Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 364-S.F.No. 3198
An act relating to human services; establishing a
process to close nursing facilities and reallocate the
savings to other facilities; requiring budget
neutrality; proposing coding for new law in Minnesota
Statutes, chapter 256B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. [256B.436] [CLOSURE PLANS.]
Subdivision 1. [DEFINITIONS.] (a) "Closure" means the
voluntary cessation of operations of a nursing facility and
voluntary delicensure and decertification of all nursing
facility beds of the nursing facility.
(b) "Commencement of closure" means the date on which the
commissioner of health is notified of a planned closure in
accordance with section 144A.16, as part of an approved closure
plan.
(c) "Completion of closure" means the date on which the
final resident of the nursing facility or nursing facilities
designated for closure in an approved closure plan is discharged
from the facility or facilities.
(d) "Closure plan" means a plan to close one or more
nursing facilities and reallocate the resulting savings to
provide special rate adjustments at other facilities.
(e) "Interim closure payments" means the medical assistance
payments that may be made to a nursing facility designated for
closure in an approved plan under this section.
(f) "Phased plan" means a closure plan affecting more than
one nursing facility undergoing closure that is commenced and
completed in phases.
(g) "Special rate adjustment" means an increase in a
nursing facility's operating rates under this section.
(h) "Standardized resident days" means the standardized
resident days as calculated under Minnesota Rules, part
9549.0054, subpart 2, based on the resident days in each
resident class for the most recent reporting period required to
be reported to the commissioner.
Subd. 2. [PROPOSAL FOR A CLOSURE PLAN.] (a) One or more
nursing facilities that are owned or operated by a nonprofit
corporation owning or operating more than 22 nursing facilities
licensed in the state of Minnesota may submit to the
commissioner a proposal for a closure plan under this section.
Between February 25, 2000, and June 30, 2001, the commissioner
may negotiate phased plans for closure of up to seven nursing
facilities.
(b) A facility or facilities reimbursed under section
256B.431 or 256B.434 with a closure plan approved by the
commissioner under subdivision 4 are eligible for the following
payments:
(1) facilities designated for closure are eligible for
interim closure payments under subdivision 5; and
(2) facilities that remain open are eligible for a special
rate adjustment.
(c) To be considered for approval, a proposal must include
the following:
(1) a description of the proposed closure plan, which shall
include identification of the facility or facilities to receive
a special rate adjustment, the amount and timing of special rate
adjustment proposed for each facility for the case mix level "A"
operating rate, the standardized resident days for each facility
for which a special rate adjustment is proposed, and the
effective date for each special rate adjustment. The actual
special rate adjustment for a facility shall be allocated
proportionately to the various rate per diems included in that
facility's operating rate;
(2) an analysis of the projected state medical assistance
costs of the closure plan as proposed, including the estimated
costs of the special rate adjustments and estimated resident
relocation costs, including county government costs;
(3) an analysis of the projected state medical assistance
savings of the closure plan as proposed, including any savings
projected to result from closure of one or more nursing
facilities;
(4) the proposed timetable for any proposed closure,
including the proposed dates for commencement and completion of
closure;
(5) the proposed relocation plan for current residents of
any facility designated for closure. The proposed relocation
plan must be designed to comply with all applicable state and
federal statutes and regulations, including, but not limited to,
section 144A.16; and Minnesota Rules, parts 4655.6810 to
4655.6830; parts 4658.1600 to 4658.1690; and parts 9546.0010 to
9546.0060; and
(6) documentation, in a format approved by the
commissioner, that all the nursing facilities receiving a
special 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.
Subd. 3. [PHASED CLOSURE PLANS.] A proposal for a phased
plan may include more than one closure, each of which must meet
the requirements of this section and each of which may be
implemented in phases at different times. As part of a phased
plan, a nursing facility may receive a special rate adjustment
under more than one phase of the plan, and the cost savings from
the closure of a nursing facility designated for closure under
the plan may be applied as an offset to the subsequent costs of
more than one phase of the plan. If a facility is proposed to
receive a special rate adjustment or provide cost savings under
more than one phase of a plan, the proposal must describe the
special rate adjustments or cost savings in each of the affected
phases of the plan. Review and approval of a phased plan under
subdivision 4 shall apply to all phases of the plan as proposed.
Subd. 4. [REVIEW AND APPROVAL OF PROPOSALS.] (a) The
commissioner may grant interim closure payments or special rate
adjustments for a nursing facility or facilities according to an
approved plan that satisfies the requirements of this section.
The commissioner shall not approve a proposal unless the
commissioner determines that projected state savings of the plan
equal or exceed projected state and county government costs,
including facility costs during the closure period, the
estimated costs of special rate adjustments, estimated resident
relocation costs, the cost of services to relocated residents,
and state agency administrative costs directly related to the
accomplishment of duties specified in this subdivision relative
to that proposal. To achieve cost neutrality costs may only be
offset against savings that occur within the same fiscal year.
For purposes of a phased plan, the requirement that costs must
not exceed savings applies to both the aggregate costs and
savings of the plan and to each phase of the plan. A special
rate adjustment under this section shall be effective no earlier
than the first day of the month following completion of closure
of all facilities designated for closure under the plan. For
purposes of a phased plan, the special rate adjustment for each
phase shall be effective no earlier than the first day of the
month following completion of closure of all facilities
designated for closure in that phase of the plan. No special
rate adjustment under this section shall take effect prior to
July 1, 2000.
(b) Upon receipt of a proposal for a closure plan, the
commissioner shall provide a copy of the proposal to the
commissioner of health. The commissioner of health shall
certify to the commissioner within 30 days whether the proposal,
if implemented, will satisfy the requirements of section
144A.16; and Minnesota Rules, parts 4655.6810 to 4655.6830, and
parts 4658.1600 to 4658.1690. The commissioner shall not
approve a plan under this section unless the commissioner of
health has made the certification required under this paragraph.
(c) The commissioner shall review a proposal for a closure
plan to determine whether it satisfies the requirements of this
section. A determination shall be made within 60 days of the
date the proposal is submitted. If the commissioner determines
that the proposal does not satisfy the requirements of this
section, or if the commissioner of health does not certify the
proposal under paragraph (b), the applicant shall be provided
written notice as soon as practicable, specifying the
deficiencies of the proposal. The proposal may be modified and
resubmitted for further review by each commissioner. The
commissioner of health shall review a modified proposal within
30 days from the date it is submitted, and the commissioner
shall make a final determination on whether the proposal
satisfies the requirements of this section within 60 days of the
date the modified proposal is submitted.
(d) Approval of a closure plan expires 18 months after
approval by the commissioner, unless commencement of closure has
occurred at all facilities designated for closure under the plan.
Subd. 5. [INTERIM CLOSURE PAYMENTS.] Instead of payments
under section 256B.431 or 256B.434, the commissioner may approve
a closure plan under which the commissioner shall:
(1) apply the interim and settle-up rate provisions under
Minnesota Rules, part 9549.0057, to include facilities covered
by this section, effective from commencement of closure to
completion of closure;
(2) extend the length of the interim period but not to
exceed 12 months;
(3) limit the amount of reimbursable expenses related to
the acquisition of new capital assets;
(4) prohibit the acquisition of additional capital debt or
refinancing of existing capital debt unless prior approval is
obtained from the commissioner;
(5) establish as the aggregate administrative operating
cost limitation for the interim period the actual aggregate
administrative operating costs for the period immediately prior
to commencement of closure that is of the same duration as the
interim period;
(6) require the retention of financial and statistical
records until the commissioner has audited the interim period
and the settle-up rate;
(7) make aggregate payments under this subdivision for the
interim period up to the level of the aggregate payments for the
period immediately prior to commencement of closure that is of
the same duration as the interim period; or
(8) change any other provision to which all parties to the
plan agree.
Subd. 6. [COST SAVINGS OF CLOSURE.] For purposes of this
section, the calculation of medical assistance cost savings from
the closure of a nursing facility designated for closure under a
closure plan shall be according to the following criteria:
(a) The projected medical assistance savings of the closure
of a facility shall be the aggregate medical assistance payments
to the facility for the most recently completed state fiscal
year prior to submission of the proposal, as reflected in the
number of resident days of care for each resident class provided
by the facility in that fiscal year, multiplied by the payment
rate for each resident class.
(b) If one or more facilities designated for closure in an
approved closure plan are not able to be closed for any reason,
or projection of savings for that closure are otherwise
prohibited under this section, the projected medical assistance
savings from that closure may not be offset against the medical
assistance costs of special rate adjustments under the plan. In
that event, the applicant must notify the commissioner in
writing and the applicant must either amend its proposal by
reducing the special rate adjustment to reduce the medical
assistance cost of the plan by at least the amount of the
medical assistance savings that were projected from the closure
of that facility, or withdraw the plan.
(c) No medical assistance savings shall be projected from
closure of a nursing facility that is designated for closure
under a closure plan, if the facility is subject to adverse
licensure action under section 144A.ll at the time the proposal
is submitted or at the commencement of closure.
(d) Medical assistance savings under paragraph (a) shall be
recognized for purposes of this section beginning the first day
of the month following the month of completion of closure for
all facilities designated for closure under the plan, or all
facilities designated for closure under that phase for a phased
plan.
Subd. 7. [OTHER RATE ADJUSTMENTS.] Except as otherwise
provided in subdivision 5, facilities subject to this section
remain eligible for any applicable rate adjustments provided
under section 256B.431, 256B.434, or any other section.
Subd. 8. [COUNTY COSTS.] A portion of the savings
estimated under subdivision 4, not to exceed $75,000 per closing
facility, may be transferred from the medical assistance account
to the commissioner to be used for relocation costs incurred by
counties.
Sec. 2. [MORATORIUM EXCEPTION PROCESS.]
For fiscal year beginning July 1, 2000, when approving
nursing home moratorium exception projects under Minnesota
Statutes, section 144A.073, the commissioner of health shall
give priority to proposals to build replacement facilities in
the city of Anoka or within ten miles of the city of Anoka.
Sec. 3. [REPORT.]
(a) By January 15, 2001, the commissioner of health and the
commissioner of human services shall each report to the senate
health and family security committee, and the house health and
human services committee, any recommendations for revision and
general application of the closure process established in
section 1, including a recommendation on the advisability of
providing an appropriation to assist counties with relocation
costs and to facilitate closure projects or downsizing projects
that are not budget neutral.
(b) The report required in paragraph (a) must also contain
recommendations to make state financial and technical assistance
available to all nursing facilities statewide that are
considering closure or downsizing due to financial or staffing
problems, or the age and structural inadequacy of the facility
and physical plant. The recommendations must address issues
related to alternative facility use, including, but not limited
to, conversion of all or part of the facility to provide
assisted living, housing with services, and board and lodging.
Sec. 4. [RELOCATION STUDY.]
(a) The commissioner of health, in consultation with
representatives of county government, nursing facility
operators, employees, residents, and advocates, shall study and
report to the legislature by January 15, 2001, on:
(1) Minnesota Statutes, section 144A.16, and on Minnesota
Rules, parts 4655.6810 to 4655.6830, and 4658.1600 to 4658.1690,
governing relocation of nursing facility and boarding care home
residents; and
(2) the impact on county government and on residents and
their families of relocations occurring under Minnesota
Statutes, section 256B.436.
(b) The report shall recommend any necessary modifications
in law or rule.
Sec. 5. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment
and applies to nursing homes that give notice of closure to the
commissioner of health on or after February 25, 2000.
Presented to the governor April 7, 2000
Signed by the governor April 11, 2000, 10:45 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes