, it shall notify the 
        parties specified in subdivision 9c, paragraph (d). 
           (d) For purposes of this subdivision, "interested person 
        acting on behalf of the vulnerable adult" means a person 
        designated in writing by the vulnerable adult to act on behalf 
        of the vulnerable adult, or a legal guardian or conservator or 
        other legal representative, a proxy or health care agent 
        appointed under chapter 145B or 145C, or an individual who is 
        related to the vulnerable adult, as defined in section 245A.02, 
        subdivision 13. 
           (e) If an individual was disqualified under section 
        245A.04, subdivision 3d, on the basis of a determination of 
        maltreatment, which was serious or recurring, and the individual 
        has requested reconsideration of the maltreatment determination 
        under paragraph (a) and reconsideration of the disqualification 
        under section 245A.04, subdivision 3b, reconsideration of the 
        maltreatment determination and requested reconsideration of the 
        disqualification shall be consolidated into a single 
        reconsideration.  If reconsideration of the maltreatment 
        determination is denied or if the disqualification is not set 
        aside or rescinded under section 245A.04, subdivision 3b, the 
        individual may request a fair hearing under section 256.045.  If 
        an individual who was disqualified on the basis of serious or 
        recurring maltreatment requests a fair hearing under paragraph 
        (b) on the maltreatment determination and the disqualification, 
        the scope of the fair hearing shall include both the 
        maltreatment determination and the disqualification. 
           (f) If a maltreatment determination or a disqualification 
        based on serious or recurring maltreatment is the basis for a 
        denial of a license under section 245A.05 or a licensing 
        sanction under section 245A.07, the license holder has the right 
        to a contested case hearing under chapter 14 and Minnesota 
        Rules, parts 1400.8510 to 1400.8612 and successor rules.  As 
        provided for under section 245A.08, the scope of the contested 
        case hearing shall include the maltreatment determination, 
        disqualification, and licensing sanction or denial of a 
        license.  In such cases, a fair hearing shall not be conducted 
        under paragraph (b).  If the disqualified subject is an 
        individual other than the license holder and upon whom a 
        background study must be conducted under section 245A.04, 
        subdivision 3, the hearings of all parties may be consolidated 
        into a single contested case hearing upon consent of all parties 
        and the administrative law judge. 
           (g) Until August 1, 2002, an individual or facility that 
        was determined by the commissioner of human services or the 
        commissioner of health to be responsible for neglect under 
        section 626.5572, subdivision 17, after October 1, 1995, and 
        before August 1, 2001, that believes that the finding of neglect 
        does not meet an amended definition of neglect may request a 
        reconsideration of the determination of neglect.  The 
        commissioner of human services or the commissioner of health 
        shall mail a notice to the last known address of individuals who 
        are eligible to seek this reconsideration.  The request for 
        reconsideration must state how the established findings no 
        longer meet the elements of the definition of neglect.  The 
        commissioner shall review the request for reconsideration and 
        make a determination within 15 calendar days.  The 
        commissioner's decision on this reconsideration is the final 
        agency action. 
           (1) For purposes of compliance with the data destruction 
        schedule under subdivision 12b, paragraph (d), when a finding of 
        substantiated maltreatment has been changed as a result of a 
        reconsideration under this paragraph, the date of the original 
        finding of a substantiated maltreatment must be used to 
        calculate the destruction date. 
           (2) For purposes of any background studies under section 
        245A.04, when a determination of substantiated maltreatment has 
        been changed as a result of a reconsideration under this 
        paragraph, any prior disqualification of the individual under 
        section 245A.04 that was based on this determination of 
        maltreatment shall be rescinded, and for future background 
        studies under section 245A.04 the commissioner must not use the 
        previous determination of substantiated maltreatment as a basis 
        for disqualification or as a basis for referring the 
        individual's maltreatment history to a health-related licensing 
        board under section 245A.04, subdivision 3d, paragraph (b). 

                                   ARTICLE 2 
                        CONTINUING CARE AND HEALTH CARE 
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        144A.071, subdivision 1a, is amended to read: 
           Subd. 1a.  [DEFINITIONS.] For purposes of sections 144A.071 
        to 144A.073, the following terms have the meanings given them: 
           (a) "Attached fixtures" has the meaning given in Minnesota 
        Rules, part 9549.0020, subpart 6. 
           (b) "Buildings" has the meaning given in Minnesota Rules, 
        part 9549.0020, subpart 7. 
           (c) "Capital assets" has the meaning given in section 
        256B.421, subdivision 16. 
           (d) "Commenced construction" means that all of the 
        following conditions were met:  the final working drawings and 
        specifications were approved by the commissioner of health; the 
        construction contracts were let; a timely construction schedule 
        was developed, stipulating dates for beginning, achieving 
        various stages, and completing construction; and all zoning and 
        building permits were applied for. 
           (e) "Completion date" means the date on which a certificate 
        of occupancy is issued for a construction project, or if a 
        certificate of occupancy is not required, the date on which the 
        construction project is available for facility use. 
           (f) "Construction" means any erection, building, 
        alteration, reconstruction, modernization, or improvement 
        necessary to comply with the nursing home licensure rules. 
           (g) "Construction project" means: 
           (1) a capital asset addition to, or replacement of a 
        nursing home or certified boarding care home that results in new 
        space or the remodeling of or renovations to existing facility 
        space; 
           (2) the remodeling or renovation of existing facility space 
        the use of which is modified as a result of the project 
        described in clause (1).  This existing space and the project 
        described in clause (1) must be used for the functions as 
        designated on the construction plans on completion of the 
        project described in clause (1) for a period of not less than 24 
        months; or 
           (3) capital asset additions or replacements that are 
        completed within 12 months before or after the completion date 
        of the project described in clause (1). 
           (h) "New licensed" or "new certified beds" means: 
           (1) newly constructed beds in a facility or the 
        construction of a new facility that would increase the total 
        number of licensed nursing home beds or certified boarding care 
        or nursing home beds in the state; or 
           (2) newly licensed nursing home beds or newly certified 
        boarding care or nursing home beds that result from remodeling 
        of the facility that involves relocation of beds but does not 
        result in an increase in the total number of beds, except when 
        the project involves the upgrade of boarding care beds to 
        nursing home beds, as defined in section 144A.073, subdivision 
        1.  "Remodeling" includes any of the type of conversion, 
        renovation, replacement, or upgrading projects as defined in 
        section 144A.073, subdivision 1. 
           (i) "Project construction costs" means the cost of the 
        facility capital asset additions, replacements, renovations, or 
        remodeling projects, construction site preparation costs, and 
        related soft costs.  Project construction costs include the cost 
        of any remodeling or renovation of existing facility space which 
        is modified as a result of the construction project.  Project 
        construction costs also includes the cost of new technology 
        implemented as part of the construction project.  Project 
        construction costs also include the cost of new technology 
        implemented as part of the construction project and depreciable 
        equipment directly identified to the project.  Any new 
        technology and depreciable equipment included in the project 
        construction costs shall, at the written election of the 
        facility, be included in the facility's appraised value for 
        purposes of Minnesota Rules, part 9549.0020, subpart 5, and debt 
        incurred for its purchase shall be included as allowable debt 
        for purposes of Minnesota Rules, part 9549.0060, subpart 5, 
        items A and C.  Any new technology and depreciable equipment 
        included in the project construction costs that the facility 
        elects not to include in its appraised value and allowable debt 
        shall be treated as provided in section 256B.431, subdivision 
        17, paragraph (b).  Written election under this paragraph must 
        be included in the facility's request for the rate change 
        related to the project, and this election may not be changed. 
           (j) "Technology" means information systems or devices that 
        make documentation, charting, and staff time more efficient or 
        encourage and allow for care through alternative settings 
        including, but not limited to, touch screens, monitors, 
        hand-helds, swipe cards, motion detectors, pagers, telemedicine, 
        medication dispensers, and equipment to monitor vital signs and 
        self-injections, and to observe skin and other conditions. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        144A.36, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] "Eligible nursing home" 
        means any nursing home licensed under sections 144A.01 to 
        144A.155 and or any boarding care facility, certified by the 
        appropriate authority under United States Code, title 42, 
        sections 1396-1396p, to participate as a vendor in the medical 
        assistance program established under chapter 256B. 
           Sec. 3.  Minnesota Statutes 2000, section 144D.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HOUSING WITH SERVICES ESTABLISHMENT OR 
        ESTABLISHMENT.] (a) "Housing with services establishment" or 
        "establishment" means: 
           (1) an establishment providing sleeping accommodations to 
        one or more adult residents, at least 80 percent of which are 55 
        years of age or older, and offering or providing, for a fee, one 
        or more regularly scheduled health-related services or two or 
        more regularly scheduled supportive services, whether offered or 
        provided directly by the establishment or by another entity 
        arranged for by the establishment; or 
           (2) an establishment that registers under section 144D.025. 
           (b) Housing with services establishment does not include: 
           (1) a nursing home licensed under chapter 144A; 
           (2) a hospital, certified boarding care home, or supervised 
        living facility licensed under sections 144.50 to 144.56; 
           (3) a board and lodging establishment licensed under 
        chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 
        9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 
        9530.4450, or under chapter 245B; 
           (4) a board and lodging establishment which serves as a 
        shelter for battered women or other similar purpose; 
           (5) a family adult foster care home licensed by the 
        department of human services; 
           (6) private homes in which the residents are related by 
        kinship, law, or affinity with the providers of services; 
           (7) residential settings for persons with mental 
        retardation or related conditions in which the services are 
        licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 
        applicable successor rules or laws; 
           (8) a home-sharing arrangement such as when an elderly or 
        disabled person or single-parent family makes lodging in a 
        private residence available to another person in exchange for 
        services or rent, or both; 
           (9) a duly organized condominium, cooperative, common 
        interest community, or owners' association of the foregoing 
        where at least 80 percent of the units that comprise the 
        condominium, cooperative, or common interest community are 
        occupied by individuals who are the owners, members, or 
        shareholders of the units; or 
           (10) services for persons with developmental disabilities 
        that are provided under a license according to Minnesota Rules, 
        parts 9525.2000 to 9525.2140 in effect until January 1, 1998, or 
        under chapter 245B. 
           Sec. 4.  [144D.025] [OPTIONAL REGISTRATION.] 
           An establishment that meets all the requirements of this 
        chapter except that fewer than 80 percent of the adult residents 
        are age 55 or older may, at its option, register as a housing 
        with services establishment. 
           Sec. 5.  Minnesota Statutes 2000, section 245.462, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGEMENT SERVICE PROVIDER.] (a) "Case 
        management service provider" means a case manager or case 
        manager associate employed by the county or other entity 
        authorized by the county board to provide case management 
        services specified in section 245.4711.  
           (b) A case manager must: 
           (1) be skilled in the process of identifying and assessing 
        a wide range of client needs; 
           (2) be knowledgeable about local community resources and 
        how to use those resources for the benefit of the client; 
           (3) have a bachelor's degree in one of the behavioral 
        sciences or related fields including, but not limited to, social 
        work, psychology, or nursing from an accredited college or 
        university or meet the requirements of paragraph (c); and 
           (4) meet the supervision and continuing education 
        requirements described in paragraphs (d), (e), and (f), as 
        applicable.  
           (c) Case managers without a bachelor's degree must meet one 
        of the requirements in clauses (1) to (3):  
           (1) have three or four years of experience as a case 
        manager associate as defined in this section; 
           (2) be a registered nurse without a bachelor's degree and 
        have a combination of specialized training in psychiatry and 
        work experience consisting of community interaction and 
        involvement or community discharge planning in a mental health 
        setting totaling three years; or 
           (3) be a person who qualified as a case manager under the 
        1998 department of human service waiver provision and meet the 
        continuing education and mentoring requirements in this section. 
           (d) A case manager with at least 2,000 hours of supervised 
        experience in the delivery of services to adults with mental 
        illness must receive regular ongoing supervision and clinical 
        supervision totaling 38 hours per year of which at least one 
        hour per month must be clinical supervision regarding individual 
        service delivery with a case management supervisor.  The 
        remaining 26 hours of supervision may be provided by a case 
        manager with two years of experience.  Group supervision may not 
        constitute more than one-half of the required supervision 
        hours.  Clinical supervision must be documented in the client 
        record. 
           (e) A case manager without 2,000 hours of supervised 
        experience in the delivery of services to adults with mental 
        illness must: 
           (1) receive clinical supervision regarding individual 
        service delivery from a mental health professional at least one 
        hour per week until the requirement of 2,000 hours of experience 
        is met; and 
           (2) complete 40 hours of training approved by the 
        commissioner in case management skills and the characteristics 
        and needs of adults with serious and persistent mental illness.  
           (f) A case manager who is not licensed, registered, or 
        certified by a health-related licensing board must receive 30 
        hours of continuing education and training in mental illness and 
        mental health services annually every two years. 
           (g) A case manager associate (CMA) must: 
           (1) work under the direction of a case manager or case 
        management supervisor; 
           (2) be at least 21 years of age; 
           (3) have at least a high school diploma or its equivalent; 
        and 
           (4) meet one of the following criteria: 
           (i) have an associate of arts degree in one of the 
        behavioral sciences or human services; 
           (ii) be a registered nurse without a bachelor's degree; 
           (iii) within the previous ten years, have three years of 
        life experience with serious and persistent mental illness as 
        defined in section 245.462, subdivision 20; or as a child had 
        severe emotional disturbance as defined in section 245.4871, 
        subdivision 6; or have three years life experience as a primary 
        caregiver to an adult with serious and persistent mental illness 
        within the previous ten years; 
           (iv) have 6,000 hours work experience as a nondegreed state 
        hospital technician; or 
           (v) be a mental health practitioner as defined in section 
        245.462, subdivision 17, clause (2). 
           Individuals meeting one of the criteria in items (i) to 
        (iv), may qualify as a case manager after four years of 
        supervised work experience as a case manager associate.  
        Individuals meeting the criteria in item (v), may qualify as a 
        case manager after three years of supervised experience as a 
        case manager associate. 
           (h) A case management associate must meet the following 
        supervision, mentoring, and continuing education requirements:  
           (1) have 40 hours of preservice training described under 
        paragraph (e), clause (2); 
           (2) receive at least 40 hours of continuing education in 
        mental illness and mental health services annually; and 
           (3) receive at least five hours of mentoring per week from 
        a case management mentor.  
        A "case management mentor" means a qualified, practicing case 
        manager or case management supervisor who teaches or advises and 
        provides intensive training and clinical supervision to one or 
        more case manager associates.  Mentoring may occur while 
        providing direct services to consumers in the office or in the 
        field and may be provided to individuals or groups of case 
        manager associates.  At least two mentoring hours per week must 
        be individual and face-to-face. 
           (i) A case management supervisor must meet the criteria for 
        mental health professionals, as specified in section 245.462, 
        subdivision 18. 
           (j) An immigrant who does not have the qualifications 
        specified in this subdivision may provide case management 
        services to adult immigrants with serious and persistent mental 
        illness who are members of the same ethnic group as the case 
        manager if the person:  
           (1) is currently enrolled in and is actively pursuing 
        credits toward the completion of a bachelor's degree in one of 
        the behavioral sciences or a related field including, but not 
        limited to, social work, psychology, or nursing from an 
        accredited college or university; 
           (2) completes 40 hours of training as specified in this 
        subdivision; and 
           (3) receives clinical supervision at least once a week 
        until the requirements of this subdivision are met. 
           Sec. 6.  Minnesota Statutes 2000, section 245.4871, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGEMENT SERVICE PROVIDER.] (a) "Case 
        management service provider" means a case manager or case 
        manager associate employed by the county or other entity 
        authorized by the county board to provide case management 
        services specified in subdivision 3 for the child with severe 
        emotional disturbance and the child's family.  
           (b) A case manager must: 
           (1) have experience and training in working with children; 
           (2) have at least a bachelor's degree in one of the 
        behavioral sciences or a related field including, but not 
        limited to, social work, psychology, or nursing from an 
        accredited college or university or meet the requirements of 
        paragraph (d); 
           (3) have experience and training in identifying and 
        assessing a wide range of children's needs; 
           (4) be knowledgeable about local community resources and 
        how to use those resources for the benefit of children and their 
        families; and 
           (5) meet the supervision and continuing education 
        requirements of paragraphs (e), (f), and (g), as applicable. 
           (c) A case manager may be a member of any professional 
        discipline that is part of the local system of care for children 
        established by the county board. 
           (d) A case manager without a bachelor's degree must meet 
        one of the requirements in clauses (1) to (3):  
           (1) have three or four years of experience as a case 
        manager associate; 
           (2) be a registered nurse without a bachelor's degree who 
        has a combination of specialized training in psychiatry and work 
        experience consisting of community interaction and involvement 
        or community discharge planning in a mental health setting 
        totaling three years; or 
           (3) be a person who qualified as a case manager under the 
        1998 department of human services waiver provision and meets the 
        continuing education, supervision, and mentoring requirements in 
        this section. 
           (e) A case manager with at least 2,000 hours of supervised 
        experience in the delivery of mental health services to children 
        must receive regular ongoing supervision and clinical 
        supervision totaling 38 hours per year, of which at least one 
        hour per month must be clinical supervision regarding individual 
        service delivery with a case management supervisor.  The other 
        26 hours of supervision may be provided by a case manager with 
        two years of experience.  Group supervision may not constitute 
        more than one-half of the required supervision hours. 
           (f) A case manager without 2,000 hours of supervised 
        experience in the delivery of mental health services to children 
        with emotional disturbance must: 
           (1) begin 40 hours of training approved by the commissioner 
        of human services in case management skills and in the 
        characteristics and needs of children with severe emotional 
        disturbance before beginning to provide case management 
        services; and 
           (2) receive clinical supervision regarding individual 
        service delivery from a mental health professional at least one 
        hour each week until the requirement of 2,000 hours of 
        experience is met. 
           (g) A case manager who is not licensed, registered, or 
        certified by a health-related licensing board must receive 30 
        hours of continuing education and training in severe emotional 
        disturbance and mental health services annually every two years. 
           (h) Clinical supervision must be documented in the child's 
        record.  When the case manager is not a mental health 
        professional, the county board must provide or contract for 
        needed clinical supervision. 
           (i) The county board must ensure that the case manager has 
        the freedom to access and coordinate the services within the 
        local system of care that are needed by the child. 
           (j) A case manager associate (CMA) must: 
           (1) work under the direction of a case manager or case 
        management supervisor; 
           (2) be at least 21 years of age; 
           (3) have at least a high school diploma or its equivalent; 
        and 
           (4) meet one of the following criteria: 
           (i) have an associate of arts degree in one of the 
        behavioral sciences or human services; 
           (ii) be a registered nurse without a bachelor's degree; 
           (iii) have three years of life experience as a primary 
        caregiver to a child with serious emotional disturbance as 
        defined in section 245.4871, subdivision 6, within the previous 
        ten years; 
           (iv) have 6,000 hours work experience as a nondegreed state 
        hospital technician; or 
           (v) be a mental health practitioner as defined in 
        subdivision 26, clause (2). 
           Individuals meeting one of the criteria in items (i) to 
        (iv) may qualify as a case manager after four years of 
        supervised work experience as a case manager associate.  
        Individuals meeting the criteria in item (v) may qualify as a 
        case manager after three years of supervised experience as a 
        case manager associate. 
           (k) Case manager associates must meet the following 
        supervision, mentoring, and continuing education requirements; 
           (1) have 40 hours of preservice training described under 
        paragraph (f), clause (1); 
           (2) receive at least 40 hours of continuing education in 
        severe emotional disturbance and mental health service annually; 
        and 
           (3) receive at least five hours of mentoring per week from 
        a case management mentor.  A "case management mentor" means a 
        qualified, practicing case manager or case management supervisor 
        who teaches or advises and provides intensive training and 
        clinical supervision to one or more case manager associates.  
        Mentoring may occur while providing direct services to consumers 
        in the office or in the field and may be provided to individuals 
        or groups of case manager associates.  At least two mentoring 
        hours per week must be individual and face-to-face. 
           (l) A case management supervisor must meet the criteria for 
        a mental health professional as specified in section 245.4871, 
        subdivision 27. 
           (m) An immigrant who does not have the qualifications 
        specified in this subdivision may provide case management 
        services to child immigrants with severe emotional disturbance 
        of the same ethnic group as the immigrant if the person:  
           (1) is currently enrolled in and is actively pursuing 
        credits toward the completion of a bachelor's degree in one of 
        the behavioral sciences or related fields at an accredited 
        college or university; 
           (2) completes 40 hours of training as specified in this 
        subdivision; and 
           (3) receives clinical supervision at least once a week 
        until the requirements of obtaining a bachelor's degree and 
        2,000 hours of supervised experience are met. 
           Sec. 7.  Minnesota Statutes 2000, section 245.50, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them. 
           (a) "Bordering state" means Iowa, North Dakota, South 
        Dakota, or Wisconsin. 
           (b) "Receiving agency or facility" means a public or 
        private hospital, mental health center, or other person or 
        organization authorized by a state to provide which provides 
        mental health services under this section to individuals from a 
        state other than the state in which the agency is located. 
           (c) "Receiving state" means the state in which a receiving 
        agency is located. 
           (d) "Sending agency" means a state or county agency which 
        sends an individual to a bordering state for treatment under 
        this section. 
           (e) "Sending state" means the state in which the sending 
        agency is located. 
           Sec. 8.  Minnesota Statutes 2000, section 245.50, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PURPOSE AND AUTHORITY.] (a) The purpose of this 
        section is to enable appropriate treatment to be provided to 
        individuals, across state lines from the individual's state of 
        residence, in qualified facilities that are closer to the homes 
        of individuals than are facilities available in the individual's 
        home state. 
           (b) Unless prohibited by another law and subject to the 
        exceptions listed in subdivision 3, a county board or the 
        commissioner of human services may contract with an agency or 
        facility in a bordering state for mental health services for 
        residents of Minnesota, and a Minnesota mental health agency or 
        facility may contract to provide services to residents of 
        bordering states.  Except as provided in subdivision 5, a person 
        who receives services in another state under this section is 
        subject to the laws of the state in which services are 
        provided.  A person who will receive services in another state 
        under this section must be informed of the consequences of 
        receiving services in another state, including the implications 
        of the differences in state laws, to the extent the individual 
        will be subject to the laws of the receiving state. 
           Sec. 9.  Minnesota Statutes 2000, section 245.50, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL CONTRACTS; WISCONSIN BORDERING 
        STATES.] The commissioner of the Minnesota department of human 
        services must enter into negotiations with appropriate personnel 
        at the Wisconsin department of health and social services and 
        must develop an agreement that conforms to the requirements of 
        subdivision 4, to enable the placement in Minnesota of patients 
        who are on emergency holds or who have been involuntarily 
        committed as mentally ill or chemically dependent in Wisconsin 
        and to enable the temporary placement in Wisconsin of patients 
        who are on emergency holds in Minnesota under section 253B.05, 
        provided that the Minnesota courts retain jurisdiction over 
        Minnesota patients, and the state of Wisconsin affords to 
        Minnesota patients the rights under Minnesota law.  Persons 
        committed by the Wisconsin courts and placed in Minnesota 
        facilities shall continue to be in the legal custody of 
        Wisconsin and Wisconsin's laws governing length of commitment, 
        reexaminations, and extension of commitment shall continue to 
        apply to these residents.  In all other respects, Wisconsin 
        residents placed in Minnesota facilities are subject to 
        Minnesota laws.  The agreement must specify that responsibility 
        for payment for the cost of care of Wisconsin residents shall 
        remain with the state of Wisconsin and the cost of care of 
        Minnesota residents shall remain with the state of Minnesota.  
        The commissioner shall be assisted by attorneys from the 
        Minnesota attorney general's office in negotiating and 
        finalizing this agreement.  The agreement shall be completed so 
        as to permit placement of Wisconsin residents in Minnesota 
        facilities and Minnesota residents in Wisconsin facilities 
        beginning July 1, 1994. (a) An individual who is detained, 
        committed, or placed on an involuntary basis under chapter 253B 
        may be confined or treated in a bordering state pursuant to a 
        contract under this section.  An individual who is detained, 
        committed, or placed on an involuntary basis under the civil law 
        of a bordering state may be confined or treated in Minnesota 
        pursuant to a contract under this section.  A peace or health 
        officer who is acting under the authority of the sending state 
        may transport an individual to a receiving agency that provides 
        services pursuant to a contract under this section and may 
        transport the individual back to the sending state under the 
        laws of the sending state.  Court orders valid under the law of 
        the sending state are granted recognition and reciprocity in the 
        receiving state for individuals covered by a contract under this 
        section to the extent that the court orders relate to 
        confinement for treatment or care of mental illness.  Such 
        treatment or care may address other conditions that may be 
        co-occurring with the mental illness.  These court orders are 
        not subject to legal challenge in the courts of the receiving 
        state.  Individuals who are detained, committed, or placed under 
        the law of a sending state and who are transferred to a 
        receiving state under this section continue to be in the legal 
        custody of the authority responsible for them under the law of 
        the sending state.  Except in emergencies, those individuals may 
        not be transferred, removed, or furloughed from a receiving 
        agency without the specific approval of the authority 
        responsible for them under the law of the sending state. 
           (b) While in the receiving state pursuant to a contract 
        under this section, an individual shall be subject to the 
        sending state's laws and rules relating to length of 
        confinement, reexaminations, and extensions of confinement.  No 
        individual may be sent to another state pursuant to a contract 
        under this section until the receiving state has enacted a law 
        recognizing the validity and applicability of this section. 
           (c) If an individual receiving services pursuant to a 
        contract under this section leaves the receiving agency without 
        permission and the individual is subject to involuntary 
        confinement under the law of the sending state, the receiving 
        agency shall use all reasonable means to return the individual 
        to the receiving agency.  The receiving agency shall immediately 
        report the absence to the sending agency.  The receiving state 
        has the primary responsibility for, and the authority to direct, 
        the return of these individuals within its borders and is liable 
        for the cost of the action to the extent that it would be liable 
        for costs of its own resident. 
           (d) Responsibility for payment for the cost of care remains 
        with the sending agency. 
           (e) This subdivision also applies to county contracts under 
        subdivision 2 which include emergency care and treatment 
        provided to a county resident in a bordering state. 
           Sec. 10.  Minnesota Statutes 2001 Supplement, section 
        256.01, subdivision 2, as amended by Laws 2002, chapter 220, 
        article 15, section 4, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall: 
           (1) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (a) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (d) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (e) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (g) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (2) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (3) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting handicapped, 
        dependent, neglected and delinquent children, and children born 
        to mothers who were not married to the children's fathers at the 
        times of the conception nor at the births of the children; 
        license and supervise child-caring and child-placing agencies 
        and institutions; supervise the care of children in boarding and 
        foster homes or in private institutions; and generally perform 
        all functions relating to the field of child welfare now vested 
        in the state board of control. 
           (4) Administer and supervise all noninstitutional service 
        to handicapped persons, including those who are visually 
        impaired, hearing impaired, or physically impaired or otherwise 
        handicapped.  The commissioner may provide and contract for the 
        care and treatment of qualified indigent children in facilities 
        other than those located and available at state hospitals when 
        it is not feasible to provide the service in state hospitals. 
           (5) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (6) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  For children under the guardianship of the 
        commissioner whose interests would be best served by adoptive 
        placement, the commissioner may contract with a licensed 
        child-placing agency or a Minnesota tribal social services 
        agency to provide adoption services.  A contract with a licensed 
        child-placing agency must be designed to supplement existing 
        county efforts and may not replace existing county programs, 
        unless the replacement is agreed to by the county board and the 
        appropriate exclusive bargaining representative or the 
        commissioner has evidence that child placements of the county 
        continue to be substantially below that of other counties.  
        Funds encumbered and obligated under an agreement for a specific 
        child shall remain available until the terms of the agreement 
        are fulfilled or the agreement is terminated. 
           (9) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (10) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) The secretary of health and human services of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (b) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) According to federal requirements, establish 
        procedures to be followed by local welfare boards in creating 
        citizen advisory committees, including procedures for selection 
        of committee members. 
           (14) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, medical assistance, or food stamp 
        program in the following manner:  
           (a) One-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance and the AFDC program 
        formerly codified in sections 256.72 to 256.87, disallowances 
        shall be shared by each county board in the same proportion as 
        that county's expenditures for the sanctioned program are to the 
        total of all counties' expenditures for the AFDC program 
        formerly codified in sections 256.72 to 256.87, and medical 
        assistance programs.  For the food stamp program, sanctions 
        shall be shared by each county board, with 50 percent of the 
        sanction being distributed to each county in the same proportion 
        as that county's administrative costs for food stamps are to the 
        total of all food stamp administrative costs for all counties, 
        and 50 percent of the sanctions being distributed to each county 
        in the same proportion as that county's value of food stamp 
        benefits issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due. 
           (b) Notwithstanding the provisions of paragraph (a), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in paragraph (a), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a).  
           (15) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (17) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) The commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced. 
           (b) The county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.  
           (c) If the required reports are not received by the 
        deadlines established in clause (b), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received.  
           (d) A county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of noncompliance.
           (e) The final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period. 
           (f) The commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) or (e) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under paragraph (c) or (e), the county board may appeal the 
        action according to sections 14.57 to 14.69. 
           (g) Counties subject to withholding of funds under 
        paragraph (c) or forfeiture or repayment of funds under 
        paragraph (e) shall not reduce or withhold benefits or services 
        to clients to cover costs incurred due to actions taken by the 
        commissioner under paragraph (c) or (e). 
           (18) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (20) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (21) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the prescription drug program 
        established under section 256.955 after the beneficiary's 
        satisfaction of any deductible established in the program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  Rebate agreements for prescription drugs 
        delivered on or after July 1, 2002, must include rebates for 
        individuals covered under the prescription drug program who are 
        under 65 years of age.  For each drug, the amount of the rebate 
        shall be equal to the basic rebate as defined for purposes of 
        the federal rebate program in United States Code, title 42, 
        section 1396r-8(c)(1).  This basic rebate shall be applied to 
        single-source and multiple-source drugs.  The manufacturers must 
        provide full payment within 30 days of receipt of the state 
        invoice for the rebate within the terms and conditions used for 
        the federal rebate program established pursuant to section 1927 
        of title XIX of the Social Security Act.  The manufacturers must 
        provide the commissioner with any information necessary to 
        verify the rebate determined per drug.  The rebate program shall 
        utilize the terms and conditions used for the federal rebate 
        program established pursuant to section 1927 of title XIX of the 
        Social Security Act. 
           (22) Have the authority to administer the federal drug 
        rebate program for drugs purchased under the medical assistance 
        program as allowed by section 1927 of title XIX of the Social 
        Security Act and according to the terms and conditions of 
        section 1927.  Rebates shall be collected for all drugs that 
        have been dispensed or administered in an outpatient setting and 
        that are from manufacturers who have signed a rebate agreement 
        with the United States Department of Health and Human Services. 
           (23) Have the authority to administer a supplemental drug 
        rebate program for drugs purchased under the medical assistance 
        program and under the prescription drug program established in 
        section 256.955.  The commissioner may enter into supplemental 
        rebate contracts with pharmaceutical manufacturers and may 
        require prior authorization for drugs that are from 
        manufacturers that have not signed a supplemental rebate 
        contract.  Prior authorization of drugs shall be subject to the 
        provisions of section 256B.0625, subdivision 13, paragraph (b). 
           (24) Operate the department's communication systems account 
        established in Laws 1993, First Special Session chapter 1, 
        article 1, section 2, subdivision 2, to manage shared 
        communication costs necessary for the operation of the programs 
        the commissioner supervises.  A communications account may also 
        be established for each regional treatment center which operates 
        communications systems.  Each account must be used to manage 
        shared communication costs necessary for the operations of the 
        programs the commissioner supervises.  The commissioner may 
        distribute the costs of operating and maintaining communication 
        systems to participants in a manner that reflects actual usage. 
        Costs may include acquisition, licensing, insurance, 
        maintenance, repair, staff time and other costs as determined by 
        the commissioner.  Nonprofit organizations and state, county, 
        and local government agencies involved in the operation of 
        programs the commissioner supervises may participate in the use 
        of the department's communications technology and share in the 
        cost of operation.  The commissioner may accept on behalf of the 
        state any gift, bequest, devise or personal property of any 
        kind, or money tendered to the state for any lawful purpose 
        pertaining to the communication activities of the department.  
        Any money received for this purpose must be deposited in the 
        department's communication systems accounts.  Money collected by 
        the commissioner for the use of communication systems must be 
        deposited in the state communication systems account and is 
        appropriated to the commissioner for purposes of this section. 
           (25) Receive any federal matching money that is made 
        available through the medical assistance program for the 
        consumer satisfaction survey.  Any federal money received for 
        the survey is appropriated to the commissioner for this 
        purpose.  The commissioner may expend the federal money received 
        for the consumer satisfaction survey in either year of the 
        biennium. 
           (26) Incorporate cost reimbursement claims from First Call 
        Minnesota and Greater Twin Cities United Way into the federal 
        cost reimbursement claiming processes of the department 
        according to federal law, rule, and regulations.  Any 
        reimbursement received is appropriated to the commissioner and 
        shall be disbursed to First Call Minnesota and Greater Twin 
        Cities United Way according to normal department payment 
        schedules. 
           (27) Develop recommended standards for foster care homes 
        that address the components of specialized therapeutic services 
        to be provided by foster care homes with those services.  
           Sec. 11.  Minnesota Statutes 2000, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 20.  [RYAN WHITE COMPREHENSIVE AIDS RESOURCES 
        EMERGENCY ACT.] The commissioner shall act as the designated 
        state agent for carrying out responsibilities required under 
        Title II of the federal Ryan White Comprehensive AIDS Resources 
        Emergency (CARE) Act.  These responsibilities include: 
           (1) coordinating statewide HIV/AIDS needs assessment 
        activities; 
           (2) developing the state's plan to meet identified health 
        and support service needs of people living with HIV/AIDS; 
           (3) administering federal funds designed to provide 
        comprehensive health and support services to persons living with 
        HIV/AIDS; 
           (4) administering federal funds designated for the AIDS 
        drug assistance program (ADAP); 
           (5) collecting rebates from pharmaceutical manufacturers on 
        drugs purchased with federal ADAP funds; and 
           (6) utilizing ADAP rebate funds in accordance with 
        guidelines of the federal Health Resources and Services 
        Administration. 
        Rebates collected under this subdivision shall be deposited into 
        the ADAP account in the special revenue fund and are 
        appropriated to the commissioner for purposes of this 
        subdivision. 
           Sec. 12.  Minnesota Statutes 2000, section 256.9657, 
        subdivision 1, as amended by Laws 2002, chapter 220, article 14, 
        section 5, is amended to read: 
           Subdivision 1.  [NURSING HOME LICENSE SURCHARGE.] (a) 
        Effective July 1, 1993, each non-state-operated nursing home 
        licensed under chapter 144A shall pay to the commissioner an 
        annual surcharge according to the schedule in subdivision 4.  
        The surcharge shall be calculated as $620 per licensed bed.  If 
        the number of licensed beds is reduced, the surcharge shall be 
        based on the number of remaining licensed beds the second month 
        following the receipt of timely notice by the commissioner of 
        human services that beds have been delicensed.  The nursing home 
        must notify the commissioner of health in writing when beds are 
        delicensed.  The commissioner of health must notify the 
        commissioner of human services within ten working days after 
        receiving written notification.  If the notification is received 
        by the commissioner of human services by the 15th of the month, 
        the invoice for the second following month must be reduced to 
        recognize the delicensing of beds.  Beds on layaway status 
        continue to be subject to the surcharge.  The commissioner of 
        human services must acknowledge a medical care surcharge appeal 
        within 30 days of receipt of the written appeal from the 
        provider. 
           (b) Effective July 1, 1994, the surcharge in paragraph (a) 
        shall be increased to $625. 
           (c) Effective August 15, 2003, the surcharge under 
        paragraph (b) shall be increased by an amount necessary to 
        ensure a net gain to the general fund of $9,620,000 during 
        fiscal year 2004 as a result of: 
           (1) the total transfers anticipated during the fiscal year 
        ending June 30, 2004, under section 256B.19, subdivision 1d, 
        paragraph (c); 
           (2) the county nursing home payment adjustments under 
        section 256B.431, subdivision 23, paragraph (c); 
           (3) the surcharges under this paragraph; and 
           (4) the nursing facility rate increases under section 
        256B.431, subdivision 37. 
        The increase under this paragraph shall not exceed $365 per bed. 
           (d) Effective August 15, 2004, the surcharge under 
        paragraph (c) shall be equal to an amount necessary to ensure a 
        net gain to the general fund each fiscal year of $10,228,000 as 
        a result of: 
           (1) the total transfers anticipated during the fiscal year 
        under section 256B.19, subdivision 1d, paragraph (c); 
           (2) the county nursing home payment adjustments under 
        section 256B.431, subdivision 23, paragraph (c); 
           (3) the surcharges under this paragraph; and 
           (4) the nursing facility rate increases under section 
        256B.431, subdivision 37. 
        The surcharge under this paragraph shall not exceed $365 per bed.
           (e) Between April 1, 2002, and August 15, 2003, a facility 
        governed by this subdivision may elect to assume full 
        participation in the medical assistance program by agreeing to 
        comply with all of the requirements of the medical assistance 
        program, including the rate equalization law in section 256B.48, 
        subdivision 1, paragraph (a), and all other requirements 
        established in law or rule, and to begin intake of new medical 
        assistance recipients.  Rates will be determined under Minnesota 
        Rules, parts 9549.0010 to 9549.0080.  Notwithstanding section 
        256B.431, subdivision 27, paragraph (i), rate calculations will 
        be subject to limits as prescribed in rule and law.  Other than 
        the adjustments in sections 256B.431, subdivisions 30 and 32; 
        256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 
        9549.0057, and any other applicable legislation enacted prior to 
        the finalization of rates, facilities assuming full 
        participation in medical assistance under this paragraph are not 
        eligible for any rate adjustments until the July 1 following 
        their settle-up period. 
           [EFFECTIVE DATE.] This section is effective April 1, 2002. 
           Sec. 13.  Minnesota Statutes 2001 Supplement, section 
        256B.0625, subdivision 13, as amended by Laws 2002, chapter 220, 
        article 15, section 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 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.  The commissioner, after receiving recommendations from 
        professional medical associations and professional pharmacist 
        associations, shall designate a formulary committee to advise 
        the commissioner on the names of drugs for which payment is 
        made, recommend a system for reimbursing providers on a set fee 
        or charge basis rather than the present system, and develop 
        methods encouraging use of generic drugs when they are less 
        expensive and equally effective as trademark drugs.  The 
        formulary committee shall consist of nine members, four of whom 
        shall be physicians who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, three of whom 
        shall be pharmacists who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, a consumer 
        representative, and a nursing home representative.  Committee 
        members shall serve three-year terms and shall serve without 
        compensation.  Members may be reappointed once.  
           (b) The commissioner shall establish a drug formulary.  Its 
        establishment and publication shall not be subject to the 
        requirements of the Administrative Procedure Act, but the 
        formulary committee shall review and comment on the formulary 
        contents.  
           The formulary shall not include:  
           (i) drugs or products for which there is no federal 
        funding; 
           (ii) over-the-counter drugs, except for 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 drug 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; 
           (iii) anorectics, except that medically necessary 
        anorectics shall be covered for a recipient previously diagnosed 
        as having pickwickian syndrome and currently diagnosed as having 
        diabetes and being morbidly obese; 
           (iv) drugs for which medical value has not been 
        established; and 
           (v) drugs from manufacturers who have not signed a rebate 
        agreement with the Department of Health and Human Services 
        pursuant to section 1927 of title XIX of the Social Security Act.
           The commissioner shall publish conditions for prohibiting 
        payment for specific drugs after considering the formulary 
        committee's recommendations.  An honorarium of $100 per meeting 
        and reimbursement for mileage shall be paid to each committee 
        member in attendance.  
           (c) The basis for determining the amount of payment shall 
        be the lower of the actual acquisition costs of the drugs plus a 
        fixed dispensing fee; the maximum allowable cost set by the 
        federal government or by the commissioner plus the fixed 
        dispensing fee; or the usual and customary price charged to the 
        public.  The pharmacy dispensing fee shall be $3.65, except that 
        the dispensing fee for intravenous solutions which must be 
        compounded by the pharmacist shall be $8 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.  Actual 
        acquisition cost includes quantity and other special discounts 
        except time and cash discounts.  The actual acquisition cost of 
        a drug shall be estimated by the commissioner, at average 
        wholesale price minus nine percent, except that where a drug has 
        had its wholesale price reduced as a result of the actions of 
        the National Association of Medicaid Fraud Control Units, the 
        estimated actual acquisition cost shall be the reduced average 
        wholesale price, without the nine percent deduction.  The 
        maximum allowable cost of a multisource drug may be set by the 
        commissioner and it shall be comparable to, but no higher than, 
        the maximum amount paid by other third-party payors in this 
        state who have maximum allowable cost programs.  The 
        commissioner shall set maximum allowable costs for multisource 
        drugs that are not on the federal upper limit list as described 
        in United States Code, title 42, chapter 7, section 1396r-8(e), 
        the Social Security Act, and Code of Federal Regulations, title 
        42, part 447, section 447.332.  Establishment of the amount of 
        payment for drugs shall not be subject to the requirements of 
        the Administrative Procedure Act.  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.  The pharmacy provider will be required to 
        credit the department for the actual acquisition cost of all 
        unused drugs that are eligible for reuse.  Over-the-counter 
        medications must be dispensed in the manufacturer's unopened 
        package.  The commissioner may permit the drug clozapine to be 
        dispensed in a quantity that is less than a 30-day supply.  
        Whenever a generically equivalent product is available, payment 
        shall be on the basis of the actual acquisition cost of the 
        generic drug, unless the prescriber specifically indicates 
        "dispense as written - brand necessary" on the prescription as 
        required by section 151.21, subdivision 2. 
           (d) For purposes of this subdivision, "multisource drugs" 
        means covered outpatient drugs, excluding innovator multisource 
        drugs for which there are two or more drug products, which: 
           (1) are related as therapeutically equivalent under the 
        Food and Drug Administration's most recent publication of 
        "Approved Drug Products with Therapeutic Equivalence 
        Evaluations"; 
           (2) are pharmaceutically equivalent and bioequivalent as 
        determined by the Food and Drug Administration; and 
           (3) are sold or marketed in Minnesota. 
        "Innovator multisource drug" means a multisource drug that was 
        originally marketed under an original new drug application 
        approved by the Food and Drug Administration. 
           (e) The formulary committee shall review and recommend 
        drugs which require prior authorization.  The formulary 
        committee may recommend drugs for prior authorization directly 
        to the commissioner, as long as opportunity for public input is 
        provided.  Prior authorization may be requested by the 
        commissioner based on medical and clinical criteria and on cost 
        before certain drugs are eligible for payment.  Before a drug 
        may be considered for prior authorization at the request of the 
        commissioner: 
           (1) the drug formulary committee must develop criteria to 
        be used for identifying drugs; the development of these criteria 
        is not subject to the requirements of chapter 14, but the 
        formulary committee shall provide opportunity for public input 
        in developing criteria; 
           (2) the drug formulary committee must hold a public forum 
        and receive public comment for an additional 15 days; and 
           (3) the drug formulary committee must consider data from 
        the state Medicaid program if such data is available; and 
           (4) the commissioner must provide information to the 
        formulary committee on the impact that placing the drug on prior 
        authorization will have on the quality of patient care and on 
        program costs, and information regarding whether the drug is 
        subject to clinical abuse or misuse.  
           Prior authorization may be required by the commissioner 
        before certain formulary drugs are eligible for payment.  If 
        prior authorization of a drug is required by the commissioner, 
        the commissioner must provide a 30-day notice period before 
        implementing the prior authorization.  If a prior authorization 
        request is denied by the department, the recipient may appeal 
        the denial in accordance with section 256.045.  If an appeal is 
        filed, the drug must be provided without prior authorization 
        until a decision is made on the appeal.  
           (f) 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; the 
        average wholesale price minus five percent; or the maximum 
        allowable cost set by the federal government under United States 
        Code, title 42, chapter 7, section 1396r-8(e), and Code of 
        Federal Regulations, title 42, section 447.332, or by the 
        commissioner under paragraph (c). 
           (g) Prior authorization shall not be required or utilized 
        for any antipsychotic drug prescribed for the treatment of 
        mental illness where there is no generically equivalent drug 
        available unless the commissioner determines that prior 
        authorization is necessary for patient safety.  This paragraph 
        applies to any supplemental drug rebate program established or 
        administered by the commissioner. 
           (h) Prior authorization shall not be required or utilized 
        for any antihemophilic factor drug prescribed for the treatment 
        of hemophilia and blood disorders where there is no generically 
        equivalent drug available unless the commissioner determines 
        that prior authorization is necessary for patient safety.  This 
        paragraph applies to any supplemental drug rebate program 
        established or administered by the commissioner.  This paragraph 
        expires July 1, 2003. 
           Sec. 14.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 26, as amended by Laws 2002, chapter 294, section 6, 
        is amended to read: 
           Subd. 26.  [SPECIAL EDUCATION SERVICES.] (a) Medical 
        assistance covers medical services identified in a recipient's 
        individualized education plan and covered under the medical 
        assistance state plan.  Covered services include occupational 
        therapy, physical therapy, speech-language therapy, clinical 
        psychological services, nursing services, school psychological 
        services, school social work services, personal care assistants 
        serving as management aides, assistive technology devices, 
        transportation services, health assessments, and other services 
        covered under the medical assistance state plan.  Mental health 
        services eligible for medical assistance reimbursement must be 
        provided or coordinated through a children's mental health 
        collaborative where a collaborative exists if the child is 
        included in the collaborative operational target population.  
        The provision or coordination of services does not require that 
        the individual education plan be developed by the collaborative. 
           The services may be provided by a Minnesota school district 
        that is enrolled as a medical assistance provider or its 
        subcontractor, and only if the services meet all the 
        requirements otherwise applicable if the service had been 
        provided by a provider other than a school district, in the 
        following areas:  medical necessity, physician's orders, 
        documentation, personnel qualifications, and prior authorization 
        requirements.  The nonfederal share of costs for services 
        provided under this subdivision is the responsibility of the 
        local school district as provided in section 125A.74.  Services 
        listed in a child's individual education plan are eligible for 
        medical assistance reimbursement only if those services meet 
        criteria for federal financial participation under the Medicaid 
        program.  
           (b) Approval of health-related services for inclusion in 
        the individual education plan does not require prior 
        authorization for purposes of reimbursement under this chapter.  
        The commissioner may require physician review and approval of 
        the plan not more than once annually or upon any modification of 
        the individual education plan that reflects a change in 
        health-related services. 
           (c) Services of a speech-language pathologist provided 
        under this section are covered notwithstanding Minnesota Rules, 
        part 9505.0390, subpart 1, item L, if the person: 
           (1) holds a masters degree in speech-language pathology; 
           (2) is licensed by the Minnesota board of teaching as an 
        educational speech-language pathologist; and 
           (3) either has a certificate of clinical competence from 
        the American Speech and Hearing Association, has completed the 
        equivalent educational requirements and work experience 
        necessary for the certificate or has completed the academic 
        program and is acquiring supervised work experience to qualify 
        for the certificate. 
           (d) Medical assistance coverage for medically necessary 
        services provided under other subdivisions in this section may 
        not be denied solely on the basis that the same or similar 
        services are covered under this subdivision. 
           (e) The commissioner shall develop and implement package 
        rates, bundled rates, or per diem rates for special education 
        services under which separately covered services are grouped 
        together and billed as a unit in order to reduce administrative 
        complexity.  
           (f) The commissioner shall develop a cost-based payment 
        structure for payment of these services.  
           (g) Effective July 1, 2000, medical assistance services 
        provided under an individual education plan or an individual 
        family service plan by local school districts shall not count 
        against medical assistance authorization thresholds for that 
        child. 
           (h) Nursing services as defined in section 148.171, 
        subdivision 15, and provided as an individual education plan 
        health-related service, are eligible for medical assistance 
        payment if they are otherwise a covered service in under the 
        medical assistant assistance program.  Medical assistance covers 
        the administration of prescription medications by a licensed 
        nurse who is employed by or under contract with a school 
        district when the administration of medications is identified in 
        the child's individualized education plan.  The simple 
        administration of medications alone is not covered under medical 
        assistance when administered by a provider other than a school 
        district or when it is not identified in the child's 
        individualized education plan. 
           [EFFECTIVE DATE.] This section is effective for services 
        provided on or after April 1, 2002, upon federal approval, if 
        federal approval is required. 
           Sec. 15.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 35, is amended to read: 
           Subd. 35.  [FAMILY COMMUNITY SUPPORT SERVICES.] (a) Medical 
        assistance covers family community support services as defined 
        in section 245.4871, subdivision 17.  In addition to the 
        provisions of section 245.4871, and to the extent authorized by 
        rules promulgated by the state agency, medical assistance covers 
        the following services as family community support services: 
           (1) services identified in an individual treatment plan 
        when provided by a trained mental health behavioral aide under 
        the direction of a mental health practitioner or mental health 
        professional; 
           (2) mental health crisis intervention and crisis 
        stabilization services provided outside of hospital inpatient 
        settings; and 
           (3) the therapeutic components of preschool and therapeutic 
        camp programs. 
           (b) Notwithstanding the provisions of Minnesota Rules, 
        parts 9505.0324, subpart 2, 9505.0326, subpart 2, and 9505.0327, 
        subpart 2, a provider of family community support services, 
        home-based mental health services, or therapeutic support of 
        foster care services under contract with a county may continue 
        to provide existing services, and may provide new services, to a 
        child if that child is placed in foster care, or the child and 
        family relocate, outside the original county of residence. 
           Sec. 16.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 44.  [TARGETED CASE MANAGEMENT SERVICES.] Medical 
        assistance covers case management services for vulnerable adults 
        and adults with developmental disabilities, as provided under 
        section 256B.0924. 
           Sec. 17.  Minnesota Statutes 2001 Supplement, section 
        256B.0627, subdivision 10, is amended to read: 
           Subd. 10.  [FISCAL INTERMEDIARY OPTION AVAILABLE FOR 
        PERSONAL CARE ASSISTANT SERVICES.] (a) The commissioner may 
        allow a recipient of personal care assistant services to use a 
        fiscal intermediary to assist the recipient in paying and 
        accounting for medically necessary covered personal care 
        assistant services authorized in subdivision 4 and within the 
        payment parameters of subdivision 5.  Unless otherwise provided 
        in this subdivision, all other statutory and regulatory 
        provisions relating to personal care assistant services apply to 
        a recipient using the fiscal intermediary option. 
           (b) The recipient or responsible party shall: 
           (1) recruit, hire, and terminate a qualified professional, 
        if a qualified professional is requested by the recipient or 
        responsible party; 
           (2) verify and document the credentials of the qualified 
        professional, if a qualified professional is requested by the 
        recipient or responsible party; 
           (3) develop a service plan based on physician orders and 
        public health nurse assessment with the assistance of a 
        qualified professional, if a qualified professional is requested 
        by the recipient or responsible party, that addresses the health 
        and safety of the recipient; 
           (4) recruit, hire, and terminate the personal care 
        assistant; 
           (5) orient and train the personal care assistant with 
        assistance as needed from the qualified professional; 
           (6) supervise and evaluate the personal care assistant with 
        assistance as needed from the recipient's physician or the 
        qualified professional; 
           (7) monitor and verify in writing and report to the fiscal 
        intermediary the number of hours worked by the personal care 
        assistant and the qualified professional; and 
           (8) enter into a written agreement, as specified in 
        paragraph (f). 
           (c) The duties of the fiscal intermediary shall be to: 
           (1) bill the medical assistance program for personal care 
        assistant and qualified professional services; 
           (2) request and secure background checks on personal care 
        assistants and qualified professionals according to section 
        245A.04; 
           (3) pay the personal care assistant and qualified 
        professional based on actual hours of services provided; 
           (4) withhold and pay all applicable federal and state 
        taxes; 
           (5) verify and keep records of hours worked by the personal 
        care assistant and qualified professional; 
           (6) make the arrangements and pay unemployment insurance, 
        taxes, workers' compensation, liability insurance, and other 
        benefits, if any; 
           (7) enroll in the medical assistance program as a fiscal 
        intermediary; and 
           (8) enter into a written agreement as specified in 
        paragraph (f) before services are provided. 
           (d) The fiscal intermediary: 
           (1) may not be related to the recipient, qualified 
        professional, or the personal care assistant; 
           (2) must ensure arm's length transactions with the 
        recipient and personal care assistant; and 
           (3) shall be considered a joint employer of the personal 
        care assistant and qualified professional to the extent 
        specified in this section. 
           The fiscal intermediary or owners of the entity that 
        provides fiscal intermediary services under this subdivision 
        must pass a criminal background check as required in section 
        256B.0627, subdivision 1, paragraph (e). 
           (e) If the recipient or responsible party requests a 
        qualified professional, the qualified professional providing 
        assistance to the recipient shall meet the qualifications 
        specified in section 256B.0625, subdivision 19c.  The qualified 
        professional shall assist the recipient in developing and 
        revising a plan to meet the recipient's needs, as assessed by 
        the public health nurse.  In performing this function, the 
        qualified professional must visit the recipient in the 
        recipient's home at least once annually.  The qualified 
        professional must report any suspected abuse, neglect, or 
        financial exploitation of the recipient to the appropriate 
        authorities.  
           (f) The fiscal intermediary, recipient or responsible 
        party, personal care assistant, and qualified professional shall 
        enter into a written agreement before services are started.  The 
        agreement shall include: 
           (1) the duties of the recipient, qualified professional, 
        personal care assistant, and fiscal agent based on paragraphs 
        (a) to (e); 
           (2) the salary and benefits for the personal care assistant 
        and the qualified professional; 
           (3) the administrative fee of the fiscal intermediary and 
        services paid for with that fee, including background check 
        fees; 
           (4) procedures to respond to billing or payment complaints; 
        and 
           (5) procedures for hiring and terminating the personal care 
        assistant and the qualified professional. 
           (g) The rates paid for personal care assistant 
        services, shared care services, qualified professional services, 
        and fiscal intermediary services under this subdivision shall be 
        the same rates paid for personal care assistant services and 
        qualified professional services under subdivision 2 
        respectively.  Except for the administrative fee of the fiscal 
        intermediary specified in paragraph (f), the remainder of the 
        rates paid to the fiscal intermediary must be used to pay for 
        the salary and benefits for the personal care assistant or the 
        qualified professional. 
           (h) As part of the assessment defined in subdivision 1, the 
        following conditions must be met to use or continue use of a 
        fiscal intermediary: 
           (1) the recipient must be able to direct the recipient's 
        own care, or the responsible party for the recipient must be 
        readily available to direct the care of the personal care 
        assistant; 
           (2) the recipient or responsible party must be 
        knowledgeable of the health care needs of the recipient and be 
        able to effectively communicate those needs; 
           (3) a face-to-face assessment must be conducted by the 
        local county public health nurse at least annually, or when 
        there is a significant change in the recipient's condition or 
        change in the need for personal care assistant services; 
           (4) the recipient cannot select the shared services option 
        as specified in subdivision 8 recipients who choose to use the 
        shared care option as specified in subdivision 8 must utilize 
        the same fiscal intermediary; and 
           (5) parties must be in compliance with the written 
        agreement specified in paragraph (f). 
           (i) The commissioner shall deny, revoke, or suspend the 
        authorization to use the fiscal intermediary option if: 
           (1) it has been determined by the qualified professional or 
        local county public health nurse that the use of this option 
        jeopardizes the recipient's health and safety; 
           (2) the parties have failed to comply with the written 
        agreement specified in paragraph (f); or 
           (3) the use of the option has led to abusive or fraudulent 
        billing for personal care assistant services.  
           The recipient or responsible party may appeal the 
        commissioner's action according to section 256.045.  The denial, 
        revocation, or suspension to use the fiscal intermediary option 
        shall not affect the recipient's authorized level of personal 
        care assistant services as determined in subdivision 5. 
           Sec. 18.  Minnesota Statutes 2001 Supplement, section 
        256B.0911, subdivision 4b, is amended to read: 
           Subd. 4b.  [EXEMPTIONS AND EMERGENCY ADMISSIONS.] (a) 
        Exemptions from the federal screening requirements outlined in 
        subdivision 4a, paragraphs (b) and (c), are limited to: 
           (1) a person who, having entered an acute care facility 
        from a certified nursing facility, is returning to a certified 
        nursing facility; and 
           (2) a person transferring from one certified nursing 
        facility in Minnesota to another certified nursing facility in 
        Minnesota; and 
           (3) a person, 21 years of age or older, who satisfies the 
        following criteria, as specified in Code of Federal Regulations, 
        title 42, section 483.106(b)(2): 
           (i) the person is admitted to a nursing facility directly 
        from a hospital after receiving acute inpatient care at the 
        hospital; 
           (ii) the person requires nursing facility services for the 
        same condition for which care was provided in the hospital; and 
           (iii) the attending physician has certified before the 
        nursing facility admission that the person is likely to receive 
        less than 30 days of nursing facility services. 
           (b) Persons who are exempt from preadmission screening for 
        purposes of level of care determination include: 
           (1) persons described in paragraph (a); 
           (2) an individual who has a contractual right to have 
        nursing facility care paid for indefinitely by the veterans' 
        administration; 
           (3) an individual enrolled in a demonstration project under 
        section 256B.69, subdivision 8, at the time of application to a 
        nursing facility; 
           (4) an individual currently being served under the 
        alternative care program or under a home and community-based 
        services waiver authorized under section 1915(c) of the federal 
        Social Security Act; and 
           (5) individuals admitted to a certified nursing facility 
        for a short-term stay, which is expected to be 14 days or less 
        in duration based upon a physician's certification, and who have 
        been assessed and approved for nursing facility admission within 
        the previous six months.  This exemption applies only if the 
        consultation team member determines at the time of the initial 
        assessment of the six-month period that it is appropriate to use 
        the nursing facility for short-term stays and that there is an 
        adequate plan of care for return to the home or community-based 
        setting.  If a stay exceeds 14 days, the individual must be 
        referred no later than the first county working day following 
        the 14th resident day for a screening, which must be completed 
        within five working days of the referral.  The payment 
        limitations in subdivision 7 apply to an individual found at 
        screening to not meet the level of care criteria for admission 
        to a certified nursing facility. 
           (c) Persons admitted to a Medicaid-certified nursing 
        facility from the community on an emergency basis as described 
        in paragraph (d) or from an acute care facility on a nonworking 
        day must be screened the first working day after admission. 
           (d) Emergency admission to a nursing facility prior to 
        screening is permitted when all of the following conditions are 
        met: 
           (1) a person is admitted from the community to a certified 
        nursing or certified boarding care facility during county 
        nonworking hours; 
           (2) a physician has determined that delaying admission 
        until preadmission screening is completed would adversely affect 
        the person's health and safety; 
           (3) there is a recent precipitating event that precludes 
        the client from living safely in the community, such as 
        sustaining an injury, sudden onset of acute illness, or a 
        caregiver's inability to continue to provide care; 
           (4) the attending physician has authorized the emergency 
        placement and has documented the reason that the emergency 
        placement is recommended; and 
           (5) the county is contacted on the first working day 
        following the emergency admission. 
        Transfer of a patient from an acute care hospital to a nursing 
        facility is not considered an emergency except for a person who 
        has received hospital services in the following situations: 
        hospital admission for observation, care in an emergency room 
        without hospital admission, or following hospital 24-hour bed 
        care. 
           (e) A nursing facility must provide a written notice to 
        persons who satisfy the criteria in paragraph (a), clause (3), 
        regarding the person's right to request and receive long-term 
        care consultation services as defined in subdivision 1a.  The 
        notice must be provided prior to the person's discharge from the 
        facility and in a format specified by the commissioner. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 19.  Minnesota Statutes 2001 Supplement, section 
        256B.0911, subdivision 4d, is amended to read: 
           Subd. 4d.  [PREADMISSION SCREENING OF INDIVIDUALS UNDER 65 
        YEARS OF AGE.] (a) It is the policy of the state of Minnesota to 
        ensure that individuals with disabilities or chronic illness are 
        served in the most integrated setting appropriate to their needs 
        and have the necessary information to make informed choices 
        about home and community-based service options. 
           (b) Individuals under 65 years of age who are admitted to a 
        nursing facility from a hospital must be screened prior to 
        admission as outlined in subdivisions 4a through 4c. 
           (c) Individuals under 65 years of age who are admitted to 
        nursing facilities with only a telephone screening must receive 
        a face-to-face assessment from the long-term care consultation 
        team member of the county in which the facility is located or 
        from the recipient's county case manager within 20 working days 
        of admission. 
           (d) Individuals under 65 years of age who are admitted to a 
        nursing facility without preadmission screening according to the 
        exemption described in subdivision 4b, paragraph (a), clause 
        (3), and who remain in the facility longer than 30 days must 
        receive a face-to-face assessment within 40 days of admission.  
           (e) At the face-to-face assessment, the long-term care 
        consultation team member or county case manager must perform the 
        activities required under subdivision 3b. 
           (e) (f) For individuals under 21 years of age, a screening 
        interview which recommends nursing facility admission must be 
        face-to-face and approved by the commissioner before the 
        individual is admitted to the nursing facility. 
           (f) (g) In the event that an individual under 65 years of 
        age is admitted to a nursing facility on an emergency basis, the 
        county must be notified of the admission on the next working 
        day, and a face-to-face assessment as described in paragraph (c) 
        must be conducted within 20 working days of admission. 
           (g) (h) At the face-to-face assessment, the long-term care 
        consultation team member or the case manager must present 
        information about home and community-based options so the 
        individual can make informed choices.  If the individual chooses 
        home and community-based services, the long-term care 
        consultation team member or case manager must complete a written 
        relocation plan within 20 working days of the visit.  The plan 
        shall describe the services needed to move out of the facility 
        and a time line for the move which is designed to ensure a 
        smooth transition to the individual's home and community. 
           (h) (i) An individual under 65 years of age residing in a 
        nursing facility shall receive a face-to-face assessment at 
        least every 12 months to review the person's service choices and 
        available alternatives unless the individual indicates, in 
        writing, that annual visits are not desired.  In this case, the 
        individual must receive a face-to-face assessment at least once 
        every 36 months for the same purposes. 
           (i) (j) Notwithstanding the provisions of subdivision 6, 
        the commissioner may pay county agencies directly for 
        face-to-face assessments for individuals under 65 years of age 
        who are being considered for placement or residing in a nursing 
        facility. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 20.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY FOR FUNDING FOR SERVICES FOR 
        NONMEDICAL ASSISTANCE RECIPIENTS.] (a) Funding for services 
        under the alternative care program is available to persons who 
        meet the following criteria: 
           (1) the person has been determined by a community 
        assessment under section 256B.0911 to be a person who would 
        require the level of care provided in a nursing facility, but 
        for the provision of services under the alternative care 
        program; 
           (2) the person is age 65 or older; 
           (3) the person would be eligible for medical assistance 
        within 180 days of admission to a nursing facility; 
           (4) the person is not ineligible for the medical assistance 
        program due to an asset transfer penalty; 
           (5) the person needs services that are not funded through 
        other state or federal funding; and 
           (6) the monthly cost of the alternative care services 
        funded by the program for this person does not exceed 75 percent 
        of the statewide weighted average monthly nursing facility rate 
        of the case mix resident class to which the individual 
        alternative care client would be assigned under Minnesota Rules, 
        parts 9549.0050 to 9549.0059, less the recipient's maintenance 
        needs allowance as described in section 256B.0915, subdivision 
        1d, paragraph (a), until the first day of the state fiscal year 
        in which the resident assessment system, under section 256B.437, 
        for nursing home rate determination is implemented.  Effective 
        on the first day of the state fiscal year in which a resident 
        assessment system, under section 256B.437, for nursing home rate 
        determination is implemented and the first day of each 
        subsequent state fiscal year, the monthly cost of alternative 
        care services for this person shall not exceed the alternative 
        care monthly cap for the case mix resident class to which the 
        alternative care client would be assigned under Minnesota Rules, 
        parts 9549.0050 to 9549.0059, which was in effect on the last 
        day of the previous state fiscal year, and adjusted by the 
        greater of any legislatively adopted home and community-based 
        services cost-of-living percentage increase or any legislatively 
        adopted statewide percent rate increase for nursing facilities.  
        This monthly limit does not prohibit the alternative care client 
        from payment for additional services, but in no case may the 
        cost of additional services purchased under this section exceed 
        the difference between the client's monthly service limit 
        defined under section 256B.0915, subdivision 3, and the 
        alternative care program monthly service limit defined in this 
        paragraph.  If medical supplies and equipment or environmental 
        modifications are or will be purchased for an alternative care 
        services recipient, the costs may be prorated on a monthly basis 
        for up to 12 consecutive months beginning with the month of 
        purchase.  If the monthly cost of a recipient's other 
        alternative care services exceeds the monthly limit established 
        in this paragraph, the annual cost of the alternative care 
        services shall be determined.  In this event, the annual cost of 
        alternative care services shall not exceed 12 times the monthly 
        limit described in this paragraph. 
           (b) Alternative care funding under this subdivision is not 
        available for a person who is a medical assistance recipient or 
        who would be eligible for medical assistance without a spenddown 
        or waiver obligation.  A person whose initial application for 
        medical assistance is being processed may be served under the 
        alternative care program for a period up to 60 days.  If the 
        individual is found to be eligible for medical assistance, 
        medical assistance must be billed for services payable under the 
        federally approved elderly waiver plan and delivered from the 
        date the individual was found eligible for the federally 
        approved elderly waiver plan.  Notwithstanding this provision, 
        upon federal approval, alternative care funds may not be used to 
        pay for any service the cost of which is payable by medical 
        assistance or which is used by a recipient to meet a medical 
        assistance income spenddown or waiver obligation.  
           (c) Alternative care funding is not available for a person 
        who resides in a licensed nursing home, certified boarding care 
        home, hospital, or intermediate care facility, except for case 
        management services which are provided in support of the 
        discharge planning process to a nursing home resident or 
        certified boarding care home resident who is ineligible for case 
        management funded by medical assistance. 
           Sec. 21.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 5, is amended to read: 
           Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a) 
        Alternative care funding may be used for payment of costs of: 
           (1) adult foster care; 
           (2) adult day care; 
           (3) home health aide; 
           (4) homemaker services; 
           (5) personal care; 
           (6) case management; 
           (7) respite care; 
           (8) assisted living; 
           (9) residential care services; 
           (10) care-related supplies and equipment; 
           (11) meals delivered to the home; 
           (12) transportation; 
           (13) skilled nursing services; 
           (14) chore services; 
           (15) companion services; 
           (16) nutrition services; 
           (17) training for direct informal caregivers; 
           (18) telemedicine telehome care devices to monitor 
        recipients in their own homes as an alternative to hospital 
        care, nursing home care, or home visits; 
           (19) other services which includes discretionary funds and 
        direct cash payments to clients, following approval by the 
        commissioner, subject to the provisions of paragraph (j).  Total 
        annual payments for "other services" for all clients within a 
        county may not exceed either ten 25 percent of that county's 
        annual alternative care program base allocation or $5,000, 
        whichever is greater.  In no case shall this amount exceed the 
        county's total annual alternative care program base allocation; 
        and 
           (20) environmental modifications. 
           (b) The county agency must ensure that the funds are not 
        used to supplant services available through other public 
        assistance or services programs. 
           (c) Unless specified in statute, the services, service 
        definitions, and standards for alternative care services shall 
        be the same as the services, service definitions, and standards 
        specified in the federally approved elderly waiver plan.  Except 
        for the county agencies' approval of direct cash payments to 
        clients as described in paragraph (j) or for a provider of 
        supplies and equipment when the monthly cost of the supplies and 
        equipment is less than $250, persons or agencies must be 
        employed by or under a contract with the county agency or the 
        public health nursing agency of the local board of health in 
        order to receive funding under the alternative care program.  
        Supplies and equipment may be purchased from a vendor not 
        certified to participate in the Medicaid program if the cost for 
        the item is less than that of a Medicaid vendor.  
           (d) The adult foster care rate shall be considered a 
        difficulty of care payment and shall not include room and 
        board.  The adult foster care rate shall be negotiated between 
        the county agency and the foster care provider.  The alternative 
        care payment for the foster care service in combination with the 
        payment for other alternative care services, including case 
        management, must not exceed the limit specified in subdivision 
        4, paragraph (a), clause (6). 
           (e) Personal care services must meet the service standards 
        defined in the federally approved elderly waiver plan, except 
        that a county agency may contract with a client's relative who 
        meets the relative hardship waiver requirement as defined in 
        section 256B.0627, subdivision 4, paragraph (b), clause (10), to 
        provide personal care services if the county agency ensures 
        supervision of this service by a registered nurse or mental 
        health practitioner qualified professional as defined in section 
        256B.0625, subdivision 19c.  
           (f) For purposes of this section, residential care services 
        are services which are provided to individuals living in 
        residential care homes.  Residential care homes are currently 
        licensed as board and lodging establishments and are registered 
        with the department of health as providing special services 
        under section 157.17 and are not subject to registration under 
        chapter 144D.  Residential care services are defined as 
        "supportive services" and "health-related services."  
        "Supportive services" means the provision of up to 24-hour 
        supervision and oversight.  Supportive services includes:  (1) 
        transportation, when provided by the residential care home only; 
        (2) socialization, when socialization is part of the plan of 
        care, has specific goals and outcomes established, and is not 
        diversional or recreational in nature; (3) assisting clients in 
        setting up meetings and appointments; (4) assisting clients in 
        setting up medical and social services; (5) providing assistance 
        with personal laundry, such as carrying the client's laundry to 
        the laundry room.  Assistance with personal laundry does not 
        include any laundry, such as bed linen, that is included in the 
        room and board rate.  "Health-related services" are limited to 
        minimal assistance with dressing, grooming, and bathing and 
        providing reminders to residents to take medications that are 
        self-administered or providing storage for medications, if 
        requested.  Individuals receiving residential care services 
        cannot receive homemaking services funded under this section.  
           (g) For the purposes of this section, "assisted living" 
        refers to supportive services provided by a single vendor to 
        clients who reside in the same apartment building of three or 
        more units which are not subject to registration under chapter 
        144D and are licensed by the department of health as a class A 
        home care provider or a class E home care provider.  Assisted 
        living services are defined as up to 24-hour supervision, and 
        oversight, supportive services as defined in clause (1), 
        individualized home care aide tasks as defined in clause (2), 
        and individualized home management tasks as defined in clause 
        (3) provided to residents of a residential center living in 
        their units or apartments with a full kitchen and bathroom.  A 
        full kitchen includes a stove, oven, refrigerator, food 
        preparation counter space, and a kitchen utensil storage 
        compartment.  Assisted living services must be provided by the 
        management of the residential center or by providers under 
        contract with the management or with the county. 
           (1) Supportive services include:  
           (i) socialization, when socialization is part of the plan 
        of care, has specific goals and outcomes established, and is not 
        diversional or recreational in nature; 
           (ii) assisting clients in setting up meetings and 
        appointments; and 
           (iii) providing transportation, when provided by the 
        residential center only.  
           (2) Home care aide tasks means:  
           (i) preparing modified diets, such as diabetic or low 
        sodium diets; 
           (ii) reminding residents to take regularly scheduled 
        medications or to perform exercises; 
           (iii) household chores in the presence of technically 
        sophisticated medical equipment or episodes of acute illness or 
        infectious disease; 
           (iv) household chores when the resident's care requires the 
        prevention of exposure to infectious disease or containment of 
        infectious disease; and 
           (v) assisting with dressing, oral hygiene, hair care, 
        grooming, and bathing, if the resident is ambulatory, and if the 
        resident has no serious acute illness or infectious disease.  
        Oral hygiene means care of teeth, gums, and oral prosthetic 
        devices.  
           (3) Home management tasks means:  
           (i) housekeeping; 
           (ii) laundry; 
           (iii) preparation of regular snacks and meals; and 
           (iv) shopping.  
           Individuals receiving assisted living services shall not 
        receive both assisted living services and homemaking services.  
        Individualized means services are chosen and designed 
        specifically for each resident's needs, rather than provided or 
        offered to all residents regardless of their illnesses, 
        disabilities, or physical conditions.  Assisted living services 
        as defined in this section shall not be authorized in boarding 
        and lodging establishments licensed according to sections 
        157.011 and 157.15 to 157.22. 
           (h) For establishments registered under chapter 144D, 
        assisted living services under this section means either the 
        services described in paragraph (g) and delivered by a class E 
        home care provider licensed by the department of health or the 
        services described under section 144A.4605 and delivered by an 
        assisted living home care provider or a class A home care 
        provider licensed by the commissioner of health. 
           (i) Payment for assisted living services and residential 
        care services shall be a monthly rate negotiated and authorized 
        by the county agency based on an individualized service plan for 
        each resident and may not cover direct rent or food costs.  
           (1) The individualized monthly negotiated payment for 
        assisted living services as described in paragraph (g) or (h), 
        and residential care services as described in paragraph (f), 
        shall not exceed the nonfederal share in effect on July 1 of the 
        state fiscal year for which the rate limit is being calculated 
        of the greater of either the statewide or any of the geographic 
        groups' weighted average monthly nursing facility payment rate 
        of the case mix resident class to which the alternative care 
        eligible client would be assigned under Minnesota Rules, parts 
        9549.0050 to 9549.0059, less the maintenance needs allowance as 
        described in section 256B.0915, subdivision 1d, paragraph (a), 
        until the first day of the state fiscal year in which a resident 
        assessment system, under section 256B.437, of nursing home rate 
        determination is implemented.  Effective on the first day of the 
        state fiscal year in which a resident assessment system, under 
        section 256B.437, of nursing home rate determination is 
        implemented and the first day of each subsequent state fiscal 
        year, the individualized monthly negotiated payment for the 
        services described in this clause shall not exceed the limit 
        described in this clause which was in effect on the last day of 
        the previous state fiscal year and which has been adjusted by 
        the greater of any legislatively adopted home and 
        community-based services cost-of-living percentage increase or 
        any legislatively adopted statewide percent rate increase for 
        nursing facilities. 
           (2) The individualized monthly negotiated payment for 
        assisted living services described under section 144A.4605 and 
        delivered by a provider licensed by the department of health as 
        a class A home care provider or an assisted living home care 
        provider and provided in a building that is registered as a 
        housing with services establishment under chapter 144D and that 
        provides 24-hour supervision in combination with the payment for 
        other alternative care services, including case management, must 
        not exceed the limit specified in subdivision 4, paragraph (a), 
        clause (6). 
           (j) A county agency may make payment from their alternative 
        care program allocation for "other services" which include use 
        of "discretionary funds" for services that are not otherwise 
        defined in this section and direct cash payments to the client 
        for the purpose of purchasing the services.  The following 
        provisions apply to payments under this paragraph: 
           (1) a cash payment to a client under this provision cannot 
        exceed 80 percent of the monthly payment limit for that client 
        as specified in subdivision 4, paragraph (a), clause (6); 
           (2) a county may not approve any cash payment for a client 
        who meets either of the following: 
           (i) has been assessed as having a dependency in 
        orientation, unless the client has an authorized 
        representative.  An "authorized representative" means an 
        individual who is at least 18 years of age and is designated by 
        the person or the person's legal representative to act on the 
        person's behalf.  This individual may be a family member, 
        guardian, representative payee, or other individual designated 
        by the person or the person's legal representative, if any, to 
        assist in purchasing and arranging for supports; or 
           (ii) is concurrently receiving adult foster care, 
        residential care, or assisted living services; 
           (3) cash payments to a person or a person's family will be 
        provided through a monthly payment and be in the form of cash, 
        voucher, or direct county payment to a vendor.  Fees or premiums 
        assessed to the person for eligibility for health and human 
        services are not reimbursable through this service option.  
        Services and goods purchased through cash payments must be 
        identified in the person's individualized care plan and must 
        meet all of the following criteria: 
           (i) they must be over and above the normal cost of caring 
        for the person if the person did not have functional 
        limitations; 
           (ii) they must be directly attributable to the person's 
        functional limitations; 
           (iii) they must have the potential to be effective at 
        meeting the goals of the program; 
           (iv) they must be consistent with the needs identified in 
        the individualized service plan.  The service plan shall specify 
        the needs of the person and family, the form and amount of 
        payment, the items and services to be reimbursed, and the 
        arrangements for management of the individual grant; and 
           (v) the person, the person's family, or the legal 
        representative shall be provided sufficient information to 
        ensure an informed choice of alternatives.  The local agency 
        shall document this information in the person's care plan, 
        including the type and level of expenditures to be reimbursed; 
           (4) the state of Minnesota, county, lead agency under 
        contract, or tribal government under contract to administer the 
        alternative care program shall not be liable for damages, 
        injuries, or liabilities sustained through the purchase of 
        direct supports or goods by the person, the person's family, or 
        the authorized representative with funds received through the 
        cash payments under this section.  Liabilities include, but are 
        not limited to, workers' compensation, the Federal Insurance 
        Contributions Act (FICA), or the Federal Unemployment Tax Act 
        (FUTA); 
           (5) persons receiving grants under this section shall have 
        the following responsibilities: 
           (i) spend the grant money in a manner consistent with their 
        individualized service plan with the local agency; 
           (ii) notify the local agency of any necessary changes in 
        the grant expenditures; 
           (iii) arrange and pay for supports; and 
           (iv) inform the local agency of areas where they have 
        experienced difficulty securing or maintaining supports; and 
           (6) the county shall report client outcomes, services, and 
        costs under this paragraph in a manner prescribed by the 
        commissioner. 
           (k) Upon implementation of direct cash payments to clients 
        under this section, any person determined eligible for the 
        alternative care program who chooses a cash payment approved by 
        the county agency shall receive the cash payment under this 
        section and not under section 256.476 unless the person was 
        receiving a consumer support grant under section 256.476 before 
        implementation of direct cash payments under this section. 
           Sec. 22.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 8, is amended to read: 
           Subd. 8.  [REQUIREMENTS FOR INDIVIDUAL CARE PLAN.] (a) The 
        case manager shall implement the plan of care for each 
        alternative care client and ensure that a client's service needs 
        and eligibility are reassessed at least every 12 months.  The 
        plan shall include any services prescribed by the individual's 
        attending physician as necessary to allow the individual to 
        remain in a community setting.  In developing the individual's 
        care plan, the case manager should include the use of volunteers 
        from families and neighbors, religious organizations, social 
        clubs, and civic and service organizations to support the formal 
        home care services.  The county shall be held harmless for 
        damages or injuries sustained through the use of volunteers 
        under this subdivision including workers' compensation 
        liability.  The lead agency shall provide documentation in each 
        individual's plan of care and, if requested, to the commissioner 
        that the most cost-effective alternatives available have been 
        offered to the individual and that the individual was free to 
        choose among available qualified providers, both public and 
        private.  The case manager must give the individual a ten-day 
        written notice of any decrease in or denial, termination, or 
        reduction of alternative care services. 
           (b) If the county administering alternative care services 
        is different than the county of financial responsibility, the 
        care plan may be implemented without the approval of the county 
        of financial responsibility. 
           Sec. 23.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 10, is amended to read: 
           Subd. 10.  [ALLOCATION FORMULA.] (a) The alternative care 
        appropriation for fiscal years 1992 and beyond shall cover only 
        alternative care eligible clients.  Prior to By July 1 of each 
        year, the commissioner shall allocate to county agencies the 
        state funds available for alternative care for persons eligible 
        under subdivision 2. 
           (b) The adjusted base for each county is the county's 
        current fiscal year base allocation plus any targeted funds 
        approved during the current fiscal year.  Calculations for 
        paragraphs (c) and (d) are to be made as follows:  for each 
        county, the determination of alternative care program 
        expenditures shall be based on payments for services rendered 
        from April 1 through March 31 in the base year, to the extent 
        that claims have been submitted and paid by June 1 of that year. 
           (c) If the alternative care program expenditures as defined 
        in paragraph (b) are 95 percent or more of the county's adjusted 
        base allocation, the allocation for the next fiscal year is 100 
        percent of the adjusted base, plus inflation to the extent that 
        inflation is included in the state budget. 
           (d) If the alternative care program expenditures as defined 
        in paragraph (b) are less than 95 percent of the county's 
        adjusted base allocation, the allocation for the next fiscal 
        year is the adjusted base allocation less the amount of unspent 
        funds below the 95 percent level. 
           (e) If the annual legislative appropriation for the 
        alternative care program is inadequate to fund the combined 
        county allocations for a biennium, the commissioner shall 
        distribute to each county the entire annual appropriation as 
        that county's percentage of the computed base as calculated in 
        paragraphs (c) and (d). 
           Sec. 24.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 12, is amended to read: 
           Subd. 12.  [CLIENT PREMIUMS.] (a) A premium is required for 
        all alternative care eligible clients to help pay for the cost 
        of participating in the program.  The amount of the premium for 
        the alternative care client shall be determined as follows: 
           (1) when the alternative care client's income less 
        recurring and predictable medical expenses is greater than the 
        recipient's maintenance needs allowance as defined in section 
        256B.0915, subdivision 1d, paragraph (a), but less than 150 
        percent of the federal poverty guideline effective on July 1 of 
        the state fiscal year in which the premium is being computed, 
        and total assets are less than $10,000, the fee is zero; 
           (2) when the alternative care client's income less 
        recurring and predictable medical expenses is greater than 150 
        percent of the federal poverty guideline effective on July 1 of 
        the state fiscal year in which the premium is being computed, 
        and total assets are less than $10,000, the fee is 25 percent of 
        the cost of alternative care services or the difference between 
        150 percent of the federal poverty guideline effective on July 1 
        of the state fiscal year in which the premium is being computed 
        and the client's income less recurring and predictable medical 
        expenses, whichever is less; and 
           (3) when the alternative care client's total assets are 
        greater than $10,000, the fee is 25 percent of the cost of 
        alternative care services.  
           For married persons, total assets are defined as the total 
        marital assets less the estimated community spouse asset 
        allowance, under section 256B.059, if applicable.  For married 
        persons, total income is defined as the client's income less the 
        monthly spousal allotment, under section 256B.058. 
           All alternative care services except case management shall 
        be included in the estimated costs for the purpose of 
        determining 25 percent of the costs. 
           The monthly premium shall be calculated based on the cost 
        of the first full month of alternative care services and shall 
        continue unaltered until the next reassessment is completed or 
        at the end of 12 months, whichever comes first.  Premiums are 
        due and payable each month alternative care services are 
        received unless the actual cost of the services is less than the 
        premium. 
           (b) The fee shall be waived by the commissioner when: 
           (1) a person who is residing in a nursing facility is 
        receiving case management only; 
           (2) a person is applying for medical assistance; 
           (3) a married couple is requesting an asset assessment 
        under the spousal impoverishment provisions; 
           (4) a person is found eligible for alternative care, but is 
        not yet receiving alternative care services; or 
           (5) a person's fee under paragraph (a) is less than $25. 
           (c) The county agency must record in the state's receivable 
        system the client's assessed premium amount or the reason the 
        premium has been waived.  The commissioner will bill and collect 
        the premium from the client.  Money collected must be deposited 
        in the general fund and is appropriated to the commissioner for 
        the alternative care program.  The client must supply the county 
        with the client's social security number at the time of 
        application.  The county shall supply the commissioner with the 
        client's social security number and other information the 
        commissioner requires to collect the premium from the client.  
        The commissioner shall collect unpaid premiums using the Revenue 
        Recapture Act in chapter 270A and other methods available to the 
        commissioner.  The commissioner may require counties to inform 
        clients of the collection procedures that may be used by the 
        state if a premium is not paid.  This paragraph does not apply 
        to alternative care pilot projects authorized in Laws 1993, 
        First Special Session chapter 1, article 5, section 133, if a 
        county operating under the pilot project reports the following 
        dollar amounts to the commissioner quarterly: 
           (1) total premiums billed to clients; 
           (2) total collections of premiums billed; and 
           (3) balance of premiums owed by clients. 
        If a county does not adhere to these reporting requirements, the 
        commissioner may terminate the billing, collecting, and 
        remitting portions of the pilot project and require the county 
        involved to operate under the procedures set forth in this 
        paragraph. 
           (d) The commissioner shall begin to adopt emergency or 
        permanent rules governing client premiums within 30 days after 
        July 1, 1991, including criteria for determining when services 
        to a client must be terminated due to failure to pay a premium.  
           Sec. 25.  Minnesota Statutes 2001 Supplement, section 
        256B.0913, subdivision 14, is amended to read: 
           Subd. 14.  [PROVIDER REQUIREMENTS, PAYMENT, AND RATE 
        ADJUSTMENTS.] (a) Unless otherwise specified in statute, 
        providers must be enrolled as Minnesota health care program 
        providers and abide by the requirements for provider 
        participation according to Minnesota Rules, part 9505.0195. 
           (b) Payment for provided alternative care services as 
        approved by the client's case manager shall be occur through the 
        invoice processing procedures of the department's Medicaid 
        Management Information System (MMIS).  To receive payment, the 
        county or vendor must submit invoices within 12 months following 
        the date of service.  The county agency and its vendors under 
        contract shall not be reimbursed for services which exceed the 
        county allocation. 
           (b) (c) The county shall negotiate individual rates with 
        vendors and may authorize service payment for actual costs up to 
        the county's current approved rate.  Notwithstanding any other 
        rule or statutory provision to the contrary, the commissioner 
        shall not be authorized to increase rates by an annual inflation 
        factor, unless so authorized by the legislature.  To improve 
        access to community services and eliminate payment disparities 
        between the alternative care program and the elderly waiver 
        program, the commissioner shall establish statewide maximum 
        service rate limits and eliminate county-specific service rate 
        limits. 
           (1) Effective July 1, 2001, for service rate limits, except 
        those in subdivision 5, paragraphs (d) and (i), the rate limit 
        for each service shall be the greater of the alternative care 
        statewide maximum rate or the elderly waiver statewide maximum 
        rate. 
           (2) Counties may negotiate individual service rates with 
        vendors for actual costs up to the statewide maximum service 
        rate limit. 
           Sec. 26.  Minnesota Statutes 2001 Supplement, section 
        256B.0915, subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, PAYMENTS, AND 
        FORECASTING.] (a) The number of medical assistance waiver 
        recipients that a county may serve must be allocated according 
        to the number of medical assistance waiver cases open on July 1 
        of each fiscal year.  Additional recipients may be served with 
        the approval of the commissioner. 
           (b) The monthly limit for the cost of waivered services to 
        an individual elderly waiver client shall be the weighted 
        average monthly nursing facility rate of the case mix resident 
        class to which the elderly waiver client would be assigned under 
        Minnesota Rules, parts 9549.0050 to 9549.0059, less the 
        recipient's maintenance needs allowance as described in 
        subdivision 1d, paragraph (a), until the first day of the state 
        fiscal year in which the resident assessment system as described 
        in section 256B.437 for nursing home rate determination is 
        implemented.  Effective on the first day of the state fiscal 
        year in which the resident assessment system as described in 
        section 256B.437 for nursing home rate determination is 
        implemented and the first day of each subsequent state fiscal 
        year, the monthly limit for the cost of waivered services to an 
        individual elderly waiver client shall be the rate of the case 
        mix resident class to which the waiver client would be assigned 
        under Minnesota Rules, parts 9549.0050 to 9549.0059, in effect 
        on the last day of the previous state fiscal year, adjusted by 
        the greater of any legislatively adopted home and 
        community-based services cost-of-living percentage increase or 
        any legislatively adopted statewide percent rate increase for 
        nursing facilities. 
           (c) If extended medical supplies and equipment or 
        environmental modifications are or will be purchased for an 
        elderly waiver client, the costs may be prorated for up to 12 
        consecutive months beginning with the month of purchase.  If the 
        monthly cost of a recipient's waivered services exceeds the 
        monthly limit established in paragraph (b), the annual cost of 
        all waivered services shall be determined.  In this event, the 
        annual cost of all waivered services shall not exceed 12 times 
        the monthly limit of waivered services as described in paragraph 
        (b).  
           (d) For a person who is a nursing facility resident at the 
        time of requesting a determination of eligibility for elderly 
        waivered services, a monthly conversion limit for the cost of 
        elderly waivered services may be requested.  The monthly 
        conversion limit for the cost of elderly waiver services shall 
        be the resident class assigned under Minnesota Rules, parts 
        9549.0050 to 9549.0059, for that resident in the nursing 
        facility where the resident currently resides until July 1 of 
        the state fiscal year in which the resident assessment system as 
        described in section 256B.437 for nursing home rate 
        determination is implemented.  Effective on July 1 of the state 
        fiscal year in which the resident assessment system as described 
        in section 256B.437 for nursing home rate determination is 
        implemented, the monthly conversion limit for the cost of 
        elderly waiver services shall be the per diem nursing facility 
        rate as determined by the resident assessment system as 
        described in section 256B.437 for that resident in the nursing 
        facility where the resident currently resides multiplied by 365 
        and divided by 12, less the recipient's maintenance needs 
        allowance as described in subdivision 1d.  The initially 
        approved conversion rate may be adjusted by the greater of any 
        subsequent legislatively adopted home and community-based 
        services cost-of-living percentage increase or any subsequent 
        legislatively adopted statewide percentage rate increase for 
        nursing facilities.  The limit under this clause only applies to 
        persons discharged from a nursing facility after a minimum 
        30-day stay and found eligible for waivered services on or after 
        July 1, 1997.  The following costs must be included in 
        determining the total monthly costs for the waiver client: 
           (1) cost of all waivered services, including extended 
        medical supplies and equipment and environmental modifications; 
        and 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           (e) Medical assistance funding for skilled nursing 
        services, private duty nursing, home health aide, and personal 
        care services for waiver recipients must be approved by the case 
        manager and included in the individual care plan. 
           (f) A county is not required to contract with a provider of 
        supplies and equipment if the monthly cost of the supplies and 
        equipment is less than $250.  
           (g) The adult foster care rate shall be considered a 
        difficulty of care payment and shall not include room and 
        board.  The adult foster care service rate shall be negotiated 
        between the county agency and the foster care provider.  The 
        elderly waiver payment for the foster care service in 
        combination with the payment for all other elderly waiver 
        services, including case management, must not exceed the limit 
        specified in paragraph (b). 
           (h) Payment for assisted living service shall be a monthly 
        rate negotiated and authorized by the county agency based on an 
        individualized service plan for each resident and may not cover 
        direct rent or food costs. 
           (1) The individualized monthly negotiated payment for 
        assisted living services as described in section 256B.0913, 
        subdivision 5, paragraph (g) or (h), and residential care 
        services as described in section 256B.0913, subdivision 5, 
        paragraph (f), shall not exceed the nonfederal share, in effect 
        on July 1 of the state fiscal year for which the rate limit is 
        being calculated, of the greater of either the statewide or any 
        of the geographic groups' weighted average monthly nursing 
        facility rate of the case mix resident class to which the 
        elderly waiver eligible client would be assigned under Minnesota 
        Rules, parts 9549.0050 to 9549.0059, less the maintenance needs 
        allowance as described in subdivision 1d, paragraph (a), until 
        the July 1 of the state fiscal year in which the resident 
        assessment system as described in section 256B.437 for nursing 
        home rate determination is implemented.  Effective on July 1 of 
        the state fiscal year in which the resident assessment system as 
        described in section 256B.437 for nursing home rate 
        determination is implemented and July 1 of each subsequent state 
        fiscal year, the individualized monthly negotiated payment for 
        the services described in this clause shall not exceed the limit 
        described in this clause which was in effect on June 30 of the 
        previous state fiscal year and which has been adjusted by the 
        greater of any legislatively adopted home and community-based 
        services cost-of-living percentage increase or any legislatively 
        adopted statewide percent rate increase for nursing facilities. 
           (2) The individualized monthly negotiated payment for 
        assisted living services described in section 144A.4605 and 
        delivered by a provider licensed by the department of health as 
        a class A home care provider or an assisted living home care 
        provider and provided in a building that is registered as a 
        housing with services establishment under chapter 144D and that 
        provides 24-hour supervision in combination with the payment for 
        other elderly waiver services, including case management, must 
        not exceed the limit specified in paragraph (b). 
           (i) The county shall negotiate individual service rates 
        with vendors and may authorize payment for actual costs up to 
        the county's current approved rate.  Persons or agencies must be 
        employed by or under a contract with the county agency or the 
        public health nursing agency of the local board of health in 
        order to receive funding under the elderly waiver program, 
        except as a provider of supplies and equipment when the monthly 
        cost of the supplies and equipment is less than $250.  
           (j) Reimbursement for the medical assistance recipients 
        under the approved waiver shall be made from the medical 
        assistance account through the invoice processing procedures of 
        the department's Medicaid Management Information System (MMIS), 
        only with the approval of the client's case manager.  The budget 
        for the state share of the Medicaid expenditures shall be 
        forecasted with the medical assistance budget, and shall be 
        consistent with the approved waiver.  
           (k) To improve access to community services and eliminate 
        payment disparities between the alternative care program and the 
        elderly waiver, the commissioner shall establish statewide 
        maximum service rate limits and eliminate county-specific 
        service rate limits. 
           (1) Effective July 1, 2001, for service rate limits, except 
        those described or defined in paragraphs (g) and (h), the rate 
        limit for each service shall be the greater of the alternative 
        care statewide maximum rate or the elderly waiver statewide 
        maximum rate. 
           (2) Counties may negotiate individual service rates with 
        vendors for actual costs up to the statewide maximum service 
        rate limit. 
           (l) Beginning July 1, 1991, the state shall reimburse 
        counties according to the payment schedule in section 256.025 
        for the county share of costs incurred under this subdivision on 
        or after January 1, 1991, for individuals who are receiving 
        medical assistance. 
           Sec. 27.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TERMINATION NOTICE.] The case manager must give 
        the individual a ten-day written notice of any decrease in 
        denial, reduction, or termination of waivered services. 
           Sec. 28.  Minnesota Statutes 2001 Supplement, section 
        256B.0915, subdivision 5, is amended to read: 
           Subd. 5.  [ASSESSMENTS AND REASSESSMENTS FOR WAIVER 
        CLIENTS.] Each client shall receive an initial assessment of 
        strengths, informal supports, and need for services in 
        accordance with section 256B.0911, subdivisions 3, 3a, and 3b.  
        A reassessment of a client served under the elderly waiver must 
        be conducted at least every 12 months and at other times when 
        the case manager determines that there has been significant 
        change in the client's functioning.  This may include instances 
        where the client is discharged from the hospital.  
           Sec. 29.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 6, is amended to read: 
           Subd. 6.  [IMPLEMENTATION OF CARE PLAN.] Each elderly 
        waiver client shall be provided a copy of a written care plan 
        that meets the requirements outlined in section 256B.0913, 
        subdivision 8.  If the county administering waivered services is 
        different than the county of financial responsibility, the care 
        plan may be implemented without the approval of the county of 
        financial responsibility. 
           Sec. 30.  Minnesota Statutes 2000, section 256B.0915, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [SERVICES AND SUPPORTS.] (a) Services and 
        supports shall meet the requirements set out in United States 
        Code, title 42, section 1396n. 
           (b) Services and supports shall promote consumer choice and 
        be arranged and provided consistent with individualized, written 
        care plans. 
           (c) The state of Minnesota, county, or tribal government 
        under contract to administer the elderly waiver shall not be 
        liable for damages, injuries, or liabilities sustained through 
        the purchase of direct supports or goods by the person, the 
        person's family, or the authorized representatives with funds 
        received through consumer-directed community support services 
        under the federally approved waiver plan.  Liabilities include, 
        but are not limited to, workers' compensation liability, the 
        Federal Insurance Contributions Act (FICA), or the Federal 
        Unemployment Tax Act (FUTA). 
           Sec. 31.  Minnesota Statutes 2001 Supplement, section 
        256B.0924, subdivision 6, is amended to read: 
           Subd. 6.  [PAYMENT FOR TARGETED CASE MANAGEMENT.] (a) 
        Medical assistance and MinnesotaCare payment for targeted case 
        management shall be made on a monthly basis.  In order to 
        receive payment for an eligible adult, the provider must 
        document at least one contact per month and not more than two 
        consecutive months without a face-to-face contact with the adult 
        or the adult's legal representative, family, primary caregiver, 
        or other relevant persons identified as necessary to the 
        development or implementation of the goals of the personal 
        service plan. 
           (b) Payment for targeted case management provided by county 
        staff under this subdivision shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), calculated as one combined average rate together with adult 
        mental health case management under section 256B.0625, 
        subdivision 20, except for calendar year 2002.  In calendar year 
        2002, the rate for case management under this section shall be 
        the same as the rate for adult mental health case management in 
        effect as of December 31, 2001.  Billing and payment must 
        identify the recipient's primary population group to allow 
        tracking of revenues. 
           (c) Payment for targeted case management provided by 
        county-contracted vendors shall be based on a monthly rate 
        negotiated by the host county.  The negotiated rate must not 
        exceed the rate charged by the vendor for the same service to 
        other payers.  If the service is provided by a team of 
        contracted vendors, the county may negotiate a team rate with a 
        vendor who is a member of the team.  The team shall determine 
        how to distribute the rate among its members.  No reimbursement 
        received by contracted vendors shall be returned to the county, 
        except to reimburse the county for advance funding provided by 
        the county to the vendor. 
           (d) If the service is provided by a team that includes 
        contracted vendors and county staff, the costs for county staff 
        participation on the team shall be included in the rate for 
        county-provided services.  In this case, the contracted vendor 
        and the county may each receive separate payment for services 
        provided by each entity in the same month.  In order to prevent 
        duplication of services, the county must document, in the 
        recipient's file, the need for team targeted case management and 
        a description of the different roles of the team members. 
           (e) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for targeted case management shall be 
        provided by the recipient's county of responsibility, as defined 
        in sections 256G.01 to 256G.12, from sources other than federal 
        funds or funds used to match other federal funds. 
           (f) The commissioner may suspend, reduce, or terminate 
        reimbursement to a provider that does not meet the reporting or 
        other requirements of this section.  The county of 
        responsibility, as defined in sections 256G.01 to 256G.12, is 
        responsible for any federal disallowances.  The county may share 
        this responsibility with its contracted vendors. 
           (g) The commissioner shall set aside five percent of the 
        federal funds received under this section for use in reimbursing 
        the state for costs of developing and implementing this section. 
           (h) Notwithstanding section 256.025, subdivision 2, 
        payments to counties for targeted case management expenditures 
        under this section shall only be made from federal earnings from 
        services provided under this section.  Payments to contracted 
        vendors shall include both the federal earnings and the county 
        share. 
           (i) Notwithstanding section 256B.041, county payments for 
        the cost of case management services provided by county staff 
        shall not be made to the state treasurer.  For the purposes of 
        targeted case management services provided by county staff under 
        this section, the centralized disbursement of payments to 
        counties under section 256B.041 consists only of federal 
        earnings from services provided under this section. 
           (j) If the recipient is a resident of a nursing facility, 
        intermediate care facility, or hospital, and the recipient's 
        institutional care is paid by medical assistance, payment for 
        targeted case management services under this subdivision is 
        limited to the last 180 days of the recipient's residency in 
        that facility and may not exceed more than six months in a 
        calendar year. 
           (k) Payment for targeted case management services under 
        this subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (l) Any growth in targeted case management services and 
        cost increases under this section shall be the responsibility of 
        the counties. 
           Sec. 32.  Minnesota Statutes 2001 Supplement, section 
        256B.0951, subdivision 7, is amended to read: 
           Subd. 7.  [WAIVER OF RULES.] If a federal waiver is 
        approved under subdivision 8, the commissioner of health may 
        exempt residents of intermediate care facilities for persons 
        with mental retardation (ICFs/MR) who participate in the 
        three-year alternative quality assurance pilot project 
        established in section 256B.095 from the requirements of 
        Minnesota Rules, chapter 4665, upon approval by the federal 
        government of a waiver of federal certification requirements for 
        ICFs/MR.  
           Sec. 33.  Minnesota Statutes 2001 Supplement, section 
        256B.0951, subdivision 8, is amended to read: 
           Subd. 8.  [FEDERAL WAIVER.] The commissioner of human 
        services shall seek federal authority to waive provisions of 
        intermediate care facilities for persons with mental retardation 
        (ICFs/MR) regulations to enable the demonstration and evaluation 
        of the alternative quality assurance system for ICFs/MR under 
        the project.  The commissioner of human services shall apply for 
        any necessary waivers as soon as practicable. a federal waiver 
        to allow intermediate care facilities for persons with mental 
        retardation (ICFs/MR) in region 10 of Minnesota to participate 
        in the alternative licensing system.  If it is necessary for 
        purposes of participation in this alternative licensing system 
        for a facility to be decertified as an ICF/MR facility according 
        to the terms of the federal waiver, when the facility seeks 
        recertification under the provisions of ICF/MR regulations at 
        the end of the demonstration project, it will not be considered 
        a new ICF/MR as defined under section 252.291 provided the 
        licensed capacity of the facility did not increase during its 
        participation in the alternative licensing system.  The 
        provisions of sections 252.82, 252.292, and 256B.5011 to 
        256B.5015 will remain applicable for counties in region 10 of 
        Minnesota and the ICFs/MR located within those counties 
        notwithstanding a county's participation in the alternative 
        licensing system. 
           Sec. 34.  Minnesota Statutes 2000, section 256B.19, 
        subdivision 1, as amended by Laws 2002, chapter 220, article 14, 
        section 7, is amended to read: 
           Subdivision 1.  [DIVISION OF COST.] The state and county 
        share of medical assistance costs not paid by federal funds 
        shall be as follows:  
           (1) ninety 90 percent state funds and ten percent county 
        funds, unless otherwise provided below; 
           (2) beginning January 1, 1992, 50 percent state funds and 
        50 percent county funds for the cost of placement of severely 
        emotionally disturbed children in regional treatment centers; 
        and 
           (3) beginning January 1, 2003, 80 percent state funds and 
        20 percent county funds for the costs of nursing facility 
        placements of persons with disabilities under the age of 65 that 
        have exceeded 90 days.  This clause shall be subject to chapter 
        256G and shall not apply to placements in facilities not 
        certified to participate in medical assistance. 
           For counties that participate in a Medicaid demonstration 
        project under sections 256B.69 and 256B.71, the division of the 
        nonfederal share of medical assistance expenses for payments 
        made to prepaid health plans or for payments made to health 
        maintenance organizations in the form of prepaid capitation 
        payments, this division of medical assistance expenses shall be 
        95 percent by the state and five percent by the county of 
        financial responsibility.  
           In counties where prepaid health plans are under contract 
        to the commissioner to provide services to medical assistance 
        recipients, the cost of court ordered treatment ordered without 
        consulting the prepaid health plan that does not include 
        diagnostic evaluation, recommendation, and referral for 
        treatment by the prepaid health plan is the responsibility of 
        the county of financial responsibility. 
           Sec. 35.  Minnesota Statutes 2001 Supplement, section 
        256B.431, subdivision 2e, is amended to read: 
           Subd. 2e.  [CONTRACTS FOR SERVICES FOR VENTILATOR-DEPENDENT 
        PERSONS.] The commissioner may contract negotiate with a nursing 
        facility eligible to receive medical assistance payments to 
        provide services to a ventilator-dependent person identified by 
        the commissioner according to criteria developed by the 
        commissioner, including:  
           (1) nursing facility care has been recommended for the 
        person by a preadmission screening team; 
           (2) the person has been hospitalized and no longer requires 
        inpatient acute care hospital services; and 
           (3) the commissioner has determined that necessary services 
        for the person cannot be provided under existing nursing 
        facility rates.  
           The commissioner may issue a request for proposals to 
        provide services to a ventilator-dependent person to nursing 
        facilities eligible to receive medical assistance payments and 
        shall select nursing facilities from among respondents according 
        to criteria developed by the commissioner, including:  
           (1) the cost-effectiveness and appropriateness of services; 
           (2) the nursing facility's compliance with federal and 
        state licensing and certification standards; and 
           (3) the proximity of the nursing facility to a 
        ventilator-dependent person identified by the commissioner who 
        requires nursing facility placement.  
           The commissioner may negotiate an adjustment to the 
        operating cost payment rate for a nursing facility selected by 
        the commissioner from among respondents to the request for 
        proposals with a resident who is ventilator-dependent, for that 
        resident.  The negotiated adjustment must reflect only the 
        actual additional cost of meeting the specialized care needs of 
        a ventilator-dependent person identified by the commissioner for 
        whom necessary services cannot be provided under existing 
        nursing facility rates and which are not otherwise covered under 
        Minnesota Rules, parts 9549.0010 to 9549.0080 or 9505.0170 to 
        9505.0475.  For persons who are initially admitted to a nursing 
        facility before July 1, 2001, and have their payment rate under 
        this subdivision negotiated after July 1, 2001, the negotiated 
        payment rate must not exceed 200 percent of the highest multiple 
        bedroom payment rate for the facility, as initially established 
        by the commissioner for the rate year for case mix 
        classification K; or, upon implementation of the RUGs-based case 
        mix system, 200 percent of the highest RUGs rate.  For persons 
        initially admitted to a nursing facility on or after July 1, 
        2001, the negotiated payment rate must not exceed 300 percent of 
        the facility's multiple bedroom payment rate for case mix 
        classification K; or, upon implementation of the RUGs-based case 
        mix system, 300 percent of the highest RUGs rate.  The 
        negotiated adjustment shall not affect the payment rate charged 
        to private paying residents under the provisions of section 
        256B.48, subdivision 1.  
           Sec. 36.  Minnesota Statutes 2000, section 256B.431, 
        subdivision 14, is amended to read: 
           Subd. 14.  [LIMITATIONS ON SALES OF NURSING FACILITIES.] 
        (a) For rate periods beginning on October 1, 1992, and for rate 
        years beginning after June 30, 1993, a nursing facility's 
        property-related payment rate as established under subdivision 
        13 shall be adjusted by either paragraph (b) or (c) for the sale 
        of the nursing facility, including sales occurring after June 
        30, 1992, as provided in this subdivision. 
           (b) If the nursing facility's property-related payment rate 
        under subdivision 13 prior to sale is greater than the nursing 
        facility's rental rate under Minnesota Rules, parts 9549.0010 to 
        9549.0080, and this section prior to sale, the nursing 
        facility's property-related payment rate after sale shall be the 
        greater of its property-related payment rate under subdivision 
        13 prior to sale or its rental rate under Minnesota Rules, parts 
        9549.0010 to 9549.0080, and this section calculated after sale. 
           (c) If the nursing facility's property-related payment rate 
        under subdivision 13 prior to sale is equal to or less than the 
        nursing facility's rental rate under Minnesota Rules, parts 
        9549.0010 to 9549.0080, and this section prior to sale, the 
        nursing facility's property-related payment rate after sale 
        shall be the nursing facility's property-related payment rate 
        under subdivision 13 plus the difference between its rental rate 
        calculated under Minnesota Rules, parts 9549.0010 to 9549.0080, 
        and this section prior to sale and its rental rate calculated 
        under Minnesota Rules, parts 9549.0010 to 9549.0080, and this 
        section calculated after sale. 
           (d) For purposes of this subdivision, "sale" means the 
        purchase of a nursing facility's capital assets with cash or 
        debt.  The term sale does not include a stock purchase of a 
        nursing facility or any of the following transactions:  
           (1) a sale and leaseback to the same licensee that does not 
        constitute a change in facility license; 
           (2) a transfer of an interest to a trust; 
           (3) gifts or other transfers for no consideration; 
           (4) a merger of two or more related organizations; 
           (5) a change in the legal form of doing business, other 
        than a publicly held organization that becomes privately held or 
        vice versa; 
           (6) the addition of a new partner, owner, or shareholder 
        who owns less than 20 percent of the nursing facility or the 
        issuance of stock; and 
           (7) a sale, merger, reorganization, or any other transfer 
        of interest between related organizations other than those 
        permitted in this section.  
           (e) For purposes of this subdivision, "sale" includes the 
        sale or transfer of a nursing facility to a close relative as 
        defined in Minnesota Rules, part 9549.0020, subpart 38, item C, 
        upon the death of an owner, due to serious illness or 
        disability, as defined under the Social Security Act, under 
        United States Code, title 42, section 423(d)(1)(A), or upon 
        retirement of an owner from the business of owning or operating 
        a nursing home at 62 years of age or older.  For sales to a 
        close relative allowed under this paragraph, otherwise 
        nonallowable debt resulting from seller financing of all or a 
        portion of the debt resulting from the sale shall be allowed and 
        shall not be subject to Minnesota Rules, part 9549.0060, subpart 
        5, item E, provided that in addition to existing requirements 
        for allowance of debt and interest, the debt is subject to 
        repayment through annual principal payments and the interest 
        rate on the related organization debt does not exceed three 
        percentage points above the posted yield for standard 
        conventional fixed rate mortgages of the Federal Home Loan 
        Mortgage Corporation for delivery in 60 days in effect on the 
        day of sale.  If at any time, the seller forgives the related 
        organization debt allowed under this paragraph for other than 
        equal amount of payment on that debt, then the buyer shall pay 
        to the state the total revenue received by the nursing facility 
        after the sale attributable to the amount of allowable debt 
        which has been forgiven.  Any assignment, sale, or transfer of 
        the debt instrument entered into by the close relatives, either 
        directly or indirectly, which grants to the close relative buyer 
        the right to receive all or a portion of the payments under the 
        debt instrument shall, effective on the date of the transfer, 
        result in the prospective reduction in the corresponding portion 
        of the allowable debt and interest expense.  Upon the death of 
        the close relative seller, any remaining balance of the close 
        relative debt must be refinanced and such refinancing shall be 
        subject to the provisions of Minnesota Rules, part 9549.0060, 
        subpart 7, item G.  This paragraph shall not apply to sales 
        occurring on or after June 30, 1997.  
           (f) For purposes of this subdivision, "effective date of 
        sale" means the later of either the date on which legal title to 
        the capital assets is transferred or the date on which closing 
        for the sale occurred.  
           (g) The effective day for the property-related payment rate 
        determined under this subdivision shall be the first day of the 
        month following the month in which the effective date of sale 
        occurs or October 1, 1992, whichever is later, provided that the 
        notice requirements under section 256B.47, subdivision 2, have 
        been met. 
           (h) Notwithstanding Minnesota Rules, part 9549.0060, 
        subparts 5, item A, subitems (3) and (4), and 7, items E and F, 
        the commissioner shall limit the total allowable debt and 
        related interest for sales occurring after June 30, 1992, to the 
        sum of clauses (1) to (3):  
           (1) the historical cost of capital assets, as of the 
        nursing facility's most recent previous effective date of sale 
        or, if there has been no previous sale, the nursing facility's 
        initial historical cost of constructing capital assets; 
           (2) the average annual capital asset additions after 
        deduction for capital asset deletions, not including 
        depreciations; and 
           (3) one-half of the allowed inflation on the nursing 
        facility's capital assets.  The commissioner shall compute the 
        allowed inflation as described in paragraph (h) (i). 
           (i) For purposes of computing the amount of allowed 
        inflation, the commissioner must apply the following principles: 
           (1) the lesser of the Consumer Price Index for all urban 
        consumers or the Dodge Construction Systems Costs for Nursing 
        Homes for any time periods during which both are available must 
        be used.  If the Dodge Construction Systems Costs for Nursing 
        Homes becomes unavailable, the commissioner shall substitute the 
        index in subdivision 3f, or such other index as the secretary of 
        the health care financing administration may designate; 
           (2) the amount of allowed inflation to be applied to the 
        capital assets in paragraph (g), clauses (1) and (2), must be 
        computed separately; 
           (3) the amount of allowed inflation must be determined on 
        an annual basis, prorated on a monthly basis for partial years 
        and if the initial month of use is not determinable for a 
        capital asset, then one-half of that calendar year shall be used 
        for purposes of prorating; 
           (4) the amount of allowed inflation to be applied to the 
        capital assets in paragraph (g), clauses (1) and (2), must not 
        exceed 300 percent of the total capital assets in any one of 
        those clauses; and 
           (5) the allowed inflation must be computed starting with 
        the month following the nursing facility's most recent previous 
        effective date of sale or, if there has been no previous sale, 
        the month following the date of the nursing facility's initial 
        occupancy, and ending with the month preceding the effective 
        date of sale. 
           (j) If the historical cost of a capital asset is not 
        readily available for the date of the nursing facility's most 
        recent previous sale or if there has been no previous sale for 
        the date of the nursing facility's initial occupancy, then the 
        commissioner shall limit the total allowable debt and related 
        interest after sale to the extent recognized by the Medicare 
        intermediary after the sale.  For a nursing facility that has no 
        historical capital asset cost data available and does not have 
        allowable debt and interest calculated by the Medicare 
        intermediary, the commissioner shall use the historical cost of 
        capital asset data from the point in time for which capital 
        asset data is recorded in the nursing facility's audited 
        financial statements. 
           (k) The limitations in this subdivision apply only to debt 
        resulting from a sale of a nursing facility occurring after June 
        30, 1992, including debt assumed by the purchaser of the nursing 
        facility. 
           Sec. 37.  Minnesota Statutes 2000, 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 (d) (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 following 
        the month 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 following the month 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 following the month 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, 
        subdivision 2. 
           (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. 38.  Minnesota Statutes 2001 Supplement, section 
        256B.431, subdivision 33, is amended to read: 
           Subd. 33.  [STAGED REDUCTION IN RATE DISPARITIES.] (a) For 
        the rate years beginning July 1, 2001, and July 1, 2002, the 
        commissioner shall adjust the operating payment rates for 
        low-rate nursing facilities reimbursed under this section or 
        section 256B.434.  
           (b) For the rate year beginning July 1, 2001, for each case 
        mix level, if the amount computed under subdivision 32 31 is 
        less than the amount in clause (1), the commissioner shall make 
        available the lesser of the amount in clause (1) or an increase 
        of ten percent over the rate in effect on June 30, 2001, as an 
        adjustment to the operating payment rate.  For the rate year 
        beginning July 1, 2002, for each case mix level, if the amount 
        computed under subdivision 32 31 is less than the amount in 
        clause (2), the commissioner shall make available the lesser of 
        the amount in clause (2) or an increase of ten percent over the 
        rate in effect on June 30, 2002, as an adjustment to the 
        operating payment rate.  For purposes of this subdivision, 
        nursing facilities shall be considered to be metro if they are 
        located in Anoka, Carver, Dakota, Hennepin, Olmsted, Ramsey, 
        Scott, or Washington counties; or in the cities of Moorhead or 
        Breckenridge; or in St. Louis county, north of Toivola and south 
        of Cook; or in Itasca county, east of a north south line two 
        miles west of Grand Rapids:  
           (1) Operating Payment Rate Target Level for July 1, 2001: 
            Case Mix Classification        Metro       Nonmetro
                      A                    $ 76.00     $ 68.13
                      B                    $ 83.40     $ 74.46
                      C                    $ 91.67     $ 81.63
                      D                    $ 99.51     $ 88.04
                      E                    $107.46     $ 94.87
                      F                    $107.96     $ 95.29
                      G                    $114.67     $100.98
                      H                    $126.99     $111.31
                      I                    $131.42     $115.06
                      J                    $138.34     $120.85
                      K                    $152.26     $133.10
           (2) Operating Payment Rate Target Level for July 1, 2002: 
            Case Mix Classification        Metro       Nonmetro
                      A                    $ 78.28     $ 70.51
                      B                    $ 85.91     $ 77.16
                      C                    $ 94.42     $ 84.62
                      D                    $102.50     $ 91.42
                      E                    $110.68     $ 98.40
                      F                    $111.20     $ 98.84
                      G                    $118.11     $104.77
                      H                    $130.80     $115.64
                      I                    $135.38     $119.50
                      J                    $142.49     $125.38
                      K                    $156.85     $137.77
           Sec. 39.  Minnesota Statutes 2001 Supplement, section 
        256B.437, subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATIONS FOR PLANNED CLOSURE OF NURSING 
        FACILITIES.] (a) By August 15, 2001, the commissioner of human 
        services shall implement and announce a program for closure or 
        partial closure of nursing facilities.  Names and identifying 
        information provided in response to the announcement shall 
        remain private unless approved, according to the timelines 
        established in the plan.  The announcement must specify: 
           (1) the criteria in subdivision 4 that will be used by the 
        commissioner to approve or reject applications; 
           (2) a requirement for the submission of a letter of intent 
        before the submission of an application; 
           (3) the information that must accompany an application; and 
           (4) (3) that applications may combine planned closure rate 
        adjustments with moratorium exception funding, in which case a 
        single application may serve both purposes. 
        Between August 1, 2001, and June 30, 2003, the commissioner may 
        approve planned closures of up to 5,140 nursing facility beds, 
        less the number of licensed beds delicensed in facilities that 
        close during the same time period without approved closure plans 
        or that have notified the commissioner of health of their intent 
        to close without an approved closure plan. 
           (b) A facility or facilities reimbursed under section 
        256B.431 or 256B.434 with a closure plan approved by the 
        commissioner under subdivision 5 may assign a planned closure 
        rate adjustment to another facility or facilities that are not 
        closing or in the case of a partial closure, to the facility 
        undertaking the partial closure.  A facility may also elect to 
        have a planned closure rate adjustment shared equally by the 
        five nursing facilities with the lowest total operating payment 
        rates in the state development region designated under section 
        462.385, in which the facility that is closing is located.  The 
        planned closure rate adjustment must be calculated under 
        subdivision 6.  Facilities that close delicense beds without a 
        closure plan, or whose closure plan is not approved by the 
        commissioner, are not eligible to assign a planned closure rate 
        adjustment under subdivision 6., unless they are delicensing 
        five or fewer beds, or less than six percent of their total 
        licensed bed capacity, whichever is greater, are located in a 
        county in the top three quartiles of beds per 1,000 persons aged 
        65 or older, and have not delicensed beds in the prior three 
        months.  Facilities meeting these criteria are eligible to 
        assign the amount calculated under subdivision 6 to themselves.  
        If a facility is delicensing the greater of six or more beds, or 
        six percent or more of its total licensed bed capacity, and does 
        not have an approved closure plan or is not eligible for the 
        adjustment under subdivision 6, the commissioner shall calculate 
        the amount the facility would have been eligible to assign under 
        subdivision 6, and shall use this amount to provide equal rate 
        adjustments to the five nursing facilities with the lowest total 
        operating payment rates in the state development region 
        designated under section 462.385, in which the facility 
        that closed delicensed beds is located. 
           (c) To be considered for approval, an application must 
        include: 
           (1) a description of the proposed closure plan, which must 
        include identification of the facility or facilities to receive 
        a planned closure rate adjustment and the amount and timing of a 
        planned closure rate adjustment proposed for each facility; 
           (2) the proposed timetable for any proposed closure, 
        including the proposed dates for announcement to residents, 
        commencement of closure, and completion of closure; 
           (3) if available, the proposed relocation plan for current 
        residents of any facility designated for closure.  The proposed 
        If a relocation plan is not available, the application must 
        include a statement agreeing to develop a relocation plan must 
        be designed to comply with all applicable state and federal 
        statutes and regulations, including, but not limited to, section 
        144A.161; 
           (4) a description of the relationship between the nursing 
        facility that is proposed for closure and the nursing facility 
        or facilities proposed to receive the planned closure rate 
        adjustment.  If these facilities are not under common ownership, 
        copies of any contracts, purchase agreements, or other documents 
        establishing a relationship or proposed relationship must be 
        provided; 
           (5) documentation, in a format approved by the 
        commissioner, that all the nursing facilities receiving a 
        planned closure rate adjustment under the plan have accepted 
        joint and several liability for recovery of overpayments under 
        section 256B.0641, subdivision 2, for the facilities designated 
        for closure under the plan; and 
           (6) an explanation of how the application coordinates with 
        planning efforts under subdivision 2.  If the planning group 
        does not support a level of nursing facility closures that the 
        commissioner considers to be reasonable, the commissioner may 
        approve a planned closure proposal without its support. 
           (d) The application must address the criteria listed in 
        subdivision 4. 
           Sec. 40.  Minnesota Statutes 2001 Supplement, section 
        256B.437, subdivision 6, is amended to read: 
           Subd. 6.  [PLANNED CLOSURE RATE ADJUSTMENT.] (a) The 
        commissioner of human services shall calculate the amount of the 
        planned closure rate adjustment available under subdivision 3, 
        paragraph (b), for up to 5,140 beds 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 following completion of 
        closure of the facility designated for closure in the 
        application and becomes part of the nursing facility's total 
        operating payment rate. 
           (c) Applicants may use the planned closure rate adjustment 
        to allow for a property payment for a new nursing facility or an 
        addition to an existing nursing facility or as an operating 
        payment rate adjustment.  Applications approved under this 
        subdivision are exempt from other requirements for moratorium 
        exceptions under section 144A.073, subdivisions 2 and 3. 
           (d) 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. 
           (e) 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 shall be computed according 
        to paragraph (a). 
           (f) 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 shall be effective 
        from the date the per bed dollar amount is increased. 
           Sec. 41.  Minnesota Statutes 2001 Supplement, section 
        256B.438, subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] This section establishes the 
        method and criteria used to determine resident reimbursement 
        classifications based upon the assessments of residents of 
        nursing homes and boarding care homes whose payment rates are 
        established under section 256B.431, 256B.434, or 256B.435.  
        Resident reimbursement classifications shall be established 
        according to the 34 group, resource utilization groups, version 
        III or RUG-III model as described in section 144.0724.  
        Reimbursement classifications established under this section 
        shall be implemented after June 30, 2002, but no later than 
        January 1, 2003.  Reimbursement classifications established 
        under this section shall be implemented no earlier than six 
        weeks after the commissioner mails notices of payment rates to 
        the facilities. 
           Sec. 42.  Minnesota Statutes 2000, section 256B.5012, 
        subdivision 2, is amended to read: 
           Subd. 2.  [OPERATING PAYMENT RATE.] (a) The operating 
        payment rate equals the facility's total payment rate in effect 
        on September 30, 2000, minus the property rate.  The operating 
        payment rate includes the special operating rate and the 
        efficiency incentive in effect as of September 30, 2000.  Within 
        the limits of appropriations specifically for this purpose, the 
        operating payment shall be increased for each rate year by the 
        annual percentage change in the Employment Cost Index for 
        Private Industry Workers - Total Compensation, as forecasted by 
        the commissioner of finance's economic consultant, in the second 
        quarter of the calendar year preceding the start of each rate 
        year.  In the case of the initial rate year beginning October 1, 
        2000, and continuing through December 31, 2001, the percentage 
        change shall be based on the percentage change in the Employment 
        Cost Index for Private Industry Workers - Total Compensation for 
        the 15-month period beginning October 1, 2000, as forecast by 
        Data Resources, Inc., in the first quarter of 2000. 
           (b) Effective October 1, 2000, the operating payment rate 
        shall be adjusted to reflect an occupancy rate equal to 100 
        percent of the facility's capacity days as of September 30, 2000.
           (c) Effective July 1, 2001, the operating payment rate 
        shall be adjusted for the increases in the department of health 
        licensing fees that were authorized in Laws 2001, First Special 
        Session chapter 9, article 1, section 30. 
           Sec. 43.  Minnesota Statutes 2000, section 256B.69, 
        subdivision 5a, as amended by Laws 2002, chapter 220, article 
        15, section 15, is amended to read: 
           Subd. 5a.  [MANAGED CARE CONTRACTS.] (a) Managed care 
        contracts under this section and sections 256L.12 and 256D.03, 
        shall be entered into or renewed on a calendar year basis 
        beginning January 1, 1996.  Managed care contracts which were in 
        effect on June 30, 1995, and set to renew on July 1, 1995, shall 
        be renewed for the period July 1, 1995 through December 31, 1995 
        at the same terms that were in effect on June 30, 1995. 
           (b) A prepaid health plan providing covered health services 
        for eligible persons pursuant to chapters 256B, 256D, and 256L, 
        is responsible for complying with the terms of its contract with 
        the commissioner.  Requirements applicable to managed care 
        programs under chapters 256B, 256D, and 256L, established after 
        the effective date of a contract with the commissioner take 
        effect when the contract is next issued or renewed. 
           (c) Effective for services rendered on or after January 1, 
        2003, the commissioner shall withhold five percent of managed 
        care plan payments under this section for the prepaid medical 
        assistance and general assistance medical care programs pending 
        completion of performance targets.  The withheld funds will 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.  A managed care plan may include as admitted 
        assets under section 62D.044 any amount withheld under this 
        paragraph that is reasonably expected to be returned.  
           Sec. 44.  Minnesota Statutes 2001 Supplement, section 
        256B.76, is amended to read: 
           256B.76 [PHYSICIAN AND DENTAL REIMBURSEMENT.] 
           (a) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for physician 
        services as follows: 
           (1) payment for level one Health Care Finance 
        Administration's common procedural coding system (HCPCS) codes 
        titled "office and other outpatient services," "preventive 
        medicine new and established patient," "delivery, antepartum, 
        and postpartum care," "critical care," cesarean delivery and 
        pharmacologic management provided to psychiatric patients, and 
        HCPCS level three codes for enhanced services for prenatal high 
        risk, shall be paid at the lower of (i) submitted charges, or 
        (ii) 25 percent above the rate in effect on June 30, 1992.  If 
        the rate on any procedure code within these categories is 
        different than the rate that would have been paid under the 
        methodology in section 256B.74, subdivision 2, then the larger 
        rate shall be paid; 
           (2) payments for all other services shall be paid at the 
        lower of (i) submitted charges, or (ii) 15.4 percent above the 
        rate in effect on June 30, 1992; 
           (3) all physician rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases 
        except that payment rates for home health agency services shall 
        be the rates in effect on September 30, 1992; 
           (4) effective for services rendered on or after January 1, 
        2000, payment rates for physician and professional services 
        shall be increased by three percent over the rates in effect on 
        December 31, 1999, except for home health agency and family 
        planning agency services; and 
           (5) the increases in clause (4) shall be implemented 
        January 1, 2000, for managed care. 
           (b) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for dental services 
        as follows: 
           (1) dental services shall be paid at the lower of (i) 
        submitted charges, or (ii) 25 percent above the rate in effect 
        on June 30, 1992; 
           (2) dental rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases; 
           (3) effective for services rendered on or after January 1, 
        2000, payment rates for dental services shall be increased by 
        three percent over the rates in effect on December 31, 1999; 
           (4) the commissioner shall award grants to community 
        clinics or other nonprofit community organizations, political 
        subdivisions, professional associations, or other organizations 
        that demonstrate the ability to provide dental services 
        effectively to public program recipients.  Grants may be used to 
        fund the costs related to coordinating access for recipients, 
        developing and implementing patient care criteria, upgrading or 
        establishing new facilities, acquiring furnishings or equipment, 
        recruiting new providers, or other development costs that will 
        improve access to dental care in a region.  In awarding grants, 
        the commissioner shall give priority to applicants that plan to 
        serve areas of the state in which the number of dental providers 
        is not currently sufficient to meet the needs of recipients of 
        public programs or uninsured individuals.  The commissioner 
        shall consider the following in awarding the grants: 
           (i) potential to successfully increase access to an 
        underserved population; 
           (ii) the ability to raise matching funds; 
           (iii) the long-term viability of the project to improve 
        access beyond the period of initial funding; 
           (iv) the efficiency in the use of the funding; and 
           (v) the experience of the proposers in providing services 
        to the target population. 
           The commissioner shall monitor the grants and may terminate 
        a grant if the grantee does not increase dental access for 
        public program recipients.  The commissioner shall consider 
        grants for the following: 
           (i) implementation of new programs or continued expansion 
        of current access programs that have demonstrated success in 
        providing dental services in underserved areas; 
           (ii) a pilot program for utilizing hygienists outside of a 
        traditional dental office to provide dental hygiene services; 
        and 
           (iii) a program that organizes a network of volunteer 
        dentists, establishes a system to refer eligible individuals to 
        volunteer dentists, and through that network provides donated 
        dental care services to public program recipients or uninsured 
        individuals; 
           (5) beginning October 1, 1999, the payment for tooth 
        sealants and fluoride treatments shall be the lower of (i) 
        submitted charge, or (ii) 80 percent of median 1997 charges; 
           (6) the increases listed in clauses (3) and (5) shall be 
        implemented January 1, 2000, for managed care; and 
           (7) effective for services provided on or after January 1, 
        2002, payment for diagnostic examinations and dental x-rays 
        provided to children under age 21 shall be the lower of (i) the 
        submitted charge, or (ii) 85 percent of median 1999 charges.  
           (c) Effective for dental services rendered on or after 
        January 1, 2002, the commissioner may, within the limits of 
        available appropriation, increase reimbursements to dentists and 
        dental clinics deemed by the commissioner to be critical access 
        dental providers.  Reimbursement to a critical access dental 
        provider may be increased by not more than 50 percent above the 
        reimbursement rate that would otherwise be paid to the 
        provider.  Payments to health plan companies shall be adjusted 
        to reflect increased reimbursements to critical access dental 
        providers as approved by the commissioner.  In determining which 
        dentists and dental clinics shall be deemed critical access 
        dental providers, the commissioner shall review: 
           (1) the utilization rate in the service area in which the 
        dentist or dental clinic operates for dental services to 
        patients covered by medical assistance, general assistance 
        medical care, or MinnesotaCare as their primary source of 
        coverage; 
           (2) the level of services provided by the dentist or dental 
        clinic to patients covered by medical assistance, general 
        assistance medical care, or MinnesotaCare as their primary 
        source of coverage; and 
           (3) whether the level of services provided by the dentist 
        or dental clinic is critical to maintaining adequate levels of 
        patient access within the service area. 
        In the absence of a critical access dental provider in a service 
        area, the commissioner may designate a dentist or dental clinic 
        as a critical access dental provider if the dentist or dental 
        clinic is willing to provide care to patients covered by medical 
        assistance, general assistance medical care, or MinnesotaCare at 
        a level which significantly increases access to dental care in 
        the service area. 
           (d) Effective July 1, 2001, the medical assistance rates 
        for outpatient mental health services provided by an entity that 
        operates: 
           (1) a Medicare-certified comprehensive outpatient 
        rehabilitation facility; and 
           (2) a facility that was certified prior to January 1, 1993, 
        with at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year who are medical 
        assistance recipients, will be increased by 38 percent, when 
        those services are provided within the comprehensive outpatient 
        rehabilitation facility and provided to residents of nursing 
        facilities owned by the entity. 
           (e) An entity that operates both a Medicare certified 
        comprehensive outpatient rehabilitation facility and a facility 
        which was certified prior to January 1, 1993, that is licensed 
        under Minnesota Rules, parts 9570.2000 to 9570.3600, and for 
        whom at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year are medical assistance 
        recipients, shall be reimbursed by the commissioner for 
        rehabilitation services at rates that are 38 percent greater 
        than the maximum reimbursement rate allowed under paragraph (a), 
        clause (2), when those services are (1) provided within the 
        comprehensive outpatient rehabilitation facility and (2) 
        provided to residents of nursing facilities owned by the entity. 
           Sec. 45.  Minnesota Statutes 2000, section 256I.04, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [LICENSE REQUIRED.] A county agency may not 
        enter into an agreement with an establishment to provide group 
        residential housing unless:  
           (1) the establishment is licensed by the department of 
        health as a hotel and restaurant; a board and lodging 
        establishment; a residential care home; a boarding care home 
        before March 1, 1985; or a supervised living facility, and the 
        service provider for residents of the facility is licensed under 
        chapter 245A.  However, an establishment licensed by the 
        department of health to provide lodging need not also be 
        licensed to provide board if meals are being supplied to 
        residents under a contract with a food vendor who is licensed by 
        the department of health; 
           (2) the residence is licensed by the commissioner of human 
        services under Minnesota Rules, parts 9555.5050 to 9555.6265, or 
        certified by a county human services agency prior to July 1, 
        1992, using the standards under Minnesota Rules, parts 9555.5050 
        to 9555.6265; or 
           (3) the establishment is registered under chapter 144D and 
        provides three meals a day, except that an establishment 
        registered under section 144D.025 is not eligible for an 
        agreement to provide group residential housing. 
           The requirements under clauses (1), (2), and (3) do not 
        apply to establishments exempt from state licensure because they 
        are located on Indian reservations and subject to tribal health 
        and safety requirements. 
           Sec. 46.  Minnesota Statutes 2000, section 256L.12, 
        subdivision 9, as amended by Laws 2002, chapter 220, article 15, 
        section 23, is amended to read: 
           Subd. 9.  [RATE SETTING.] (a) Rates will be prospective, 
        per capita, where possible.  The commissioner may allow health 
        plans to arrange for inpatient hospital services on a risk or 
        nonrisk basis.  The commissioner shall consult with an 
        independent actuary to determine appropriate rates. 
           (b) For services rendered on or after January 1, 2003, the 
        commissioner shall withhold .5 percent of managed care plan 
        payments under this section pending completion of performance 
        targets.  The withheld funds will must be returned no sooner 
        than July 1 and no later than July 31 of the following year if 
        performance targets in the contract are achieved.  A managed 
        care plan may include as admitted assets under section 62D.044 
        any amount withheld under this paragraph that is reasonably 
        expected to be returned.  
           Sec. 47.  Laws 2002, chapter 220, article 17, section 2, 
        subdivision 6, is amended to read: 
        Subd. 6.  Continuing Care 
        Grants
        General              (8,907,000) (26,227,000)
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Aging Adult Service
        Grants
        General                   -0-     (2,638,000)
        [PLANNING AND SERVICE DEVELOPMENT.] The 
        planning and service development grant 
        from Laws 2001, First Special Session 
        chapter 9, article 17, section 2, 
        subdivision 9, is eliminated for fiscal 
        year 2003.  Base funding for the 
        2004-2005 biennium shall be $550,000 
        each year.  Notwithstanding Laws 2001, 
        First Special Session chapter 9, 
        article 17, section 2, subdivision 9, 
        beginning in fiscal year 2004, the 
        commissioner shall annually distribute 
        $5,000 to each county.  Counties with 
        more than 10,000 persons over age 65 
        shall receive a distribution of an 
        additional 25 cents for each person 
        over age 65.  The amount distributed to 
        each area agency on aging shall be 
        $2,500. 
        [COMMUNITY SERVICES DEVELOPMENT 
        GRANTS.] For fiscal year 2003, base 
        level funding for community services 
        development grants under Minnesota 
        Statutes, section 256.9754, is reduced 
        by $1,478,000.  For fiscal year 2004, 
        base level funding for these grants is 
        reduced by $768,000.  For fiscal year 
        2005, base level funding shall be 
        $3,000,000, and this amount shall be 
        the base funding level for these grants 
        for the biennium beginning July 1, 
        2005.  Notwithstanding section 5, this 
        provision shall not expire. 
        (b) Medical Assistance
        Long-Term Care Waivers and
        Home Care Grants
        General              18,471,000    12,833,000
        (c) Medical Assistance
        Long-Term Care Facilities
        Grants
        General             (27,382,000)  (31,922,000)
        (d) Group Residential
        Housing Grants
        General                   4,000       574,000
        [FEDERAL FUNDING FOR GROUP RESIDENTIAL 
        HOUSING COSTS.] The commissioner shall 
        seek federal funding to offset costs 
        for group residential housing services 
        under Minnesota Statutes, chapter 256I. 
        Any federal funding received shall be 
        distributed to counties on a pro rata 
        basis according to county spending 
        under Minnesota Statutes, section 
        256B.19, subdivision 1, clause (3), for 
        the costs of nursing facility 
        placements of persons with disabilities 
        under the age of 65 that have exceeded 
        90 days.  The commissioner shall report 
        to the legislature by January 15, 2003, 
        on the status of additional federal 
        funding for group residential housing 
        costs. 
        (e) Chemical Dependency 
        Entitlement Grants
        General                  -0-          (84,000)
        [CONSOLIDATED CHEMICAL DEPENDENCY 
        TREATMENT FUND RESERVE TRANSFER.] In 
        fiscal year 2003, $8,544,000 of funds 
        available in the consolidated chemical 
        dependency treatment fund general 
        reserve account is transferred to the 
        general fund. 
        (f) Community Social Services
        Block Grants
        General                  -0-       (4,990,000)
        [CSSA TRADITIONAL APPROPRIATION 
        REDUCTION.] For fiscal year 2003, base 
        level funding for community social 
        service aids under Minnesota Statutes, 
        section 256E.06, subdivisions 1 and 2, 
        is reduced by $4,700,000.  This 
        reduction shall become part of base 
        level funding for the biennium 
        beginning July 1, 2003.  
        Notwithstanding section 5, this 
        provision shall not expire. 
        [CSSA GRANTS FOR FORMER GRH 
        RECIPIENTS.] For fiscal year 2003, base 
        level funding for community social 
        service aids under Minnesota Statutes, 
        section 256E.06, subdivision 2b, is 
        reduced by $290,000.  This reduction 
        shall become part of base level funding 
        for the biennium beginning July 1, 
        2003.  These reductions shall be made 
        on a pro rata basis to each affected 
        county.  Notwithstanding section 5, 
        this provision shall not expire. 
           Sec. 48.  [CASE MANAGEMENT STUDY.] 
           The commissioner of human services shall study case 
        management services for persons with disabilities, in 
        consultation with consumers, providers, consumer advocates, and 
        local social service and public health agencies.  The 
        commissioner shall report to the chairs and ranking minority 
        members of the house and senate committees having jurisdiction 
        over health and human services policy and funding, by January 
        15, 2003, on strategies that: 
           (1) streamline administration; 
           (2) improve case management service availability across the 
        state; 
           (3) enhance consumer access to needed services and 
        supports; 
           (4) improve accountability and the use of performance 
        measures; 
           (5) provide for consumer choice of vendor; and 
           (6) improve the financing of case management services. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 49.  [MENTAL HEALTH SERVICES RATE INCREASE 
        PASS-THROUGH.] 
           Prepaid health plans must pass through to service providers 
        the rate increases provided under Minnesota Statutes, section 
        256B.761. 
           Sec. 50.  [COMMUNITY SERVICES DEVELOPMENT GRANTS USAGE.] 
           For fiscal year 2003, the commissioner of human services 
        may make grants under the community services development grants 
        program in Minnesota Statutes, section 256.9754, for the 
        development of housing options for persons under age 65 residing 
        in nursing facilities. 
           Sec. 51.  [ACCESS TO AFFORDABLE HOUSING.] 
           The commissioners of human services and the Minnesota 
        housing finance agency shall make recommendations to the 
        long-term care task force by January 15, 2003, on ways to 
        increase the ability of persons with disabilities to access 
        affordable housing.  The recommendations shall include: 
           (1) income supplement or housing subsidy options that 
        support efforts to relocate persons under the age of 65 from 
        nursing facilities or to divert them from a nursing facility 
        placement; 
           (2) an analysis of the impacts of the state using a fixed 
        amount attributable to room and board costs for home and 
        community-based waiver recipients in group residential settings; 
           (3) options to maximize federal funding that result in no 
        additional costs to the state.  These options may include the 
        transfer of state funds between income maintenance programs and 
        the Medicaid program.  These options may be implemented prior to 
        the report to the task force.  Any additional funds made 
        available through implementation of these options and not 
        utilized to support persons relocating from nursing facilities 
        shall be used to reduce the county share enacted in Laws 2002, 
        chapter 220, article 14, section 8; and 
           (4) alternatives that provide additional incentives to 
        county agencies that successfully discharge persons with 
        disabilities under the age of 65 from nursing facilities. 
           Sec. 52.  [PRIOR AUTHORIZATION REPORT.] 
           The commissioner of human services shall review prior 
        authorization of prescription drugs in the fee-for-service 
        medical assistance program in terms of the cost effectiveness 
        achieved through prior authorization on prescription drug costs 
        and on other medical assistance costs and evaluate the effect 
        that placing a drug on prior authorization has had on the 
        quality of patient care.  The commissioner shall submit the 
        results to the chairs and ranking minority members of the senate 
        and house of representatives committees having jurisdiction over 
        human services funding by January 15, 2004. 
           Sec. 53.  [PILOT PROGRAM FOR DEAF-BLIND SERVICES.] 
           (a) The commissioners of human services; children, 
        families, and learning; and state services for the blind shall 
        meet with deaf-blind citizens, parents of deaf-blind children, 
        and the Minnesota commission serving deaf and hard-of-hearing 
        individuals to determine which agency can most efficiently and 
        effectively develop and administer a pilot program for 
        consumer-directed services to provide needed services to 
        deaf-blind adults, children, and families. 
           (b) The planning for this pilot program must proceed using 
        current appropriations.  The agency that develops the pilot 
        program described in paragraph (a) shall provide a report to the 
        senate and house of representatives policy and fiscal committees 
        having jurisdiction over human services issues by January 1, 
        2003, that addresses future funding for the program.  The report 
        shall include the program proposal, recommendations, and a 
        fiscal note. 
           Sec. 54.  [SERVICES FOR DEAF-BLIND PERSONS.] 
           (a) Effective for fiscal years beginning on or after July 
        1, 2003, the commissioner of human services shall combine the 
        existing $1,000,000 biennial base level funding for deaf-blind 
        services into a single grant program.  Within the limits of the 
        appropriation for this purpose, each biennium at least $350,000 
        shall be awarded for services to deaf-blind children and their 
        families and at least $250,000 shall be awarded for services to 
        deaf-blind adults. 
           (b) The commissioner may make grants: 
           (1) for services provided by organizations; and 
           (2) to develop and administer consumer-directed services. 
           (c) Any entity that is able to satisfy the grant criteria 
        is eligible to receive a grant under paragraph (a). 
           (d) Deaf-blind service providers are not required to, but 
        may, provide intervenor services as part of the service package 
        provided with grant funds under this section. 
           Sec. 55.  [FEASIBILITY ASSESSMENT OF MEDICAL ASSISTANCE 
        EXPANSION TO COVER DEAF-BLIND SERVICES.] 
           (a) The commissioner of human services shall study and 
        report to the legislature by January 15, 2003, with a 
        feasibility assessment of the costs and policy implications, 
        including the necessity of federal waivers, to expand benefits 
        covered under medical assistance and under medical assistance 
        waiver programs to include the following services for deaf-blind 
        persons: 
           (1) sign language interpreters; 
           (2) intervenors; 
           (3) support service persons; 
           (4) orientation and mobility services; and 
           (5) rehabilitation teaching services. 
           (b) Notwithstanding Laws 2001, First Special Session 
        chapter 9, article 17, section 10, subdivision 3, the 
        commissioner may transfer $20,000 of deaf and hard-of-hearing 
        grants to operations for purposes of paragraph (a).  The study 
        and report under paragraph (a) is exempt from the consulting 
        contract moratorium in Laws 2002, chapter 220, article 10, 
        section 37. 
           Sec. 56.  [REPEALER; TARGETED CASE MANAGEMENT.] 
           Minnesota Statutes 2001 Supplement, section 256B.0621, 
        subdivision 1, is repealed. 

                                   ARTICLE 3 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2000, section 62J.692, 
        subdivision 4, as amended by Laws 2002, chapter 220, article 15, 
        section 1, is amended to read: 
           Subd. 4.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
        shall annually distribute medical education funds to all 
        qualifying applicants based on the following criteria:  
           (1) total medical education funds available for 
        distribution; 
           (2) total number of eligible trainee FTEs in each clinical 
        medical education program; and 
           (3) the statewide average cost per trainee as determined by 
        the application information provided in the first year of the 
        biennium, by type of trainee, in each clinical medical education 
        program.  
           (b) Funds distributed shall not be used to displace current 
        funding appropriations from federal or state sources.  
           (c) Funds shall be distributed to the sponsoring 
        institutions indicating the amount to be distributed to each of 
        the sponsor's clinical medical education programs based on the 
        criteria in this subdivision and in accordance with the 
        commissioner's approval letter.  Each clinical medical education 
        program must distribute funds to the training sites as specified 
        in the commissioner's approval letter.  Sponsoring institutions, 
        which are accredited through an organization recognized by the 
        department of education or the health care financing 
        administration, may contract directly with training sites to 
        provide clinical training.  To ensure the quality of clinical 
        training, those accredited sponsoring institutions must: 
           (1) develop contracts specifying the terms, expectations, 
        and outcomes of the clinical training conducted at sites; and 
           (2) take necessary action if the contract requirements are 
        not met.  Action may include the withholding of payments under 
        this section or the removal of students from the site.  
           (d) Any funds not distributed in accordance with the 
        commissioner's approval letter must be returned to the medical 
        education and research fund within 30 days of receiving notice 
        from the commissioner.  The commissioner shall distribute 
        returned funds to the appropriate training sites in accordance 
        with the commissioner's approval letter. 
           (e) The commissioner shall distribute no later than by June 
        30 of each year an amount equal to the funds transferred under 
        section 62J.694, subdivision 2a, paragraph (b), plus five 
        percent interest at a rate equal to the average earnings paid 
        under section 62J.694, subdivision 2a, to the University of 
        Minnesota board of regents for the costs of the academic health 
        center as specified under section 62J.694, subdivision 2a, 
        paragraph (a). 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        125A.515, is amended to read: 
           125A.515 [PLACEMENT OF CHILDREN WITHOUT DISABILITIES 
        STUDENTS; APPROVAL OF EDUCATION PROGRAM.] 
           Subdivision 1.  [APPROVAL OF EDUCATION PROGRAMS.] The 
        commissioner shall approve education programs in care and 
        treatment facilities for placement of children without 
        disabilities and youth in care and treatment facilities 
        including detention centers, before being licensed by the 
        department of human services under Minnesota Rules, parts 
        9545.0905 to 9545.1125 and 9545.1400 to 9545.1480, or the 
        department of corrections under Minnesota Rules, chapters 2925, 
        2930, 2935, and 2950.  For the purposes of this section, care 
        and treatment facilities includes adult facilities that admit 
        children and provide an education program specifically designed 
        for children who are residents of the facility including 
        chemical dependency and other substance abuse programs, shelter 
        care facilities, hospitals, correctional facilities, mental 
        health programs, and detention facilities.  Education programs 
        in these facilities shall conform to state and federal education 
        laws including the Individuals with Disabilities Education Act 
        (IDEA). 
           Subd. 2.  [DEFINITION OF CARE AND TREATMENT 
        PLACEMENT.] Students placed in the following public or private 
        facilities are considered to be placed for care and treatment: 
           (1) group foster home, department of corrections; 
           (2) secure juvenile detention facilities, department of 
        corrections; 
           (3) juvenile residential facilities, department of 
        corrections; 
           (4) temporary holdover - eight day, department of 
        corrections; 
           (5) group homes, department of human services; 
           (6) residential academies, department of human services; 
           (7) transitional programs, department of human services; 
           (8) shelter care, department of human services and 
        department of corrections; 
           (9) shelter for homeless, department of human services; 
           (10) adult facilities that admit persons under the age of 
        22; and 
           (11) residential treatment programs. 
           Subd. 3.  [RESPONSIBILITIES FOR PROVIDING EDUCATION.] (a) 
        The district in which the facility is located must provide 
        education services, including special education if eligible, to 
        all students placed in a facility for care and treatment. 
           (b) For education programs operated by the department of 
        corrections, the providing district shall be the department of 
        corrections.  For students remanded to the commissioner of 
        corrections, the providing and resident district shall be the 
        department of corrections.  
           (c) Placement for care and treatment does not automatically 
        make a student eligible for special education.  A student placed 
        in a care and treatment facility is eligible for special 
        education under state and federal law including the Individuals 
        with Disabilities Education Act under United States Code, title 
        20, chapter 33. 
           Subd. 4.  [EDUCATION SERVICES REQUIRED.] (a) Education 
        services must be provided to a student beginning within three 
        business days after the student enters the care and treatment 
        facility.  The first four days of the student's placement may be 
        used to screen the student for educational and safety issues. 
           (b) If the student does not meet the eligibility criteria 
        for special education, regular education services must be 
        provided to that student. 
           Subd. 5.  [EDUCATION PROGRAMS FOR STUDENTS PLACED IN 
        FACILITIES FOR CARE AND TREATMENT.] (a) When a student is placed 
        in a care and treatment facility that has an on-site education 
        program, the providing district, upon notice from the care and 
        treatment facility, must contact the resident district within 
        one business day to determine if a student has been identified 
        as having a disability, and to request at least the student's 
        transcript, and for students with disabilities, the most recent 
        individualized education plan (IEP) and evaluation report, and 
        to determine if the student has been identified as a student 
        with a disability.  The resident district must send a facsimile 
        copy to the providing district within two business days of 
        receiving the request. 
           (b) If a student placed for care and treatment has been 
        identified as having a disability and has an individual 
        education plan in the resident district: 
           (1) the providing agency must conduct an individualized 
        education plan meeting to reach an agreement about continuing or 
        modifying special education services in accordance with the 
        current individualized education plan goals and objectives and 
        to determine if additional evaluations are necessary; and 
           (2) at least the following people shall receive written 
        notice or documented phone call to be followed with written 
        notice to attend the individualized education plan meeting: 
           (i) the person or agency placing the student; 
           (ii) the resident district; 
           (iii) the appropriate teachers and related services staff 
        from the providing district; 
           (iv) appropriate staff from the care and treatment 
        facility; 
           (v) the parents or legal guardians of the student; and 
           (vi) when appropriate, the student. 
           (c) For a student who has not been identified as a student 
        with a disability, a screening must be conducted by the 
        providing districts as soon as possible to determine the 
        student's educational and behavioral needs and must include a 
        review of the student's educational records. 
           Subd. 6.  [EXIT REPORT SUMMARIZING EDUCATIONAL 
        PROGRESS.] If a student has been placed in a care and treatment 
        facility for 15 or more business days, the providing district 
        must prepare an exit report summarizing the regular education, 
        special education, evaluation, educational progress, and service 
        information and must send the report to the resident district 
        and the next providing district if different, the parent or 
        legal guardian, and any appropriate social service agency.  For 
        students with disabilities, this report must include the 
        student's IEP. 
           Subd. 7.  [MINIMUM EDUCATIONAL SERVICES REQUIRED.] At a 
        minimum, the providing district is responsible for: 
           (1) the education necessary, including summer school 
        services, for a student who is not performing at grade level as 
        indicated in the education record or IEP; and 
           (2) a school day, of the same length as the school day of 
        the providing district, unless the unique needs of the student, 
        as documented through the IEP or education record in 
        consultation with treatment providers, requires an alteration in 
        the length of the school day. 
           Subd. 8.  [PLACEMENT, SERVICES, AND DUE PROCESS.] When a 
        student's treatment and educational needs allow, education shall 
        be provided in a regular educational setting.  The determination 
        of the amount and site of integrated services must be a joint 
        decision between the student's parents or legal guardians and 
        the treatment and education staff.  When applicable, educational 
        placement decisions must be made by the IEP team of the 
        providing district.  Educational services shall be provided in 
        conformance with the least restrictive environment principle of 
        the Individuals with Disabilities Education Act.  The providing 
        district and care and treatment facility shall cooperatively 
        develop discipline and behavior management procedures to be used 
        in emergency situations that comply with the Minnesota Pupil 
        Fair Dismissal Act and other relevant state and federal laws and 
        regulations. 
           Subd. 9.  [REIMBURSEMENT FOR EDUCATION SERVICES.] (a) 
        Education services provided to students who have been placed for 
        care and treatment are reimbursable in accordance with special 
        education and general education statutes. 
           (b) Indirect or consultative services provided in 
        conjunction with regular education prereferral interventions and 
        assessment provided to regular education students suspected of 
        being disabled and who have demonstrated learning or behavioral 
        problems in a screening are reimbursable with special education 
        categorical aids. 
           (c) Regular education, including screening, provided to 
        students with or without disabilities is not reimbursable with 
        special education categorical aids. 
           Subd. 10.  [STUDENTS UNABLE TO ATTEND SCHOOL BUT NOT PLACED 
        IN CARE AND TREATMENT FACILITIES.] Students who are absent from, 
        or predicted to be absent from, school for 15 consecutive or 
        intermittent days, at home or in facilities not licensed by the 
        departments of corrections or human services are not students 
        placed for care and treatment.  These students include students 
        with and without disabilities who are home due to accident or 
        illness, in a hospital or other medical facility, or in a day 
        treatment center.  These students are entitled to education 
        services through their district of residence. 
           Sec. 3.  Minnesota Statutes 2000, section 125A.76, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL DISTRICT SPECIAL EDUCATION AID.] (a) A 
        school district's special education aid for fiscal year 2000 and 
        later equals the state total special education aid, minus the 
        amount determined under paragraphs (b) and (c), times the ratio 
        of the district's adjusted special education base revenue to the 
        state total adjusted special education base revenue.  If the 
        commissioner of children, families, and learning modifies its 
        rules for special education in a manner that increases a 
        district's special education obligations or service 
        requirements, the commissioner shall annually increase each 
        district's special education aid by the amount necessary to 
        compensate for the increased service requirements.  The 
        additional aid equals the cost in the current year attributable 
        to rule changes not reflected in the computation of special 
        education base revenue, multiplied by the appropriate 
        percentages from subdivision 2. 
           (b) Notwithstanding paragraph (a), if the special education 
        base revenue for a district equals zero, the special education 
        aid equals the amount computed according to subdivision 2 using 
        current year data. 
           (c) Notwithstanding paragraphs (a) and (b), if the special 
        education base revenue for a district is greater than zero, and 
        the base year amount for the district under subdivision 2, 
        paragraph (a), clause (7), equals zero, the special education 
        aid equals the sum of the amount computed according to paragraph 
        (a), plus the amount computed according to subdivision 2, 
        paragraph (a), clause (7), using current year data. 
           (d) A charter school under section 124D.10 shall generate 
        state special education aid based on current year expenditures 
        for its first four years of operation and only in its fifth and 
        later years shall paragraphs (a), (b), and (c) apply. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 4.  Minnesota Statutes 2000, section 144.05, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [IDENTIFICATION OF DECEASED INDIVIDUALS.] Upon 
        receiving notice under section 149A.90, subdivision 1, of the 
        death of an individual who cannot be identified, the 
        commissioner must post on the department's Web site information 
        regarding the individual for purposes of obtaining information 
        that may aid in identifying the individual and for purposes of 
        notifying relatives who may be seeking the individual.  The 
        information must remain on the Web site continuously until the 
        person's identity is determined. 
           Sec. 5.  Minnesota Statutes 2001 Supplement, section 
        144.148, subdivision 2, is amended to read: 
           Subd. 2.  [PROGRAM.] (a) The commissioner of health shall 
        award rural hospital capital improvement grants to eligible 
        rural hospitals.  Except as provided in paragraph (b), a grant 
        shall not exceed $500,000 per hospital.  Prior to the receipt of 
        any grant, the hospital must certify to the commissioner that at 
        least one-quarter of the grant amount, which may include in-kind 
        services, is available for the same purposes from nonstate 
        resources.  Notwithstanding any law to the contrary, funds 
        awarded to grantees in a grant agreement do not lapse until 
        expended by the grantee.  
           (b) A grant shall not exceed $1,500,000 per eligible rural 
        hospital that also satisfies the following criteria: 
           (1) is the only hospital in a county; 
           (2) has 25 or fewer licensed hospital beds with a net 
        hospital operating margin not greater than an average of two 
        percent over the three fiscal years prior to application; 
           (3) is located in a medically underserved community (MUC) 
        or a health professional shortage area (HPSA); 
           (4) is located near a migrant worker employment site and 
        regularly treats significant numbers of migrant workers and 
        their families; and 
           (5) has not previously received a grant under this section 
        prior to July 1, 1999. 
           Sec. 6.  Minnesota Statutes 2000, section 144.335, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COSTS.] (a) When a patient requests a copy of 
        the patient's record for purposes of reviewing current medical 
        care, the provider must not charge a fee.  
           (b) When a provider or its representative makes copies of 
        patient records upon a patient's request under this section, the 
        provider or its representative may charge the patient or the 
        patient's representative no more than 75 cents per page, plus 
        $10 for time spent retrieving and copying the records, unless 
        other law or a rule or contract provide for a lower maximum 
        charge.  This limitation does not apply to x-rays.  The provider 
        may charge a patient no more than the actual cost of reproducing 
        X-rays, plus no more than $10 for the time spent retrieving and 
        copying the x-rays. 
           (c) The respective maximum charges of 75 cents per page and 
        $10 for time provided in this subdivision are in effect for 
        calendar year 1992 and may be adjusted annually each calendar 
        year as provided in this subdivision.  The permissible maximum 
        charges shall change each year by an amount that reflects the 
        change, as compared to the previous year, in the consumer price 
        index for all urban consumers, Minneapolis-St. Paul (CPI-U), 
        published by the department of labor. 
           (d) A provider or its representative must not charge a fee 
        to provide copies of records requested by a patient or the 
        patient's authorized representative if the request for copies of 
        records is for purposes of appealing a denial of social security 
        disability income or social security disability benefits under 
        title II or title XVI of the Social Security Act.  For the 
        purpose of further appeals, a patient may receive no more than 
        two medical record updates without charge, but only for medical 
        record information previously not provided.  For purposes of 
        this paragraph, a patient's authorized representative does not 
        include units of state government engaged in the adjudication of 
        social security disability claims.  
           Sec. 7.  Minnesota Statutes 2000, section 144.417, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RULES.] (a) The state commissioner of 
        health shall adopt rules necessary and reasonable to implement 
        the provisions of sections 144.411 to 144.417, except as 
        provided for in section 144.414.  
           (b) Rules implementing sections 144.411 to 144.417 adopted 
        after January 1, 2002, may not take effect until approved by a 
        law enacted after January 1, 2002.  This paragraph does not 
        apply to a rule or severable portion of a rule governing smoking 
        in office buildings, factories, warehouses, or similar places of 
        work, or in health care facilities.  This paragraph does not 
        apply to a rule changing the definition of "restaurant" to make 
        it the same as the definition in section 157.15, subdivision 12. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2000, section 147B.02, 
        subdivision 9, is amended to read: 
           Subd. 9.  [RENEWAL.] (a) To renew a license an applicant 
        must: 
           (1) annually, or as determined by the board, complete a 
        renewal application on a form provided by the board; 
           (2) submit the renewal fee; 
           (3) provide evidence annually of one hour of continuing 
        education in the subject of infection control, including blood 
        borne pathogen diseases; 
           (4) provide documentation of current and active NCCAOM 
        certification; or 
           (5) (4) if licensed under subdivision 5 or 6, meet the same 
        NCCAOM professional development activity requirements as those 
        licensed under subdivision 7. 
           (b) An applicant shall submit any additional information 
        requested by the board to clarify information presented in the 
        renewal application.  The information must be submitted within 
        30 days after the board's request, or the renewal request is 
        nullified. 
           Sec. 9.  Minnesota Statutes 2001 Supplement, section 
        149A.90, subdivision 1, is amended to read: 
           Subdivision 1.  [DEATH RECORD.] (a) Except as provided in 
        this section, a death record must be completed and filed for 
        every known death by the mortician, funeral director, or other 
        person lawfully in charge of the disposition of the body. 
           (b) If the body is that of an individual whose identity is 
        unknown, the person in charge of the disposition of the body 
        must notify the commissioner for purposes of compliance with 
        section 144.05, subdivision 4. 
           Sec. 10.  Minnesota Statutes 2000, section 261.063, is 
        amended to read: 
           261.063 [TAX LEVY FOR SOCIAL SERVICES; BOARD DUTY; 
        PENALTY.] 
           (a) The board of county commissioners of each county shall 
        annually levy taxes and fix a rate sufficient to produce the 
        full amount required for poor relief, general assistance, 
        Minnesota family investment program, county share of county and 
        state supplemental aid to supplemental security income 
        applicants or recipients, and any other social security measures 
        wherein there is now or may hereafter be county participation, 
        sufficient to produce the full amount necessary for each such 
        item, including administrative expenses, for the ensuing year, 
        within the time fixed by law in addition to all other tax levies 
        and tax rates, however fixed or determined, and any commissioner 
        who shall fail to comply herewith shall be guilty of a gross 
        misdemeanor and shall be immediately removed from office by the 
        governor.  For the purposes of this paragraph, "poor relief" 
        means county services provided under sections 261.035, 261.04, 
        and 261.21 to 261.231. 
           (b) Nothing within the provisions of this section shall be 
        construed as requiring a county agency to provide income support 
        or cash assistance to needy persons when they are no longer 
        eligible for assistance under general assistance, the Minnesota 
        family investment program, or Minnesota supplemental aid. 
           Sec. 11.  [REPEALER.] 
           Minnesota Statutes 2000, section 147B.01, subdivisions 8 
        and 15, are repealed. 
           Presented to the governor May 16, 2002 
           Signed by the governor May 18, 2002, 7:10 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes