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2001 Minnesota Session Laws

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                              CHAPTER 9-S.F.No. 4 
                  An act relating to the operation of state government; 
                  modifying provisions relating to health; health 
                  department; health care; human services; human 
                  services department; continuing care; consumer 
                  information; long-term care; mental health and civil 
                  commitment; assistance programs; nursing services 
                  agencies; workforce and recruitment; child welfare and 
                  foster care; child support licensing and licensing 
                  background studies; vital statistics; patient 
                  protection; criminal justice; driving while impaired; 
                  appropriating money for health and human services and 
                  criminal justice; amending Minnesota Statutes 2000, 
                  sections 13.46, subdivision 4; 13.461, subdivision 17; 
                  13B.06, subdivision 7; 15A.083, subdivision 4; 45.027, 
                  subdivision 6; 62A.095, subdivision 1; 62A.48, 
                  subdivision 4, by adding subdivisions; 62D.17, 
                  subdivision 1; 62J.152, subdivision 8; 62J.38; 
                  62J.451, subdivision 5; 62J.692, subdivision 7, by 
                  adding a subdivision; 62M.02, subdivision 21; 62Q.56; 
                  62Q.58; 62S.01, by adding subdivisions; 62S.26; 
                  103I.101, subdivision 6; 103I.112; 103I.208, 
                  subdivisions 1, 2; 103I.235, subdivision 1; 103I.525, 
                  subdivisions 2, 6, 8, 9; 103I.531, subdivisions 2, 6, 
                  8, 9; 103I.535, subdivisions 2, 6, 8, 9; 103I.541, 
                  subdivisions 2b, 4, 5; 103I.545; 116L.11, subdivision 
                  4; 116L.12, subdivisions 4, 5; 116L.13, subdivision 1; 
                  121A.15, by adding subdivisions; 135A.14, by adding a 
                  subdivision; 137.38, subdivision 1; 144.057; 144.0721, 
                  subdivision 1; 144.1202, subdivision 4; 144.122; 
                  144.1464; 144.148, subdivision 2; 144.1491, 
                  subdivision 1; 144.212, subdivisions 2a, 3, 5, 7, 8, 
                  9, 11; 144.214, subdivisions 1, 3, 4; 144.215, 
                  subdivisions 1, 3, 4, 6, 7; 144.217; 144.218; 144.221, 
                  subdivisions 1, 3; 144.222, subdivision 2; 144.223; 
                  144.225, subdivisions 1, 2, 2a, 3, 7, as amended; 
                  144.226, subdivisions 1, 3, 4; 144.227; 144.395, 
                  subdivision 2; 144.551, subdivision 1; 144.98, 
                  subdivision 3; 144A.071, subdivisions 1, 1a, 2, 4a; 
                  144A.073, subdivisions 2, as amended, 4; 144A.44, 
                  subdivision 1; 144A.4605, subdivision 4; 144D.03, 
                  subdivision 2; 144D.04, subdivisions 2, 3; 144D.06; 
                  145.881, subdivision 2; 145A.15, subdivision 1, by 
                  adding a subdivision; 145A.16, subdivision 1, by 
                  adding a subdivision; 148.212; 148.284; 148B.21, 
                  subdivision 6a; 148B.22, subdivision 3; 150A.10, by 
                  adding a subdivision; 157.16, subdivision 3; 157.22, 
                  as amended; 169A.07; 169A.20, subdivision 3; 169A.25; 
                  169A.26; 169A.27; 169A.275; 169A.283, subdivision 1; 
                  169A.40, subdivision 3; 169A.63, subdivision 1; 
                  171.29, subdivision 2; 214.104; 241.272, subdivision 
                  6; 241.32, by adding a subdivision; 241.45; 242.192; 
                  243.51, subdivisions 1, 3; 245.462, subdivisions 8, 
                  18, by adding subdivisions; 245.474, by adding a 
                  subdivision; 245.4871, subdivisions 10, 27, by adding 
                  a subdivision; 245.4875, subdivision 2; 245.4876, 
                  subdivision 1, by adding a subdivision; 245.488, by 
                  adding a subdivision; 245.4885, subdivision 1; 
                  245.4886, subdivision 1; 245.814, subdivision 1; 
                  245.99, subdivision 4; 245A.02, subdivisions 1, 9, by 
                  adding a subdivision; 245A.03, subdivisions 2, 2b, by 
                  adding a subdivision; 245A.035, subdivision 1; 
                  245A.04, subdivisions 3, 3a, 3b, 3c, 3d, 6, 11, by 
                  adding a subdivision; 245A.05; 245A.06; 245A.07; 
                  245A.08; 245A.13, subdivisions 7, 8; 245A.16, 
                  subdivision 1; 245B.08, subdivision 3; 252.275, 
                  subdivision 4b; 252A.02, subdivisions 12, 13, by 
                  adding a subdivision; 252A.111, subdivision 6; 
                  252A.16, subdivision 1; 252A.19, subdivision 2; 
                  252A.20, subdivision 1; 253B.02, subdivisions 10, 13; 
                  253B.03, subdivisions 5, 10, by adding a subdivision; 
                  253B.04, subdivisions 1, 1a, by adding a subdivision; 
                  253B.045, subdivision 6; 253B.05, subdivision 1; 
                  253B.065, subdivision 5; 253B.066, subdivision 1; 
                  253B.07, subdivisions 1, 2, 7; 253B.09, subdivision 1; 
                  253B.10, subdivision 4; 254B.02, subdivision 3; 
                  254B.03, subdivision 1; 254B.04, subdivision 1; 
                  254B.09, by adding a subdivision; 256.01, subdivisions 
                  2, as amended, 18, by adding a subdivision; 256.045, 
                  subdivisions 3, 3b, 4; 256.476, subdivisions 1, 2, 3, 
                  4, 5, 8, by adding a subdivision; 256.741, 
                  subdivisions 1, 5, 8; 256.955, subdivisions 2a, 2b; 
                  256.9657, subdivision 2; 256.969, subdivision 3a, by 
                  adding a subdivision; 256.975, by adding subdivisions; 
                  256.979, subdivisions 5, 6; 256.98, subdivision 8; 
                  256B.04, by adding a subdivision; 256B.055, 
                  subdivision 3a; 256B.056, subdivisions 1a, 3, 4, 4b, 
                  5, by adding subdivisions; 256B.057, subdivisions 2, 
                  3, 7, 9, by adding a subdivision; 256B.0625, 
                  subdivisions 3b, 7, 13, 13a, 17, 17a, 18a, 19a, 19c, 
                  20, 30, 34, by adding subdivisions; 256B.0627, 
                  subdivisions 1, 2, 4, 5, 7, 8, 10, 11, by adding 
                  subdivisions; 256B.0635, subdivisions 1, 2; 256B.0644; 
                  256B.0911, subdivisions 1, 3, 5, 6, 7, by adding 
                  subdivisions; 256B.0913, subdivisions 1, 2, 4, 5, 6, 
                  7, 8, 9, 10, 11, 12, 13, 14; 256B.0915, subdivisions 
                  1d, 3, 5; 256B.0916, subdivisions 7, 9, by adding a 
                  subdivision; 256B.0917, subdivision 7, by adding a 
                  subdivision; 256B.092, subdivision 5; 256B.093, 
                  subdivision 3; 256B.095; 256B.0951, subdivisions 1, 3, 
                  4, 5, 7, by adding subdivisions; 256B.0952, 
                  subdivisions 1, 4; 256B.19, subdivision 1c; 256B.431, 
                  subdivisions 2e, 17, by adding subdivisions; 256B.433, 
                  subdivision 3a; 256B.434, subdivision 4, by adding 
                  subdivisions; 256B.49, by adding subdivisions; 
                  256B.5012, by adding a subdivision; 256B.69, 
                  subdivisions 4, 5c, 23, by adding a subdivision; 
                  256B.75; 256B.76; 256D.03, subdivision 3; 256D.053, 
                  subdivision 1; 256D.35, by adding subdivisions; 
                  256D.425, subdivision 1; 256D.44, subdivision 5; 
                  256I.05, subdivisions 1d, 1e, by adding a subdivision; 
                  256J.08, subdivision 55a, by adding a subdivision; 
                  256J.09, subdivisions 1, 2, 3, by adding subdivisions; 
                  256J.21, subdivision 2; 256J.24, subdivisions 2, 9, 
                  10; 256J.26, subdivision 1; 256J.31, subdivisions 4, 
                  12; 256J.32, subdivisions 4, 7a; 256J.37, subdivision 
                  9; 256J.39, subdivision 2; 256J.42, subdivisions 1, 3, 
                  4, by adding a subdivision; 256J.45, subdivisions 1, 
                  2; 256J.46, subdivisions 1, 2a; 256J.48, by adding a 
                  subdivision; 256J.49, subdivisions 2, 13, by adding a 
                  subdivision; 256J.50, subdivisions 1, 7, 10, by adding 
                  a subdivision; 256J.515; 256J.52, subdivisions 2, 6; 
                  256J.53, subdivision 1; 256J.56; 256J.57, subdivision 
                  2; 256J.62, subdivisions 2a, 9; 256J.625, subdivisions 
                  1, 2, 4; 256J.645; 256J.751; 256K.03, subdivision 1; 
                  256K.07; 256K.25, subdivisions 1, 3, 4, 5, 6; 256L.03, 
                  by adding a subdivision; 256L.05, subdivision 2; 
                  256L.06, subdivision 3; 256L.07, subdivision 2; 
                  256L.12, by adding a subdivision; 256L.15, subdivision 
                  1; 256L.16; 256L.17, subdivision 2; 257.0725; 
                  260C.201, subdivision 1, as amended; 260C.301, 
                  subdivision 3, as amended; 260C.317, subdivision 4; 
                  261.062; 268.0122, subdivision 2; 326.38; 357.021, 
                  subdivisions 6, 7; 393.07, by adding a subdivision; 
                  518.5513, subdivision 5; 518.575, subdivision 1; 
                  518.5851, by adding a subdivision; 518.5853, by adding 
                  a subdivision; 518.6111, subdivision 5; 518.6195; 
                  518.64, subdivision 2, as amended; 518.641, 
                  subdivisions 1, 2, 3, by adding a subdivision; 
                  548.091, subdivision 1a; 611.23; 626.556, subdivisions 
                  10, as amended, 10b, 10d, as amended, 10e, 10f, 10i, 
                  as amended, 11, 12; 626.557, subdivisions 3, 9d, 12b; 
                  626.5572, subdivision 17; 626.559, subdivision 2; Laws 
                  1995, chapter 178, article 2, section 36; Laws 1995, 
                  chapter 207, article 3, section 21, as amended; Laws 
                  1997, chapter 203, article 9, section 21, as amended; 
                  Laws 1999, chapter 152, section 1; Laws 1999, chapter 
                  152, section 4; Laws 1999, chapter 245, article 3, 
                  section 45, as amended; Laws 1999, chapter 245, 
                  article 4, section 110; Laws 1999, chapter 245, 
                  article 10, section 10, as amended; Laws 2000, chapter 
                  364, section 2; Laws 2001, chapter 154, section 1, 
                  subdivision 1; Laws 2001, chapter 161, section 45; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 62D; 62Q; 62S; 116L; 144; 144A; 145; 145A; 
                  169A; 214; 244; 245A; 246; 256; 256B; 256I; 256J; 
                  299A; 325F; repealing Minnesota Statutes 2000, 
                  sections 116L.12, subdivisions 2, 7; 121A.15, 
                  subdivision 6; 144.148, subdivision 8; 144.1761; 
                  144.217, subdivision 4; 144.219; 144A.16; 145.9245; 
                  145.927; 252A.111, subdivision 3; 256.476, subdivision 
                  7; 256B.0635, subdivision 3; 256B.0911, subdivisions 
                  2, 2a, 4, 9; 256B.0912; 256B.0913, subdivisions 3, 
                  15a, 15b, 15c, 16; 256B.0915, subdivisions 3a, 3b, 3c; 
                  256B.0951, subdivision 6; 256B.19, subdivision 1b; 
                  256B.434, subdivision 5; 256B.49, subdivisions 1, 2, 
                  3, 4, 5, 6, 7, 8, 9, 10; 256D.066; 256J.08, 
                  subdivision 50a; 256J.12, subdivision 3; 256J.43; 
                  256J.44; 256J.46, subdivision 1a; 256J.49, subdivision 
                  11; 256J.53, subdivision 4; 256L.02, subdivision 4; 
                  518.641, subdivisions 4, 5; Laws 1995, chapter 178, 
                  article 2, section 48, subdivision 6; Minnesota Rules, 
                  parts 4655.6810; 4655.6820; 4655.6830; 4658.1600; 
                  4658.1605; 4658.1610; 4658.1690; 9505.2390; 9505.2395; 
                  9505.2396; 9505.2400; 9505.2405; 9505.2410; 9505.2413; 
                  9505.2415; 9505.2420; 9505.2425; 9505.2426; 9505.2430; 
                  9505.2435; 9505.2440; 9505.2445; 9505.2450; 9505.2455; 
                  9505.2458; 9505.2460; 9505.2465; 9505.2470; 9505.2473; 
                  9505.2475; 9505.2480; 9505.2485; 9505.2486; 9505.2490; 
                  9505.2495; 9505.2496; 9505.2500; 9505.3010; 9505.3015; 
                  9505.3020; 9505.3025; 9505.3030; 9505.3035; 9505.3040; 
                  9505.3065; 9505.3085; 9505.3135; 9505.3500; 9505.3510; 
                  9505.3520; 9505.3530; 9505.3535; 9505.3540; 9505.3545; 
                  9505.3550; 9505.3560; 9505.3570; 9505.3575; 9505.3580; 
                  9505.3585; 9505.3600; 9505.3610; 9505.3620; 9505.3622; 
                  9505.3624; 9505.3626; 9505.3630; 9505.3635; 9505.3640; 
                  9505.3645; 9505.3650; 9505.3660; 9505.3670; 9543.3000; 
                  9543.3010; 9543.3020; 9543.3030; 9543.3040; 9543.3050; 
                  9543.3060; 9543.3080; 9543.3090; 9546.0010; 9546.0020; 
                  9546.0030; 9546.0040; 9546.0050; 9546.0060. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                              DEPARTMENT OF HEALTH 
           Section 1.  Minnesota Statutes 2000, section 62J.152, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPEALER.] This section and sections 62J.15 and 
        62J.156 are repealed effective July 1, 2001 2005. 
           Sec. 2.  Minnesota Statutes 2000, section 62J.451, 
        subdivision 5, is amended to read: 
           Subd. 5.  [HEALTH CARE ELECTRONIC DATA INTERCHANGE 
        SYSTEM.] (a) The health data institute shall establish an 
        electronic data interchange system that electronically 
        transmits, collects, archives, and provides users of data with 
        the data necessary for their specific interests, in order to 
        promote a high quality, cost-effective, consumer-responsive 
        health care system.  This public-private information system 
        shall be developed to make health care claims processing and 
        financial settlement transactions more efficient and to provide 
        an efficient, unobtrusive method for meeting the shared 
        electronic data interchange needs of consumers, group 
        purchasers, providers, and the state. 
           (b) The health data institute shall operate the Minnesota 
        center for health care electronic data interchange established 
        in section 62J.57, and shall integrate the goals, objectives, 
        and activities of the center with those of the health data 
        institute's electronic data interchange system. 
           Sec. 3.  Minnesota Statutes 2000, section 103I.101, 
        subdivision 6, is amended to read: 
           Subd. 6.  [FEES FOR VARIANCES.] The commissioner shall 
        charge a nonrefundable application fee of $120 $150 to cover the 
        administrative cost of processing a request for a variance or 
        modification of rules adopted by the commissioner under this 
        chapter. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 4.  Minnesota Statutes 2000, section 103I.112, is 
        amended to read: 
           103I.112 [FEE EXEMPTIONS FOR STATE AND LOCAL GOVERNMENT.] 
           (a) The commissioner of health may not charge fees required 
        under this chapter to a federal agency, state agency, or a local 
        unit of government or to a subcontractor performing work for the 
        state agency or local unit of government.  
           (b) "Local unit of government" means a statutory or home 
        rule charter city, town, county, or soil and water conservation 
        district, watershed district, an organization formed for the 
        joint exercise of powers under section 471.59, a board of health 
        or community health board, or other special purpose district or 
        authority with local jurisdiction in water and related land 
        resources management. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 5.  Minnesota Statutes 2000, section 103I.208, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WELL NOTIFICATION FEE.] The well 
        notification fee to be paid by a property owner is:  
           (1) for a new well, $120 $150, which includes the state 
        core function fee; 
           (2) for a well sealing, $20 $30 for each well, which 
        includes the state core function fee, except that for monitoring 
        wells constructed on a single property, having depths within a 
        25 foot range, and sealed within 48 hours of start of 
        construction, a single fee of $20 $30; and 
           (3) for construction of a dewatering well, $120 $150, which 
        includes the state core function fee, for each well except a 
        dewatering project comprising five or more wells shall be 
        assessed a single fee of $600 $750 for the wells recorded on the 
        notification. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 6.  Minnesota Statutes 2000, section 103I.208, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PERMIT FEE.] The permit fee to be paid by a 
        property owner is:  
           (1) for a well that is not in use under a maintenance 
        permit, $100 $125 annually; 
           (2) for construction of a monitoring well, $120 $150, which 
        includes the state core function fee; 
           (3) for a monitoring well that is unsealed under a 
        maintenance permit, $100 $125 annually; 
           (4) for monitoring wells used as a leak detection device at 
        a single motor fuel retail outlet, a single petroleum bulk 
        storage site excluding tank farms, or a single agricultural 
        chemical facility site, the construction permit fee 
        is $120 $150, which includes the state core function fee, per 
        site regardless of the number of wells constructed on the site, 
        and the annual fee for a maintenance permit for unsealed 
        monitoring wells is $100 $125 per site regardless of the number 
        of monitoring wells located on site; 
           (5) for a groundwater thermal exchange device, in addition 
        to the notification fee for wells, $120 $150, which includes the 
        state core function fee; 
           (6) for a vertical heat exchanger, $120 $150; 
           (7) for a dewatering well that is unsealed under a 
        maintenance permit, $100 $125 annually for each well, except a 
        dewatering project comprising more than five wells shall be 
        issued a single permit for $500 $625 annually for wells recorded 
        on the permit; and 
           (8) for excavating holes for the purpose of installing 
        elevator shafts, $120 $150 for each hole. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 7.  Minnesota Statutes 2000, section 103I.235, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISCLOSURE OF WELLS TO BUYER.] (a) Before 
        signing an agreement to sell or transfer real property, the 
        seller must disclose in writing to the buyer information about 
        the status and location of all known wells on the property, by 
        delivering to the buyer either a statement by the seller that 
        the seller does not know of any wells on the property, or a 
        disclosure statement indicating the legal description and 
        county, and a map drawn from available information showing the 
        location of each well to the extent practicable.  In the 
        disclosure statement, the seller must indicate, for each well, 
        whether the well is in use, not in use, or sealed.  
           (b) At the time of closing of the sale, the disclosure 
        statement information, name and mailing address of the buyer, 
        and the quartile, section, township, and range in which each 
        well is located must be provided on a well disclosure 
        certificate signed by the seller or a person authorized to act 
        on behalf of the seller. 
           (c) A well disclosure certificate need not be provided if 
        the seller does not know of any wells on the property and the 
        deed or other instrument of conveyance contains the statement:  
        "The Seller certifies that the Seller does not know of any wells 
        on the described real property."  
           (d) If a deed is given pursuant to a contract for deed, the 
        well disclosure certificate required by this subdivision shall 
        be signed by the buyer or a person authorized to act on behalf 
        of the buyer.  If the buyer knows of no wells on the property, a 
        well disclosure certificate is not required if the following 
        statement appears on the deed followed by the signature of the 
        grantee or, if there is more than one grantee, the signature of 
        at least one of the grantees:  "The Grantee certifies that the 
        Grantee does not know of any wells on the described real 
        property."  The statement and signature of the grantee may be on 
        the front or back of the deed or on an attached sheet and an 
        acknowledgment of the statement by the grantee is not required 
        for the deed to be recordable. 
           (e) This subdivision does not apply to the sale, exchange, 
        or transfer of real property:  
           (1) that consists solely of a sale or transfer of severed 
        mineral interests; or 
           (2) that consists of an individual condominium unit as 
        described in chapters 515 and 515B. 
           (f) For an area owned in common under chapter 515 or 515B 
        the association or other responsible person must report to the 
        commissioner by July 1, 1992, the location and status of all 
        wells in the common area.  The association or other responsible 
        person must notify the commissioner within 30 days of any change 
        in the reported status of wells. 
           (g) For real property sold by the state under section 
        92.67, the lessee at the time of the sale is responsible for 
        compliance with this subdivision. 
           (h) If the seller fails to provide a required well 
        disclosure certificate, the buyer, or a person authorized to act 
        on behalf of the buyer, may sign a well disclosure certificate 
        based on the information provided on the disclosure statement 
        required by this section or based on other available information.
           (i) A county recorder or registrar of titles may not record 
        a deed or other instrument of conveyance dated after October 31, 
        1990, for which a certificate of value is required under section 
        272.115, or any deed or other instrument of conveyance dated 
        after October 31, 1990, from a governmental body exempt from the 
        payment of state deed tax, unless the deed or other instrument 
        of conveyance contains the statement made in accordance with 
        paragraph (c) or (d) or is accompanied by the well disclosure 
        certificate containing all the information required by paragraph 
        (b) or (d).  The county recorder or registrar of titles must not 
        accept a certificate unless it contains all the required 
        information.  The county recorder or registrar of titles shall 
        note on each deed or other instrument of conveyance accompanied 
        by a well disclosure certificate that the well disclosure 
        certificate was received.  The notation must include the 
        statement "No wells on property" if the disclosure certificate 
        states there are no wells on the property.  The well disclosure 
        certificate shall not be filed or recorded in the records 
        maintained by the county recorder or registrar of titles.  After 
        noting "No wells on property" on the deed or other instrument of 
        conveyance, the county recorder or registrar of titles shall 
        destroy or return to the buyer the well disclosure certificate.  
        The county recorder or registrar of titles shall collect from 
        the buyer or the person seeking to record a deed or other 
        instrument of conveyance, a fee of $20 $30 for receipt of a 
        completed well disclosure certificate.  By the tenth day of each 
        month, the county recorder or registrar of titles shall transmit 
        the well disclosure certificates to the commissioner of health.  
        By the tenth day after the end of each calendar quarter, the 
        county recorder or registrar of titles shall transmit to the 
        commissioner of health $17.50 $27.50 of the fee for each well 
        disclosure certificate received during the quarter.  The 
        commissioner shall maintain the well disclosure certificate for 
        at least six years.  The commissioner may store the certificate 
        as an electronic image.  A copy of that image shall be as valid 
        as the original. 
           (j) No new well disclosure certificate is required under 
        this subdivision if the buyer or seller, or a person authorized 
        to act on behalf of the buyer or seller, certifies on the deed 
        or other instrument of conveyance that the status and number of 
        wells on the property have not changed since the last previously 
        filed well disclosure certificate.  The following statement, if 
        followed by the signature of the person making the statement, is 
        sufficient to comply with the certification requirement of this 
        paragraph:  "I am familiar with the property described in this 
        instrument and I certify that the status and number of wells on 
        the described real property have not changed since the last 
        previously filed well disclosure certificate."  The 
        certification and signature may be on the front or back of the 
        deed or on an attached sheet and an acknowledgment of the 
        statement is not required for the deed or other instrument of 
        conveyance to be recordable. 
           (k) The commissioner in consultation with county recorders 
        shall prescribe the form for a well disclosure certificate and 
        provide well disclosure certificate forms to county recorders 
        and registrars of titles and other interested persons. 
           (l) Failure to comply with a requirement of this 
        subdivision does not impair: 
           (1) the validity of a deed or other instrument of 
        conveyance as between the parties to the deed or instrument or 
        as to any other person who otherwise would be bound by the deed 
        or instrument; or 
           (2) the record, as notice, of any deed or other instrument 
        of conveyance accepted for filing or recording contrary to the 
        provisions of this subdivision. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 8.  Minnesota Statutes 2000, section 103I.525, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION FEE.] The application fee for a well 
        contractor's license is $50 $75.  The commissioner may not act 
        on an application until the application fee is paid.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 9.  Minnesota Statutes 2000, section 103I.525, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LICENSE FEE.] The fee for a well contractor's 
        license is $250, except the fee for an individual well 
        contractor's license is $50 $75. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 10.  Minnesota Statutes 2000, section 103I.525, 
        subdivision 8, is amended to read: 
           Subd. 8.  [RENEWAL.] (a) A licensee must file an 
        application and a renewal application fee to renew the license 
        by the date stated in the license.  
           (b) The renewal application fee shall be set by the 
        commissioner under section 16A.1285 for a well contractor's 
        license is $250.  
           (c) The renewal application must include information that 
        the applicant has met continuing education requirements 
        established by the commissioner by rule.  
           (d) At the time of the renewal, the commissioner must have 
        on file all properly completed well reports, well sealing 
        reports, reports of excavations to construct elevator shafts, 
        well permits, and well notifications for work conducted by the 
        licensee since the last license renewal. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 11.  Minnesota Statutes 2000, section 103I.525, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INCOMPLETE OR LATE RENEWAL.] If a licensee fails 
        to submit all information required for renewal in subdivision 8 
        or submits the application and information after the required 
        renewal date: 
           (1) the licensee must include an additional a late fee set 
        by the commissioner of $75; and 
           (2) the licensee may not conduct activities authorized by 
        the well contractor's license until the renewal application, 
        renewal application fee, late fee, and all other information 
        required in subdivision 8 are submitted. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 12.  Minnesota Statutes 2000, section 103I.531, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION FEE.] The application fee for a 
        limited well/boring contractor's license is $50 $75.  The 
        commissioner may not act on an application until the application 
        fee is paid.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 13.  Minnesota Statutes 2000, section 103I.531, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LICENSE FEE.] The fee for a limited well/boring 
        contractor's license is $50 $75.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 14.  Minnesota Statutes 2000, section 103I.531, 
        subdivision 8, is amended to read: 
           Subd. 8.  [RENEWAL.] (a) A person must file an application 
        and a renewal application fee to renew the limited well/boring 
        contractor's license by the date stated in the license.  
           (b) The renewal application fee shall be set by the 
        commissioner under section 16A.1285 for a limited well/boring 
        contractor's license is $75.  
           (c) The renewal application must include information that 
        the applicant has met continuing education requirements 
        established by the commissioner by rule.  
           (d) At the time of the renewal, the commissioner must have 
        on file all properly completed well sealing reports, well 
        permits, vertical heat exchanger permits, and well notifications 
        for work conducted by the licensee since the last license 
        renewal. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 15.  Minnesota Statutes 2000, section 103I.531, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INCOMPLETE OR LATE RENEWAL.] If a licensee fails 
        to submit all information required for renewal in subdivision 8 
        or submits the application and information after the required 
        renewal date: 
           (1) the licensee must include an additional a late fee set 
        by the commissioner of $75; and 
           (2) the licensee may not conduct activities authorized by 
        the limited well/boring contractor's license until the renewal 
        application, renewal application fee, and late fee, and all 
        other information required in subdivision 8 are submitted. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 16.  Minnesota Statutes 2000, section 103I.535, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION FEE.] The application fee for an 
        elevator shaft contractor's license is $50 $75.  The 
        commissioner may not act on an application until the application 
        fee is paid. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 17.  Minnesota Statutes 2000, section 103I.535, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LICENSE FEE.] The fee for an elevator shaft 
        contractor's license is $50 $75.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 18.  Minnesota Statutes 2000, section 103I.535, 
        subdivision 8, is amended to read: 
           Subd. 8.  [RENEWAL.] (a) A person must file an application 
        and a renewal application fee to renew the license by the date 
        stated in the license.  
           (b) The renewal application fee shall be set by the 
        commissioner under section 16A.1285 for an elevator shaft 
        contractor's license is $75.  
           (c) The renewal application must include information that 
        the applicant has met continuing education requirements 
        established by the commissioner by rule.  
           (d) At the time of renewal, the commissioner must have on 
        file all reports and permits for elevator shaft work conducted 
        by the licensee since the last license renewal. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 19.  Minnesota Statutes 2000, section 103I.535, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INCOMPLETE OR LATE RENEWAL.] If a licensee fails 
        to submit all information required for renewal in subdivision 8 
        or submits the application and information after the required 
        renewal date: 
           (1) the licensee must include an additional a late fee set 
        by the commissioner of $75; and 
           (2) the licensee may not conduct activities authorized by 
        the elevator shaft contractor's license until the renewal 
        application, renewal application fee, and late fee, and all 
        other information required in subdivision 8 are submitted. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 20.  Minnesota Statutes 2000, section 103I.541, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [APPLICATION FEE.] The application fee for a 
        monitoring well contractor registration is $50 $75.  The 
        commissioner may not act on an application until the application 
        fee is paid.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 21.  Minnesota Statutes 2000, section 103I.541, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RENEWAL.] (a) A person must file an application 
        and a renewal application fee to renew the registration by the 
        date stated in the registration.  
           (b) The renewal application fee shall be set by the 
        commissioner under section 16A.1285 for a monitoring well 
        contractor's registration is $75.  
           (c) The renewal application must include information that 
        the applicant has met continuing education requirements 
        established by the commissioner by rule.  
           (d) At the time of the renewal, the commissioner must have 
        on file all well reports, well sealing reports, well permits, 
        and notifications for work conducted by the registered person 
        since the last registration renewal. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 22.  Minnesota Statutes 2000, section 103I.541, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INCOMPLETE OR LATE RENEWAL.] If a registered 
        person submits a renewal application after the required renewal 
        date: 
           (1) the registered person must include an additional a late 
        fee set by the commissioner of $75; and 
           (2) the registered person may not conduct activities 
        authorized by the monitoring well contractor's registration 
        until the renewal application, renewal application fee, late 
        fee, and all other information required in subdivision 4 are 
        submitted. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 23.  Minnesota Statutes 2000, section 103I.545, is 
        amended to read: 
           103I.545 [REGISTRATION OF DRILLING MACHINES REQUIRED.] 
           Subdivision 1.  [DRILLING MACHINE.] (a) A person may not 
        use a drilling machine such as a cable tool, rotary tool, hollow 
        rod tool, or auger for a drilling activity requiring a license 
        or registration under this chapter unless the drilling machine 
        is registered with the commissioner.  
           (b) A person must apply for the registration on forms 
        prescribed by the commissioner and submit a $50 $75 registration 
        fee. 
           (c) A registration is valid for one year.  
           Subd. 2.  [PUMP HOIST.] (a) A person may not use a machine 
        such as a pump hoist for an activity requiring a license or 
        registration under this chapter to repair wells or borings, seal 
        wells or borings, or install pumps unless the machine is 
        registered with the commissioner.  
           (b) A person must apply for the registration on forms 
        prescribed by the commissioner and submit a $50 $75 registration 
        fee. 
           (c) A registration is valid for one year. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 24.  Minnesota Statutes 2000, section 121A.15, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [DISCLOSURES REQUIRED.] (a) This paragraph 
        applies to any written information about immunization 
        requirements for enrollment in a school or child care facility 
        that: 
           (1) is provided to a person to be immunized or enrolling or 
        enrolled in a school or child care facility, or to the person's 
        parent or guardian if the person is under 18 years of age and 
        not emancipated; and 
           (2) is provided by the department of health; the department 
        of children, families, and learning; the department of human 
        services; an immunization provider; or a school or child care 
        facility.  
        Such written information must describe the exemptions from 
        immunizations permitted under subdivision 3, paragraphs (c) and 
        (d).  The information on exemptions from immunizations provided 
        according to this paragraph must be in a font size at least 
        equal to the font size of the immunization requirements, in the 
        same font style as the immunization requirements, and on the 
        same page of the written document as the immunization 
        requirements. 
           (b) Before immunizing a person, an immunization provider 
        must provide the person, or the person's parent or guardian if 
        the person is under 18 years of age and not emancipated, with 
        the following information in writing:  
           (1) a list of the immunizations required for enrollment in 
        a school or child care facility; 
           (2) a description of the exemptions from immunizations 
        permitted under subdivision 3, paragraphs (c) and (d); 
           (3) a list of additional immunizations currently 
        recommended by the commissioner; and 
           (4) in accordance with federal law, a copy of the vaccine 
        information sheet from the federal Department of Health and 
        Human Services that lists possible adverse reactions to the 
        immunization to be provided.  
           Sec. 25.  Minnesota Statutes 2000, section 121A.15, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [MODIFICATIONS TO SCHEDULE.] (a) The 
        commissioner of health may adopt modifications to the 
        immunization requirements of this section.  A proposed 
        modification made under this subdivision must be part of the 
        current immunization recommendations of each of the following 
        organizations:  the United States Public Health Service's 
        Advisory Committee on Immunization Practices, the American 
        Academy of Family Physicians, and the American Academy of 
        Pediatrics.  In proposing a modification to the immunization 
        schedule, the commissioner must: 
           (1) consult with the commissioner of children, families, 
        and learning; the commissioner of human services; the chancellor 
        of the Minnesota state colleges and universities; and the 
        president of the University of Minnesota; and 
           (2) consider the following criteria:  the epidemiology of 
        the disease, the morbidity and mortality rates for the disease, 
        the safety and efficacy of the vaccine, the cost of a 
        vaccination program, the cost of enforcing vaccination 
        requirements, and a cost-benefit analysis of the vaccination. 
           (b) Before a proposed modification may be adopted, the 
        commissioner must notify the chairs of the house and senate 
        committees with jurisdiction over health policy issues.  If the 
        chairs of the relevant standing committees determine a public 
        hearing regarding the proposed modifications is in order, the 
        hearing must be scheduled within 60 days of receiving notice 
        from the commissioner.  If a hearing is scheduled, the 
        commissioner may not adopt any proposed modifications until 
        after the hearing is held.  
           (c) The commissioner shall comply with the requirements of 
        chapter 14 regarding the adoption of any proposed modifications 
        to the immunization schedule.  
           (d) In addition to the publication requirements of chapter 
        14, the commissioner of health must inform all immunization 
        providers of any adopted modifications to the immunization 
        schedule in a timely manner.  
           Sec. 26.  Minnesota Statutes 2000, section 135A.14, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [MODIFICATIONS TO SCHEDULE.] (a) The commissioner 
        of health may adopt modifications to the immunization 
        requirements of this section.  A proposed modification made 
        under this subdivision must be part of the current immunization 
        recommendations of each of the following organizations:  the 
        United States Public Health Service's Advisory Committee on 
        Immunization Practices, the American Academy of Family 
        Physicians, and the American Academy of Pediatrics.  In 
        proposing a modification to the immunization schedule, the 
        commissioner must: 
           (1) consult with the commissioner of children, families, 
        and learning; the commissioner of human services; the chancellor 
        of the Minnesota state colleges and universities; and the 
        president of the University of Minnesota; and 
           (2) consider the following criteria:  the epidemiology of 
        the disease, the morbidity and mortality rates for the disease, 
        the safety and efficacy of the vaccine, the cost of a 
        vaccination program, the cost of enforcing vaccination 
        requirements, and a cost-benefit analysis of the vaccination. 
           (b) Before a proposed modification may be adopted, the 
        commissioner must notify the chairs of the house and senate 
        committees with jurisdiction over health policy issues.  If the 
        chairs of the relevant standing committees determine a public 
        hearing regarding the proposed modifications is in order, the 
        hearing must be scheduled within 60 days of receiving notice 
        from the commissioner.  If a hearing is scheduled, the 
        commissioner may not adopt any proposed modifications until 
        after the hearing is held.  
           (c) The commissioner shall comply with the requirements of 
        chapter 14 regarding the adoption of any proposed modifications 
        to the immunization schedule.  
           (d) In addition to the publication requirements of chapter 
        14, the commissioner of health must inform all immunization 
        providers of any adopted modifications to the immunization 
        schedule in a timely manner. 
           Sec. 27.  [144.0751] [HEALTH STANDARDS.] 
           (a) Safe drinking water or air quality standards 
        established or revised by the commissioner of health must: 
           (1) be based on scientifically acceptable, peer-reviewed 
        information; and 
           (2) include a reasonable margin of safety to adequately 
        protect the health of infants, children, and adults by taking 
        into consideration risks to each of the following health 
        outcomes:  reproductive development and function, respiratory 
        function, immunologic suppression or hypersensitization, 
        development of the brain and nervous system, endocrine 
        (hormonal) function, cancer, general infant and child 
        development, and any other important health outcomes identified 
        by the commissioner. 
           (b) For purposes of this section, "peer-reviewed" means a 
        scientifically based review conducted by individuals with 
        substantial knowledge and experience in toxicology, health risk 
        assessment, or other related fields as determined by the 
        commissioner. 
           Sec. 28.  Minnesota Statutes 2000, section 144.1202, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AGREEMENT; CONDITIONS OF IMPLEMENTATION.] (a) An 
        agreement entered into before August 2, 2002 2003, must remain 
        in effect until terminated under the Atomic Energy Act of 1954, 
        United States Code, title 42, section 2021, paragraph (j).  The 
        governor may not enter into an initial agreement with the 
        Nuclear Regulatory Commission after August 1, 2002 2003.  If an 
        agreement is not entered into by August 1, 2002 2003, any rules 
        adopted under this section are repealed effective August 1, 2002 
        2003. 
           (b) An agreement authorized under subdivision 1 must be 
        approved by law before it may be implemented. 
           Sec. 29.  [144.1205] [RADIOACTIVE MATERIAL; SOURCE AND 
        SPECIAL NUCLEAR MATERIAL; FEES; INSPECTION.] 
           Subdivision 1.  [APPLICATION AND LICENSE RENEWAL FEE.] When 
        a license is required for radioactive material or source or 
        special nuclear material by a rule adopted under section 
        144.1202, subdivision 2, an application fee according to 
        subdivision 4 must be paid upon initial application for a 
        license.  The licensee must renew the license 60 days before the 
        expiration date of the license by paying a license renewal fee 
        equal to the application fee under subdivision 4.  The 
        expiration date of a license is the date set by the United 
        States Nuclear Regulatory Commission before transfer of the 
        licensing program under section 144.1202 and thereafter as 
        specified by rule of the commissioner of health. 
           Subd. 2.  [ANNUAL FEE.] A licensee must pay an annual fee 
        at least 60 days before the anniversary date of the issuance of 
        the license.  The annual fee is an amount equal to 80 percent of 
        the application fee under subdivision 4, rounded to the nearest 
        whole dollar. 
           Subd. 3.  [FEE CATEGORIES; INCORPORATION OF FEDERAL 
        LICENSING CATEGORIES.] (a) Fee categories under this section are 
        equivalent to the licensing categories used by the United States 
        Nuclear Regulatory Commission under Code of Federal Regulations, 
        title 10, parts 30 to 36, 39, 40, 70, 71, and 150, except as 
        provided in paragraph (b). 
           (b) The category of "Academic, small" is the type of 
        license required for the use of radioactive materials in a 
        teaching institution.  Radioactive materials are limited to ten 
        radionuclides not to exceed a total activity amount of one curie.
           Subd. 4.  [APPLICATION FEE.] A licensee must pay an 
        application fee as follows: 
        Radioactive material,  Application    U.S. Nuclear Regulatory
        source and             fee            Commission licensing
        special material                      category as reference
        Type A broadscope      $20,000        Medical institution type A
        Type B broadscope      $15,000        Research and development
                                              type B
        Type C broadscope      $10,000        Academic type C
        Medical use            $4,000         Medical
                                              Medical institution
                                              Medical private practice
        Mobile nuclear                                                 
        medical laboratory     $4,000         Mobile medical laboratory
        Medical special use                                     
        sealed sources         $6,000         Teletherapy
                                              High dose rate remote
                                              afterloaders
                                              Stereotactic
                                              radiosurgery devices
        In vitro testing       $2,300         In vitro testing
                                              laboratories
        Measuring gauge,
        sealed sources         $2,000         Fixed gauges
                                              Portable gauges
                                              Analytical instruments
                                              Measuring systems - other
        Gas chromatographs     $1,200         Gas chromatographs
        Manufacturing and 
        distribution           $14,700        Manufacturing and 
                                              distribution - other
        Distribution only      $8,800         Distribution of
                                              radioactive material
                                              for commercial use only
        Other services         $1,500         Other services
        Nuclear medicine 
        pharmacy               $4,100         Nuclear pharmacy
        Waste disposal         $9,400         Waste disposal service
                                              prepackage
                                              Waste disposal service
                                              processing/repackage
        Waste storage only     $7,000         To receive and store
                                              radioactive material waste
        Industrial
        radiography            $8,400         Industrial radiography
                                              fixed location
                                              Industrial radiography
                                              portable/temporary sites
        Irradiator - 
        self-shielded          $4,100         Irradiators self-shielded
                                              less than 10,000 curies
        Irradiator - 
        less than 10,000 Ci    $7,500         Irradiators less than
                                              10,000 curies
        Irradiator - 
        more than 10,000 Ci    $11,500        Irradiators greater than
                                              10,000 curies
        Research and
        development,
        no distribution        $4,100         Research and development
        Radioactive material 
        possession only        $1,000         Byproduct possession only
        Source material        $1,000         Source material shielding
        Special nuclear 
        material, less than 
        200 grams              $1,000         Special nuclear material
                                              plutonium-neutron sources
                                              less than 200 grams
        Pacemaker
        manufacturing          $1,000         Pacemaker byproduct
                                              and/or special nuclear
                                              material - medical
                                              institution
        General license
        distribution           $2,100         General license
                                              distribution
        General license 
        distribution, exempt   $1,500         General license 
                                              distribution -
                                              certain exempt items
        Academic, small        $1,000         Possession limit of ten
                                              radionuclides, not to
                                              exceed a total of one curie
                                              of activity
        Veterinary             $2,000         Veterinary use
        Well logging           $5,000         Well logging
           Subd. 5.  [PENALTY FOR LATE PAYMENT.] An annual fee or a 
        license renewal fee submitted to the commissioner after the due 
        date specified by rule must be accompanied by an additional 
        amount equal to 25 percent of the fee due. 
           Subd. 6.  [INSPECTIONS.] The commissioner of health shall 
        make periodic safety inspections of the radioactive material and 
        source and special nuclear material of a licensee.  The 
        commissioner shall prescribe the frequency of safety inspections 
        by rule. 
           Subd. 7.  [RECOVERY OF REINSPECTION COST.] If the 
        commissioner finds serious violations of public health standards 
        during an inspection under subdivision 6, the licensee must pay 
        all costs associated with subsequent reinspection of the 
        source.  The costs shall be the actual costs incurred by the 
        commissioner and include, but are not limited to, labor, 
        transportation, per diem, materials, legal fees, testing, and 
        monitoring costs. 
           Subd. 8.  [RECIPROCITY FEE.] A licensee submitting an 
        application for reciprocal recognition of a materials license 
        issued by another agreement state or the United States Nuclear 
        Regulatory Commission for a period of 180 days or less during a 
        calendar year must pay one-half of the application fee specified 
        under subdivision 4.  For a period of 181 days or more, the 
        licensee must pay the entire application fee under subdivision 4.
           Subd. 9.  [FEES FOR LICENSE AMENDMENTS.] A licensee must 
        pay a fee to amend a license as follows: 
           (1) to amend a license requiring no license review 
        including, but not limited to, facility name change or removal 
        of a previously authorized user, no fee; 
           (2) to amend a license requiring review including, but not 
        limited to, addition of isotopes, procedure changes, new 
        authorized users, or a new radiation safety officer, $200; and 
           (3) to amend a license requiring review and a site visit 
        including, but not limited to, facility move or addition of 
        processes, $400. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 30.  Minnesota Statutes 2000, section 144.122, is 
        amended to read: 
           144.122 [LICENSE, PERMIT, AND SURVEY FEES.] 
           (a) The state commissioner of health, by rule, may 
        prescribe reasonable procedures and fees for filing with the 
        commissioner as prescribed by statute and for the issuance of 
        original and renewal permits, licenses, registrations, and 
        certifications issued under authority of the commissioner.  The 
        expiration dates of the various licenses, permits, 
        registrations, and certifications as prescribed by the rules 
        shall be plainly marked thereon.  Fees may include application 
        and examination fees and a penalty fee for renewal applications 
        submitted after the expiration date of the previously issued 
        permit, license, registration, and certification.  The 
        commissioner may also prescribe, by rule, reduced fees for 
        permits, licenses, registrations, and certifications when the 
        application therefor is submitted during the last three months 
        of the permit, license, registration, or certification period.  
        Fees proposed to be prescribed in the rules shall be first 
        approved by the department of finance.  All fees proposed to be 
        prescribed in rules shall be reasonable.  The fees shall be in 
        an amount so that the total fees collected by the commissioner 
        will, where practical, approximate the cost to the commissioner 
        in administering the program.  All fees collected shall be 
        deposited in the state treasury and credited to the state 
        government special revenue fund unless otherwise specifically 
        appropriated by law for specific purposes. 
           (b) The commissioner may charge a fee for voluntary 
        certification of medical laboratories and environmental 
        laboratories, and for environmental and medical laboratory 
        services provided by the department, without complying with 
        paragraph (a) or chapter 14.  Fees charged for environment and 
        medical laboratory services provided by the department must be 
        approximately equal to the costs of providing the services.  
           (c) The commissioner may develop a schedule of fees for 
        diagnostic evaluations conducted at clinics held by the services 
        for children with handicaps program.  All receipts generated by 
        the program are annually appropriated to the commissioner for 
        use in the maternal and child health program. 
           (d) The commissioner, for fiscal years 1996 and beyond, 
        shall set license fees for hospitals and nursing homes that are 
        not boarding care homes at the following levels: 
        Joint Commission on Accreditation of Healthcare 
        Organizations (JCAHO hospitals)      $1,017
                                             $7,055
        Non-JCAHO hospitals                  $762 plus $34 per bed
                                             $4,680 plus $234 per bed
        Nursing home                         $78 plus $19 per bed
                                             $183 plus $91 per bed
           For fiscal years 1996 and beyond, The commissioner shall 
        set license fees for outpatient surgical centers, boarding care 
        homes, and supervised living facilities at the following levels: 
        Outpatient surgical centers          $517
                                             $1,512
        Boarding care homes                  $78 plus $19 per bed
                                             $183 plus $91 per bed
        Supervised living facilities         $78 plus $19 per bed
                                             $183 plus $91 per bed.
           (e) Unless prohibited by federal law, the commissioner of 
        health shall charge applicants the following fees to cover the 
        cost of any initial certification surveys required to determine 
        a provider's eligibility to participate in the Medicare or 
        Medicaid program: 
        Prospective payment surveys for          $  900
        hospitals
        Swing bed surveys for nursing homes      $1,200
        Psychiatric hospitals                    $1,400
        Rural health facilities                  $1,100
        Portable X-ray providers                 $  500
        Home health agencies                     $1,800
        Outpatient therapy agencies              $  800
        End stage renal dialysis providers       $2,100
        Independent therapists                   $  800
        Comprehensive rehabilitation             $1,200
        outpatient facilities
        Hospice providers                        $1,700
        Ambulatory surgical providers            $1,800
        Hospitals                                $4,200
        Other provider categories or             Actual surveyor costs:
        additional resurveys required            average surveyor cost x
        to complete initial certification        number of hours for the
                                                 survey process.
           These fees shall be submitted at the time of the 
        application for federal certification and shall not be 
        refunded.  All fees collected after the date that the imposition 
        of fees is not prohibited by federal law shall be deposited in 
        the state treasury and credited to the state government special 
        revenue fund. 
           Sec. 31.  Minnesota Statutes 2000, section 144.1464, is 
        amended to read: 
           144.1464 [SUMMER HEALTH CARE INTERNS.] 
           Subdivision 1.  [SUMMER INTERNSHIPS.] The commissioner of 
        health, through a contract with a nonprofit organization as 
        required by subdivision 4, shall award grants to hospitals and, 
        clinics, nursing facilities, and home care providers to 
        establish a secondary and post-secondary summer health care 
        intern program.  The purpose of the program is to expose 
        interested secondary and post-secondary pupils to various 
        careers within the health care profession. 
           Subd. 2.  [CRITERIA.] (a) The commissioner, through the 
        organization under contract, shall award grants to 
        hospitals and, clinics, nursing facilities, and home care 
        providers that agree to:  
           (1) provide secondary and post-secondary summer health care 
        interns with formal exposure to the health care profession; 
           (2) provide an orientation for the secondary and 
        post-secondary summer health care interns; 
           (3) pay one-half the costs of employing the secondary and 
        post-secondary summer health care intern, based on an overall 
        hourly wage that is at least the minimum wage but does not 
        exceed $6 an hour; 
           (4) interview and hire secondary and post-secondary pupils 
        for a minimum of six weeks and a maximum of 12 weeks; and 
           (5) employ at least one secondary student for each 
        post-secondary student employed, to the extent that there are 
        sufficient qualifying secondary student applicants. 
           (b) In order to be eligible to be hired as a secondary 
        summer health intern by a hospital or, clinic, nursing facility, 
        or home care provider, a pupil must: 
           (1) intend to complete high school graduation requirements 
        and be between the junior and senior year of high school; and 
           (2) be from a school district in proximity to the facility; 
        and 
           (3) provide the facility with a letter of recommendation 
        from a health occupations or science educator. 
           (c) In order to be eligible to be hired as a post-secondary 
        summer health care intern by a hospital or clinic, a pupil must: 
           (1) intend to complete a health care training program or a 
        two-year or four-year degree program and be planning on 
        enrolling in or be enrolled in that training program or degree 
        program; and 
           (2) be enrolled in a Minnesota educational institution or 
        be a resident of the state of Minnesota; priority must be given 
        to applicants from a school district or an educational 
        institution in proximity to the facility; and 
           (3) provide the facility with a letter of recommendation 
        from a health occupations or science educator. 
           (d) Hospitals and, clinics, nursing facilities, and home 
        care providers awarded grants may employ pupils as secondary and 
        post-secondary summer health care interns beginning on or after 
        June 15, 1993, if they agree to pay the intern, during the 
        period before disbursement of state grant money, with money 
        designated as the facility's 50 percent contribution towards 
        internship costs.  
           Subd. 3.  [GRANTS.] The commissioner, through the 
        organization under contract, shall award separate grants to 
        hospitals and, clinics, nursing facilities, and home care 
        providers meeting the requirements of subdivision 2.  The grants 
        must be used to pay one-half of the costs of employing secondary 
        and post-secondary pupils in a hospital or, clinic, nursing 
        facility, or home care setting during the course of the 
        program.  No more than 50 percent of the participants may be 
        post-secondary students, unless the program does not receive 
        enough qualified secondary applicants per fiscal year.  No more 
        than five pupils may be selected from any secondary or 
        post-secondary institution to participate in the program and no 
        more than one-half of the number of pupils selected may be from 
        the seven-county metropolitan area. 
           Subd. 4.  [CONTRACT.] The commissioner shall contract with 
        a statewide, nonprofit organization representing facilities at 
        which secondary and post-secondary summer health care interns 
        will serve, to administer the grant program established by this 
        section.  Grant funds that are not used in one fiscal year may 
        be carried over to the next fiscal year.  The organization 
        awarded the grant shall provide the commissioner with any 
        information needed by the commissioner to evaluate the program, 
        in the form and at the times specified by the commissioner. 
           Sec. 32.  Minnesota Statutes 2000, 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 $300,000 $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.  
           (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. 33.  [144.1499] [PROMOTION OF HEALTH CARE AND 
        LONG-TERM CARE CAREERS.] 
           The commissioner of health, in consultation with an 
        organization representing health care employers, long-term care 
        employers, and educational institutions, may make grants to 
        qualifying consortia as defined in section 116L.11, subdivision 
        4, for intergenerational programs to encourage middle and high 
        school students to work and volunteer in health care and 
        long-term care settings.  To qualify for a grant under this 
        section, a consortium shall:  
           (1) develop a health and long-term care careers curriculum 
        that provides career exploration and training in national skill 
        standards for health care and long-term care and that is 
        consistent with Minnesota graduation standards and other related 
        requirements; 
           (2) offer programs for high school students that provide 
        training in health and long-term care careers with credits that 
        articulate into post-secondary programs; and 
           (3) provide technical support to the participating health 
        care and long-term care employer to enable the use of the 
        employer's facilities and programs for kindergarten to grade 12 
        health and long-term care careers education.  
           Sec. 34.  [144.1502] [DENTISTS LOAN FORGIVENESS.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "qualifying educational loans" means government, commercial, and 
        foundation loans for actual costs paid for tuition, reasonable 
        education expenses, and reasonable living expenses related to 
        the graduate or undergraduate education of a dentist. 
           Subd. 2.  [CREATION OF ACCOUNT; LOAN FORGIVENESS 
        PROGRAM.] A dentist education account is established in the 
        general fund.  The commissioner of health shall use money from 
        the account to establish a loan forgiveness program for dentists 
        who agree to care for substantial numbers of state public 
        program participants and other low- to moderate-income uninsured 
        patients. 
           Subd. 3.  [ELIGIBILITY.] To be eligible to participate in 
        the loan forgiveness program, a dental student must submit an 
        application to the commissioner of health while attending a 
        program of study designed to prepare the individual to become a 
        licensed dentist.  For fiscal year 2002, applicants may have 
        graduated from a dentistry program in calendar year 2001.  A 
        dental student who is accepted into the loan forgiveness program 
        must sign a contract to agree to serve a minimum three-year 
        service obligation during which at least 25 percent of the 
        dentist's yearly patient encounters are delivered to state 
        public program enrollees or patients receiving sliding fee 
        schedule discounts through a formal sliding fee schedule meeting 
        the standards established by the United States Department of 
        Health and Human Services under Code of Federal Regulations, 
        title 42, section 51, chapter 303.  The service obligation shall 
        begin no later than March 31 of the first year following 
        completion of training.  If fewer applications are submitted by 
        dental students than there are participant slots available, the 
        commissioner may consider applications submitted by dental 
        program graduates who are licensed dentists.  Dentists selected 
        for loan forgiveness must comply with all terms and conditions 
        of this section.  
           Subd. 4.  [LOAN FORGIVENESS.] The commissioner of health 
        may accept up to 14 applicants per year for participation in the 
        loan forgiveness program.  Applicants are responsible for 
        securing their own loans.  The commissioner shall select 
        participants based on their suitability for practice serving 
        public program patients, as indicated by experience or 
        training.  The commissioner shall give preference to applicants 
        who have attended a Minnesota dentistry educational institution 
        and to applicants closest to completing their training.  For 
        each year that a participant meets the service obligation 
        required under subdivision 3, up to a maximum of four years, the 
        commissioner shall make annual disbursements directly to the 
        participant equivalent to $10,000 per year of service, not to 
        exceed $40,000 or the balance of the qualifying educational 
        loans, whichever is less.  Before receiving loan repayment 
        disbursements and as requested, the participant must complete 
        and return to the commissioner an affidavit of practice form 
        provided by the commissioner verifying that the participant is 
        practicing as required under subdivision 3.  The participant 
        must provide the commissioner with verification that the full 
        amount of loan repayment disbursement received by the 
        participant has been applied toward the designated loans.  After 
        each disbursement, verification must be received by the 
        commissioner and approved before the next loan repayment 
        disbursement is made.  Participants who move their practice 
        remain eligible for loan repayment as long as they practice as 
        required under subdivision 3. 
           Subd. 5.  [PENALTY FOR NONFULFILLMENT.] If a participant 
        does not fulfill the service commitment under subdivision 3, the 
        commissioner of health shall collect from the participant 100 
        percent of any payments made for qualified educational loans and 
        interest at a rate established according to section 270.75.  The 
        commissioner shall deposit the money collected in the dentist 
        education account established under subdivision 2. 
           Subd. 6.  [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or 
        service obligations cancel in the event of a participant's 
        death.  The commissioner of health may waive or suspend payment 
        or service obligations in cases of total and permanent 
        disability or long-term temporary disability lasting for more 
        than two years.  The commissioner shall evaluate all other 
        requests for suspension or waivers on a case-by-case basis and 
        may grant a waiver of all or part of the money owed as a result 
        of a nonfulfillment penalty if emergency circumstances prevented 
        fulfillment of the required service commitment. 
           Sec. 35.  Minnesota Statutes 2000, section 144.226, 
        subdivision 4, is amended to read: 
           Subd. 4.  [VITAL RECORDS SURCHARGE.] In addition to any fee 
        prescribed under subdivision 1, there is a nonrefundable 
        surcharge of $3 $2 for each certified and noncertified birth or 
        death record, and for a certification that the record cannot be 
        found.  The local or state registrar shall forward this amount 
        to the state treasurer to be deposited into the state government 
        special revenue fund.  This surcharge shall not be charged under 
        those circumstances in which no fee for a birth or death record 
        is permitted under subdivision 1, paragraph (a).  This surcharge 
        requirement expires June 30, 2002. 
           Sec. 36.  Minnesota Statutes 2000, section 144.395, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXPENDITURES.] (a) Up to five percent of the 
        fair market value of the fund on the preceding July 1, must be 
        spent to reduce the human and economic consequences of tobacco 
        use among the youth of this state through state and local 
        tobacco prevention measures and efforts, and for other public 
        health initiatives. 
           (b) Notwithstanding paragraph (a), on January 1, 2000, up 
        to five percent of the fair market value of the fund is 
        appropriated to the commissioner of health to distribute as 
        grants under section 144.396, subdivisions 5 and 6, in 
        accordance with allocations in paragraph (c), clauses (1) and 
        (2).  Up to $200,000 of this appropriation is available to the 
        commissioner to conduct the statewide assessments described in 
        section 144.396, subdivision 3. 
           (c) Beginning July 1, 2000, and on July 1 of each year 
        thereafter, the money in paragraph (a) is appropriated as 
        follows, except as provided in paragraphs (d) and (e):  
           (1) 67 percent to the commissioner of health to distribute 
        as grants under section 144.396, subdivision 5, to fund 
        statewide tobacco use prevention initiatives aimed at youth; 
           (2) 16.5 percent to the commissioner of health to 
        distribute as grants under section 144.396, subdivision 6, to 
        fund local public health initiatives aimed at tobacco use 
        prevention in coordination with other local health-related 
        efforts to achieve measurable improvements in health among 
        youth; and 
           (3) 16.5 percent to the commissioner of health to 
        distribute in accordance with section 144.396, subdivision 7.  
           (d) A maximum of $150,000 of each annual appropriation to 
        the commissioner of health in paragraphs (b) and (c) may be used 
        by the commissioner for administrative expenses associated with 
        implementing this section. 
           (e) Beginning July 1, 2001, $1,100,000 $1,250,000 of each 
        annual appropriation to the commissioner under paragraph (c), 
        clause (1), may be used to provide base level funding for the 
        commissioner's tobacco prevention and control programs and 
        activities.  This appropriation must occur before any other 
        appropriation under this subdivision. 
           Sec. 37.  Minnesota Statutes 2000, section 144.551, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTED CONSTRUCTION OR MODIFICATION.] 
        (a) The following construction or modification may not be 
        commenced:  
           (1) any erection, building, alteration, reconstruction, 
        modernization, improvement, extension, lease, or other 
        acquisition by or on behalf of a hospital that increases the bed 
        capacity of a hospital, relocates hospital beds from one 
        physical facility, complex, or site to another, or otherwise 
        results in an increase or redistribution of hospital beds within 
        the state; and 
           (2) the establishment of a new hospital.  
           (b) This section does not apply to:  
           (1) construction or relocation within a county by a 
        hospital, clinic, or other health care facility that is a 
        national referral center engaged in substantial programs of 
        patient care, medical research, and medical education meeting 
        state and national needs that receives more than 40 percent of 
        its patients from outside the state of Minnesota; 
           (2) a project for construction or modification for which a 
        health care facility held an approved certificate of need on May 
        1, 1984, regardless of the date of expiration of the 
        certificate; 
           (3) a project for which a certificate of need was denied 
        before July 1, 1990, if a timely appeal results in an order 
        reversing the denial; 
           (4) a project exempted from certificate of need 
        requirements by Laws 1981, chapter 200, section 2; 
           (5) a project involving consolidation of pediatric 
        specialty hospital services within the Minneapolis-St. Paul 
        metropolitan area that would not result in a net increase in the 
        number of pediatric specialty hospital beds among the hospitals 
        being consolidated; 
           (6) a project involving the temporary relocation of 
        pediatric-orthopedic hospital beds to an existing licensed 
        hospital that will allow for the reconstruction of a new 
        philanthropic, pediatric-orthopedic hospital on an existing site 
        and that will not result in a net increase in the number of 
        hospital beds.  Upon completion of the reconstruction, the 
        licenses of both hospitals must be reinstated at the capacity 
        that existed on each site before the relocation; 
           (7) the relocation or redistribution of hospital beds 
        within a hospital building or identifiable complex of buildings 
        provided the relocation or redistribution does not result in: 
        (i) an increase in the overall bed capacity at that site; (ii) 
        relocation of hospital beds from one physical site or complex to 
        another; or (iii) redistribution of hospital beds within the 
        state or a region of the state; 
           (8) relocation or redistribution of hospital beds within a 
        hospital corporate system that involves the transfer of beds 
        from a closed facility site or complex to an existing site or 
        complex provided that:  (i) no more than 50 percent of the 
        capacity of the closed facility is transferred; (ii) the 
        capacity of the site or complex to which the beds are 
        transferred does not increase by more than 50 percent; (iii) the 
        beds are not transferred outside of a federal health systems 
        agency boundary in place on July 1, 1983; and (iv) the 
        relocation or redistribution does not involve the construction 
        of a new hospital building; 
           (9) a construction project involving up to 35 new beds in a 
        psychiatric hospital in Rice county that primarily serves 
        adolescents and that receives more than 70 percent of its 
        patients from outside the state of Minnesota; 
           (10) a project to replace a hospital or hospitals with a 
        combined licensed capacity of 130 beds or less if:  (i) the new 
        hospital site is located within five miles of the current site; 
        and (ii) the total licensed capacity of the replacement 
        hospital, either at the time of construction of the initial 
        building or as the result of future expansion, will not exceed 
        70 licensed hospital beds, or the combined licensed capacity of 
        the hospitals, whichever is less; 
           (11) the relocation of licensed hospital beds from an 
        existing state facility operated by the commissioner of human 
        services to a new or existing facility, building, or complex 
        operated by the commissioner of human services; from one 
        regional treatment center site to another; or from one building 
        or site to a new or existing building or site on the same 
        campus; 
           (12) the construction or relocation of hospital beds 
        operated by a hospital having a statutory obligation to provide 
        hospital and medical services for the indigent that does not 
        result in a net increase in the number of hospital beds; or 
           (13) a construction project involving the addition of up to 
        31 new beds in an existing nonfederal hospital in Beltrami 
        county; or 
           (14) a construction project involving the addition of up to 
        eight new beds in an existing nonfederal hospital in Otter Tail 
        county with 100 licensed acute care beds. 
           Sec. 38.  Minnesota Statutes 2000, section 144.98, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FEES.] (a) An application for certification 
        under subdivision 1 must be accompanied by the biennial fee 
        specified in this subdivision.  The fees are for: 
           (1) nonrefundable base certification fee, $500 $1,200; and 
           (2) test category certification fees: 
        Test Category                                  Certification Fee
        Clean water program bacteriology                      $200 $600
        Safe drinking water program bacteriology                   $600
        Clean water program inorganic chemistry, 
          fewer than four constituents                        $100 $600
        Safe drinking water program inorganic chemistry, 
          four or more constituents                           $300 $600
        Clean water program chemistry metals, 
          fewer than four constituents                        $200 $800
        Safe drinking water program chemistry metals, 
          four or more constituents                           $500 $800
        Resource conservation and recovery program 
          chemistry metals                                         $800
        Clean water program volatile organic compounds      $600 $1,200
        Safe drinking water program 
          volatile organic compounds                             $1,200
        Resource conservation and recovery program 
          volatile organic compounds                             $1,200
        Underground storage tank program
          volatile organic compounds                             $1,200
        Clean water program other organic compounds         $600 $1,200
        Safe drinking water program other organic compounds      $1,200
        Resource conservation and recovery program
          other organic compounds                                $1,200
           (b) The total biennial certification fee is the base fee 
        plus the applicable test category fees.  The biennial 
        certification fee for a contract laboratory is 1.5 times the 
        total certification fee. 
           (c) Laboratories located outside of this state that require 
        an on-site survey will be assessed an additional $1,200 $2,500 
        fee. 
           (d) Fees must be set so that the total fees support the 
        laboratory certification program.  Direct costs of the 
        certification service include program administration, 
        inspections, the agency's general support costs, and attorney 
        general costs attributable to the fee function. 
           (e) A change fee shall be assessed if a laboratory requests 
        additional analytes or methods at any time other than when 
        applying for or renewing its certification.  The change fee is 
        equal to the test category certification fee for the analyte.  
           (f) A variance fee shall be assessed if a laboratory 
        requests and is granted a variance from a rule adopted under 
        this section.  The variance fee is $500 per variance. 
           (g) Refunds or credits shall not be made for analytes or 
        methods requested but not approved.  
           (h) Certification of a laboratory shall not be awarded 
        until all fees are paid. 
           Sec. 39.  Minnesota Statutes 2000, section 144A.44, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATEMENT OF RIGHTS.] A person who 
        receives home care services has these rights: 
           (1) the right to receive written information about rights 
        in advance of receiving care or during the initial evaluation 
        visit before the initiation of treatment, including what to do 
        if rights are violated; 
           (2) the right to receive care and services according to a 
        suitable and up-to-date plan, and subject to accepted medical or 
        nursing standards, to take an active part in creating and 
        changing the plan and evaluating care and services; 
           (3) the right to be told in advance of receiving care about 
        the services that will be provided, the disciplines that will 
        furnish care, the frequency of visits proposed to be furnished, 
        other choices that are available, and the consequences of these 
        choices including the consequences of refusing these services; 
           (4) the right to be told in advance of any change in the 
        plan of care and to take an active part in any change; 
           (5) the right to refuse services or treatment; 
           (6) the right to know, in advance, any limits to the 
        services available from a provider, and the provider's grounds 
        for a termination of services; 
           (7) the right to know in advance of receiving care whether 
        the services are covered by health insurance, medical 
        assistance, or other health programs, the charges for services 
        that will not be covered by Medicare, and the charges that the 
        individual may have to pay; 
           (8) the right to know what the charges are for services, no 
        matter who will be paying the bill; 
           (9) the right to know that there may be other services 
        available in the community, including other home care services 
        and providers, and to know where to go for information about 
        these services; 
           (10) the right to choose freely among available providers 
        and to change providers after services have begun, within the 
        limits of health insurance, medical assistance, or other health 
        programs; 
           (11) the right to have personal, financial, and medical 
        information kept private, and to be advised of the provider's 
        policies and procedures regarding disclosure of such 
        information; 
           (12) the right to be allowed access to records and written 
        information from records in accordance with section 144.335; 
           (13) the right to be served by people who are properly 
        trained and competent to perform their duties; 
           (14) the right to be treated with courtesy and respect, and 
        to have the patient's property treated with respect; 
           (15) the right to be free from physical and verbal abuse; 
           (16) the right to reasonable, advance notice of changes in 
        services or charges, including at least ten days' advance notice 
        of the termination of a service by a provider, except in cases 
        where: 
           (i) the recipient of services engages in conduct that 
        alters the conditions of employment as specified in the 
        employment contract between the home care provider and the 
        individual providing home care services, or creates an abusive 
        or unsafe work environment for the individual providing home 
        care services; or 
           (ii) an emergency for the informal caregiver or a 
        significant change in the recipient's condition has resulted in 
        service needs that exceed the current service provider agreement 
        and that cannot be safely met by the home care provider; 
           (17) the right to a coordinated transfer when there will be 
        a change in the provider of services; 
           (18) the right to voice grievances regarding treatment or 
        care that is, or fails to be, furnished, or regarding the lack 
        of courtesy or respect to the patient or the patient's property; 
           (19) the right to know how to contact an individual 
        associated with the provider who is responsible for handling 
        problems and to have the provider investigate and attempt to 
        resolve the grievance or complaint; 
           (20) the right to know the name and address of the state or 
        county agency to contact for additional information or 
        assistance; and 
           (21) the right to assert these rights personally, or have 
        them asserted by the patient's family or guardian when the 
        patient has been judged incompetent, without retaliation. 
           Sec. 40.  Minnesota Statutes 2000, section 144A.4605, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LICENSE REQUIRED.] (a) A housing with services 
        establishment registered under chapter 144D that is required to 
        obtain a home care license must obtain an assisted living home 
        care license according to this section or a class A or class E 
        license according to rule.  A housing with services 
        establishment that obtains a class E license under this 
        subdivision remains subject to the payment limitations in 
        sections 256B.0913, subdivision 5, paragraph (h), and 256B.0915, 
        subdivision 3, paragraph (g). 
           (b) A board and lodging establishment registered for 
        special services as of December 31, 1996, and also registered as 
        a housing with services establishment under chapter 144D, must 
        deliver home care services according to sections 144A.43 to 
        144A.48, and may apply for a waiver from requirements under 
        Minnesota Rules, parts 4668.0002 to 4668.0240, to operate a 
        licensed agency under the standards of section 157.17.  Such 
        waivers as may be granted by the department will expire upon 
        promulgation of home care rules implementing section 144A.4605. 
           (c) An adult foster care provider licensed by the 
        department of human services and registered under chapter 144D 
        may continue to provide health-related services under its foster 
        care license until the promulgation of home care rules 
        implementing this section. 
           (d) An assisted living home care provider licensed under 
        this section must comply with the disclosure provisions of 
        section 325F.691 to the extent they are applicable. 
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 41.  Minnesota Statutes 2000, section 144D.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REGISTRATION INFORMATION.] The establishment 
        shall provide the following information to the commissioner in 
        order to be registered: 
           (1) the business name, street address, and mailing address 
        of the establishment; 
           (2) the name and mailing address of the owner or owners of 
        the establishment and, if the owner or owners are not natural 
        persons, identification of the type of business entity of the 
        owner or owners, and the names and addresses of the officers and 
        members of the governing body, or comparable persons for 
        partnerships, limited liability corporations, or other types of 
        business organizations of the owner or owners; 
           (3) the name and mailing address of the managing agent, 
        whether through management agreement or lease agreement, of the 
        establishment, if different from the owner or owners, and the 
        name of the on-site manager, if any; 
           (4) verification that the establishment has entered into an 
        elderly housing with services contract, as required in section 
        144D.04, with each resident or resident's representative; 
           (5) verification that the establishment is complying with 
        the requirements of section 325F.691, if applicable; 
           (5) (6) the name and address of at least one natural person 
        who shall be responsible for dealing with the commissioner on 
        all matters provided for in sections 144D.01 to 144D.06, and on 
        whom personal service of all notices and orders shall be made, 
        and who shall be authorized to accept service on behalf of the 
        owner or owners and the managing agent, if any; and 
           (6) (7) the signature of the authorized representative of 
        the owner or owners or, if the owner or owners are not natural 
        persons, signatures of at least two authorized representatives 
        of each owner, one of which shall be an officer of the owner. 
           Personal service on the person identified under clause (5) 
        (6) by the owner or owners in the registration shall be 
        considered service on the owner or owners, and it shall not be a 
        defense to any action that personal service was not made on each 
        individual or entity.  The designation of one or more 
        individuals under this subdivision shall not affect the legal 
        responsibility of the owner or owners under sections 144D.01 to 
        144D.06. 
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 42.  Minnesota Statutes 2000, section 144D.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS OF CONTRACT.] An elderly housing with 
        services contract, which need not be entitled as such to comply 
        with this section, shall include at least the following elements 
        in itself or through supporting documents or attachments: 
           (1) name, street address, and mailing address of the 
        establishment; 
           (2) the name and mailing address of the owner or owners of 
        the establishment and, if the owner or owners is not a natural 
        person, identification of the type of business entity of the 
        owner or owners; 
           (3) the name and mailing address of the managing agent, 
        through management agreement or lease agreement, of the 
        establishment, if different from the owner or owners; 
           (4) the name and address of at least one natural person who 
        is authorized to accept service on behalf of the owner or owners 
        and managing agent; 
           (5) statement describing the registration and licensure 
        status of the establishment and any provider providing 
        health-related or supportive services under an arrangement with 
        the establishment; 
           (6) term of the contract; 
           (7) description of the services to be provided to the 
        resident in the base rate to be paid by resident; 
           (8) description of any additional services available for an 
        additional fee from the establishment directly or through 
        arrangements with the establishment; 
           (9) fee schedules outlining the cost of any additional 
        services; 
           (10) description of the process through which the contract 
        may be modified, amended, or terminated; 
           (11) description of the establishment's complaint 
        resolution process available to residents including the 
        toll-free complaint line for the office of ombudsman for older 
        Minnesotans; 
           (12) the resident's designated representative, if any; 
           (13) the establishment's referral procedures if the 
        contract is terminated; 
           (14) criteria used by the establishment to determine who 
        may continue to reside in the elderly housing with services 
        establishment; 
           (15) billing and payment procedures and requirements; 
           (16) statement regarding the ability of residents to 
        receive services from service providers with whom the 
        establishment does not have an arrangement; and 
           (17) statement regarding the availability of public funds 
        for payment for residence or services in the establishment. 
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 43.  Minnesota Statutes 2000, section 144D.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTRACTS IN PERMANENT FILES.] Elderly housing 
        with services contracts and related documents executed by each 
        resident or resident's representative shall be maintained by the 
        establishment in files from the date of execution until three 
        years after the contract is terminated.  The contracts and the 
        written disclosures required under section 325F.691, if 
        applicable, shall be made available for on-site inspection by 
        the commissioner upon request at any time. 
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 44.  Minnesota Statutes 2000, section 144D.06, is 
        amended to read: 
           144D.06 [OTHER LAWS.] 
           A housing with services establishment shall obtain and 
        maintain all other licenses, permits, registrations, or other 
        governmental approvals required of it in addition to 
        registration under this chapter.  A housing with services 
        establishment is subject to the provisions of section 325F.691 
        and chapter 504B. 
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 45.  [145.56] [SUICIDE PREVENTION.] 
           Subdivision 1.  [SUICIDE PREVENTION PLAN.] The commissioner 
        of health shall refine, coordinate, and implement the state's 
        suicide prevention plan using an evidence-based, public health 
        approach focused on prevention, in collaboration with the 
        commissioner of human services; the commissioner of public 
        safety; the commissioner of children, families, and learning; 
        and appropriate agencies, organizations, and institutions in the 
        community.  
           Subd. 2.  [COMMUNITY-BASED PROGRAMS.] (a) The commissioner 
        shall establish a grant program to fund: 
           (1) community-based programs to provide education, 
        outreach, and advocacy services to populations who may be at 
        risk for suicide; 
           (2) community-based programs that educate community helpers 
        and gatekeepers, such as family members, spiritual leaders, 
        coaches, and business owners, employers, and coworkers on how to 
        prevent suicide by encouraging help-seeking behaviors; 
           (3) community-based programs that educate populations at 
        risk for suicide and community helpers and gatekeepers that must 
        include information on the symptoms of depression and other 
        psychiatric illnesses, the warning signs of suicide, skills for 
        preventing suicides, and making or seeking effective referrals 
        to intervention and community resources; and 
           (4) community-based programs to provide evidence-based 
        suicide prevention and intervention education to school staff, 
        parents, and students in grades kindergarten through 12.  
           Subd. 3.  [WORKPLACE AND PROFESSIONAL EDUCATION.] (a) The 
        commissioner shall promote the use of employee assistance and 
        workplace programs to support employees with depression and 
        other psychiatric illnesses and substance abuse disorders, and 
        refer them to services.  In promoting these programs, the 
        commissioner shall collaborate with employer and professional 
        associations, unions, and safety councils. 
           (b) The commissioner shall provide training and technical 
        assistance to local public health and other community-based 
        professionals to provide for integrated implementation of best 
        practices for preventing suicides. 
           Subd. 4.  [COLLECTION AND REPORTING SUICIDE DATA.] The 
        commissioner shall coordinate with federal, regional, local, and 
        other state agencies to collect, analyze, and annually issue a 
        public report on Minnesota-specific data on suicide and suicidal 
        behaviors.  
           Subd. 5.  [PERIODIC EVALUATIONS; BIENNIAL REPORTS.] The 
        commissioner shall conduct periodic evaluations of the impact of 
        and outcomes from implementation of the state's suicide 
        prevention plan and each of the activities specified in this 
        section.  By July 1, 2002, and July 1 of each even-numbered year 
        thereafter, the commissioner shall report the results of these 
        evaluations to the chairs of the policy and finance committees 
        in the house and senate with jurisdiction over health and human 
        services issues. 
           Sec. 46.  Minnesota Statutes 2000, section 145.881, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES.] The advisory task force shall meet on a 
        regular basis to perform the following duties:  
           (a) review and report on the health care needs of mothers 
        and children throughout the state of Minnesota; 
           (b) review and report on the type, frequency and impact of 
        maternal and child health care services provided to mothers and 
        children under existing maternal and child health care programs, 
        including programs administered by the commissioner of health; 
           (c) establish, review, and report to the commissioner a 
        list of program guidelines and criteria which the advisory task 
        force considers essential to providing an effective maternal and 
        child health care program to low income populations and high 
        risk persons and fulfilling the purposes defined in section 
        145.88; 
           (d) review staff recommendations of the department of 
        health regarding maternal and child health grant awards before 
        the awards are made; 
           (e) make recommendations to the commissioner for the use of 
        other federal and state funds available to meet maternal and 
        child health needs; 
           (f) make recommendations to the commissioner of health on 
        priorities for funding the following maternal and child health 
        services:  (1) prenatal, delivery and postpartum care, (2) 
        comprehensive health care for children, especially from birth 
        through five years of age, (3) adolescent health services, (4) 
        family planning services, (5) preventive dental care, (6) 
        special services for chronically ill and handicapped children 
        and (7) any other services which promote the health of mothers 
        and children; and 
           (g) make recommendations to the commissioner of health on 
        the process to distribute, award and administer the maternal and 
        child health block grant funds; and 
           (h) review the measures that are used to define the 
        variables of the funding distribution formula in section 
        145.882, subdivision 4, every two years and make recommendations 
        to the commissioner of health for changes based upon principles 
        established by the advisory task force for this purpose.  
           Sec. 47.  [145.9268] [COMMUNITY CLINIC GRANTS.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "eligible community clinic" means: 
           (1) a clinic that provides services under conditions as 
        defined in Minnesota Rules, part 9505.0255, and utilizes a 
        sliding fee scale to determine eligibility for charity care; 
           (2) an Indian tribal government or Indian health service 
        unit; or 
           (3) a consortium of clinics comprised of entities under 
        clause (1) or (2). 
           Subd. 2.  [GRANTS AUTHORIZED.] The commissioner of health 
        shall award grants to eligible community clinics to improve the 
        ongoing viability of Minnesota's clinic-based safety net 
        providers.  Grants shall be awarded to support the capacity of 
        eligible community clinics to serve low-income populations, 
        reduce current or future uncompensated care burdens, or provide 
        for improved care delivery infrastructure.  The commissioner 
        shall award grants to community clinics in metropolitan and 
        rural areas of the state, and shall ensure geographic 
        representation in grant awards among all regions of the state. 
           Subd. 3.  [ALLOCATION OF GRANTS.] (a) To receive a grant 
        under this section, an eligible community clinic must submit an 
        application to the commissioner of health by the deadline 
        established by the commissioner.  A grant may be awarded upon 
        the signing of a grant contract.  Community clinics may apply 
        for and the commissioner may award grants for one-year or 
        two-year periods. 
           (b) An application must be on a form and contain 
        information as specified by the commissioner but at a minimum 
        must contain: 
           (1) a description of the purpose or project for which grant 
        funds will be used; 
           (2) a description of the problem or problems the grant 
        funds will be used to address; and 
           (3) a description of achievable objectives, a workplan, and 
        a timeline for implementation and completion of processes or 
        projects enabled by the grant. 
           (c) The commissioner shall review each application to 
        determine whether the application is complete and whether the 
        applicant and the project are eligible for a grant.  In 
        evaluating applications according to paragraph (d), the 
        commissioner shall establish criteria including, but not limited 
        to:  the priority level of the project; the applicant's 
        thoroughness and clarity in describing the problem grant funds 
        are intended to address; a description of the applicant's 
        proposed project; the manner in which the applicant will 
        demonstrate the effectiveness of any projects undertaken; and 
        evidence of efficiencies and effectiveness gained through 
        collaborative efforts.  The commissioner may also take into 
        account other relevant factors, including, but not limited to, 
        the percentage for which uninsured patients represent the 
        applicant's patient base and the degree to which grant funds 
        will be used to support services increasing access to health 
        care services.  During application review, the commissioner may 
        request additional information about a proposed project, 
        including information on project cost.  Failure to provide the 
        information requested disqualifies an applicant.  The 
        commissioner has discretion over the number of grants awarded. 
           (d) In determining which eligible community clinics will 
        receive grants under this section, the commissioner shall give 
        preference to those grant applications that show evidence of 
        collaboration with other eligible community clinics, hospitals, 
        health care providers, or community organizations.  In addition, 
        the commissioner shall give priority, in declining order, to 
        grant applications for projects that: 
           (1) provide a direct offset to expenses incurred for 
        services provided to the clinic's target population; 
           (2) establish, update, or improve information, data 
        collection, or billing systems; 
           (3) procure, modernize, remodel, or replace equipment used 
        in the delivery of direct patient care at a clinic; 
           (4) provide improvements for care delivery, such as 
        increased translation and interpretation services; or 
           (5) other projects determined by the commissioner to 
        improve the ability of applicants to provide care to the 
        vulnerable populations they serve. 
           (e) A grant awarded to an eligible community clinic may not 
        exceed $300,000 per eligible community clinic.  For an applicant 
        applying as a consortium of clinics, a grant may not exceed 
        $300,000 per clinic included in the consortium.  The 
        commissioner has discretion over the number of grants awarded.  
           Subd. 4.  [EVALUATION AND REPORT.] The commissioner of 
        health shall evaluate the overall effectiveness of the grant 
        program.  The commissioner shall collect progress reports to 
        evaluate the grant program from the eligible community clinics 
        receiving grants.  Every two years, as part of this evaluation, 
        the commissioner shall report to the legislature on priority 
        areas for grants set under subdivision 3 and provide any 
        recommendations for adding or changing priority areas. 
           Sec. 48.  [145.928] [ELIMINATING HEALTH DISPARITIES.] 
           Subdivision 1.  [GOAL; ESTABLISHMENT.] It is the goal of 
        the state, by 2010, to decrease by 50 percent the disparities in 
        infant mortality rates and adult and child immunization rates 
        for American Indians and populations of color, as compared with 
        rates for whites.  To do so and to achieve other measurable 
        outcomes, the commissioner of health shall establish a program 
        to close the gap in the health status of American Indians and 
        populations of color as compared with whites in the following 
        priority areas:  infant mortality, breast and cervical cancer 
        screening, HIV/AIDS and sexually transmitted infections, adult 
        and child immunizations, cardiovascular disease, diabetes, and 
        accidental injuries and violence.  
           Subd. 2.  [STATE-COMMUNITY PARTNERSHIPS; PLAN.] The 
        commissioner, in partnership with culturally-based community 
        organizations; the Indian affairs council under section 3.922; 
        the council on affairs of Chicano/Latino people under section 
        3.9223; the council on Black Minnesotans under section 3.9225; 
        the council on Asian-Pacific Minnesotans under section 3.9226; 
        community health boards as defined in section 145A.02; and 
        tribal governments, shall develop and implement a comprehensive, 
        coordinated plan to reduce health disparities in the health 
        disparity priority areas identified in subdivision 1. 
           Subd. 3.  [MEASURABLE OUTCOMES.] The commissioner, in 
        consultation with the community partners listed in subdivision 
        2, shall establish measurable outcomes to achieve the goal 
        specified in subdivision 1 and to determine the effectiveness of 
        the grants and other activities funded under this section in 
        reducing health disparities in the priority areas identified in 
        subdivision 1.  The development of measurable outcomes must be 
        completed before any funds are distributed under this section. 
           Subd. 4.  [STATEWIDE ASSESSMENT.] The commissioner shall 
        enhance current data tools to ensure a statewide assessment of 
        the risk behaviors associated with the health disparity priority 
        areas identified in subdivision 1.  The statewide assessment 
        must be used to establish a baseline to measure the effect of 
        activities funded under this section.  To the extent feasible, 
        the commissioner shall conduct the assessment so that the 
        results may be compared to national data. 
           Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner shall 
        provide the necessary expertise to grant applicants to ensure 
        that submitted proposals are likely to be successful in reducing 
        the health disparities identified in subdivision 1.  The 
        commissioner shall provide grant recipients with guidance and 
        training on best or most promising strategies to use to reduce 
        the health disparities identified in subdivision 1.  The 
        commissioner shall also assist grant recipients in the 
        development of materials and procedures to evaluate local 
        community activities. 
           Subd. 6.  [PROCESS.] (a) The commissioner, in consultation 
        with the community partners listed in subdivision 2, shall 
        develop the criteria and procedures used to allocate grants 
        under this section.  In developing the criteria, the 
        commissioner shall establish an administrative cost limit for 
        grant recipients.  At the time a grant is awarded, the 
        commissioner must provide a grant recipient with information on 
        the outcomes established according to subdivision 3. 
           (b) A grant recipient must coordinate its activities to 
        reduce health disparities with other entities receiving funds 
        under this section that are in the grant recipient's service 
        area. 
           Subd. 7.  [COMMUNITY GRANT PROGRAM; IMMUNIZATION RATES AND 
        INFANT MORTALITY RATES.] (a) The commissioner shall award grants 
        to eligible applicants for local or regional projects and 
        initiatives directed at reducing health disparities in one or 
        both of the following priority areas: 
           (1) decreasing racial and ethnic disparities in infant 
        mortality rates; or 
           (2) increasing adult and child immunization rates in 
        nonwhite racial and ethnic populations. 
           (b) The commissioner may award up to 20 percent of the 
        funds available as planning grants.  Planning grants must be 
        used to address such areas as community assessment, coordination 
        activities, and development of community supported strategies. 
           (c) Eligible applicants may include, but are not limited 
        to, faith-based organizations, social service organizations, 
        community nonprofit organizations, community health boards, 
        tribal governments, and community clinics.  Applicants must 
        submit proposals to the commissioner.  A proposal must specify 
        the strategies to be implemented to address one or both of the 
        priority areas listed in paragraph (a) and must be targeted to 
        achieve the outcomes established according to subdivision 3. 
           (d) The commissioner shall give priority to applicants who 
        demonstrate that their proposed project or initiative: 
           (1) is supported by the community the applicant will serve; 
           (2) is research-based or based on promising strategies; 
           (3) is designed to complement other related community 
        activities; 
           (4) utilizes strategies that positively impact both 
        priority areas; 
           (5) reflects racially and ethnically appropriate 
        approaches; and 
           (6) will be implemented through or with community-based 
        organizations that reflect the race or ethnicity of the 
        population to be reached. 
           Subd. 8.  [COMMUNITY GRANT PROGRAM; OTHER HEALTH 
        DISPARITIES.] (a) The commissioner shall award grants to 
        eligible applicants for local or regional projects and 
        initiatives directed at reducing health disparities in one or 
        more of the following priority areas: 
           (1) decreasing racial and ethnic disparities in morbidity 
        and mortality rates from breast and cervical cancer; 
           (2) decreasing racial and ethnic disparities in morbidity 
        and mortality rates from HIV/AIDS and sexually transmitted 
        infections; 
           (3) decreasing racial and ethnic disparities in morbidity 
        and mortality rates from cardiovascular disease; 
           (4) decreasing racial and ethnic disparities in morbidity 
        and mortality rates from diabetes; or 
           (5) decreasing racial and ethnic disparities in morbidity 
        and mortality rates from accidental injuries or violence. 
           (b) The commissioner may award up to 20 percent of the 
        funds available as planning grants.  Planning grants must be 
        used to address such areas as community assessment, determining 
        community priority areas, coordination activities, and 
        development of community supported strategies. 
           (c) Eligible applicants may include, but are not limited 
        to, faith-based organizations, social service organizations, 
        community nonprofit organizations, community health boards, and 
        community clinics.  Applicants shall submit proposals to the 
        commissioner.  A proposal must specify the strategies to be 
        implemented to address one or more of the priority areas listed 
        in paragraph (a) and must be targeted to achieve the outcomes 
        established according to subdivision 3. 
           (d) The commissioner shall give priority to applicants who 
        demonstrate that their proposed project or initiative: 
           (1) is supported by the community the applicant will serve; 
           (2) is research-based or based on promising strategies; 
           (3) is designed to complement other related community 
        activities; 
           (4) utilizes strategies that positively impact more than 
        one priority area; 
           (5) reflects racially and ethnically appropriate 
        approaches; and 
           (6) will be implemented through or with community-based 
        organizations that reflect the race or ethnicity of the 
        population to be reached. 
           Subd. 9.  [HEALTH OF FOREIGN-BORN PERSONS.] (a) The 
        commissioner shall distribute funds to community health boards 
        for health screening and follow-up services for tuberculosis for 
        foreign-born persons.  Funds shall be distributed based on the 
        following formula: 
           (1) $1,500 per foreign-born person with pulmonary 
        tuberculosis in the community health board's service area; 
           (2) $500 per foreign-born person with extrapulmonary 
        tuberculosis in the community health board's service area; 
           (3) $500 per month of directly observed therapy provided by 
        the community health board for each uninsured foreign-born 
        person with pulmonary or extrapulmonary tuberculosis; and 
           (4) $50 per foreign-born person in the community health 
        board's service area. 
           (b) Payments must be made at the end of each state fiscal 
        year.  The amount paid per tuberculosis case, per month of 
        directly observed therapy, and per foreign-born person must be 
        proportionately increased or decreased to fit the actual amount 
        appropriated for that fiscal year. 
           Subd. 10.  [TRIBAL GOVERNMENTS.] The commissioner shall 
        award grants to American Indian tribal governments for 
        implementation of community interventions to reduce health 
        disparities for the priority areas listed in subdivisions 7 and 
        8.  A community intervention must be targeted to achieve the 
        outcomes established according to subdivision 3.  Tribal 
        governments must submit proposals to the commissioner and must 
        demonstrate partnerships with local public health entities.  The 
        distribution formula shall be determined by the commissioner, in 
        consultation with the tribal governments. 
           Subd. 11.  [COORDINATION.] The commissioner shall 
        coordinate the projects and initiatives funded under this 
        section with other efforts at the local, state, or national 
        level to avoid duplication and promote complementary efforts. 
           Subd. 12.  [EVALUATION.] Using the outcomes established 
        according to subdivision 3, the commissioner shall conduct a 
        biennial evaluation of the community grant programs, community 
        health board activities, and tribal government activities funded 
        under this section.  Grant recipients, tribal governments, and 
        community health boards shall cooperate with the commissioner in 
        the evaluation and shall provide the commissioner with the 
        information needed to conduct the evaluation. 
           Subd. 13.  [REPORT.] The commissioner shall submit a 
        biennial report to the legislature on the local community 
        projects, tribal government, and community health board 
        prevention activities funded under this section.  These reports 
        must include information on grant recipients, activities that 
        were conducted using grant funds, evaluation data, and outcome 
        measures, if available.  These reports are due by January 15 of 
        every other year, beginning in the year 2003.  
           Subd. 14.  [SUPPLANTATION OF EXISTING FUNDS.] Funds 
        received under this section must be used to develop new programs 
        or expand current programs that reduce health disparities.  
        Funds must not be used to supplant current county or tribal 
        expenditures. 
           Sec. 49.  Minnesota Statutes 2000, section 145A.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] (a) The commissioner of 
        health shall expand the current grant program to fund additional 
        projects designed to prevent child abuse and neglect and reduce 
        juvenile delinquency by promoting positive parenting, resiliency 
        in children, and a healthy beginning for children by providing 
        early intervention services for families in need.  Grant dollars 
        shall be available to train paraprofessionals to provide in-home 
        intervention services and to allow public health nurses to do 
        case management of services.  The grant program shall provide 
        early intervention services for families in need and will 
        include: 
           (1) expansion of current public health nurse and family 
        aide home visiting programs and public health home visiting 
        projects which prevent child abuse and neglect, prevent juvenile 
        delinquency, and build resiliency in children; 
           (2) early intervention to promote a healthy and nurturing 
        beginning; 
           (3) distribution of educational and public information 
        programs and materials in hospital maternity divisions, 
        well-baby clinics, obstetrical clinics, and community clinics; 
        and 
           (4) training of home visitors in skills necessary for 
        comprehensive home visiting which promotes a healthy and 
        nurturing beginning for the child. 
           (b) No new grants shall be awarded under this section after 
        June 30, 2001.  Grant contracts awarded and in effect under this 
        section as of July 1, 2001, shall continue until their 
        expiration date. 
           Sec. 50.  Minnesota Statutes 2000, section 145A.15, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [EXPIRATION.] This section expires June 30, 2003. 
           Sec. 51.  Minnesota Statutes 2000, section 145A.16, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
        establish a grant program to fund universally offered home 
        visiting programs designed to serve all live births in 
        designated geographic areas.  The commissioner shall designate 
        the geographic area to be served by each program.  At least one 
        program must provide home visiting services to families within 
        the seven-county metropolitan area, and at least one program 
        must provide home visiting services to families outside the 
        metropolitan area.  The purpose of the program is to strengthen 
        families and to promote positive parenting and healthy child 
        development.  No new grants shall be awarded under this section 
        after June 30, 2001.  Competitive grant contracts awarded and in 
        effect under this section as of July 1, 2001, shall expire 
        December 31, 2003. 
           Sec. 52.  Minnesota Statutes 2000, section 145A.16, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [EXPIRATION.] This section expires December 31, 
        2003. 
           Sec. 53.  [145A.17] [FAMILY HOME VISITING PROGRAMS.] 
           Subdivision 1.  [ESTABLISHMENT; GOALS.] The commissioner 
        shall establish a program to fund family home visiting programs 
        designed to foster a healthy beginning for children in families 
        at or below 200 percent of the federal poverty guidelines, 
        prevent child abuse and neglect, reduce juvenile delinquency, 
        promote positive parenting and resiliency in children, and 
        promote family health and economic self-sufficiency.  A program 
        funded under this section must serve families at or below 200 
        percent of the federal poverty guidelines, and other families 
        determined to be at risk, including but not limited to being at 
        risk for child abuse, child neglect, or juvenile delinquency.  
        Programs must give priority for services to families considered 
        to be in need of services, including but not limited to families 
        with: 
           (1) adolescent parents; 
           (2) a history of alcohol or other drug abuse; 
           (3) a history of child abuse, domestic abuse, or other 
        types of violence; 
           (4) a history of domestic abuse, rape, or other forms of 
        victimization; 
           (5) reduced cognitive functioning; 
           (6) a lack of knowledge of child growth and development 
        stages; 
           (7) low resiliency to adversities and environmental 
        stresses; or 
           (8) insufficient financial resources to meet family needs. 
           Subd. 2.  [ALLOCATION OF FUNDS.] The commissioner shall 
        distribute funds available under this section to community 
        health boards, as defined in section 145A.02, and to tribal 
        governments.  Funds shall be distributed to community health 
        boards as follows:  (1) each community health board shall 
        receive an allocation of $25,000 per year; and (2) remaining 
        funds available to community health boards shall be distributed 
        according to the formula in section 256J.625, subdivision 3.  
        The commissioner, in consultation with tribal governments, shall 
        establish a formula for distributing funds to tribal governments.
           Subd. 3.  [REQUIREMENTS FOR PROGRAMS; PROCESS.] (a) Before 
        a community health board or tribal government may receive an 
        allocation under subdivision 2, a community health board or 
        tribal government must submit a proposal to the commissioner 
        that includes identification, based on a community assessment, 
        of the populations at or below 200 percent of the federal 
        poverty guidelines that will be served and the other populations 
        that will be served.  Each program that receives funds must: 
           (1) use either a broad community-based or selective 
        community-based strategy to provide preventive and early 
        intervention home visiting services; 
           (2) offer a home visit by a trained home visitor.  If a 
        home visit is accepted, the first home visit must occur 
        prenatally or as soon after birth as possible and must include a 
        public health nursing assessment by a public health nurse; 
           (3) offer, at a minimum, information on infant care, child 
        growth and development, positive parenting, preventing diseases, 
        preventing exposure to environmental hazards, and support 
        services available in the community; 
           (4) provide information on and referrals to health care 
        services, if needed, including information on health care 
        coverage for which the child or family may be eligible; and 
        provide information on preventive services, developmental 
        assessments, and the availability of public assistance programs 
        as appropriate; 
           (5) provide youth development programs; 
           (6) recruit home visitors who will represent, to the extent 
        possible, the races, cultures, and languages spoken by families 
        that may be served; 
           (7) train and supervise home visitors in accordance with 
        the requirements established under subdivision 4; 
           (8) maximize resources and minimize duplication by 
        coordinating activities with local social and human services 
        organizations, education organizations, and other appropriate 
        governmental entities and community-based organizations and 
        agencies; and 
           (9) utilize appropriate racial and ethnic approaches to 
        providing home visiting services. 
           (b) Funds available under this section shall not be used 
        for medical services.  The commissioner shall establish an 
        administrative cost limit for recipients of funds.  The outcome 
        measures established under subdivision 6 must be specified to 
        recipients of funds at the time the funds are distributed. 
           (c) Data collected on individuals served by the home 
        visiting programs must remain confidential and must not be 
        disclosed by providers of home visiting services without a 
        specific informed written consent that identifies disclosures to 
        be made.  Upon request, agencies providing home visiting 
        services must provide recipients with information on 
        disclosures, including the names of entities and individuals 
        receiving the information and the general purpose of the 
        disclosure.  Prospective and current recipients of home visiting 
        services must be told and informed in writing that written 
        consent for disclosure of data is not required for access to 
        home visiting services. 
           Subd. 4.  [TRAINING.] The commissioner shall establish 
        training requirements for home visitors and minimum requirements 
        for supervision by a public health nurse.  The requirements for 
        nurses must be consistent with chapter 148.  Training must 
        include child development, positive parenting techniques, 
        screening and referrals for child abuse and neglect, and diverse 
        cultural practices in child rearing and family systems. 
           Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner shall 
        provide administrative and technical assistance to each program, 
        including assistance in data collection and other activities 
        related to conducting short- and long-term evaluations of the 
        programs as required under subdivision 7.  The commissioner may 
        request research and evaluation support from the University of 
        Minnesota. 
           Subd. 6.  [OUTCOME MEASURES.] The commissioner shall 
        establish outcomes to determine the impact of family home 
        visiting programs funded under this section on the following 
        areas: 
           (1) appropriate utilization of preventive health care; 
           (2) rates of substantiated child abuse and neglect; 
           (3) rates of unintentional child injuries; 
           (4) rates of children who are screened and who pass early 
        childhood screening; and 
           (5) any additional qualitative goals and quantitative 
        measures established by the commissioner. 
           Subd. 7.  [EVALUATION.] Using the qualitative goals and 
        quantitative outcome measures established under subdivisions 1 
        and 6, the commissioner shall conduct ongoing evaluations of the 
        programs funded under this section.  Community health boards and 
        tribal governments shall cooperate with the commissioner in the 
        evaluations and shall provide the commissioner with the 
        information necessary to conduct the evaluations.  As part of 
        the ongoing evaluations, the commissioner shall rate the impact 
        of the programs on the outcome measures listed in subdivision 6, 
        and shall periodically determine whether home visiting programs 
        are the best way to achieve the qualitative goals established 
        under subdivisions 1 and 6.  If the commissioner determines that 
        home visiting programs are not the best way to achieve these 
        goals, the commissioner shall provide the legislature with 
        alternative methods for achieving them. 
           Subd. 8.  [REPORT.] By January 15, 2002, and January 15 of 
        each even-numbered year thereafter, the commissioner shall 
        submit a report to the legislature on the family home visiting 
        programs funded under this section and on the results of the 
        evaluations conducted under subdivision 7. 
           Subd. 9.  [NO SUPPLANTING OF EXISTING FUNDS.] Funding 
        available under this section may be used only to supplement, not 
        to replace, nonstate funds being used for home visiting services 
        as of July 1, 2001. 
           Sec. 54.  Minnesota Statutes 2000, section 157.16, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ESTABLISHMENT FEES; DEFINITIONS.] (a) The 
        following fees are required for food and beverage service 
        establishments, hotels, motels, lodging establishments, and 
        resorts licensed under this chapter.  Food and beverage service 
        establishments must pay the highest applicable fee under 
        paragraph (e), clause (1), (2), (3), or (4), and establishments 
        serving alcohol must pay the highest applicable fee under 
        paragraph (e), clause (6) or (7).  The license fee for new 
        operators previously licensed under this chapter for the same 
        calendar year is one-half of the appropriate annual license fee, 
        plus any penalty that may be required.  The license fee for 
        operators opening on or after October 1 is one-half of the 
        appropriate annual license fee, plus any penalty that may be 
        required. 
           (b) All food and beverage service establishments, except 
        special event food stands, and all hotels, motels, lodging 
        establishments, and resorts shall pay an annual base fee of 
        $100 $145. 
           (c) A special event food stand shall pay a flat fee 
        of $30 $35 annually.  "Special event food stand" means a fee 
        category where food is prepared or served in conjunction with 
        celebrations, county fairs, or special events from a special 
        event food stand as defined in section 157.15. 
           (d) In addition to the base fee in paragraph (b), each food 
        and beverage service establishment, other than a special event 
        food stand, and each hotel, motel, lodging establishment, and 
        resort shall pay an additional annual fee for each fee category 
        as specified in this paragraph: 
           (1) Limited food menu selection, $30 $40.  "Limited food 
        menu selection" means a fee category that provides one or more 
        of the following: 
           (i) prepackaged food that receives heat treatment and is 
        served in the package; 
           (ii) frozen pizza that is heated and served; 
           (iii) a continental breakfast such as rolls, coffee, juice, 
        milk, and cold cereal; 
           (iv) soft drinks, coffee, or nonalcoholic beverages; or 
           (v) cleaning for eating, drinking, or cooking utensils, 
        when the only food served is prepared off site. 
           (2) Small establishment, including boarding establishments, 
        $55 $75.  "Small establishment" means a fee category that has no 
        salad bar and meets one or more of the following: 
           (i) possesses food service equipment that consists of no 
        more than a deep fat fryer, a grill, two hot holding containers, 
        and one or more microwave ovens; 
           (ii) serves dipped ice cream or soft serve frozen desserts; 
           (iii) serves breakfast in an owner-occupied bed and 
        breakfast establishment; 
           (iv) is a boarding establishment; or 
           (v) meets the equipment criteria in clause (3), item (i) or 
        (ii), and has a maximum patron seating capacity of not more than 
        50.  
           (3) Medium establishment, $150 $210.  "Medium establishment"
        means a fee category that meets one or more of the following: 
           (i) possesses food service equipment that includes a range, 
        oven, steam table, salad bar, or salad preparation area; 
           (ii) possesses food service equipment that includes more 
        than one deep fat fryer, one grill, or two hot holding 
        containers; or 
           (iii) is an establishment where food is prepared at one 
        location and served at one or more separate locations. 
           Establishments meeting criteria in clause (2), item (v), 
        are not included in this fee category.  
           (4) Large establishment, $250 $350.  "Large establishment" 
        means either: 
           (i) a fee category that (A) meets the criteria in clause 
        (3), items (i) or (ii), for a medium establishment, (B) seats 
        more than 175 people, and (C) offers the full menu selection an 
        average of five or more days a week during the weeks of 
        operation; or 
           (ii) a fee category that (A) meets the criteria in clause 
        (3), item (iii), for a medium establishment, and (B) prepares 
        and serves 500 or more meals per day. 
           (5) Other food and beverage service, including food carts, 
        mobile food units, seasonal temporary food stands, and seasonal 
        permanent food stands, $30 $40. 
           (6) Beer or wine table service, $30 $40.  "Beer or wine 
        table service" means a fee category where the only alcoholic 
        beverage service is beer or wine, served to customers seated at 
        tables. 
           (7) Alcoholic beverage service, other than beer or wine 
        table service, $75 $105. 
           "Alcohol beverage service, other than beer or wine table 
        service" means a fee category where alcoholic mixed drinks are 
        served or where beer or wine are served from a bar. 
           (8) Lodging per sleeping accommodation unit, $4 $6, 
        including hotels, motels, lodging establishments, and resorts, 
        up to a maximum of $400 $600.  "Lodging per sleeping 
        accommodation unit" means a fee category including the number of 
        guest rooms, cottages, or other rental units of a hotel, motel, 
        lodging establishment, or resort; or the number of beds in a 
        dormitory. 
           (9) First public swimming pool, $100 $140; each additional 
        public swimming pool, $50 $80.  "Public swimming pool" means a 
        fee category that has the meaning given in Minnesota Rules, part 
        4717.0250, subpart 8. 
           (10) First spa, $50 $80; each additional spa, $25 $40.  
        "Spa pool" means a fee category that has the meaning given in 
        Minnesota Rules, part 4717.0250, subpart 9. 
           (11) Private sewer or water, $30 $40.  "Individual private 
        water" means a fee category with a water supply other than a 
        community public water supply as defined in Minnesota Rules, 
        chapter 4720.  "Individual private sewer" means a fee category 
        with an individual sewage treatment system which uses subsurface 
        treatment and disposal. 
           (e) A fee is not required for a food and beverage service 
        establishment operated by a school as defined in sections 
        120A.05, subdivisions 9, 11, 13, and 17 and 120A.22. 
           (f) A fee of $150 for review of the construction plans must 
        accompany the initial license application for food and beverage 
        service establishments, hotels, motels, lodging establishments, 
        or resorts. 
           (g) (f) When existing food and beverage service 
        establishments, hotels, motels, lodging establishments, or 
        resorts are extensively remodeled, a fee of $150 must be 
        submitted with the remodeling plans. 
           (h) (g) Seasonal temporary food stands and special event 
        food stands are not required to submit construction or 
        remodeling plans for review. 
           [EFFECTIVE DATE.] This section is effective January 1, 2002.
           Sec. 55.  Minnesota Statutes 2000, section 157.22, as 
        amended by Laws 2001, chapter 65, section 1, is amended to read: 
           157.22 [EXEMPTIONS.] 
           This chapter shall not be construed to apply to: 
           (1) interstate carriers under the supervision of the United 
        States Department of Health and Human Services; 
           (2) any building constructed and primarily used for 
        religious worship; 
           (3) any building owned, operated, and used by a college or 
        university in accordance with health regulations promulgated by 
        the college or university under chapter 14; 
           (4) any person, firm, or corporation whose principal mode 
        of business is licensed under sections 28A.04 and 28A.05, is 
        exempt at that premises from licensure as a food or beverage 
        establishment; provided that the holding of any license pursuant 
        to sections 28A.04 and 28A.05 shall not exempt any person, firm, 
        or corporation from the applicable provisions of this chapter or 
        the rules of the state commissioner of health relating to food 
        and beverage service establishments; 
           (5) family day care homes and group family day care homes 
        governed by sections 245A.01 to 245A.16; 
           (6) nonprofit senior citizen centers for the sale of 
        home-baked goods; 
           (7) fraternal or patriotic organizations that are tax 
        exempt under section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7), 
        501(c)(10), or 501(c)(19) of the Internal Revenue Code of 1986, 
        or organizations related to or affiliated with such fraternal or 
        patriotic organizations.  Such organizations may organize events 
        at which home-prepared food is donated by organization members 
        for sale at the events, provided: 
           (i) the event is not a circus, carnival, or fair; 
           (ii) the organization controls the admission of persons to 
        the event, the event agenda, or both; and 
           (iii) the organization's licensed kitchen is not used in 
        any manner for the event; and 
           (8) food not prepared at an establishment and brought in by 
        individuals attending a potluck event for consumption at the 
        potluck event.  An organization sponsoring a potluck event under 
        this clause may advertise the potluck event to the public 
        through any means.  Individuals who are not members of an 
        organization sponsoring a potluck event under this clause may 
        attend the potluck event and consume the food at the event.  
        Licensed food establishments other than schools cannot be 
        sponsors of potluck events.  A school may sponsor and hold 
        potluck events in areas of the school other than the school's 
        kitchen, provided that the school's kitchen is not used in any 
        manner for the potluck event.  For purposes of this clause, 
        "school" means a public school as defined in section 120A.05, 
        subdivisions 9, 11, 13, and 17, or a nonpublic school, church, 
        or religious organization at which a child is provided with 
        instruction in compliance with sections 120A.22 and 120A.24.  
        Potluck event food shall not be brought into a licensed food 
        establishment kitchen; and 
           (9) a home school in which a child is provided instruction 
        at home. 
           Sec. 56.  Minnesota Statutes 2000, section 326.38, is 
        amended to read: 
           326.38 [LOCAL REGULATIONS.] 
           Any city having a system of waterworks or sewerage, or any 
        town in which reside over 5,000 people exclusive of any 
        statutory cities located therein, or the metropolitan airports 
        commission, may, by ordinance, adopt local regulations providing 
        for plumbing permits, bonds, approval of plans, and inspections 
        of plumbing, which regulations are not in conflict with the 
        plumbing standards on the same subject prescribed by the state 
        commissioner of health.  No city or such town shall prohibit 
        plumbers licensed by the state commissioner of health from 
        engaging in or working at the business, except cities and 
        statutory cities which, prior to April 21, 1933, by ordinance 
        required the licensing of plumbers.  Any city by ordinance may 
        prescribe regulations, reasonable standards, and inspections and 
        grant permits to any person, firm, or corporation engaged in the 
        business of installing water softeners, who is not licensed as a 
        master plumber or journeyman plumber by the state commissioner 
        of health, to connect water softening and water filtering 
        equipment to private residence water distribution systems, where 
        provision has been previously made therefor and openings left 
        for that purpose or by use of cold water connections to a 
        domestic water heater; where it is not necessary to rearrange, 
        make any extension or alteration of, or addition to any pipe, 
        fixture or plumbing connected with the water system except to 
        connect the water softener, and provided the connections so made 
        comply with minimum standards prescribed by the state 
        commissioner of health. 
           Sec. 57.  [325F.72] [DISCLOSURE OF SPECIAL CARE STATUS 
        REQUIRED.] 
           Subdivision 1.  [PERSONS TO WHOM DISCLOSURE IS 
        REQUIRED.] Housing with services establishments, as defined in 
        sections 144D.01 to 144D.07, that secure, segregate, or provide 
        a special program or special unit for residents with a diagnosis 
        of probable Alzheimer's disease or a related disorder or that 
        advertise, market, or otherwise promote the establishment as 
        providing specialized care for Alzheimer's disease or a related 
        disorder are considered a "special care unit."  All special care 
        units shall provide a written disclosure to the following: 
           (1) the commissioner of health, if requested; 
           (2) the office of ombudsman for older Minnesotans; and 
           (3) each person seeking placement within a residence, or 
        the person's authorized representative, before an agreement to 
        provide the care is entered into. 
           Subd. 2.  [CONTENT.] Written disclosure shall include, but 
        is not limited to, the following: 
           (1) a statement of the overall philosophy and how it 
        reflects the special needs of residents with Alzheimer's disease 
        or other dementias; 
           (2) the criteria for determining who may reside in the 
        special care unit; 
           (3) the process used for assessment and establishment of 
        the service plan or agreement, including how the plan is 
        responsive to changes in the resident's condition; 
           (4) staffing credentials, job descriptions, and staff 
        duties and availability, including any training specific to 
        dementia; 
           (5) physical environment as well as design and security 
        features that specifically address the needs of residents with 
        Alzheimer's disease or other dementias; 
           (6) frequency and type of programs and activities for 
        residents of the special care unit; 
           (7) involvement of families in resident care and 
        availability of family support programs; 
           (8) fee schedules for additional services to the residents 
        of the special care unit; and 
           (9) a statement that residents will be given a written 
        notice 30 days prior to changes in the fee schedule. 
           Subd. 3.  [DUTY TO UPDATE.] Substantial changes to 
        disclosures must be reported to the parties listed in 
        subdivision 1 at the time the change is made. 
           Subd. 4.  [REMEDY.] The attorney general may seek the 
        remedies set forth in section 8.31 for repeated and intentional 
        violations of this section.  However, no private right of action 
        may be maintained as provided under section 8.31, subdivision 3a.
           [EFFECTIVE DATE.] This section is effective October 1, 2001.
           Sec. 58.  [RECOMMENDATIONS; INCENTIVES FOR MAGNET 
        HOSPITALS.] 
           The commissioner of health shall develop recommendations 
        for incentives that may be implemented to increase the number of 
        magnet hospitals in Minnesota.  These recommendations must be 
        reported by December 1, 2001 to the chairs of the house and 
        senate committees with jurisdiction over health and human 
        services policy and finance issues. 
           Sec. 59.  [STUDY; FACTORS INFLUENCING PATIENT CARE AND 
        PATIENT SAFETY.] 
           The commissioner of health, in consultation with relevant 
        stakeholders, shall review available research and literature and 
        identify the major factors influencing patient care and patient 
        safety, including but not limited to staffing levels for nurses 
        and other health care professionals in health care facilities.  
        This report must be coordinated, to the extent possible, with 
        other studies relating to health quality and patient safety 
        authorized by the 2001 legislature.  The commissioner shall 
        report findings from the study, including recommendations on 
        ongoing analysis and measurement of these factors for the 
        Minnesota health care system, to the chairs of the policy and 
        finance committees in the house and senate with jurisdiction 
        over health and human services issues by February 15, 2002. 
           Sec. 60.  [STUDY; IMPACT OF WORKFORCE SHORTAGE ON HEALTH 
        CARE COSTS.] 
           The commissioner of health shall review available data, 
        research, and literature and assess the effects of health care 
        labor availability and its impact on health care costs.  The 
        commissioner shall report findings and recommendations to the 
        chairs of the policy and finance committees in the house and 
        senate with jurisdiction over health and human services issues 
        by February 15, 2002. 
           Sec. 61.  [MEDICATIONS DISPENSED IN SCHOOLS STUDY.] 
           (a) The commissioner of health, in consultation with the 
        board of nursing, shall study the relationship between the Nurse 
        Practice Act, Minnesota Statutes, sections 148.171 to 148.285; 
        and 121A.22, which specifies the administration of medications 
        in schools and the activities authorized under these sections, 
        including the administration of prescription and nonprescription 
        medications and medications needed by students to manage a 
        chronic illness.  The commissioner shall also make 
        recommendations on necessary statutory changes needed to promote 
        student health and safety in relation to administering 
        medications in schools and addressing the changing health needs 
        of students.  
           (b) The commissioner shall convene a work group to assist 
        in the study and recommendations.  The work group shall consist 
        of representatives of the commissioner of human services; the 
        commissioner of children, families, and learning; the board of 
        nursing; the board of teaching; school nurses; parents; school 
        administrators; school board associations; the American Academy 
        of Pediatrics; and the Minnesota Nurse's Association. 
           (c) The commissioner shall submit these recommendations and 
        any recommended statutory changes to the legislature by January 
        15, 2002.  
           Sec. 62.  [REPEALER.] 
           (a) Minnesota Statutes 2000, section 144.148, subdivision 
        8, is repealed. 
           (b) Minnesota Statutes 2000, sections 121A.15, subdivision 
        6; and 145.927, are repealed. 
           [EFFECTIVE DATE.] Paragraph (a) of this section is 
        effective the day following final enactment. 

                                   ARTICLE 2 
                                  HEALTH CARE 
           Section 1.  Minnesota Statutes 2000, section 62A.095, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICABILITY.] (a) No health plan shall 
        be offered, sold, or issued to a resident of this state, or to 
        cover a resident of this state, unless the health plan complies 
        with subdivision 2. 
           (b) Health plans providing benefits under health care 
        programs administered by the commissioner of human services are 
        not subject to the limits described in subdivision 2 but are 
        subject to the right of subrogation provisions under section 
        256B.37 and the lien provisions under section 256.015; 256B.042; 
        256D.03, subdivision 8; or 256L.03, subdivision 6. 
           Sec. 2.  Minnesota Statutes 2000, section 62J.692, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TRANSFERS FROM THE COMMISSIONER OF HUMAN 
        SERVICES.] (a) The amount transferred according to section 
        256B.69, subdivision 5c, paragraph (a), clause (1), shall be 
        distributed by the commissioner to clinical medical education 
        programs that meet the qualifications of subdivision 3 based on 
        a distribution formula that reflects a summation of two factors: 
           (1) an education factor, which is determined by the total 
        number of eligible trainee FTEs and the total statewide average 
        costs per trainee, by type of trainee, in each clinical medical 
        education program; and 
           (2) a public program volume factor, which is determined by 
        the total volume of public program revenue received by each 
        training site as a percentage of all public program revenue 
        received by all training sites in the fund pool created under 
        this subdivision.  
           In this formula, the education factor shall be weighted at 
        50 percent and the public program volume factor shall be 
        weighted at 50 percent. 
           (b) Public program revenue for the distribution formula in 
        paragraph (a) shall include revenue from medical assistance, 
        prepaid medical assistance, general assistance medical care, and 
        prepaid general assistance medical care. 
           (c) Training sites that receive no public program revenue 
        shall be ineligible for funds available under this 
        subdivision paragraph. 
           (b) Fifty percent of the amount transferred according to 
        section 256B.69, subdivision 5c, paragraph (a), clause (2), 
        shall be distributed by the commissioner to the University of 
        Minnesota board of regents for the purposes described in 
        sections 137.38 to 137.40.  Of the remaining amount transferred 
        according to section 256B.69, subdivision 5c, paragraph (a), 
        clause (2), 24 percent of the amount shall be distributed by the 
        commissioner to the Hennepin County Medical Center for clinical 
        medical education.  The remaining 26 percent of the amount 
        transferred shall be distributed by the commissioner in 
        accordance with subdivision 7a.  If the federal approval is not 
        obtained for the matching funds under section 256B.69, 
        subdivision 5c, paragraph (a), clause (2), 100 percent of the 
        amount transferred under this paragraph shall be distributed by 
        the commissioner to the University of Minnesota board of regents 
        for the purposes described in sections 137.38 to 137.40.  
           Sec. 3.  Minnesota Statutes 2000, section 62J.692, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [CLINICAL MEDICAL EDUCATION INNOVATIONS 
        GRANTS.] (a) The commissioner shall award grants to teaching 
        institutions and clinical training sites for projects that 
        increase dental access for underserved populations and promote 
        innovative clinical training of dental professionals.  In 
        awarding the grants, the commissioner, in consultation with the 
        commissioner of human services, shall consider the following: 
           (1) potential to successfully increase access to an 
        underserved population; 
           (2) the long-term viability of the project to improve 
        access beyond the period of initial funding; 
           (3) evidence of collaboration between the applicant and 
        local communities; 
           (4) the efficiency in the use of the funding; and 
           (5) the priority level of the project in relation to state 
        clinical education, access, and workforce goals. 
           (b) The commissioner shall periodically evaluate the 
        priorities in awarding the innovations grants in order to ensure 
        that the priorities meet the changing workforce needs of the 
        state. 
           Sec. 4.  Minnesota Statutes 2000, section 137.38, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONDITION.] If the board of regents 
        accepts the funding appropriated for amount transferred under 
        section 62J.692, subdivision 7, paragraph (b), to be used for 
        the purposes described in sections 137.38 to 137.40, it shall 
        comply with the duties for which the appropriations are transfer 
        is made. 
           Sec. 5.  Minnesota Statutes 2000, section 150A.10, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [LIMITED AUTHORIZATION FOR DENTAL 
        HYGIENISTS.] (a) Notwithstanding subdivision 1, a dental 
        hygienist licensed under this chapter may be employed or 
        retained by a health care facility to perform dental hygiene 
        services described under paragraph (b) without the patient first 
        being examined by a licensed dentist if the dental hygienist: 
           (1) has two years practical clinical experience with a 
        licensed dentist within the preceding five years; and 
           (2) has entered into a collaborative agreement with a 
        licensed dentist that designates authorization for the services 
        provided by the dental hygienist. 
           (b) The dental hygiene services authorized to be performed 
        by a dental hygienist under this subdivision are limited to 
        removal of deposits and stains from the surfaces of the teeth, 
        application of topical preventive or prophylactic agents, 
        polishing and smoothing restorations, removal of marginal 
        overhangs, performance of preliminary charting, taking of 
        radiographs, and performance of root planing and soft-tissue 
        curettage.  The dental hygienist shall not place pit and fissure 
        sealants, unless the patient has been recently examined and the 
        treatment planned by a licensed dentist.  The dental hygienist 
        shall not perform injections of anesthetic agents or the 
        administration of nitrous oxide unless under the indirect 
        supervision of a licensed dentist.  The performance of dental 
        hygiene services in a health care facility is limited to 
        patients, students, and residents of the facility. 
           (c) A collaborating dentist must be licensed under this 
        chapter and may enter into a collaborative agreement with no 
        more than four dental hygienists.  The collaborative agreement 
        must include: 
           (1) consideration for medically compromised patients and 
        medical conditions for which a dental evaluation and treatment 
        plan must occur prior to the provision of dental hygiene 
        services; and 
           (2) a period of time in which an examination by a dentist 
        should occur. 
        The collaborative agreement must be maintained by the dentist 
        and the dental hygienist and must be made available to the board 
        upon request.  
           (d) For the purposes of this subdivision, a "health care 
        facility" is limited to a hospital; nursing home; home health 
        agency; group home serving the elderly, disabled, or juveniles; 
        state-operated facility licensed by the commissioner of human 
        services or the commissioner of corrections; and federal, state, 
        or local public health facility, community clinic, or tribal 
        clinic.  
           (e) For purposes of this subdivision, a "collaborative 
        agreement" means a written agreement with a licensed dentist who 
        authorizes and accepts responsibility for the services performed 
        by the dental hygienist.  The services authorized under this 
        subdivision and the collaborative agreement may be performed 
        without the presence of a licensed dentist and may be performed 
        at a location other than the usual place of practice of the 
        dentist or dental hygienist and without a dentist's diagnosis 
        and treatment plan, unless specified in the collaborative 
        agreement. 
           Sec. 6.  Minnesota Statutes 2000, section 256.01, 
        subdivision 2, as amended by Laws 2001, chapter 178, article 1, 
        section 2, 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 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. 
           (22) (23) 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. 
           (23) (24) 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. 
           (24) (25) 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. 
           (25) (26) 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.
           [EFFECTIVE DATE.] This section is effective 30 days 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2000, section 256.955, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ELIGIBILITY.] An individual satisfying the 
        following requirements and the requirements described in 
        subdivision 2, paragraph (d), is eligible for the prescription 
        drug program: 
           (1) is at least 65 years of age or older; and 
           (2) is eligible as a qualified Medicare beneficiary 
        according to section 256B.057, subdivision 3 or, 3a, or, 3b, 
        clause (1), or is eligible under section 256B.057, subdivision 3 
        or, 3a, or 3b, clause (1), and is also eligible for medical 
        assistance or general assistance medical care with a spenddown 
        as defined in section 256B.056, subdivision 5. 
           [EFFECTIVE DATE.] This section is effective January 1, 2002.
           Sec. 8.  Minnesota Statutes 2000, section 256.955, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [ELIGIBILITY.] Effective July 1, 2002, an 
        individual satisfying the following requirements and the 
        requirements described in subdivision 2, paragraph (d), is 
        eligible for the prescription drug program: 
           (1) is under 65 years of age; and 
           (2) is eligible as a qualified Medicare beneficiary 
        according to section 256B.057, subdivision 3, or 3a or is 
        eligible under section 256B.057, subdivision 3, or 3a and is 
        also eligible for medical assistance or general assistance 
        medical care with a spenddown as defined in section 256B.056, 
        subdivision 5. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 9.  [256.956] [PURCHASING ALLIANCE STOP-LOSS FUND.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following definitions apply:  
           (a) "Commissioner" means the commissioner of human services.
           (b) "Health plan" means a policy, contract, or certificate 
        issued by a health plan company to a qualifying purchasing 
        alliance.  Any health plan issued to the members of a qualifying 
        purchasing alliance must meet the requirements of chapter 62L.  
           (c) "Health plan company" means: 
           (1) a health carrier as defined under section 62A.011, 
        subdivision 2; 
           (2) a community integrated service network operating under 
        chapter 62N; or 
           (3) an accountable provider network operating under chapter 
        62T.  
           (d) "Qualifying employer" means an employer who: 
           (1) is a member of a qualifying purchasing alliance; 
           (2) has at least one employee but no more than ten 
        employees or is a sole proprietor or farmer; 
           (3) did not offer employer-subsidized health care coverage 
        to its employees for at least 12 months prior to joining the 
        purchasing alliance; and 
           (4) is offering health coverage through the purchasing 
        alliance to all employees who work at least 20 hours per week 
        unless the employee is eligible for Medicare. 
        For purposes of this subdivision, "employer-subsidized health 
        coverage" means health coverage for which the employer pays at 
        least 50 percent of the cost of coverage for the employee.  
           (e) "Qualifying enrollee" means an employee of a qualifying 
        employer or the employee's dependent covered by a health plan.  
           (f) "Qualifying purchasing alliance" means a purchasing 
        alliance as defined in section 62T.01, subdivision 2, that: 
           (1) meets the requirements of chapter 62T; 
           (2) services a geographic area located in outstate 
        Minnesota, excluding the city of Duluth; and 
           (3) is organized and operating before May 1, 2001. 
           The criteria used by the qualifying purchasing alliance for 
        membership must be approved by the commissioner of health.  A 
        qualifying purchasing alliance may begin enrolling qualifying 
        employers after July 1, 2001, with enrollment ending by December 
        31, 2003.  
           Subd. 2.  [CREATION OF ACCOUNT.] A purchasing alliance 
        stop-loss fund account is established in the general fund.  The 
        commissioner shall use the money to establish a stop-loss fund 
        from which a health plan company may receive reimbursement for 
        claims paid for qualifying enrollees.  The account consists of 
        money appropriated by the legislature.  Money from the account 
        must be used for the stop-loss fund.  
           Subd. 3.  [REIMBURSEMENT.] (a) A health plan company may 
        receive reimbursement from the fund for 90 percent of the 
        portion of the claim that exceeds $30,000 but not of the portion 
        that exceeds $100,000 in a calendar year for a qualifying 
        enrollee.  
           (b) Claims shall be reported and funds shall be distributed 
        on a calendar-year basis.  Claims shall be eligible for 
        reimbursement only for the calendar year in which the claims 
        were paid.  
           (c) Once claims paid on behalf of a qualifying enrollee 
        reach $100,000 in a given calendar year, no further claims may 
        be submitted for reimbursement on behalf of that enrollee in 
        that calendar year.  
           Subd. 4.  [REQUEST PROCESS.] (a) Each health plan company 
        must submit a request for reimbursement from the fund on a form 
        prescribed by the commissioner.  Requests for payment must be 
        submitted no later than April 1 following the end of the 
        calendar year for which the reimbursement request is being made, 
        beginning April 1, 2002. 
           (b) The commissioner may require a health plan company to 
        submit claims data as needed in connection with the 
        reimbursement request.  
           Subd. 5.  [DISTRIBUTION.] (a) The commissioner shall 
        calculate the total claims reimbursement amount for all 
        qualifying health plan companies for the calendar year for which 
        claims are being reported and shall distribute the stop-loss 
        funds on an annual basis.  
           (b) In the event that the total amount requested for 
        reimbursement by the health plan companies for a calendar year 
        exceeds the funds available for distribution for claims paid by 
        all health plan companies during the same calendar year, the 
        commissioner shall provide for the pro rata distribution of the 
        available funds.  Each health plan company shall be eligible to 
        receive only a proportionate amount of the available funds as 
        the health plan company's total eligible claims paid compares to 
        the total eligible claims paid by all health plan companies.  
           (c) In the event that funds available for distribution for 
        claims paid by all health plan companies during a calendar year 
        exceed the total amount requested for reimbursement by all 
        health plan companies during the same calendar year, any excess 
        funds shall be reallocated for distribution in the next calendar 
        year.  
           Subd. 6.  [DATA.] Upon the request of the commissioner, 
        each health plan company shall furnish such data as the 
        commissioner deems necessary to administer the fund.  The 
        commissioner may require that such data be submitted on a per 
        enrollee, aggregate, or categorical basis.  Any data submitted 
        under this section shall be classified as private data or 
        nonpublic data as defined in section 13.02. 
           Subd. 7.  [DELEGATION.] The commissioner may delegate any 
        or all of the commissioner's administrative duties to another 
        state agency or to a private contractor.  
           Subd. 8.  [REPORT.] The commissioner of commerce, in 
        consultation with the office of rural health and the qualifying 
        purchasing alliances, shall evaluate the extent to which the 
        purchasing alliance stop-loss fund increases the availability of 
        employer-subsidized health care coverage for residents residing 
        in the geographic areas served by the qualifying purchasing 
        alliances.  A preliminary report must be submitted to the 
        legislature by February 15, 2003, and a final report must be 
        submitted by February 15, 2004.  
           Subd. 9.  [SUNSET.] This section shall expire January 1, 
        2005.  
           Sec. 10.  [256.958] [RETIRED DENTIST PROGRAM.] 
           Subdivision 1.  [PROGRAM.] The commissioner of human 
        services shall establish a program to reimburse a retired 
        dentist for the dentist's license fee and for the reasonable 
        cost of malpractice insurance compared to other dentists in the 
        community in exchange for the dentist providing 100 hours of 
        dental services on a volunteer basis within a 12-month period at 
        a community dental clinic or a dental training clinic located at 
        a Minnesota state college or university.  
           Subd. 2.  [DOCUMENTATION.] Upon completion of the required 
        hours, the retired dentist shall submit to the commissioner the 
        following: 
           (1) documentation of the service provided; 
           (2) the cost of malpractice insurance for the 12-month 
        period; and 
           (3) the cost of the license.  
           Subd. 3.  [REIMBURSEMENT.] Upon receipt of the information 
        described in subdivision 2, the commissioner shall provide 
        reimbursement to the retired dentist for the cost of malpractice 
        insurance for the previous 12-month period and the cost of the 
        license.  
           Sec. 11.  [256.959] [DENTAL PRACTICE DONATION PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of human 
        services shall establish a dental practice donation program that 
        coordinates the donation of a qualifying dental practice to a 
        qualified charitable organization and assists in locating a 
        dentist licensed under chapter 150A who wishes to maintain the 
        dental practice.  
           Subd. 2.  [QUALIFYING DENTAL PRACTICE.] To qualify for the 
        dental practice donation program, a dental practice must meet 
        the following requirements: 
           (1) the dental practice must be owned by the donating 
        dentist; 
           (2) the dental practice must be located in a designated 
        underserved area of the state as defined by the commissioner; 
        and 
           (3) the practice must be equipped with the basic dental 
        equipment necessary to maintain a dental practice as determined 
        by the commissioner.  
           Subd. 3.  [COORDINATION.] The commissioner shall establish 
        a procedure for dentists to donate their dental practices to a 
        qualified charitable organization.  The commissioner shall 
        authorize a practice for donation only if it meets the 
        requirements of subdivision 2 and there is a licensed dentist 
        who is interested in entering into an agreement as described in 
        subdivision 4.  Upon donation of the practice, the commissioner 
        shall provide the donating dentist with a statement verifying 
        that a donation of the practice was made to a qualifying 
        charitable organization for purposes of state and federal income 
        tax returns.  
           Subd. 4.  [DONATED DENTAL PRACTICE AGREEMENT.] (a) A 
        dentist accepting the donated practice must enter into an 
        agreement with the qualified charitable organization to maintain 
        the dental practice for a minimum of five years at the donated 
        practice site and to provide services to underserved populations 
        up to a preagreed percentage of patients served.  
           (b) The agreement must include the terms for the recovery 
        of the donated dental practice if the dentist accepting the 
        practice does not fulfill the service commitment required under 
        this subdivision.  
           (c) Any costs associated with operating the dental practice 
        during the service commitment time period are the financial 
        responsibility of the dentist accepting the practice. 
           Sec. 12.  Minnesota Statutes 2000, section 256.9657, 
        subdivision 2, is amended to read: 
           Subd. 2.  [HOSPITAL SURCHARGE.] (a) Effective October 1, 
        1992, each Minnesota hospital except facilities of the federal 
        Indian Health Service and regional treatment centers shall pay 
        to the medical assistance account a surcharge equal to 1.4 
        percent of net patient revenues excluding net Medicare revenues 
        reported by that provider to the health care cost information 
        system according to the schedule in subdivision 4.  
           (b) Effective July 1, 1994, the surcharge under paragraph 
        (a) is increased to 1.56 percent. 
           (c) Notwithstanding the Medicare cost finding and allowable 
        cost principles, the hospital surcharge is not an allowable cost 
        for purposes of rate setting under sections 256.9685 to 256.9695.
           Sec. 13.  Minnesota Statutes 2000, section 256.969, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [GREATER MINNESOTA PAYMENT ADJUSTMENT AFTER JUNE 
        30, 2001.] (a) For admissions occurring after June 30, 2001, the 
        commissioner shall pay fee-for-service inpatient admissions for 
        the diagnosis-related groups specified in paragraph (b) at 
        hospitals located outside of the seven-county metropolitan area 
        at the higher of: 
           (1) the hospital's current payment rate for the diagnostic 
        category to which the diagnosis-related group belongs, exclusive 
        of disproportionate population adjustments received under 
        subdivision 9 and hospital payment adjustments received under 
        subdivision 23; or 
           (2) 90 percent of the average payment rate for that 
        diagnostic category for hospitals located within the 
        seven-county metropolitan area, exclusive of disproportionate 
        population adjustments received under subdivision 9 and hospital 
        payment adjustments received under subdivisions 20 and 23.  The 
        commissioner may adjust this percentage each year so that the 
        estimated payment increases under this paragraph are equal to 
        the funding provided under section 256B.195 for this purpose. 
           (b) The payment increases provided in paragraph (a) apply 
        to the following diagnosis-related groups, as they fall within 
        the diagnostic categories: 
           (1) 370 cesarean section with complicating diagnosis; 
           (2) 371 cesarean section without complicating diagnosis; 
           (3) 372 vaginal delivery with complicating diagnosis; 
           (4) 373 vaginal delivery without complicating diagnosis; 
           (5) 386 extreme immaturity and respiratory distress 
        syndrome, neonate; 
           (6) 388 full-term neonates with other problems; 
           (7) 390 prematurity without major problems; 
           (8) 391 normal newborn; 
           (9) 385 neonate, died or transferred to another acute care 
        facility; 
           (10) 425 acute adjustment reaction and psychosocial 
        dysfunction; 
           (11) 430 psychoses; 
           (12) 431 childhood mental disorders; and 
           (13) 164-167 appendectomy. 
           Sec. 14.  Minnesota Statutes 2000, section 256B.04, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [CONTRACT FOR ADMINISTRATIVE SERVICES FOR 
        AMERICAN INDIAN CHILDREN.] Notwithstanding subdivision 1, the 
        commissioner may contract with federally recognized Indian 
        tribes with a reservation in Minnesota for the provision of 
        early and periodic screening, diagnosis, and treatment 
        administrative services for American Indian children, according 
        to Code of Federal Regulations, title 42, section 441, subpart 
        B, and Minnesota Rules, part 9505.1693 et seq., when the tribe 
        chooses to provide such services.  For purposes of this 
        subdivision, "American Indian" has the meaning given to persons 
        to whom services will be provided for in Code of Federal 
        Regulations, title 42, section 36.12.  Notwithstanding Minnesota 
        Rules, part 9505.1748, subpart 1, the commissioner, the local 
        agency, and the tribe may contract with any entity for the 
        provision of early and periodic screening, diagnosis, and 
        treatment administrative services. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  Minnesota Statutes 2000, section 256B.055, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [MFIP-S FAMILIES; FAMILIES ELIGIBLE UNDER PRIOR 
        AFDC RULES WITH CHILDREN.] (a) Beginning January 1, 1998, or on 
        the date that MFIP-S is implemented in counties, medical 
        assistance may be paid for a person receiving public assistance 
        under the MFIP-S program.  Beginning July 1, 2002, medical 
        assistance may be paid for a person who is a child under the age 
        of 18, or age 18 if a full-time student in a secondary school, 
        or in the equivalent level of vocational or technical training, 
        and reasonably expected to complete the program before reaching 
        age 19; the parent of a dependent child, including a pregnant 
        woman; or a caretaker relative of a dependent child.  
           (b) Beginning January 1, 1998, medical assistance may be 
        paid for a person who would have been eligible for public 
        assistance under the income and resource standards, or who would 
        have been eligible but for excess income or assets, under the 
        state's AFDC plan in effect as of July 16, 1996, as required by 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (PRWORA), Public Law Number 104-193. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 16.  Minnesota Statutes 2000, section 256B.056, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
        specifically required by state law or rule or federal law or 
        regulation, the methodologies used in counting income and assets 
        to determine eligibility for medical assistance for persons 
        whose eligibility category is based on blindness, disability, or 
        age of 65 or more years, the methodologies for the supplemental 
        security income program shall be used.  Increases in benefits 
        under title II of the Social Security Act shall not be counted 
        as income for purposes of this subdivision until July 1 of each 
        year.  Effective upon federal approval, for children eligible 
        under section 256B.055, subdivision 12, or for home and 
        community-based waiver services whose eligibility for medical 
        assistance is determined without regard to parental income, 
        child support payments, including any payments made by an 
        obligor in satisfaction of or in addition to a temporary or 
        permanent order for child support, and social security payments 
        are not counted as income.  For families and children, which 
        includes all other eligibility categories, the methodologies 
        under the state's AFDC plan in effect as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        shall be used, except that effective July 1, 2002, the $90 and 
        $30 and one-third earned income disregards shall not apply and 
        the disregard specified in subdivision 1c shall apply.  
        Effective upon federal approval, in-kind contributions to, and 
        payments made on behalf of, a recipient, by an obligor, in 
        satisfaction of or in addition to a temporary or permanent order 
        for child support or maintenance, shall be considered income to 
        the recipient.  For these purposes, a "methodology" does not 
        include an asset or income standard, or accounting method, or 
        method of determining effective dates. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 17.  Minnesota Statutes 2000, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [AGED, BLIND, AND DISABLED INCOME 
        METHODOLOGY.] The $20 general income disregard allowed under the 
        supplemental security income program is included in the standard 
        and shall not be allowed as a deduction from income for a person 
        eligible under section 256B.055, subdivisions 7, 7a, and 12. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 18.  Minnesota Statutes 2000, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [FAMILIES WITH CHILDREN INCOME METHODOLOGY.] (a) 
        For children ages one to five whose eligibility is determined 
        under section 256B.057, subdivision 2, 21 percent of countable 
        earned income shall be disregarded for up to four months.  
           (b) For families with children whose eligibility is 
        determined using the standard specified in section 256B.056, 
        subdivision 4, paragraph (c), 17 percent of countable earned 
        income shall be disregarded for up to four months. 
           (c) If the disregard has been applied to the wage earner's 
        income for four months, the disregard shall not be applied again 
        until the wage earner's income has not been considered in 
        determining medical assistance eligibility for 12 consecutive 
        months.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 19.  Minnesota Statutes 2000, section 256B.056, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ASSET LIMITATIONS FOR ELDERLY AND DISABLED 
        INDIVIDUALS.] To be eligible for medical assistance, a person 
        must not individually own more than $3,000 in assets, or if a 
        member of a household with two family members, husband and wife, 
        or parent and child, the household must not own more than $6,000 
        in assets, plus $200 for each additional legal dependent.  In 
        addition to these maximum amounts, an eligible individual or 
        family may accrue interest on these amounts, but they must be 
        reduced to the maximum at the time of an eligibility 
        redetermination.  The accumulation of the clothing and personal 
        needs allowance according to section 256B.35 must also be 
        reduced to the maximum at the time of the eligibility 
        redetermination.  The value of assets that are not considered in 
        determining eligibility for medical assistance is the value of 
        those assets excluded under the AFDC state plan as of July 16, 
        1996, as required by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
        Number 104-193, for families and children, and the supplemental 
        security income program for aged, blind, and disabled persons, 
        with the following exceptions: 
           (a) Household goods and personal effects are not considered.
           (b) Capital and operating assets of a trade or business 
        that the local agency determines are necessary to the person's 
        ability to earn an income are not considered. 
           (c) Motor vehicles are excluded to the same extent excluded 
        by the supplemental security income program. 
           (d) Assets designated as burial expenses are excluded to 
        the same extent excluded by the supplemental security income 
        program. 
           (e) Effective upon federal approval, for a person who no 
        longer qualifies as an employed person with a disability due to 
        loss of earnings, assets allowed while eligible for medical 
        assistance under section 256B.057, subdivision 9, are not 
        considered for 12 months, beginning with the first month of 
        ineligibility as an employed person with a disability, to the 
        extent that the person's total assets remain within the allowed 
        limits of section 256B.057, subdivision 9, paragraph (b). 
           Sec. 20.  Minnesota Statutes 2000, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 3c.  [ASSET LIMITATIONS FOR FAMILIES AND CHILDREN.] A 
        household of two or more persons must not own more than $30,000 
        in total net assets, and a household of one person must not own 
        more than $15,000 in total net assets.  In addition to these 
        maximum amounts, an eligible individual or family may accrue 
        interest on these amounts, but they must be reduced to the 
        maximum at the time of an eligibility redetermination.  The 
        value of assets that are not considered in determining 
        eligibility for medical assistance for families and children is 
        the value of those assets excluded under the AFDC state plan as 
        of July 16, 1996, as required by the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
        Number 104-193, with the following exceptions: 
           (1) household goods and personal effects are not 
        considered; 
           (2) capital and operating assets of a trade or business up 
        to $200,000 are not considered; 
           (3) one motor vehicle is excluded for each person of legal 
        driving age who is employed or seeking employment; 
           (4) one burial plot and all other burial expenses equal to 
        the supplemental security income program asset limit are not 
        considered for each individual; 
           (5) court-ordered settlements up to $10,000 are not 
        considered; 
           (6) individual retirement accounts and funds are not 
        considered; and 
           (7) assets owned by children are not considered.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 21.  Minnesota Statutes 2000, section 256B.056, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INCOME.] (a) To be eligible for medical 
        assistance, a person eligible under section 256B.055, 
        subdivision subdivisions 7, not receiving supplemental security 
        income program payments, and 7a, and 12, may have income up to 
        100 percent of the federal poverty guidelines.  Effective 
        January 1, 2000, and each successive January, recipients of 
        supplemental security income may have an income up to the 
        supplemental security income standard in effect on that date.  
           (b) To be eligible for medical assistance, families and 
        children may have an income up to 133-1/3 percent of the AFDC 
        income standard in effect under the July 16, 1996, AFDC state 
        plan.  Effective July 1, 2000, the base AFDC standard in effect 
        on July 16, 1996, shall be increased by three 
        percent.  Effective January 1, 2000, and each successive 
        January, recipients of supplemental security income may have an 
        income up to the supplemental security income standard in effect 
        on that date.  
           (c) Effective July 1, 2002, to be eligible for medical 
        assistance, families and children may have an income up to 100 
        percent of the federal poverty guidelines for the family size.  
           (d) In computing income to determine eligibility of persons 
        under paragraphs (a) to (c) who are not residents of long-term 
        care facilities, the commissioner shall disregard increases in 
        income as required by Public Law Numbers 94-566, section 503; 
        99-272; and 99-509.  Veterans aid and attendance benefits and 
        Veterans Administration unusual medical expense payments are 
        considered income to the recipient. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 22.  Minnesota Statutes 2000, section 256B.056, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [INCOME VERIFICATION.] The local agency shall 
        not require a monthly income verification form for a recipient 
        who is a resident of a long-term care facility and who has 
        monthly earned income of $80 or less.  The commissioner or 
        county agency shall use electronic verification as the primary 
        method of income verification.  If there is a discrepancy 
        between reported income and electronically verified income, an 
        individual may be required to submit additional verification.  
           Sec. 23.  Minnesota Statutes 2000, section 256B.056, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXCESS INCOME.] A person who has excess income 
        is eligible for medical assistance if the person has expenses 
        for medical care that are more than the amount of the person's 
        excess income, computed by deducting incurred medical expenses 
        from the excess income to reduce the excess to the income 
        standard specified in subdivision 4 5c.  The person shall elect 
        to have the medical expenses deducted at the beginning of a 
        one-month budget period or at the beginning of a six-month 
        budget period.  The commissioner shall allow persons eligible 
        for assistance on a one-month spenddown basis under this 
        subdivision to elect to pay the monthly spenddown amount in 
        advance of the month of eligibility to the state agency in order 
        to maintain eligibility on a continuous basis.  If the recipient 
        does not pay the spenddown amount on or before the 20th of the 
        month, the recipient is ineligible for this option for the 
        following month.  The local agency shall code the Medicaid 
        Management Information System (MMIS) to indicate that the 
        recipient has elected this option.  The state agency shall 
        convey recipient eligibility information relative to the 
        collection of the spenddown to providers through the Electronic 
        Verification System (EVS).  A recipient electing advance payment 
        must pay the state agency the monthly spenddown amount on or 
        before the 20th of the month in order to be eligible for this 
        option in the following month.  
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 24.  Minnesota Statutes 2000, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 5c.  [EXCESS INCOME STANDARD.] (a) The excess income 
        standard for families with children is the standard specified in 
        subdivision 4. 
           (b) The excess income standard for a person whose 
        eligibility is based on blindness, disability, or age of 65 or 
        more years is 70 percent of the federal poverty guidelines for 
        the family size.  Effective July 1, 2002, the excess income 
        standard for this paragraph shall equal 75 percent of the 
        federal poverty guidelines. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 25.  Minnesota Statutes 2000, section 256B.057, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHILDREN.] Except as specified in subdivision 
        1b, effective July 1, 2002, a child one through five 18 years of 
        age in a family whose countable income is less no greater than 
        133 170 percent of the federal poverty guidelines for the same 
        family size, is eligible for medical assistance.  A child six 
        through 18 years of age, who was born after September 30, 1983, 
        in a family whose countable income is less than 100 percent of 
        the federal poverty guidelines for the same family size is 
        eligible for medical assistance.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 26.  Minnesota Statutes 2000, section 256B.057, 
        subdivision 3, is amended to read: 
           Subd. 3.  [QUALIFIED MEDICARE BENEFICIARIES.] A person who 
        is entitled to Part A Medicare benefits, whose income is equal 
        to or less than 100 percent of the federal poverty guidelines, 
        and whose assets are no more than $10,000 for a single 
        individual and $18,000 for a married couple or family of two or 
        more, is eligible for medical assistance reimbursement of Part A 
        and Part B premiums, Part A and Part B coinsurance and 
        deductibles, and cost-effective premiums for enrollment with a 
        health maintenance organization or a competitive medical plan 
        under section 1876 of the Social Security Act.  Reimbursement of 
        the Medicare coinsurance and deductibles, when added to the 
        amount paid by Medicare, must not exceed the total rate the 
        provider would have received for the same service or services if 
        the person were a medical assistance recipient with Medicare 
        coverage.  Increases in benefits under Title II of the Social 
        Security Act shall not be counted as income for purposes of this 
        subdivision until the first day of the second full month 
        following publication of the change in the federal poverty 
        guidelines July 1 of each year.  
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 27.  Minnesota Statutes 2000, section 256B.057, 
        subdivision 7, is amended to read: 
           Subd. 7.  [WAIVER OF MAINTENANCE OF EFFORT REQUIREMENT.] 
        Unless a federal waiver of the maintenance of effort requirement 
        of section 2105(d) of title XXI of the Balanced Budget Act of 
        1997, Public Law Number 105-33, Statutes at Large, volume 111, 
        page 251, is granted by the federal Department of Health and 
        Human Services by September 30, 1998, eligibility for children 
        under age 21 must be determined without regard to asset 
        standards established in section 256B.056, subdivision 3 3c.  
        The commissioner of human services shall publish a notice in the 
        State Register upon receipt of a federal waiver. 
           Sec. 28.  Minnesota Statutes 2000, section 256B.057, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
        assistance may be paid for a person who is employed and who: 
           (1) meets the definition of disabled under the supplemental 
        security income program; 
           (2) is at least 16 but less than 65 years of age; 
           (3) meets the asset limits in paragraph (b); and 
           (4) pays a premium, if required, under paragraph (c).  
        Any spousal income or assets shall be disregarded for purposes 
        of eligibility and premium determinations. 
           After the month of enrollment, a person enrolled in medical 
        assistance under this subdivision who is temporarily unable to 
        work and without receipt of earned income due to a medical 
        condition, as verified by a physician, may retain eligibility 
        for up to four calendar months. 
           (b) For purposes of determining eligibility under this 
        subdivision, a person's assets must not exceed $20,000, 
        excluding: 
           (1) all assets excluded under section 256B.056; 
           (2) retirement accounts, including individual accounts, 
        401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
           (3) medical expense accounts set up through the person's 
        employer. 
           (c) A person whose earned and unearned income is equal to 
        or greater than 200 than 100 percent of federal poverty 
        guidelines for the applicable family size must pay a premium to 
        be eligible for medical assistance under this subdivision.  The 
        premium shall be equal to ten percent of the person's gross 
        earned and unearned income above 200 percent of federal poverty 
        guidelines for the applicable family size up to the cost of 
        coverage based on the person's gross earned and unearned income 
        and the applicable family size using a sliding fee scale 
        established by the commissioner, which begins at one percent of 
        income at 100 percent of the federal poverty guidelines and 
        increases to 7.5 percent of income for those with incomes at or 
        above 300 percent of the federal poverty guidelines.  Annual 
        adjustments in the premium schedule based upon changes in the 
        federal poverty guidelines shall be effective for premiums due 
        in July of each year.  
           (d) A person's eligibility and premium shall be determined 
        by the local county agency.  Premiums must be paid to the 
        commissioner.  All premiums are dedicated to the commissioner. 
           (e) Any required premium shall be determined at application 
        and redetermined annually at recertification or when a change in 
        income or family size occurs. 
           (f) Premium payment is due upon notification from the 
        commissioner of the premium amount required.  Premiums may be 
        paid in installments at the discretion of the commissioner. 
           (g) Nonpayment of the premium shall result in denial or 
        termination of medical assistance unless the person demonstrates 
        good cause for nonpayment.  Good cause exists if the 
        requirements specified in Minnesota Rules, part 9506.0040, 
        subpart 7, items B to D, are met.  Nonpayment shall include 
        payment with a returned, refused, or dishonored instrument.  The 
        commissioner may require a guaranteed form of payment as the 
        only means to replace a returned, refused, or dishonored 
        instrument. 
           [EFFECTIVE DATE.] This section is effective November 1, 
        2001. 
           Sec. 29.  Minnesota Statutes 2000, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [CERTAIN PERSONS NEEDING TREATMENT FOR BREAST OR 
        CERVICAL CANCER.] (a) Medical assistance may be paid for a 
        person who: 
           (1) has been screened for breast or cervical cancer by the 
        Minnesota breast and cervical cancer control program, and 
        program funds have been used to pay for the person's screening; 
           (2) according to the person's treating health professional, 
        needs treatment, including diagnostic services necessary to 
        determine the extent and proper course of treatment, for breast 
        or cervical cancer, including precancerous conditions and early 
        stage cancer; 
           (3) meets the income eligibility guidelines for the 
        Minnesota breast and cervical cancer control program; 
           (4) is under age 65; 
           (5) is not otherwise eligible for medical assistance under 
        United States Code, title 42, section 1396(a)(10)(A)(i); and 
           (6) is not otherwise covered under creditable coverage, as 
        defined under United States Code, title 42, section 300gg(c). 
           (b) Medical assistance provided for an eligible person 
        under this subdivision shall be limited to services provided 
        during the period that the person receives treatment for breast 
        or cervical cancer. 
           (c) A person meeting the criteria in paragraph (a) is 
        eligible for medical assistance without meeting the eligibility 
        criteria relating to income and assets in section 256B.056, 
        subdivisions 1a to 5b. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 30.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [TELEMEDICINE CONSULTATIONS.] (a) Medical 
        assistance covers telemedicine consultations.  Telemedicine 
        consultations must be made via two-way, interactive video or 
        store-and-forward technology.  Store-and-forward technology 
        includes telemedicine consultations that do not occur in real 
        time via synchronous transmissions, and that do not require a 
        face-to-face encounter with the patient for all or any part of 
        any such telemedicine consultation.  The patient record must 
        include a written opinion from the consulting physician 
        providing the telemedicine consultation.  A communication 
        between two physicians that consists solely of a telephone 
        conversation is not a telemedicine consultation.  Coverage is 
        limited to three telemedicine consultations per recipient per 
        calendar week.  Telemedicine consultations shall be paid at the 
        full allowable rate. 
           (b) This subdivision expires July 1, 2001.  
           Sec. 31.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [INTENSIVE EARLY INTERVENTION BEHAVIOR THERAPY 
        SERVICES FOR CHILDREN WITH AUTISM SPECTRUM DISORDERS.] (a) 
        [COVERAGE.] Medical assistance covers home-based intensive early 
        intervention behavior therapy for children with autism spectrum 
        disorders.  Children with autism spectrum disorder, and their 
        custodial parents or foster parents, may access other covered 
        services to treat autism spectrum disorder, and are not required 
        to receive intensive early intervention behavior therapy 
        services under this subdivision.  Intensive early intervention 
        behavior therapy does not include coverage for services to treat 
        developmental disorders of language, early onset psychosis, 
        Rett's disorder, selective mutism, social anxiety disorder, 
        stereotypic movement disorder, dementia, obsessive compulsive 
        disorder, schizoid personality disorder, avoidant personality 
        disorder, or reactive attachment disorder.  If a child with 
        autism spectrum disorder is diagnosed to have one or more of 
        these conditions, intensive early intervention behavior therapy 
        includes coverage only for services necessary to treat the 
        autism spectrum disorder. 
           (b) [PURPOSE OF INTENSIVE EARLY INTERVENTION BEHAVIOR 
        THERAPY SERVICES (IEIBTS).] The purpose of IEIBTS is to improve 
        the child's behavioral functioning, to prevent development of 
        challenging behaviors, to eliminate autistic behaviors, to 
        reduce the risk of out-of-home placement, and to establish 
        independent typical functioning in language and social 
        behavior.  The procedures used to accomplish these goals are 
        based upon research in applied behavior analysis. 
           (c) [ELIGIBLE CHILDREN.] A child is eligible to initiate 
        IEIBTS if, the child meets the additional eligibility criteria 
        in paragraph (d) and in a diagnostic assessment by a mental 
        health professional who is not under the employ of the service 
        provider, the child: 
           (1) is found to have an autism spectrum disorder; 
           (2) has a current IQ of either untestable, or at least 30; 
           (3) if nonverbal, initiated behavior therapy by 42 months 
        of age; 
           (4) if verbal, initiated behavior therapy by 48 months of 
        age; or 
           (5) if having an IQ of at least 50, initiated behavior 
        therapy by 84 months of age. 
        To continue after six-month individualized treatment plan (ITP) 
        reviews, at least one of the child's custodial parents or foster 
        parents must participate in an average of at least five hours of 
        documented behavior therapy per week for six months, and 
        consistently implement behavior therapy recommendations 24 hours 
        a day.  To continue after six-month individualized treatment 
        plan (ITP) reviews, the child must show documented progress 
        toward mastery of six-month benchmark behavior objectives.  The 
        maximum number of months during which services may be billed is 
        54, or up to the month of August in the first year in which the 
        child completes first grade, whichever comes last.  If 
        significant progress towards treatment goals has not been 
        achieved after 24 months of treatment, treatment must be 
        discontinued. 
           (d) [ADDITIONAL ELIGIBILITY CRITERIA.] A child is eligible 
        to initiate IEIBTS if: 
           (1) in medical and diagnostic assessments by medical and 
        mental health professionals, it is determined that the child 
        does not have severe or profound mental retardation; 
           (2) an accurate assessment of the child's hearing has been 
        performed, including audiometry if the brain stem auditory 
        evokes response; 
           (3) a blood lead test has been performed prior to 
        initiation of treatment; and 
           (4) an EEG or neurologic evaluation is done, prior to 
        initiation of treatment, if the child has a history of staring 
        spells or developmental regression.  
           (e) [COVERED SERVICES.] The focus of IEIBTS must be to 
        treat the principal diagnostic features of the autism spectrum 
        disorder.  All IEIBTS must be delivered by a team of 
        practitioners under the consistent supervision of a single 
        clinical supervisor.  A mental health professional must develop 
        the ITP for IEIBTS.  The ITP must include six-month benchmark 
        behavior objectives.  All behavior therapy must be based upon 
        research in applied behavior analysis, with an emphasis upon 
        positive reinforcement of carefully task-analyzed skills for 
        optimum rates of progress.  All behavior therapy must be 
        consistently applied and generalized throughout the 24-hour day 
        and seven-day week by all of the child's regular care 
        providers.  When placing the child in school activities, a 
        majority of the peers must have no mental health diagnosis, and 
        the child must have sufficient social skills to succeed with 80 
        percent of the school activities.  Reactive consequences, such 
        as redirection, correction, positive practice, or time-out, must 
        be used only when necessary to improve the child's success when 
        proactive procedures alone have not been effective.  IEIBTS must 
        be delivered by a team of behavior therapy practitioners who are 
        employed under the direction of the same agency.  The team may 
        deliver up to 200 billable hours per year of direct clinical 
        supervisor services, up to 700 billable hours per year of senior 
        behavior therapist services, and up to 1,800 billable hours per 
        year of direct behavior therapist services.  A one-hour clinical 
        review meeting for the child, parents, and staff must be 
        scheduled 50 weeks a year, at which behavior therapy is reviewed 
        and planned.  At least one-quarter of the annual clinical 
        supervisor billable hours shall consist of on-site clinical 
        meeting time.  At least one-half of the annual senior behavior 
        therapist billable hours shall consist of direct services to the 
        child or parents.  All of the behavioral therapist billable 
        hours shall consist of direct on-site services to the child or 
        parents.  None of the senior behavior therapist billable hours 
        or behavior therapist billable hours shall consist of clinical 
        meeting time.  If there is any regression of the autistic 
        spectrum disorder after 12 months of therapy, a neurologic 
        consultation must be performed. 
           (f) [PROVIDER QUALIFICATIONS.] The provider agency must be 
        capable of delivering consistent applied behavior analysis 
        (ABA)-based behavior therapy in the home.  The site director of 
        the agency must be a mental health professional and a board 
        certified behavior analyst certified by the behavior analyst 
        certification board.  Each clinical supervisor must be a 
        certified associate behavior analyst certified by the behavior 
        analyst certification board or have equivalent experience in 
        applied behavior analysis. 
           (g) [SUPERVISION REQUIREMENTS.] (1) Each behavior therapist 
        practitioner must be continuously supervised while in the home 
        until the practitioner has mastered competencies for independent 
        practice.  Each behavior therapist must have mastered three 
        credits of academic content and practice in an applied behavior 
        analysis sequence at an accredited university before providing 
        more than 12 months of therapy.  A college degree or minimum 
        hours of experience are not required.  Each behavior therapist 
        must continue training through weekly direct observation by the 
        senior behavior therapist, through demonstrated performance in 
        clinical meetings with the clinical supervisor, and annual 
        training in applied behavior analysis. 
           (2) Each senior behavior therapist practitioner must have 
        mastered the senior behavior therapy competencies, completed one 
        year of practice as a behavior therapist, and six months of 
        co-therapy training with another senior behavior therapist or 
        have an equivalent amount of experience in applied behavior 
        analysis.  Each senior behavior therapist must have mastered 12 
        credits of academic content and practice in an applied behavior 
        analysis sequence at an accredited university before providing 
        more than 12 months of senior behavior therapy.  Each senior 
        behavior therapist must continue training through demonstrated 
        performance in clinical meetings with the clinical supervisor, 
        and annual training in applied behavior analysis. 
           (3) Each clinical supervisor practitioner must have 
        mastered the clinical supervisor and family consultation 
        competencies, completed two years of practice as a senior 
        behavior therapist and one year of co-therapy training with 
        another clinical supervisor, or equivalent experience in applied 
        behavior analysis.  Each clinical supervisor must continue 
        training through annual training in applied behavior analysis. 
           (h) [PLACE OF SERVICE.] IEIBTS are provided primarily in 
        the child's home and community.  Services may be provided in the 
        child's natural school or preschool classroom, home of a 
        relative, natural recreational setting, or day care. 
           (i) [PRIOR AUTHORIZATION REQUIREMENTS.] Prior authorization 
        shall be required for services provided after 200 hours of 
        clinical supervisor, 700 hours of senior behavior therapist, or 
        1,800 hours of behavior therapist services per year. 
           (j) [PAYMENT RATES.] The following payment rates apply: 
           (1) for an IEIBTS clinical supervisor practitioner under 
        supervision of a mental health professional, the lower of the 
        submitted charge or $67 per hour unit; 
           (2) for an IEIBTS senior behavior therapist practitioner 
        under supervision of a mental health professional, the lower of 
        the submitted charge or $37 per hour unit; or 
           (3) for an IEIBTS behavior therapist practitioner under 
        supervision of a mental health professional, the lower of the 
        submitted charge or $27 per hour unit. 
        An IEIBTS practitioner may receive payment for travel time which 
        exceeds 50 minutes one-way.  The maximum payment allowed will be 
        $0.51 per minute for up to a maximum of 300 hours per year. 
           For any week during which the above charges are made to 
        medical assistance, payments for the following services are 
        excluded:  supervising mental health professional hours and 
        personal care attendant, home-based mental health, 
        family-community support, or mental health behavioral aide hours.
           (k) [REPORT.] The commissioner shall collect evidence of 
        the effectiveness of intensive early intervention behavior 
        therapy services and present a report to the legislature by July 
        1, 2006. 
           [EFFECTIVE DATE.] This section is effective January 1, 2003.
           Sec. 32.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
        except for fertility drugs when specifically used to enhance 
        fertility, if prescribed by a licensed practitioner and 
        dispensed by a licensed pharmacist, by a physician enrolled in 
        the medical assistance program as a dispensing physician, or by 
        a physician 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 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 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 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 
        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.  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 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). 
           [EFFECTIVE DATE.] This section is effective 30 days 
        following final enactment. 
           Sec. 33.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 13a, is amended to read: 
           Subd. 13a.  [DRUG UTILIZATION REVIEW BOARD.] A nine-member 
        drug utilization review board is established.  The board is 
        comprised of at least three but no more than four licensed 
        physicians actively engaged in the practice of medicine in 
        Minnesota; at least three licensed pharmacists actively engaged 
        in the practice of pharmacy in Minnesota; and one consumer 
        representative; the remainder to be made up of health care 
        professionals who are licensed in their field and have 
        recognized knowledge in the clinically appropriate prescribing, 
        dispensing, and monitoring of covered outpatient drugs.  The 
        board shall be staffed by an employee of the department who 
        shall serve as an ex officio nonvoting member of the board.  The 
        members of the board shall be appointed by the commissioner and 
        shall serve three-year terms.  The members shall be selected 
        from lists submitted by professional associations.  The 
        commissioner shall appoint the initial members of the board for 
        terms expiring as follows:  three members for terms expiring 
        June 30, 1996; three members for terms expiring June 30, 1997; 
        and three members for terms expiring June 30, 1998.  Members may 
        be reappointed once.  The board shall annually elect a chair 
        from among the members. 
           The commissioner shall, with the advice of the board: 
           (1) implement a medical assistance retrospective and 
        prospective drug utilization review program as required by 
        United States Code, title 42, section 1396r-8(g)(3); 
           (2) develop and implement the predetermined criteria and 
        practice parameters for appropriate prescribing to be used in 
        retrospective and prospective drug utilization review; 
           (3) develop, select, implement, and assess interventions 
        for physicians, pharmacists, and patients that are educational 
        and not punitive in nature; 
           (4) establish a grievance and appeals process for 
        physicians and pharmacists under this section; 
           (5) publish and disseminate educational information to 
        physicians and pharmacists regarding the board and the review 
        program; 
           (6) adopt and implement procedures designed to ensure the 
        confidentiality of any information collected, stored, retrieved, 
        assessed, or analyzed by the board, staff to the board, or 
        contractors to the review program that identifies individual 
        physicians, pharmacists, or recipients; 
           (7) establish and implement an ongoing process to (i) 
        receive public comment regarding drug utilization review 
        criteria and standards, and (ii) consider the comments along 
        with other scientific and clinical information in order to 
        revise criteria and standards on a timely basis; and 
           (8) adopt any rules necessary to carry out this section. 
           The board may establish advisory committees.  The 
        commissioner may contract with appropriate organizations to 
        assist the board in carrying out the board's duties.  The 
        commissioner may enter into contracts for services to develop 
        and implement a retrospective and prospective review program. 
           The board shall report to the commissioner annually on the 
        date the Drug Utilization Review Annual Report is due to the 
        Health Care Financing Administration.  This report is to cover 
        the preceding federal fiscal year.  The commissioner shall make 
        the report available to the public upon request.  The report 
        must include information on the activities of the board and the 
        program; the effectiveness of implemented interventions; 
        administrative costs; and any fiscal impact resulting from the 
        program.  An honorarium of $50 $100 per meeting and 
        reimbursement for mileage shall be paid to each board member in 
        attendance. 
           Sec. 34.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 17, is amended to read: 
           Subd. 17.  [TRANSPORTATION COSTS.] (a) Medical assistance 
        covers transportation costs incurred solely for obtaining 
        emergency medical care or transportation costs incurred by 
        nonambulatory persons in obtaining emergency or nonemergency 
        medical care when paid directly to an ambulance company, common 
        carrier, or other recognized providers of transportation 
        services.  For the purpose of this subdivision, a person who is 
        incapable of transport by taxicab or bus shall be considered to 
        be nonambulatory. 
           (b) Medical assistance covers special transportation, as 
        defined in Minnesota Rules, part 9505.0315, subpart 1, item F, 
        if the provider receives and maintains a current physician's 
        order by the recipient's attending physician certifying that the 
        recipient has a physical or mental impairment that would 
        prohibit the recipient from safely accessing and using a bus, 
        taxi, other commercial transportation, or private automobile.  
        Special transportation includes driver-assisted service to 
        eligible individuals.  Driver-assisted service includes 
        passenger pickup at and return to the individual's residence or 
        place of business, assistance with admittance of the individual 
        to the medical facility, and assistance in passenger securement 
        or in securing of wheelchairs or stretchers in the vehicle.  The 
        commissioner shall establish maximum medical assistance 
        reimbursement rates for special transportation services for 
        persons who need a wheelchair lift accessible van or 
        stretcher-equipped stretcher-accessible vehicle and for those 
        who do not need a wheelchair lift accessible van or 
        stretcher-equipped stretcher-accessible vehicle.  The average of 
        these two rates per trip must not exceed $15 for the base rate 
        and $1.20 $1.40 per mile.  Special transportation provided to 
        nonambulatory persons who do not need a wheelchair lift 
        accessible van or stretcher-equipped stretcher-accessible 
        vehicle, may be reimbursed at a lower rate than special 
        transportation provided to persons who need a wheelchair lift 
        accessible van or stretcher-equipped stretcher-accessible 
        vehicle.  
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 35.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 17a, is amended to read: 
           Subd. 17a.  [PAYMENT FOR AMBULANCE SERVICES.] Effective for 
        services rendered on or after July 1, 1999 2001, medical 
        assistance payments for ambulance services shall be increased by 
        five percent paid at the Medicare reimbursement rate or at the 
        medical assistance payment rate in effect on July 1, 2000, 
        whichever is greater.  
           Sec. 36.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 18a, is amended to read: 
           Subd. 18a.  [PAYMENT FOR MEALS AND LODGING ACCESS TO 
        MEDICAL SERVICES.] (a) Medical assistance reimbursement for 
        meals for persons traveling to receive medical care may not 
        exceed $5.50 for breakfast, $6.50 for lunch, or $8 for dinner. 
           (b) Medical assistance reimbursement for lodging for 
        persons traveling to receive medical care may not exceed $50 per 
        day unless prior authorized by the local agency. 
           (c) Medical assistance direct mileage reimbursement to the 
        eligible person or the eligible person's driver may not exceed 
        20 cents per mile. 
           (d) Medical assistance covers oral language interpreter 
        services when provided by an enrolled health care provider 
        during the course of providing a direct, person-to-person 
        covered health care service to an enrolled recipient with 
        limited English proficiency. 
           Sec. 37.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 30, is amended to read: 
           Subd. 30.  [OTHER CLINIC SERVICES.] (a) Medical assistance 
        covers rural health clinic services, federally qualified health 
        center services, nonprofit community health clinic services, 
        public health clinic services, and the services of a clinic 
        meeting the criteria established in rule by the commissioner.  
        Rural health clinic services and federally qualified health 
        center services mean services defined in United States Code, 
        title 42, section 1396d(a)(2)(B) and (C).  Payment for rural 
        health clinic and federally qualified health center services 
        shall be made according to applicable federal law and regulation.
           (b) A federally qualified health center that is beginning 
        initial operation shall submit an estimate of budgeted costs and 
        visits for the initial reporting period in the form and detail 
        required by the commissioner.  A federally qualified health 
        center that is already in operation shall submit an initial 
        report using actual costs and visits for the initial reporting 
        period.  Within 90 days of the end of its reporting period, a 
        federally qualified health center shall submit, in the form and 
        detail required by the commissioner, a report of its operations, 
        including allowable costs actually incurred for the period and 
        the actual number of visits for services furnished during the 
        period, and other information required by the commissioner.  
        Federally qualified health centers that file Medicare cost 
        reports shall provide the commissioner with a copy of the most 
        recent Medicare cost report filed with the Medicare program 
        intermediary for the reporting year which support the costs 
        claimed on their cost report to the state. 
           (c) In order to continue cost-based payment under the 
        medical assistance program according to paragraphs (a) and (b), 
        a federally qualified health center or rural health clinic must 
        apply for designation as an essential community provider within 
        six months of final adoption of rules by the department of 
        health according to section 62Q.19, subdivision 7.  For those 
        federally qualified health centers and rural health clinics that 
        have applied for essential community provider status within the 
        six-month time prescribed, medical assistance payments will 
        continue to be made according to paragraphs (a) and (b) for the 
        first three years after application.  For federally qualified 
        health centers and rural health clinics that either do not apply 
        within the time specified above or who have had essential 
        community provider status for three years, medical assistance 
        payments for health services provided by these entities shall be 
        according to the same rates and conditions applicable to the 
        same service provided by health care providers that are not 
        federally qualified health centers or rural health clinics.  
           (d) Effective July 1, 1999, the provisions of paragraph (c) 
        requiring a federally qualified health center or a rural health 
        clinic to make application for an essential community provider 
        designation in order to have cost-based payments made according 
        to paragraphs (a) and (b) no longer apply. 
           (e) Effective January 1, 2000, payments made according to 
        paragraphs (a) and (b) shall be limited to the cost phase-out 
        schedule of the Balanced Budget Act of 1997. 
           (f) Effective January 1, 2001, each federally qualified 
        health center and rural health clinic may elect to be paid 
        either under the prospective payment system established in 
        United States Code, title 42, section 1396a(aa) or under an 
        alternative payment methodology consistent with the requirements 
        of United States Code, title 42, section 1396a(aa) and approved 
        by the Health Care Financing Administration.  The alternative 
        payment methodology shall be 100 percent of cost as determined 
        according to Medicare cost principles. 
           Sec. 38.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 34, is amended to read: 
           Subd. 34.  [INDIAN HEALTH SERVICES FACILITIES.] Medical 
        assistance payments and MinnesotaCare payments to facilities of 
        the Indian health service and facilities operated by a tribe or 
        tribal organization under funding authorized by United States 
        Code, title 25, sections 450f to 450n, or title III of the 
        Indian Self-Determination and Education Assistance Act, Public 
        Law Number 93-638, for enrollees who are eligible for federal 
        financial participation, shall be at the option of the facility 
        in accordance with the rate published by the United States 
        Assistant Secretary for Health under the authority of United 
        States Code, title 42, sections 248(a) and 249(b).  General 
        assistance medical care payments to facilities of the Indian 
        health services and facilities operated by a tribe or tribal 
        organization for the provision of outpatient medical care 
        services billed after June 30, 1990, must be in accordance with 
        the general assistance medical care rates paid for the same 
        services when provided in a facility other than a facility of 
        the Indian health service or a facility operated by a tribe or 
        tribal organization.  MinnesotaCare payments for enrollees who 
        are not eligible for federal financial participation at 
        facilities of the Indian Health Service and facilities operated 
        by a tribe or tribal organization for the provision of 
        outpatient medical services must be in accordance with the 
        medical assistance rates paid for the same services when 
        provided in a facility other than a facility of the Indian 
        Health Service or a facility operated by a tribe or tribal 
        organization. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 39.  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 persons with developmental disabilities not receiving home 
        and community-based waiver services. 
           Sec. 40.  Minnesota Statutes 2000, section 256B.0635, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INCREASED EMPLOYMENT.] Beginning January 
        1, 1998 (a) Until June 30, 2002, medical assistance may be paid 
        for persons who received MFIP-S or medical assistance for 
        families and children in at least three of six months preceding 
        the month in which the person became ineligible for MFIP-S or 
        medical assistance, if the ineligibility was due to an increase 
        in hours of employment or employment income or due to the loss 
        of an earned income disregard.  In addition, to receive 
        continued assistance under this section, persons who received 
        medical assistance for families and children but did not receive 
        MFIP-S must have had income less than or equal to the assistance 
        standard for their family size under the state's AFDC plan in 
        effect as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193, increased by three percent 
        effective July 1, 2000, at the time medical assistance 
        eligibility began.  A person who is eligible for extended 
        medical assistance is entitled to six months of assistance 
        without reapplication, unless the assistance unit ceases to 
        include a dependent child.  For a person under 21 years of age, 
        medical assistance may not be discontinued within the six-month 
        period of extended eligibility until it has been determined that 
        the person is not otherwise eligible for medical assistance.  
        Medical assistance may be continued for an additional six months 
        if the person meets all requirements for the additional six 
        months, according to title XIX of the Social Security Act, as 
        amended by section 303 of the Family Support Act of 1988, Public 
        Law Number 100-485. 
           (b) Beginning July 1, 2002, medical assistance for families 
        and children may be paid for persons who were eligible under 
        section 256B.055, subdivision 3a, in at least three of six 
        months preceding the month in which the person became ineligible 
        under that section if the ineligibility was due to an increase 
        in hours of employment or employment income or due to the loss 
        of an earned income disregard.  A person who is eligible for 
        extended medical assistance is entitled to six months of 
        assistance without reapplication, unless the assistance unit 
        ceases to include a dependent child, except medical assistance 
        may not be discontinued for that dependent child under 21 years 
        of age within the six-month period of extended eligibility until 
        it has been determined that the person is not otherwise eligible 
        for medical assistance.  Medical assistance may be continued for 
        an additional six months if the person meets all requirements 
        for the additional six months, according to title XIX of the 
        Social Security Act, as amended by section 303 of the Family 
        Support Act of 1988, Public Law Number 100-485. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001. 
           Sec. 41.  Minnesota Statutes 2000, section 256B.0635, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCREASED CHILD OR SPOUSAL SUPPORT.] Beginning 
        January 1, 1998 (a) Until June 30, 2002, medical assistance may 
        be paid for persons who received MFIP-S or medical assistance 
        for families and children in at least three of the six months 
        preceding the month in which the person became ineligible for 
        MFIP-S or medical assistance, if the ineligibility was the 
        result of the collection of child or spousal support under part 
        D of title IV of the Social Security Act.  In addition, to 
        receive continued assistance under this section, persons who 
        received medical assistance for families and children but did 
        not receive MFIP-S must have had income less than or equal to 
        the assistance standard for their family size under the state's 
        AFDC plan in effect as of July 16, 1996, as required by the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (PRWORA), Public Law Number 104-193 increased by three 
        percent effective July 1, 2000, at the time medical assistance 
        eligibility began.  A person who is eligible for extended 
        medical assistance under this subdivision is entitled to four 
        months of assistance without reapplication, unless the 
        assistance unit ceases to include a dependent child.  For a 
        person under 21 years of age, except medical assistance may not 
        be discontinued for that dependent child under 21 years of age 
        within the four-month period of extended eligibility until it 
        has been determined that the person is not otherwise eligible 
        for medical assistance. 
           (b) Beginning July 1, 2002, medical assistance for families 
        and children may be paid for persons who were eligible under 
        section 256B.055, subdivision 3a, in at least three of the six 
        months preceding the month in which the person became ineligible 
        under that section if the ineligibility was the result of the 
        collection of child or spousal support under part D of title IV 
        of the Social Security Act.  A person who is eligible for 
        extended medical assistance under this subdivision is entitled 
        to four months of assistance without reapplication, unless the 
        assistance unit ceases to include a dependent child, except 
        medical assistance may not be discontinued for that dependent 
        child under 21 years of age within the four-month period of 
        extended eligibility until it has been determined that the 
        person is not otherwise eligible for medical assistance. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001. 
           Sec. 42.  [256B.0637] [PRESUMPTIVE ELIGIBILITY FOR CERTAIN 
        PERSONS NEEDING TREATMENT FOR BREAST OR CERVICAL CANCER.] 
           Medical assistance is available during a presumptive 
        eligibility period for persons who meet the criteria in section 
        256B.057, subdivision 10.  For purposes of this section, the 
        presumptive eligibility period begins on the date on which an 
        entity designated by the commissioner determines, based on 
        preliminary information, that the person meets the criteria in 
        section 256B.057, subdivision 10.  The presumptive eligibility 
        period ends on the day on which a determination is made as to 
        the person's eligibility, except that if an application is not 
        submitted by the last day of the month following the month 
        during which the determination based on preliminary information 
        is made, the presumptive eligibility period ends on that last 
        day of the month. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 43.  Minnesota Statutes 2000, section 256B.0644, is 
        amended to read: 
           256B.0644 [PARTICIPATION REQUIRED FOR REIMBURSEMENT UNDER 
        OTHER STATE HEALTH CARE PROGRAMS.] 
           A vendor of medical care, as defined in section 256B.02, 
        subdivision 7, and a health maintenance organization, as defined 
        in chapter 62D, must participate as a provider or contractor in 
        the medical assistance program, general assistance medical care 
        program, and MinnesotaCare as a condition of participating as a 
        provider in health insurance plans and programs or contractor 
        for state employees established under section 43A.18, the public 
        employees insurance program under section 43A.316, for health 
        insurance plans offered to local statutory or home rule charter 
        city, county, and school district employees, the workers' 
        compensation system under section 176.135, and insurance plans 
        provided through the Minnesota comprehensive health association 
        under sections 62E.01 to 62E.19.  The limitations on insurance 
        plans offered to local government employees shall not be 
        applicable in geographic areas where provider participation is 
        limited by managed care contracts with the department of human 
        services.  For providers other than health maintenance 
        organizations, participation in the medical assistance program 
        means that (1) the provider accepts new medical assistance, 
        general assistance medical care, and MinnesotaCare patients or 
        (2) at least 20 percent of the provider's patients are covered 
        by medical assistance, general assistance medical care, and 
        MinnesotaCare as their primary source of coverage.  Patients 
        seen on a volunteer basis by the provider at a location other 
        than the provider's usual place of practice may be considered in 
        meeting this participation requirement.  The commissioner shall 
        establish participation requirements for health maintenance 
        organizations.  The commissioner shall provide lists of 
        participating medical assistance providers on a quarterly basis 
        to the commissioner of employee relations, the commissioner of 
        labor and industry, and the commissioner of commerce.  Each of 
        the commissioners shall develop and implement procedures to 
        exclude as participating providers in the program or programs 
        under their jurisdiction those providers who do not participate 
        in the medical assistance program.  The commissioner of employee 
        relations shall implement this section through contracts with 
        participating health and dental carriers. 
           Sec. 44.  [256B.0924] [TARGETED CASE MANAGEMENT SERVICES 
        FOR VULNERABLE ADULTS AND PERSONS WITH DEVELOPMENTAL 
        DISABILITIES.] 
           Subdivision 1.  [PURPOSE.] The state recognizes that 
        targeted case management services can decrease the need for more 
        costly services such as multiple emergency room visits or 
        hospitalizations by linking eligible individuals with less 
        costly services available in the community. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given: 
           (a) "Targeted case management" means services which will 
        assist medical assistance eligible persons to gain access to 
        needed medical, social, educational, and other services.  
        Targeted case management does not include therapy, treatment, 
        legal, or outreach services. 
           (b) "Targeted case management for adults" means activities 
        that coordinate and link social and other services designed to 
        help eligible persons gain access to needed protective services, 
        social, health care, mental health, habilitative, educational, 
        vocational, recreational, advocacy, legal, chemical, health, and 
        other related services. 
           Subd. 3.  [ELIGIBILITY.] Persons are eligible to receive 
        targeted case management services under this section if the 
        requirements in paragraphs (a) and (b) are met. 
           (a) The person must be assessed and determined by the local 
        county agency to: 
           (1) be age 18 or older; 
           (2) be receiving medical assistance; 
           (3) have significant functional limitations; and 
           (4) be in need of service coordination to attain or 
        maintain living in an integrated community setting. 
           (b) The person must be a vulnerable adult in need of adult 
        protection as defined in section 626.5572, or is an adult with 
        mental retardation as defined in section 252A.02, subdivision 2, 
        or a related condition as defined in section 252.27, subdivision 
        1a, and is not receiving home and community-based waiver 
        services. 
           Subd. 4.  [TARGETED CASE MANAGEMENT SERVICE 
        ACTIVITIES.] (a) For persons with mental retardation or a 
        related condition, targeted case management services must meet 
        the provisions of section 256B.092. 
           (b) For persons not eligible as a person with mental 
        retardation or a related condition, targeted case management 
        service activities include: 
           (1) an assessment of the person's need for targeted case 
        management services; 
           (2) the development of a written personal service plan; 
           (3) a regular review and revision of the written personal 
        service plan with the recipient and the recipient's legal 
        representative, and others as identified by the recipient, to 
        ensure access to necessary services and supports identified in 
        the plan; 
           (4) effective communication with the recipient and the 
        recipient's legal representative and others identified by the 
        recipient; 
           (5) coordination of referrals for needed services with 
        qualified providers; 
           (6) coordination and monitoring of the overall service 
        delivery to ensure the quality and effectiveness of services; 
           (7) assistance to the recipient and the recipient's legal 
        representative to help make an informed choice of services; 
           (8) advocating on behalf of the recipient when service 
        barriers are encountered or referring the recipient and the 
        recipient's legal representative to an independent advocate; 
           (9) monitoring and evaluating services identified in the 
        personal service plan to ensure personal outcomes are met and to 
        ensure satisfaction with services and service delivery; 
           (10) conducting face-to-face monitoring with the recipient 
        at least twice a year; 
           (11) completing and maintain necessary documentation that 
        supports verifies the activities in this section; 
           (12) coordinating with the medical assistance facility 
        discharge planner in the 180-day period prior to the recipient's 
        discharge into the community; and 
           (13) a personal service plan developed and reviewed at 
        least annually with the recipient and the recipient's legal 
        representative.  The personal service plan must be revised when 
        there is a change in the recipient's status.  The personal 
        service plan must identify: 
           (i) the desired personal short and long-term outcomes; 
           (ii) the recipient's preferences for services and supports, 
        including development of a person-centered plan if requested; 
        and 
           (iii) formal and informal services and supports based on 
        areas of assessment, such as:  social, health, mental health, 
        residence, family, educational and vocational, safety, legal, 
        self-determination, financial, and chemical health as determined 
        by the recipient and the recipient's legal representative and 
        the recipient's support network. 
           Subd. 5.  [PROVIDER STANDARDS.] County boards or providers 
        who contract with the county are eligible to receive medical 
        assistance reimbursement for adult targeted case management 
        services.  To qualify as a provider of targeted case management 
        services the vendor must: 
           (1) have demonstrated the capacity and experience to 
        provide the activities of case management services defined in 
        subdivision 4; 
           (2) be able to coordinate and link community resources 
        needed by the recipient; 
           (3) have the administrative capacity and experience to 
        serve the eligible population in providing services and to 
        ensure quality of services under state and federal requirements; 
           (4) have a financial management system that provides 
        accurate documentation of services and costs under state and 
        federal requirements; 
           (5) have the capacity to document and maintain individual 
        case records complying with state and federal requirements; 
           (6) coordinate with county social service agencies 
        responsible for planning for community social services under 
        chapters 256E and 256F; conducting adult protective 
        investigations under section 626.557, and conducting prepetition 
        screenings for commitments under section 253B.07; 
           (7) coordinate with health care providers to ensure access 
        to necessary health care services; 
           (8) have a procedure in place that notifies the recipient 
        and the recipient's legal representative of any conflict of 
        interest if the contracted targeted case management service 
        provider also provides the recipient's services and supports and 
        provides information on all potential conflicts of interest and 
        obtains the recipient's informed consent and provides the 
        recipient with alternatives; and 
           (9) have demonstrated the capacity to achieve the following 
        performance outcomes:  access, quality, and consumer 
        satisfaction. 
           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. 
           (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. 
           Subd. 7.  [IMPLEMENTATION AND EVALUATION.] The commissioner 
        of human services in consultation with county boards shall 
        establish a program to accomplish the provisions of subdivisions 
        1 to 6.  The commissioner in consultation with county boards 
        shall establish performance measures to evaluate the 
        effectiveness of the targeted case management services.  If a 
        county fails to meet agreed upon performance measures, the 
        commissioner may authorize contracted providers other than the 
        county.  Providers contracted by the commissioner shall also be 
        subject to the standards in subdivision 6. 
           [EFFECTIVE DATE.] This section is effective January 1, 2002.
           Sec. 45.  Minnesota Statutes 2000, section 256B.19, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [ADDITIONAL PORTION OF NONFEDERAL SHARE.] In 
        addition to any payment required under subdivision 1b, (a) 
        Hennepin county shall be responsible for a monthly transfer 
        payment of $1,500,000, due before noon on the 15th of each month 
        and the University of Minnesota shall be responsible for a 
        monthly transfer payment of $500,000 due before noon on the 15th 
        of each month, beginning July 15, 1995.  These sums shall be 
        part of the designated governmental unit's portion of the 
        nonfederal share of medical assistance costs, but shall not be 
        subject to payback provisions of section 256.025. 
           (b) Beginning July 1, 2001, Hennepin county's payment under 
        paragraph (a) shall be $2,066,000 each month. 
           (c) Beginning July 1, 2001, the commissioner shall increase 
        annual capitation payments to metropolitan health plan under 
        section 256B.69 for the prepaid medical assistance program by 
        approximately $3,400,000, plus any available federal matching 
        funds, to recognize higher than average medical education costs. 
           Sec. 46.  [256B.195] [ADDITIONAL INTERGOVERNMENTAL 
        TRANSFERS; HOSPITAL PAYMENTS.] 
           Subdivision 1.  [FEDERAL APPROVAL REQUIRED.] Sections 
        145.9268, 256.969, subdivision 26, and this section are 
        contingent on federal approval of the intergovernmental 
        transfers and payments to safety net hospitals and community 
        clinics authorized under this section.  These sections are also 
        contingent on current payment, by the government entities, of 
        intergovernmental transfers under section 256B.19 and this 
        section. 
           Subd. 2.  [PAYMENTS FROM GOVERNMENTAL ENTITIES.] (a) In 
        addition to any payment required under section 256B.19, 
        effective July 15, 2001, the following government entities shall 
        make the payments indicated before noon on the 15th of each 
        month: 
           (1) Hennepin county, $2,000,000; and 
           (2) Ramsey county, $1,000,000. 
           (b) These sums shall be part of the designated governmental 
        unit's portion of the nonfederal share of medical assistance 
        costs.  Of these payments, Hennepin county shall pay 71 percent 
        directly to Hennepin County Medical Center, and Ramsey county 
        shall pay 71 percent directly to Regions hospital.  The counties 
        must provide certification to the commissioner of payments to 
        hospitals under this subdivision. 
           Subd. 3.  [PAYMENTS TO CERTAIN SAFETY NET PROVIDERS.] (a) 
        Effective July 15, 2001, the commissioner shall make the 
        following payments to the hospitals indicated after noon on the 
        15th of each month: 
           (1) to Hennepin County Medical Center, any federal matching 
        funds available to match the payments received by the medical 
        center under subdivision 2, to increase payments for medical 
        assistance admissions and to recognize higher medical assistance 
        costs in institutions that provide high levels of charity care; 
        and 
           (2) to Regions hospital, any federal matching funds 
        available to match the payments received by the hospital under 
        subdivision 2, to increase payments for medical assistance 
        admissions and to recognize higher medical assistance costs in 
        institutions that provide high levels of charity care.  
           (b) Effective July 15, 2001, the following percentages of 
        the transfers under subdivision 2 shall be retained by the 
        commissioner for deposit each month into the general fund: 
           (1) 18 percent, plus any federal matching funds, shall be 
        allocated for the following purposes: 
           (i) during the fiscal year beginning July 1, 2001, of the 
        amount available under this clause, 39.7 percent shall be 
        allocated to make increased hospital payments under section 
        256.969, subdivision 26; 34.2 percent shall be allocated to fund 
        the amounts due from small rural hospitals, as defined in 
        section 144.148, for overpayments under section 256.969, 
        subdivision 5a, resulting from a determination that medical 
        assistance and general assistance payments exceeded the charge 
        limit during the period from 1994 to 1997; and 26.1 percent 
        shall be allocated to the commissioner of health for rural 
        hospital capital improvement grants under section 144.148; and 
           (ii) during fiscal years beginning on or after July 1, 
        2002, of the amount available under this clause, 55 percent 
        shall be allocated to make increased hospital payments under 
        section 256.969, subdivision 26, and 45 percent shall be 
        allocated to the commissioner of health for rural hospital 
        capital improvement grants under section 144.148; and 
           (2) 11 percent shall be allocated to the commissioner of 
        health to fund community clinic grants under section 145.9268. 
           (c) This subdivision shall apply to fee-for-service 
        payments only and shall not increase capitation payments or 
        payments made based on average rates. 
           (d) Medical assistance rate or payment changes, including 
        those required to obtain federal financial participation under 
        section 62J.692, subdivision 8, shall precede the determination 
        of intergovernmental transfer amounts determined in this 
        subdivision.  Participation in the intergovernmental transfer 
        program shall not result in the offset of any health care 
        provider's receipt of medical assistance payment increases other 
        than limits resulting from hospital-specific charge limits and 
        limits on disproportionate share hospital payments. 
           Subd. 4.  [ADJUSTMENTS PERMITTED.] (a) The commissioner may 
        adjust the intergovernmental transfers under subdivision 2 and 
        the payments under subdivision 3, and payments and transfers 
        under subdivision 5, based on the commissioner's determination 
        of Medicare upper payment limits, hospital-specific charge 
        limits, and hospital-specific limitations on disproportionate 
        share payments.  Any adjustments must be made on a proportional 
        basis.  If participation by a particular hospital under this 
        section is limited, the commissioner shall adjust the payments 
        that relate to that hospital under subdivisions 2, 3, and 5 on a 
        proportional basis in order to allow the hospital to participate 
        under this section to the fullest extent possible and shall 
        increase other payments under subdivisions 2, 3, and 5 to the 
        extent allowable to maintain the overall level of payments under 
        this section.  The commissioner may make adjustments under this 
        subdivision only after consultation with the counties and 
        hospitals identified in subdivisions 2 and 3, and, if 
        subdivision 5 receives federal approval, with the hospital and 
        educational institution identified in subdivision 5. 
           (b) The ratio of medical assistance payments specified in 
        subdivision 3 to the intergovernmental transfers specified in 
        subdivision 2 shall not be reduced except as provided under 
        paragraph (a). 
           Subd. 5.  [INCLUSION OF FAIRVIEW UNIVERSITY MEDICAL 
        CENTER.] (a) Upon federal approval of the inclusion of Fairview 
        university medical center in the nonstate government category, 
        the commissioner shall establish an intergovernmental transfer 
        with the University of Minnesota in an amount determined by the 
        commissioner based on the increase in the Medicare upper payment 
        limit due solely to the inclusion of Fairview university medical 
        center as a nonstate government hospital and limited by 
        hospital-specific charge limits and the amount available under 
        the hospital-specific disproportionate share limit. 
           (b) The commissioner shall increase payments for medical 
        assistance admissions at Fairview University Medical Center by 
        71 percent of the transfer plus any federal matching payments on 
        that amount, to increase payments for medical assistance 
        admissions and to recognize higher medical assistance costs in 
        institutions that provide high levels of charity care.  From 
        this payment, Fairview University Medical Center shall pay to 
        the University of Minnesota the cost of the transfer, on the 
        same day the payment is received.  Eighteen percent of the 
        transfer plus any federal matching payments shall be used as 
        specified in subdivision 3, paragraph (b), clause (1).  Payments 
        under section 256.969, subdivision 26, may be increased above 
        the 90 percent level specified in that subdivision within the 
        limits of additional funding available under this subdivision.  
        Eleven percent of the transfer shall be used to increase the 
        grants under section 145.9268. 
           Sec. 47.  [256B.53] [DENTAL ACCESS GRANTS.] 
           (a) 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.  
           (b) 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:  
           (1) potential to successfully increase access to an 
        underserved population; 
           (2) the long-term viability of the project to improve 
        access beyond the period of initial funding; 
           (3) the efficiency in the use of the funding; and 
           (4) the experience of the applicants in providing services 
        to the target population. 
           (c) The commissioner shall consider grants for the 
        following: 
           (1) implementation of new programs or continued expansion 
        of current access programs that have demonstrated success in 
        providing dental services in underserved areas; 
           (2) a program for mobile or other types of outreach dental 
        clinics in underserved geographic areas; 
           (3) a program for school-based dental clinics in schools 
        with high numbers of children receiving medical assistance; 
           (4) a program testing new models of care that are sensitive 
        to the cultural needs of the recipients; 
           (5) a program creating new educational campaigns that 
        inform individuals of the importance of good oral health and the 
        link between dental disease and overall health status; 
           (6) a program that organizes a network of volunteer 
        dentists to provide dental services to public program recipients 
        or uninsured individuals; and 
           (7) a program that tests new delivery models by creating 
        partnerships between local providers and county public health 
        agencies.  
           (d) The commissioner shall evaluate the effects of the 
        dental access initiatives funded through the dental access 
        grants and submit a report to the legislature by January 15, 
        2003.  
           Sec. 48.  [256B.55] [DENTAL ACCESS ADVISORY COMMITTEE.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
        establish a dental access advisory committee to monitor the 
        purchasing, administration, and coverage of dental care services 
        for the public health care programs to ensure dental care access 
        and quality for public program recipients.  
           Subd. 2.  [MEMBERSHIP.] (a) The membership of the advisory 
        committee shall include, but is not limited to, representatives 
        of dentists, including a dentist practicing in the seven-county 
        metropolitan area and a dentist practicing outside the 
        seven-county metropolitan area; oral surgeons; pediatric 
        dentists; dental hygienists; community clinics; client advocacy 
        groups; public health; health service plans; the University of 
        Minnesota school of dentistry and the department of pediatrics; 
        and the commissioner of health.  
           (b) The advisory committee is governed by section 15.059 
        for membership terms and removal of members.  Members shall not 
        receive per diem compensation or reimbursement for expenses.  
           Subd. 3.  [DUTIES.] The advisory committee shall provide 
        recommendations on the following: 
           (1) how to reduce the administrative burden governing 
        dental care coverage policies in order to promote administrative 
        simplification, including prior authorization, coverage limits, 
        and co-payment collections; 
           (2) developing and implementing an action plan to improve 
        the oral health of children and persons with special needs in 
        the state; 
           (3) exploring alternative ways of purchasing and improving 
        access to dental services; 
           (4) developing ways to foster greater responsibility among 
        health care program recipients in seeking and obtaining dental 
        care, including initiatives to keep dental appointments and 
        comply with dental care plans; 
           (5) exploring innovative ways for dental providers to 
        schedule public program patients in order to reduce or minimize 
        the effect of appointment no shows; 
           (6) exploring ways to meet the barriers that may be present 
        in providing dental services to health care program recipients 
        such as language, culture, disability, and lack of 
        transportation; and 
           (7) exploring the possibility of pediatricians, family 
        physicians, and nurse practitioners providing basic oral health 
        screenings and basic preventive dental services.  
           Subd. 4.  [REPORT.] The commissioner shall submit a report 
        by February 1, 2002, and by February 1, 2003, summarizing the 
        activities and recommendations of the advisory committee. 
           Subd. 5.  [SUNSET.] Notwithstanding section 15.059, 
        subdivision 5, this section expires June 30, 2003.  
           Sec. 49.  Minnesota Statutes 2000, section 256B.69, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATION OF CHOICE.] (a) The commissioner 
        shall develop criteria to determine when limitation of choice 
        may be implemented in the experimental counties.  The criteria 
        shall ensure that all eligible individuals in the county have 
        continuing access to the full range of medical assistance 
        services as specified in subdivision 6.  
           (b) The commissioner shall exempt the following persons 
        from participation in the project, in addition to those who do 
        not meet the criteria for limitation of choice:  
           (1) persons eligible for medical assistance according to 
        section 256B.055, subdivision 1; 
           (2) persons eligible for medical assistance due to 
        blindness or disability as determined by the social security 
        administration or the state medical review team, unless:  
           (i) they are 65 years of age or older,; or 
           (ii) they reside in Itasca county or they reside in a 
        county in which the commissioner conducts a pilot project under 
        a waiver granted pursuant to section 1115 of the Social Security 
        Act; 
           (3) recipients who currently have private coverage through 
        a health maintenance organization; 
           (4) recipients who are eligible for medical assistance by 
        spending down excess income for medical expenses other than the 
        nursing facility per diem expense; 
           (5) recipients who receive benefits under the Refugee 
        Assistance Program, established under United States Code, title 
        8, section 1522(e); 
           (6) children who are both determined to be severely 
        emotionally disturbed and receiving case management services 
        according to section 256B.0625, subdivision 20; and 
           (7) adults who are both determined to be seriously and 
        persistently mentally ill and received case management services 
        according to section 256B.0625, subdivision 20; and 
           (8) persons eligible for medical assistance according to 
        section 256B.057, subdivision 10.  
        Children under age 21 who are in foster placement may enroll in 
        the project on an elective basis.  Individuals excluded under 
        clauses (6) and (7) may choose to enroll on an elective basis.  
           (c) The commissioner may allow persons with a one-month 
        spenddown who are otherwise eligible to enroll to voluntarily 
        enroll or remain enrolled, if they elect to prepay their monthly 
        spenddown to the state.  
           (d) Beginning on or after July 1, 1997, The commissioner 
        may require those individuals to enroll in the prepaid medical 
        assistance program who otherwise would have been excluded 
        under paragraph (b), clauses (1) and, (3), and (8), and under 
        Minnesota Rules, part 9500.1452, subpart 2, items H, K, and L.  
           (e) Before limitation of choice is implemented, eligible 
        individuals shall be notified and after notification, shall be 
        allowed to choose only among demonstration providers.  The 
        commissioner may assign an individual with private coverage 
        through a health maintenance organization, to the same health 
        maintenance organization for medical assistance coverage, if the 
        health maintenance organization is under contract for medical 
        assistance in the individual's county of residence.  After 
        initially choosing a provider, the recipient is allowed to 
        change that choice only at specified times as allowed by the 
        commissioner.  If a demonstration provider ends participation in 
        the project for any reason, a recipient enrolled with that 
        provider must select a new provider but may change providers 
        without cause once more within the first 60 days after 
        enrollment with the second provider. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 50.  Minnesota Statutes 2000, section 256B.69, 
        subdivision 5c, is amended to read: 
           Subd. 5c.  [MEDICAL EDUCATION AND RESEARCH FUND.] (a) 
        Beginning in January 1999 and each year thereafter: 
           (1) The commissioner of human services shall transfer an 
        amount equal to the reduction in the prepaid medical assistance 
        and prepaid general assistance medical care payments resulting 
        from clause (2), excluding nursing facility and elderly waiver 
        payments and demonstration projects operating under subdivision 
        23, to the medical education and research fund established under 
        section 62J.692; each year to the medical education and research 
        fund established under section 62J.692, the following: 
           (2) (1) an amount equal to the reduction in the prepaid 
        medical assistance and prepaid general assistance medical care 
        payments as specified in this clause.  Until January 1, 2002, 
        the county medical assistance and general assistance medical 
        care capitation base rate prior to plan specific adjustments and 
        after the regional rate adjustments under section 256B.69, 
        subdivision 5b, shall be is reduced 6.3 percent for Hennepin 
        county, two percent for the remaining metropolitan counties, and 
        no reduction for nonmetropolitan Minnesota counties; and after 
        January 1, 2002, the county medical assistance and general 
        assistance medical care capitation base rate prior to plan 
        specific adjustments shall be is reduced 6.3 percent for 
        Hennepin county, two percent for the remaining metropolitan 
        counties, and 1.6 percent for nonmetropolitan Minnesota 
        counties.  Nursing facility and elderly waiver payments and 
        demonstration project payments operating under subdivision 23 
        are excluded from this reduction.  The amount calculated under 
        this clause shall not be adjusted for periods already paid due 
        to subsequent changes to the capitation payments; and 
           (2) beginning July 1, 2001, $2,537,000 from the capitation 
        rates paid under this section plus any federal matching funds on 
        this amount.  
           (3) the amount calculated under clause (1) shall not be 
        adjusted for subsequent changes to the capitation payments for 
        periods already paid. 
           (b) This subdivision shall be effective upon approval of a 
        federal waiver which allows federal financial participation in 
        the medical education and research fund. 
           Sec. 51.  Minnesota Statutes 2000, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 6c.  [DENTAL SERVICES DEMONSTRATION PROJECT.] The 
        commissioner shall establish a dental services demonstration 
        project in Crow Wing, Todd, Morrison, Wadena, and Cass counties 
        for provision of dental services to medical assistance, general 
        assistance medical care, and MinnesotaCare recipients.  The 
        commissioner may contract on a prospective per capita payment 
        basis for these dental services with an organization licensed 
        under chapter 62C, 62D, or 62N in accordance with section 
        256B.037 or may establish and administer a fee-for-service 
        system for the reimbursement of dental services.  
           Sec. 52.  Minnesota Statutes 2000, section 256B.69, 
        subdivision 23, is amended to read: 
           Subd. 23.  [ALTERNATIVE INTEGRATED LONG-TERM CARE SERVICES; 
        ELDERLY AND DISABLED PERSONS.] (a) The commissioner may 
        implement demonstration projects to create alternative 
        integrated delivery systems for acute and long-term care 
        services to elderly persons and persons with disabilities as 
        defined in section 256B.77, subdivision 7a, that provide 
        increased coordination, improve access to quality services, and 
        mitigate future cost increases.  The commissioner may seek 
        federal authority to combine Medicare and Medicaid capitation 
        payments for the purpose of such demonstrations.  Medicare funds 
        and services shall be administered according to the terms and 
        conditions of the federal waiver and demonstration provisions.  
        For the purpose of administering medical assistance funds, 
        demonstrations under this subdivision are subject to 
        subdivisions 1 to 22.  The provisions of Minnesota Rules, parts 
        9500.1450 to 9500.1464, apply to these demonstrations, with the 
        exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, 
        subpart 1, items B and C, which do not apply to persons 
        enrolling in demonstrations under this section.  An initial open 
        enrollment period may be provided.  Persons who disenroll from 
        demonstrations under this subdivision remain subject to 
        Minnesota Rules, parts 9500.1450 to 9500.1464.  When a person is 
        enrolled in a health plan under these demonstrations and the 
        health plan's participation is subsequently terminated for any 
        reason, the person shall be provided an opportunity to select a 
        new health plan and shall have the right to change health plans 
        within the first 60 days of enrollment in the second health 
        plan.  Persons required to participate in health plans under 
        this section who fail to make a choice of health plan shall not 
        be randomly assigned to health plans under these demonstrations. 
        Notwithstanding section 256L.12, subdivision 5, and Minnesota 
        Rules, part 9505.5220, subpart 1, item A, if adopted, for the 
        purpose of demonstrations under this subdivision, the 
        commissioner may contract with managed care organizations, 
        including counties, to serve only elderly persons eligible for 
        medical assistance, elderly and disabled persons, or disabled 
        persons only.  For persons with primary diagnoses of mental 
        retardation or a related condition, serious and persistent 
        mental illness, or serious emotional disturbance, the 
        commissioner must ensure that the county authority has approved 
        the demonstration and contracting design.  Enrollment in these 
        projects for persons with disabilities shall be voluntary until 
        July 1, 2001.  The commissioner shall not implement any 
        demonstration project under this subdivision for persons with 
        primary diagnoses of mental retardation or a related condition, 
        serious and persistent mental illness, or serious emotional 
        disturbance, without approval of the county board of the county 
        in which the demonstration is being implemented. 
           Before implementation of a demonstration project for 
        disabled persons, the commissioner must provide information to 
        appropriate committees of the house of representatives and 
        senate and must involve representatives of affected disability 
        groups in the design of the demonstration projects. 
           (b) A nursing facility reimbursed under the alternative 
        reimbursement methodology in section 256B.434 may, in 
        collaboration with a hospital, clinic, or other health care 
        entity provide services under paragraph (a).  The commissioner 
        shall amend the state plan and seek any federal waivers 
        necessary to implement this paragraph.  
           Sec. 53.  Minnesota Statutes 2000, section 256B.75, is 
        amended to read: 
           256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
           (a) For outpatient hospital facility fee payments for 
        services rendered on or after October 1, 1992, the commissioner 
        of human services shall pay the lower of (1) submitted charge, 
        or (2) 32 percent above the rate in effect on June 30, 1992, 
        except for those services for which there is a federal maximum 
        allowable payment.  Effective for services rendered on or after 
        January 1, 2000, payment rates for nonsurgical outpatient 
        hospital facility fees and emergency room facility fees shall be 
        increased by eight percent over the rates in effect on December 
        31, 1999, except for those services for which there is a federal 
        maximum allowable payment.  Services for which there is a 
        federal maximum allowable payment shall be paid at the lower of 
        (1) submitted charge, or (2) the federal maximum allowable 
        payment.  Total aggregate payment for outpatient hospital 
        facility fee services shall not exceed the Medicare upper 
        limit.  If it is determined that a provision of this section 
        conflicts with existing or future requirements of the United 
        States government with respect to federal financial 
        participation in medical assistance, the federal requirements 
        prevail.  The commissioner may, in the aggregate, prospectively 
        reduce payment rates to avoid reduced federal financial 
        participation resulting from rates that are in excess of the 
        Medicare upper limitations. 
           (b) Notwithstanding paragraph (a), payment for outpatient, 
        emergency, and ambulatory surgery hospital facility fee services 
        for critical access hospitals designated under section 144.1483, 
        clause (11), shall be paid on a cost-based payment system that 
        is based on the cost-finding methods and allowable costs of the 
        Medicare program. 
           (c) Effective for services provided on or after July 1, 
        2002, rates that are based on the Medicare outpatient 
        prospective payment system shall be replaced by a budget neutral 
        prospective payment system that is derived using medical 
        assistance data.  The commissioner shall provide a proposal to 
        the 2002 legislature to define and implement this provision. 
           Sec. 54.  Minnesota Statutes 2000, 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," Caesarean 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; and 
           (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) 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. 55.  [256B.78] [MEDICAL ASSISTANCE DEMONSTRATION 
        PROJECT FOR FAMILY PLANNING SERVICES.] 
           (a) The commissioner of human services shall establish a 
        medical assistance demonstration project to determine whether 
        improved access to coverage of prepregnancy family planning 
        services reduces medical assistance and MFIP costs. 
           (b) This section is effective upon federal approval of the 
        demonstration project. 
           Sec. 56.  Minnesota Statutes 2000, section 256D.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
        (a) General assistance medical care may be paid for any person 
        who is not eligible for medical assistance under chapter 256B, 
        including eligibility for medical assistance based on a 
        spenddown of excess income according to section 256B.056, 
        subdivision 5, or MinnesotaCare as defined in paragraph (b), 
        except as provided in paragraph (c); and: 
           (1) who is receiving assistance under section 256D.05, 
        except for families with children who are eligible under 
        Minnesota family investment program-statewide (MFIP-S), who is 
        having a payment made on the person's behalf under sections 
        256I.01 to 256I.06, or who resides in group residential housing 
        as defined in chapter 256I and can meet a spenddown using the 
        cost of remedial services received through group residential 
        housing; or 
           (2)(i) who is a resident of Minnesota; and whose equity in 
        assets is not in excess of $1,000 per assistance unit.  Exempt 
        assets, the reduction of excess assets, and the waiver of excess 
        assets must conform to the medical assistance program in chapter 
        256B, with the following exception:  the maximum amount of 
        undistributed funds in a trust that could be distributed to or 
        on behalf of the beneficiary by the trustee, assuming the full 
        exercise of the trustee's discretion under the terms of the 
        trust, must be applied toward the asset maximum; and 
           (ii) who has countable income not in excess of the 
        assistance standards established in section 256B.056, 
        subdivision 4 5c, paragraph (b), or whose excess income is spent 
        down according to section 256B.056, subdivision 5, to that 
        standard using a six-month budget period.  The method for 
        calculating earned income disregards and deductions for a person 
        who resides with a dependent child under age 21 shall 
        follow section 256B.056, subdivision 1a.  However, if a 
        disregard of $30 and one-third of the remainder has been applied 
        to the wage earner's income, the disregard shall not be applied 
        again until the wage earner's income has not been considered in 
        an eligibility determination for general assistance, general 
        assistance medical care, medical assistance, or MFIP-S for 12 
        consecutive months the AFDC income disregard and deductions in 
        effect under the July 16, 1996, AFDC state plan.  The earned 
        income and work expense deductions for a person who does not 
        reside with a dependent child under age 21 shall be the same as 
        the method used to determine eligibility for a person under 
        section 256D.06, subdivision 1, except the disregard of the 
        first $50 of earned income is not allowed; 
           (3) who would be eligible for medical assistance except 
        that the person resides in a facility that is determined by the 
        commissioner or the federal Health Care Financing Administration 
        to be an institution for mental diseases; or 
           (4) who is ineligible for medical assistance under chapter 
        256B or general assistance medical care under any other 
        provision of this section, and is receiving care and 
        rehabilitation services from a nonprofit center established to 
        serve victims of torture.  These individuals are eligible for 
        general assistance medical care only for the period during which 
        they are receiving services from the center.  During this period 
        of eligibility, individuals eligible under this clause shall not 
        be required to participate in prepaid general assistance medical 
        care.  
           (b) Beginning January 1, 2000, applicants or recipients who 
        meet all eligibility requirements of MinnesotaCare as defined in 
        sections 256L.01 to 256L.16, and are: 
           (i) adults with dependent children under 21 whose gross 
        family income is equal to or less than 275 percent of the 
        federal poverty guidelines; or 
           (ii) adults without children with earned income and whose 
        family gross income is between 75 percent of the federal poverty 
        guidelines and the amount set by section 256L.04, subdivision 7, 
        shall be terminated from general assistance medical care upon 
        enrollment in MinnesotaCare. 
           (c) For services rendered on or after July 1, 1997, 
        eligibility is limited to one month prior to application if the 
        person is determined eligible in the prior month.  A 
        redetermination of eligibility must occur every 12 months.  
        Beginning January 1, 2000, Minnesota health care program 
        applications completed by recipients and applicants who are 
        persons described in paragraph (b), may be returned to the 
        county agency to be forwarded to the department of human 
        services or sent directly to the department of human services 
        for enrollment in MinnesotaCare.  If all other eligibility 
        requirements of this subdivision are met, eligibility for 
        general assistance medical care shall be available in any month 
        during which a MinnesotaCare eligibility determination and 
        enrollment are pending.  Upon notification of eligibility for 
        MinnesotaCare, notice of termination for eligibility for general 
        assistance medical care shall be sent to an applicant or 
        recipient.  If all other eligibility requirements of this 
        subdivision are met, eligibility for general assistance medical 
        care shall be available until enrollment in MinnesotaCare 
        subject to the provisions of paragraph (e). 
           (d) The date of an initial Minnesota health care program 
        application necessary to begin a determination of eligibility 
        shall be the date the applicant has provided a name, address, 
        and social security number, signed and dated, to the county 
        agency or the department of human services.  If the applicant is 
        unable to provide an initial application when health care is 
        delivered due to a medical condition or disability, a health 
        care provider may act on the person's behalf to complete the 
        initial application.  The applicant must complete the remainder 
        of the application and provide necessary verification before 
        eligibility can be determined.  The county agency must assist 
        the applicant in obtaining verification if necessary.  On the 
        basis of information provided on the completed application, an 
        applicant who meets the following criteria shall be determined 
        eligible beginning in the month of application: 
           (1) has gross income less than 90 percent of the applicable 
        income standard; 
           (2) has liquid assets that total within $300 of the asset 
        standard; 
           (3) does not reside in a long-term care facility; and 
           (4) meets all other eligibility requirements. 
        The applicant must provide all required verifications within 30 
        days' notice of the eligibility determination or eligibility 
        shall be terminated. 
           (e) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (f) General assistance medical care is not available for a 
        person in a correctional facility unless the person is detained 
        by law for less than one year in a county correctional or 
        detention facility as a person accused or convicted of a crime, 
        or admitted as an inpatient to a hospital on a criminal hold 
        order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (g) General assistance medical care is not available for 
        applicants or recipients who do not cooperate with the county 
        agency to meet the requirements of medical assistance.  General 
        assistance medical care is limited to payment of emergency 
        services only for applicants or recipients as described in 
        paragraph (b), whose MinnesotaCare coverage is denied or 
        terminated for nonpayment of premiums as required by sections 
        256L.06 and 256L.07.  
           (h) In determining the amount of assets of an individual, 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (i) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        Number 104-193, sections 421 and 422, and subsequently set out 
        in federal rules. 
           (j)(1) An undocumented noncitizen or a nonimmigrant is 
        ineligible for general assistance medical care other than 
        emergency services.  For purposes of this subdivision, a 
        nonimmigrant is an individual in one or more of the classes 
        listed in United States Code, title 8, section 1101(a)(15), and 
        an undocumented noncitizen is an individual who resides in the 
        United States without the approval or acquiescence of the 
        Immigration and Naturalization Service. 
           (2) This paragraph does not apply to a child under age 18, 
        to a Cuban or Haitian entrant as defined in Public Law Number 
        96-422, section 501(e)(1) or (2)(a), or to a noncitizen who is 
        aged, blind, or disabled as defined in Code of Federal 
        Regulations, title 42, sections 435.520, 435.530, 435.531, 
        435.540, and 435.541, or effective October 1, 1998, to an 
        individual eligible for general assistance medical care under 
        paragraph (a), clause (4), who cooperates with the Immigration 
        and Naturalization Service to pursue any applicable immigration 
        status, including citizenship, that would qualify the individual 
        for medical assistance with federal financial participation. 
           (k) For purposes of paragraphs (g) and (j), "emergency 
        services" has the meaning given in Code of Federal Regulations, 
        title 42, section 440.255(b)(1), except that it also means 
        services rendered because of suspected or actual pesticide 
        poisoning. 
           (l) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001.  
           Sec. 57.  Minnesota Statutes 2000, section 256J.31, 
        subdivision 12, is amended to read: 
           Subd. 12.  [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 
        participant who is not in vendor payment status may discontinue 
        receipt of the cash assistance portion of the MFIP assistance 
        grant and retain eligibility for child care assistance under 
        section 119B.05 and for medical assistance under sections 
        256B.055, subdivision 3a, and 256B.0635.  For the months a 
        participant chooses to discontinue the receipt of the cash 
        portion of the MFIP grant, the assistance unit accrues months of 
        eligibility to be applied toward eligibility for child care 
        under section 119B.05 and for medical assistance under sections 
        256B.055, subdivision 3a, and 256B.0635. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 58.  Minnesota Statutes 2000, section 256K.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION OF PROGRAM.] Except for the 
        provisions in this section, the provisions for the MFIP 
        application process shall be followed.  Within two days after 
        receipt of a completed combined application form, the county 
        agency must refer to the provider the applicant who meets the 
        conditions under section 256K.02, and notify the applicant in 
        writing of the program including the following provisions: 
           (1) notification that, as part of the application process, 
        applicants are required to attend orientation, to be followed 
        immediately by a job search; 
           (2) the program provider, the date, time, and location of 
        the scheduled program orientation; 
           (3) the procedures for qualifying for and receiving 
        benefits under the program; 
           (4) the immediate availability of supportive services, 
        including, but not limited to, child care, transportation, 
        medical assistance, and other work-related aid; and 
           (5) the rights, responsibilities, and obligations of 
        participants in the program, including, but not limited to, the 
        grounds for exemptions and deferrals, the consequences for 
        refusing or failing to participate fully, and the appeal process.
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 59.  Minnesota Statutes 2000, section 256K.07, is 
        amended to read: 
           256K.07 [ELIGIBILITY FOR FOOD STAMPS, MEDICAL ASSISTANCE, 
        AND CHILD CARE.] 
           The participant shall be treated as an MFIP recipient for 
        food stamps, medical assistance, and child care eligibility 
        purposes.  The participant who leaves the program as a result of 
        increased earnings from employment shall be eligible for 
        transitional medical assistance and child care without regard to 
        MFIP receipt in three of the six months preceding ineligibility. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 60.  Minnesota Statutes 2000, section 256L.03, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [CO-PAYMENTS FOR CERTAIN CHILDREN.] Effective 
        July 1, 2002, through June 30, 2006, the MinnesotaCare benefit 
        plan for children enrolled in MinnesotaCare who, in accordance 
        with section 256L.15, subdivision 1, paragraph (c), opt not to 
        pay a premium shall include a $5 co-payment for nonpreventive 
        physician services, chiropractic services, and hospital 
        outpatient services as determined by the commissioner.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 61.  Minnesota Statutes 2000, section 256L.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMMISSIONER'S DUTIES.] The commissioner shall 
        use individuals' social security numbers as identifiers for 
        purposes of administering the plan and conduct data matches to 
        verify income.  Applicants shall submit evidence of individual 
        and family income, earned and unearned, such as the most recent 
        income tax return, wage slips, or other documentation that is 
        determined by the commissioner as necessary to verify income 
        eligibility or county agency shall use electronic verification 
        as the primary method of income verification.  If there is a 
        discrepancy between reported income and electronically verified 
        income, an individual may be required to submit additional 
        verification.  In addition, the commissioner shall perform 
        random audits to verify reported income and eligibility.  The 
        commissioner may execute data sharing arrangements with the 
        department of revenue and any other governmental agency in order 
        to perform income verification related to eligibility and 
        premium payment under the MinnesotaCare program. 
           Sec. 62.  Minnesota Statutes 2000, section 256L.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
        Premiums are dedicated to the commissioner for MinnesotaCare. 
           (b) The commissioner shall develop and implement procedures 
        to:  (1) require enrollees to report changes in income; (2) 
        adjust sliding scale premium payments, based upon changes in 
        enrollee income; and (3) disenroll enrollees from MinnesotaCare 
        for failure to pay required premiums.  Failure to pay includes 
        payment with a dishonored check, a returned automatic bank 
        withdrawal, or a refused credit card or debit card payment.  The 
        commissioner may demand a guaranteed form of payment, including 
        a cashier's check or a money order, as the only means to replace 
        a dishonored, returned, or refused payment. 
           (c) Premiums are calculated on a calendar month basis and 
        may be paid on a monthly, quarterly, or annual basis, with the 
        first payment due upon notice from the commissioner of the 
        premium amount required.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan within one calendar month after the due date 
        effective for the calendar month for which the premium was due.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program may not reenroll until four calendar 
        months have elapsed.  Persons disenrolled for nonpayment who pay 
        all past due premiums as well as current premiums due, including 
        premiums due for the period of disenrollment, within 20 days of 
        disenrollment, shall be reenrolled retroactively to the first 
        day of disenrollment.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        for four calendar months unless the person demonstrates good 
        cause for nonpayment.  Good cause does not exist if a person 
        chooses to pay other family expenses instead of the premium.  
        The commissioner shall define good cause in rule. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002. 
           Sec. 63.  Minnesota Statutes 2000, section 256L.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED 
        COVERAGE.] (a) To be eligible, a family or individual must not 
        have access to subsidized health coverage through an employer 
        and must not have had access to employer-subsidized coverage 
        through a current employer for 18 months prior to application or 
        reapplication.  A family or individual whose employer-subsidized 
        coverage is lost due to an employer terminating health care 
        coverage as an employee benefit during the previous 18 months is 
        not eligible.  
           (b) This subdivision does not apply to a family or 
        individual who was enrolled in MinnesotaCare within six months 
        or less of reapplication and who no longer has 
        employer-subsidized coverage due to the employer terminating 
        health care coverage as an employee benefit.  
           (c) For purposes of this requirement, subsidized health 
        coverage means health coverage for which the employer pays at 
        least 50 percent of the cost of coverage for the employee or 
        dependent, or a higher percentage as specified by the 
        commissioner.  Children are eligible for employer-subsidized 
        coverage through either parent, including the noncustodial 
        parent.  The commissioner must treat employer contributions to 
        Internal Revenue Code Section 125 plans and any other employer 
        benefits intended to pay health care costs as qualified employer 
        subsidies toward the cost of health coverage for employees for 
        purposes of this subdivision. 
           [EFFECTIVE DATE.] This section is effective July 1, 2001, 
        or upon receipt of federal approval, whichever is later. 
           Sec. 64.  Minnesota Statutes 2000, section 256L.12, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [COVERAGE AT INDIAN HEALTH SERVICE 
        FACILITIES.] For American Indian enrollees of MinnesotaCare, 
        MinnesotaCare shall cover health care services provided at 
        Indian Health Service facilities and facilities operated by a 
        tribe or tribal organization under funding authorized by United 
        States Code, title 25, sections 450f to 450n, or title III of 
        the Indian Self-Determination and Education Act, Public Law 
        Number 93-638, if those services would otherwise be covered 
        under section 256L.03.  Payments for services provided under 
        this subdivision shall be made on a fee-for-service basis, and 
        may, at the option of the tribe or organization, be made at the 
        rates authorized under sections 256.969, subdivision 16, and 
        256B.0625, subdivision 34, for those MinnesotaCare enrollees 
        eligible for coverage at medical assistance rates.  For purposes 
        of this subdivision, "American Indian" has the meaning given to 
        persons to whom services will be provided for in the Code of 
        Federal Regulations, title 42, section 36.12. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 65.  Minnesota Statutes 2000, section 256L.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREMIUM DETERMINATION.] (a) Families with 
        children and individuals shall pay a premium determined 
        according to a sliding fee based on a percentage of the family's 
        gross family income.  
           (b) Pregnant women and children under age two are exempt 
        from the provisions of section 256L.06, subdivision 3, paragraph 
        (b), clause (3), requiring disenrollment for failure to pay 
        premiums.  For pregnant women, this exemption continues until 
        the first day of the month following the 60th day postpartum.  
        Women who remain enrolled during pregnancy or the postpartum 
        period, despite nonpayment of premiums, shall be disenrolled on 
        the first of the month following the 60th day postpartum for the 
        penalty period that otherwise applies under section 256L.06, 
        unless they begin paying premiums. 
           (c) Effective July 1, 2002, through June 30, 2006, at their 
        option, children with gross family income at or below 217 
        percent of the federal poverty guidelines who are eligible for 
        MinnesotaCare in the first month following termination from 
        medical assistance shall not pay a premium for 12 months. 
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 66.  Minnesota Statutes 2000, section 256L.16, is 
        amended to read: 
           256L.16 [PAYMENT RATES; SERVICES FOR FAMILIES AND CHILDREN 
        UNDER THE MINNESOTACARE HEALTH CARE REFORM WAIVER.] 
           Section 256L.11, subdivision 2, shall not apply to services 
        provided to children families with children who are eligible to 
        receive expanded services according to section 256L.03, 
        subdivision 1a 256L.04, subdivision 1, paragraph (a). 
           Sec. 67.  Minnesota Statutes 2000, section 256L.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMIT ON TOTAL ASSETS.] (a) Effective April 1, 
        1997 July 1, 2002, or upon federal approval, whichever is later, 
        in order to be eligible for the MinnesotaCare program, a 
        household of two or more persons must not own more than $30,000 
        in total net assets, and a household of one person must not own 
        more than $15,000 in total net assets. 
           (b) For purposes of this subdivision, total net assets 
        include all assets, with the following exceptions: 
           (1) a homestead is not considered; 
           (2) household goods and personal effects are not 
        considered; 
           (3) any assets owned by children; 
           (4) vehicles used for employment; 
           (5) court-ordered settlements up to $10,000; 
           (6) individual retirement accounts; and 
           (7) capital and operating assets of a trade or business up 
        to $200,000 in net assets are not considered. 
           (c) If an asset excluded under paragraph (b) has a negative 
        value, the negative value shall be subtracted from the total net 
        assets under paragraph (a) assets are determined according to 
        section 256B.056, subdivision 3c.  
           [EFFECTIVE DATE.] This section is effective July 1, 2001. 
           Sec. 68.  Laws 1995, chapter 178, article 2, section 36, is 
        amended to read: 
           Sec. 36.  [EMPOWERMENT ZONES; ADMINISTRATIVE SIMPLIFICATION 
        OF WELFARE LAWS.] 
           (a) The commissioner of human services shall make 
        recommendations to effectuate the changes in federal laws and 
        regulations, state laws and rules, and the state plan to improve 
        the administrative efficiency of the aid to families with 
        dependent children, general assistance, work readiness, family 
        general assistance, medical assistance, general assistance 
        medical care, and food stamp programs.  At a minimum, the 
        following administrative standards and procedures must be 
        changed. 
           The commissioner shall: 
           (1) require income or eligibility reviews no more 
        frequently than annually for cases in which income is normally 
        invariant, as in aid to families with dependent children cases 
        where the only source of household income is Supplemental Social 
        Security Income; 
           (2) permit households to report income annually when the 
        source of income is excluded, such as a minor's earnings; 
           (3) require income or eligibility reviews no more 
        frequently than annually for extended medical assistance cases; 
           (4) require income or eligibility reviews no more 
        frequently than annually for a medical assistance postpartum 
        client, where the client previously had eligibility under a 
        different basis prior to pregnancy or if other household members 
        have eligibility with the same income/basis that applies to the 
        client; 
           (5) (4) permit all income or eligibility reviews for foster 
        care medical assistance cases to use the short application form; 
        and 
           (6) (5) make dependent care expenses declaratory for 
        medical assistance; and 
           (7) permit households to only report gifts worth $100 or 
        more per month. 
           (b) The county's administrative savings resulting from 
        these changes may be allocated to fund any lawful purpose. 
           (c) The recommendations must be provided in a report to the 
        chairs of the appropriate legislative committees by August 1, 
        1995.  The recommendations must include a list of the 
        administrative standards and procedures that require approval by 
        the federal government before implementation, and also which 
        administrative simplification standards and procedures may be 
        implemented by a county prior to receiving a federal waiver. 
           (d) The commissioner shall seek the necessary waivers from 
        the federal government as soon as possible to implement the 
        administrative simplification standards and procedures. 
           Sec. 69.  Laws 1999, chapter 245, article 4, section 110, 
        is amended to read: 
           Sec. 110.  [PROGRAMS FOR SENIOR CITIZENS.] 
           The commissioner of human services shall study the 
        eligibility criteria of and benefits provided to persons age 65 
        and over through the array of cash assistance and health care 
        programs administered by the department, and the extent to which 
        these programs can be combined, simplified, or coordinated to 
        reduce administrative costs and improve access.  The 
        commissioner shall also study potential barriers to enrollment 
        for low-income seniors who would otherwise deplete resources 
        necessary to maintain independent community living.  At a 
        minimum, the study must include an evaluation of asset 
        requirements and enrollment sites.  The commissioner shall 
        report study findings and recommendations to the legislature by 
        June 30, 2001 January 15, 2002. 
           Sec. 70.  [REGULATORY SIMPLIFICATION FOR STATE HEALTH CARE 
        PROGRAM PROVIDERS.] 
           The commissioner of human services, in consultation with 
        providers participating in state health care programs, shall 
        identify nonfinancial barriers to increased provider enrollment 
        and provider retention in state health care programs, and shall 
        implement procedures to address these barriers.  Areas to be 
        examined by the commissioner shall include, but are not limited 
        to, regulatory complexity and inconsistencies between state 
        health care programs, provider requirements, provision of 
        technical assistance to providers, responsiveness to provider 
        inquiries and complaints, claims processing turnaround times, 
        and policies for rejecting provider claims.  The commissioner 
        shall report to the legislature by February 15, 2002, on any 
        changes to the administration of state health care programs that 
        will be implemented as a result of the study, and present 
        recommendations for any necessary changes in state law. 
           Sec. 71.  [EXPAND DENTAL AUXILIARY PERSONNEL; 
        FOREIGN-TRAINED DENTISTS; DENTAL CLINICS.] 
           Subdivision 1.  [DEVELOPMENT.] (a) The board of dentistry, 
        in consultation with the University of Minnesota school of 
        dentistry, the Minnesota state colleges and universities that 
        offer a dental auxiliary training program, the commissioner of 
        health, and licensed dentists and dental auxiliaries practicing 
        in private practice and at community clinics, shall develop new 
        expanded duties for registered dental assistants and dental 
        hygienists.  The new duties must be performed under direct or 
        indirect supervision of a licensed dentist.  These expanded 
        duties must be limited to reversible procedures, including, but 
        not limited to, placement, contouring, and adjustment of amalgam 
        restorations, temporary restorations, the alignment and 
        cementing of stainless steel crowns to primary teeth, and 
        application of pit and fissure sealants.  These expanded duties 
        shall not include or imply a diagnosis or treatment plan, nor 
        include prescribing medications, cutting hard or soft tissue, or 
        any direct patient care in which formal training has not been 
        completed.  The board shall establish the necessary educational 
        qualifications to perform the new duties. 
           (b) The board shall make recommendations to amend Minnesota 
        Statutes, chapter 150A, to permit a foreign-trained dentist to 
        practice as a dental hygienist or as a registered dental 
        assistant. 
           (c) The board shall submit the proposed changes to 
        Minnesota Statutes, chapter 150A, to the legislature by January 
        15, 2002. 
           Subd. 2.  [DENTAL CLINICS.] The commissioner of health, in 
        consultation with the Minnesota state colleges and universities, 
        shall determine the capital improvements needed to establish 
        community-based dental clinics at state colleges and 
        universities to be used as training sites and as public 
        community-based dental clinics for public program recipients 
        during times when the school is not in session and the clinic is 
        not in use.  The commissioner shall submit the necessary capital 
        improvement costs for start-up equipment and necessary 
        infrastructure as part of the 2002 legislative capital budget 
        requests. 
           Sec. 72.  [NOTICE OF PREMIUM CHANGES IN THE EMPLOYED 
        PERSONS WITH DISABILITIES PROGRAM.] 
           The commissioner of human services shall provide notice to 
        all medical assistance recipients receiving coverage through the 
        employed persons with disabilities program under Minnesota 
        Statutes, section 256B.057, subdivision 9, of the first new 
        premium schedule in effect on November 1, 2001, at least two 
        months before the month in which the first new premium is due. 
           Sec. 73.  [ADDITIONAL TRAINING REQUIREMENTS.] 
           The board of dentistry may make recommendations to the 2002 
        legislature on additional training requirements for dental 
        hygienists practicing under the limited authorization provided 
        in Minnesota Statutes, section 150A.10, subdivision 1a. 
           Sec. 74.  [ELIGIBILITY EXCEPTION TO THE PRESCRIPTION DRUG 
        PROGRAM.] 
           Notwithstanding the requirements of Minnesota Statutes, 
        section 256.955, subdivision 2, paragraph (d), from March 1, 
        2001, to June 30, 2002, the definition of a "qualified 
        individual" in the prescription drug program established under 
        Minnesota Statutes, section 256.955, shall include an individual 
        who: 
           (1) was enrolled in the prescription drug program prior to 
        March 1, 2001; 
           (2) was enrolled in a Medicare risk plan prior to March 1, 
        2001, to which an annual prescription drug benefit of $400 was 
        added on March 1, 2001; and 
           (3) meets the requirements described in Minnesota Statutes, 
        section 256.955, subdivision 2, paragraph (d), clauses (1) and 
        (5), and subdivision 2a. 
        The prescription benefit offered by the Medicare risk plan shall 
        be primary to benefits provided under the prescription drug 
        program. 
           Sec. 75.  [MINNESOTACARE ELIGIBILITY FOR SELF-EMPLOYED 
        FARMERS.] 
           (a) The commissioner of human services shall seek federal 
        approval to redefine in the MinnesotaCare program the definition 
        of "gross individual or gross family income" for farm 
        self-employed to mean income calculated using as a baseline the 
        adjusted gross income reported on the applicant's federal income 
        tax form for the previous year and adding back in reported 
        depreciation amounts that apply to the business in which the 
        family is currently engaged. 
           (b) Upon receipt of federal approval, the commissioner 
        shall notify the legislature.  No change to the definition shall 
        be implemented without further action by the legislature. 
           Sec. 76.  [REPEALER.] 
           (a) Minnesota Statutes 2000, section 256B.0635, subdivision 
        3, and 256B.19, subdivision 1b, are repealed effective July 1, 
        2001. 
           (b) Minnesota Statutes 2000, section 256L.02, subdivision 
        4, is repealed effective January 1, 2003. 

                                   ARTICLE 3 
                                CONTINUING CARE 
           Section 1.  Minnesota Statutes 2000, section 245A.13, 
        subdivision 7, is amended to read: 
           Subd. 7.  [RATE RECOMMENDATION.] The commissioner of human 
        services may review rates of a residential program participating 
        in the medical assistance program which is in receivership and 
        that has needs or deficiencies documented by the department of 
        health or the department of human services.  If the commissioner 
        of human services determines that a review of the rate 
        established under section 256B.501 sections 256B.5012 and 
        256B.5013 is needed, the commissioner shall: 
           (1) review the order or determination that cites the 
        deficiencies or needs; and 
           (2) determine the need for additional staff, additional 
        annual hours by type of employee, and additional consultants, 
        services, supplies, equipment, repairs, or capital assets 
        necessary to satisfy the needs or deficiencies. 
           Sec. 2.  Minnesota Statutes 2000, section 245A.13, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ADJUSTMENT TO THE RATE.] Upon review of rates 
        under subdivision 7, the commissioner may adjust the residential 
        program's payment rate.  The commissioner shall review the 
        circumstances, together with the residential program cost report 
        program's most recent income and expense report, to determine 
        whether or not the deficiencies or needs can be corrected or met 
        by reallocating residential program staff, costs, revenues, 
        or any other resources including any investments, efficiency 
        incentives, or allowances.  If the commissioner determines that 
        any deficiency cannot be corrected or the need cannot be met 
        with the payment rate currently being paid, the commissioner 
        shall determine the payment rate adjustment by dividing the 
        additional annual costs established during the commissioner's 
        review by the residential program's actual resident days from 
        the most recent desk-audited cost income and expense report or 
        the estimated resident days in the projected receivership 
        period.  The payment rate adjustment must meet the conditions in 
        Minnesota Rules, parts 9553.0010 to 9553.0080, and remains in 
        effect during the period of the receivership or until another 
        date set by the commissioner.  Upon the subsequent sale, 
        closure, or transfer of the residential program, the 
        commissioner may recover amounts that were paid as payment rate 
        adjustments under this subdivision.  This recovery shall be 
        determined through a review of actual costs and resident days in 
        the receivership period.  The costs the commissioner finds to be 
        allowable shall be divided by the actual resident days for the 
        receivership period.  This rate shall be compared to the rate 
        paid throughout the receivership period, with the difference 
        multiplied by resident days, being the amount to be repaid to 
        the commissioner.  Allowable costs shall be determined by the 
        commissioner as those ordinary, necessary, and related to 
        resident care by prudent and cost-conscious management.  The 
        buyer or transferee shall repay this amount to the commissioner 
        within 60 days after the commissioner notifies the buyer or 
        transferee of the obligation to repay.  This provision does not 
        limit the liability of the seller to the commissioner pursuant 
        to section 256B.0641. 
           Sec. 3.  Minnesota Statutes 2000, section 252.275, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [GUARANTEED FLOOR.] Each county with an original 
        allocation for the preceding year that is equal to or less than 
        the guaranteed floor minimum index shall have a guaranteed floor 
        equal to its original allocation for the preceding year.  Each 
        county with an original allocation for the preceding year that 
        is greater than the guaranteed floor minimum index shall have a 
        guaranteed floor equal to the lesser of clause (1) or (2): 
           (1) the county's original allocation for the preceding 
        year; or 
           (2) 70 percent of the county's reported expenditures 
        eligible for reimbursement during the 12 months ending on June 
        30 of the preceding calendar year. 
           For calendar year 1993, the guaranteed floor minimum index 
        shall be $20,000.  For each subsequent year, the index shall be 
        adjusted by the projected change in the average value in the 
        United States Department of Labor Bureau of Labor Statistics 
        consumer price index (all urban) for that year. 
           Notwithstanding this subdivision, no county shall be 
        allocated a guaranteed floor of less than $1,000. 
           When the amount of funds available for allocation is less 
        than the amount available in the previous year, each county's 
        previous year allocation shall be reduced in proportion to the 
        reduction in the statewide funding, to establish each county's 
        guaranteed floor. 
           Sec. 4.  Minnesota Statutes 2000, section 254B.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESERVE ACCOUNT.] The commissioner shall 
        allocate money from the reserve account to counties that, during 
        the current fiscal year, have met or exceeded the base level of 
        expenditures for eligible chemical dependency services from 
        local money.  The commissioner shall establish the base level 
        for fiscal year 1988 as the amount of local money used for 
        eligible services in calendar year 1986.  In later years, the 
        base level must be increased in the same proportion as state 
        appropriations to implement Laws 1986, chapter 394, sections 8 
        to 20, are increased.  The base level must be decreased if the 
        fund balance from which allocations are made under section 
        254B.02, subdivision 1, is decreased in later years.  The local 
        match rate for the reserve account is the same rate as applied 
        to the initial allocation.  Reserve account payments must not be 
        included when calculating the county adjustments made according 
        to subdivision 2.  For counties providing medical assistance or 
        general assistance medical care through managed care plans on 
        January 1, 1996, the base year is fiscal year 1995.  For 
        counties beginning provision of managed care after January 1, 
        1996, the base year is the most recent fiscal year before 
        enrollment in managed care begins.  For counties providing 
        managed care, the base level will be increased or decreased in 
        proportion to changes in the fund balance from which allocations 
        are made under subdivision 2, but will be additionally increased 
        or decreased in proportion to the change in county adjusted 
        population made in subdivision 1, paragraphs (b) and 
        (c).  Effective July 1, 2001, at the end of each biennium, any 
        funds deposited in the reserve account funds in excess of those 
        needed to meet obligations incurred under this section and 
        sections 254B.06 and 254B.09 shall cancel to the general fund. 
           Sec. 5.  Minnesota Statutes 2000, section 254B.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LOCAL AGENCY DUTIES.] (a) Every local 
        agency shall provide chemical dependency services to persons 
        residing within its jurisdiction who meet criteria established 
        by the commissioner for placement in a chemical dependency 
        residential or nonresidential treatment service.  Chemical 
        dependency money must be administered by the local agencies 
        according to law and rules adopted by the commissioner under 
        sections 14.001 to 14.69. 
           (b) In order to contain costs, the county board shall, with 
        the approval of the commissioner of human services, select 
        eligible vendors of chemical dependency services who can provide 
        economical and appropriate treatment.  Unless the local agency 
        is a social services department directly administered by a 
        county or human services board, the local agency shall not be an 
        eligible vendor under section 254B.05.  The commissioner may 
        approve proposals from county boards to provide services in an 
        economical manner or to control utilization, with safeguards to 
        ensure that necessary services are provided.  If a county 
        implements a demonstration or experimental medical services 
        funding plan, the commissioner shall transfer the money as 
        appropriate.  If a county selects a vendor located in another 
        state, the county shall ensure that the vendor is in compliance 
        with the rules governing licensure of programs located in the 
        state. 
           (c) The calendar year 1998 2002 rate for vendors may not 
        increase more than three percent above the rate approved in 
        effect on January 1, 1997 2001.  The calendar year 1999 2003 
        rate for vendors may not increase more than three percent above 
        the rate in effect on January 1, 1998 2002.  The calendar years 
        2004 and 2005 rates may not exceed the rate in effect on January 
        1, 2003. 
           (d) A culturally specific vendor that provides assessments 
        under a variance under Minnesota Rules, part 9530.6610, shall be 
        allowed to provide assessment services to persons not covered by 
        the variance. 
           Sec. 6.  Minnesota Statutes 2000, section 254B.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) Persons eligible for 
        benefits under Code of Federal Regulations, title 25, part 20, 
        persons eligible for medical assistance benefits under sections 
        256B.055, 256B.056, and 256B.057, subdivisions 1, 2, 5, and 6, 
        or who meet the income standards of section 256B.056, 
        subdivision 4, and persons eligible for general assistance 
        medical care under section 256D.03, subdivision 3, are entitled 
        to chemical dependency fund services.  State money appropriated 
        for this paragraph must be placed in a separate account 
        established for this purpose.  
           Persons with dependent children who are determined to be in 
        need of chemical dependency treatment pursuant to an assessment 
        under section 626.556, subdivision 10, or a case plan under 
        section 260C.201, subdivision 6, or 260C.212, shall be assisted 
        by the local agency to access needed treatment services.  
        Treatment services must be appropriate for the individual or 
        family, which may include long-term care treatment or treatment 
        in a facility that allows the dependent children to stay in the 
        treatment facility.  The county shall pay for out-of-home 
        placement costs, if applicable. 
           (b) A person not entitled to services under paragraph (a), 
        but with family income that is less than 60 percent of the state 
        median income for a family of like size and composition 215 
        percent of the federal poverty guidelines for the applicable 
        family size, shall be eligible to receive chemical dependency 
        fund services within the limit of funds available after persons 
        entitled to services under paragraph (a) have been 
        served appropriated for this group for the fiscal year.  If 
        notified by the state agency of limited funds, a county must 
        give preferential treatment to persons with dependent children 
        who are in need of chemical dependency treatment pursuant to an 
        assessment under section 626.556, subdivision 10, or a case plan 
        under section 260C.201, subdivision 6, or 260C.212.  A county 
        may spend money from its own sources to serve persons under this 
        paragraph.  State money appropriated for this paragraph must be 
        placed in a separate account established for this purpose. 
           (c) Persons whose income is between 60 215 percent and 115 
        412 percent of the state median income federal poverty 
        guidelines for the applicable family size shall be eligible for 
        chemical dependency services on a sliding fee basis, within the 
        limit of funds available, after persons entitled to services 
        under paragraph (a) and persons eligible for services under 
        paragraph (b) have been served appropriated for this group for 
        the fiscal year.  Persons eligible under this paragraph must 
        contribute to the cost of services according to the sliding fee 
        scale established under subdivision 3.  A county may spend money 
        from its own sources to provide services to persons under this 
        paragraph.  State money appropriated for this paragraph must be 
        placed in a separate account established for this purpose. 
           Sec. 7.  Minnesota Statutes 2000, section 254B.09, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [PAYMENTS TO IMPROVE SERVICES TO AMERICAN 
        INDIANS.] The commissioner may set rates for chemical dependency 
        services according to the American Indian Health Improvement 
        Act, Public Law Number 94-437, for eligible vendors.  These 
        rates shall supersede rates set in county purchase of service 
        agreements when payments are made on behalf of clients eligible 
        according to Public Law Number 94-437. 
           Sec. 8.  Minnesota Statutes 2000, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [GRANTS FOR CASE MANAGEMENT SERVICES TO PERSONS 
        WITH HIV OR AIDS.] The commissioner may award grants to eligible 
        vendors for the development, implementation, and evaluation of 
        case management services for individuals infected with the human 
        immunodeficiency virus.  HIV/AIDs case management services will 
        be provided to increase access to cost effective health care 
        services, to reduce the risk of HIV transmission, to ensure that 
        basic client needs are met, and to increase client access to 
        needed community supports or services. 
           Sec. 9.  Minnesota Statutes 2000, section 256.476, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE AND GOALS.] The commissioner of 
        human services shall establish a consumer support grant 
        program to assist for individuals with functional limitations 
        and their families in purchasing and securing supports which the 
        individuals need to live as independently and productively in 
        the community as possible who wish to purchase and secure their 
        own supports.  The commissioner and local agencies shall jointly 
        develop an implementation plan which must include a way to 
        resolve the issues related to county liability.  The program 
        shall: 
           (1) make support grants or exception grants described in 
        subdivision 11 available to individuals or families as an 
        effective alternative to existing programs and services, such as 
        the developmental disability family support program, the 
        alternative care program, personal care attendant services, home 
        health aide services, and private duty nursing facility 
        services; 
           (2) provide consumers more control, flexibility, and 
        responsibility over the needed supports their services and 
        supports; 
           (3) promote local program management and decision making; 
        and 
           (4) encourage the use of informal and typical community 
        supports. 
           Sec. 10.  Minnesota Statutes 2000, section 256.476, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them: 
           (a) "County board" means the county board of commissioners 
        for the county of financial responsibility as defined in section 
        256G.02, subdivision 4, or its designated representative.  When 
        a human services board has been established under sections 
        402.01 to 402.10, it shall be considered the county board for 
        the purposes of this section. 
           (b) "Family" means the person's birth parents, adoptive 
        parents or stepparents, siblings or stepsiblings, children or 
        stepchildren, grandparents, grandchildren, niece, nephew, aunt, 
        uncle, or spouse.  For the purposes of this section, a family 
        member is at least 18 years of age. 
           (c) "Functional limitations" means the long-term inability 
        to perform an activity or task in one or more areas of major 
        life activity, including self-care, understanding and use of 
        language, learning, mobility, self-direction, and capacity for 
        independent living.  For the purpose of this section, the 
        inability to perform an activity or task results from a mental, 
        emotional, psychological, sensory, or physical disability, 
        condition, or illness. 
           (d) "Informed choice" means a voluntary decision made by 
        the person or the person's legal representative, after becoming 
        familiarized with the alternatives to: 
           (1) select a preferred alternative from a number of 
        feasible alternatives; 
           (2) select an alternative which may be developed in the 
        future; and 
           (3) refuse any or all alternatives. 
           (e) "Local agency" means the local agency authorized by the 
        county board or, for counties not participating in the consumer 
        grant program by July 1, 2002, the commissioner, to carry out 
        the provisions of this section. 
           (f) "Person" or "persons" means a person or persons meeting 
        the eligibility criteria in subdivision 3. 
           (g) "Authorized representative" means an individual 
        designated by the person or their legal representative to act on 
        their behalf.  This individual may be a family member, guardian, 
        representative payee, or other individual designated by the 
        person or their legal representative, if any, to assist in 
        purchasing and arranging for supports.  For the purposes of this 
        section, an authorized representative is at least 18 years of 
        age. 
           (h) "Screening" means the screening of a person's service 
        needs under sections 256B.0911 and 256B.092. 
           (i) "Supports" means services, care, aids, home 
        environmental modifications, or assistance purchased by the 
        person or the person's family.  Examples of supports include 
        respite care, assistance with daily living, and adaptive aids 
        assistive technology.  For the purpose of this section, 
        notwithstanding the provisions of section 144A.43, supports 
        purchased under the consumer support program are not considered 
        home care services. 
           (j) "Program of origination" means the program the 
        individual transferred from when approved for the consumer 
        support grant program. 
           Sec. 11.  Minnesota Statutes 2000, section 256.476, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY TO APPLY FOR GRANTS.] (a) A person 
        is eligible to apply for a consumer support grant if the person 
        meets all of the following criteria: 
           (1) the person is eligible for and has been approved to 
        receive services under medical assistance as determined under 
        sections 256B.055 and 256B.056 or the person is eligible for and 
        has been approved to receive services under alternative care 
        services as determined under section 256B.0913 or the person has 
        been approved to receive a grant under the developmental 
        disability family support program under section 252.32; 
           (2) the person is able to direct and purchase the person's 
        own care and supports, or the person has a family member, legal 
        representative, or other authorized representative who can 
        purchase and arrange supports on the person's behalf; 
           (3) the person has functional limitations, requires ongoing 
        supports to live in the community, and is at risk of or would 
        continue institutionalization without such supports; and 
           (4) the person will live in a home.  For the purpose of 
        this section, "home" means the person's own home or home of a 
        person's family member.  These homes are natural home settings 
        and are not licensed by the department of health or human 
        services. 
           (b) Persons may not concurrently receive a consumer support 
        grant if they are: 
           (1) receiving home and community-based services under 
        United States Code, title 42, section 1396h(c); personal care 
        attendant and home health aide services under section 256B.0625; 
        a developmental disability family support grant; or alternative 
        care services under section 256B.0913; or 
           (2) residing in an institutional or congregate care setting.
           (c) A person or person's family receiving a consumer 
        support grant shall not be charged a fee or premium by a local 
        agency for participating in the program.  
           (d) The commissioner may limit the participation of nursing 
        facility residents, residents of intermediate care facilities 
        for persons with mental retardation, and the recipients of 
        services from federal waiver programs in the consumer support 
        grant program if the participation of these individuals will 
        result in an increase in the cost to the state. 
           (e) The commissioner shall establish a budgeted 
        appropriation each fiscal year for the consumer support grant 
        program.  The number of individuals participating in the program 
        will be adjusted so the total amount allocated to counties does 
        not exceed the amount of the budgeted appropriation.  The 
        budgeted appropriation will be adjusted annually to accommodate 
        changes in demand for the consumer support grants. 
           Sec. 12.  Minnesota Statutes 2000, section 256.476, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SUPPORT GRANTS; CRITERIA AND LIMITATIONS.] (a) A 
        county board may choose to participate in the consumer support 
        grant program.  If a county board chooses to participate in the 
        program, has not chosen to participate by July 1, 2002, the 
        commissioner shall contract with another county or other entity 
        to provide access to residents of the nonparticipating county 
        who choose the consumer support grant option.  The commissioner 
        shall notify the county board in a county that has declined to 
        participate of the commissioner's intent to enter into a 
        contract with another county or other entity at least 30 days in 
        advance of entering into the contract.  The local agency shall 
        establish written procedures and criteria to determine the 
        amount and use of support grants.  These procedures must 
        include, at least, the availability of respite care, assistance 
        with daily living, and adaptive aids.  The local agency may 
        establish monthly or annual maximum amounts for grants and 
        procedures where exceptional resources may be required to meet 
        the health and safety needs of the person on a time-limited 
        basis, however, the total amount awarded to each individual may 
        not exceed the limits established in subdivision 5, paragraph 
        (f) subdivision 11. 
           (b) Support grants to a person or a person's family will be 
        provided through a monthly subsidy payment and be in the form of 
        cash, voucher, or direct county payment to vendor.  Support 
        grant amounts must be determined by the local agency.  Each 
        service and item purchased with a support grant must meet all of 
        the following criteria:  
           (1) it must be over and above the normal cost of caring for 
        the person if the person did not have functional limitations; 
           (2) it must be directly attributable to the person's 
        functional limitations; 
           (3) it must enable the person or the person's family to 
        delay or prevent out-of-home placement of the person; and 
           (4) it must be consistent with the needs identified in the 
        service plan, when applicable. 
           (c) Items and services purchased with support grants must 
        be those for which there are no other public or private funds 
        available to the person or the person's family.  Fees assessed 
        to the person or the person's family for health and human 
        services are not reimbursable through the grant. 
           (d) In approving or denying applications, the local agency 
        shall consider the following factors:  
           (1) the extent and areas of the person's functional 
        limitations; 
           (2) the degree of need in the home environment for 
        additional support; and 
           (3) the potential effectiveness of the grant to maintain 
        and support the person in the family environment or the person's 
        own home. 
           (e) At the time of application to the program or screening 
        for other services, the person or the person's family shall be 
        provided sufficient information to ensure an informed choice of 
        alternatives by the person, the person's legal representative, 
        if any, or the person's family.  The application shall be made 
        to the local agency and shall specify the needs of the person 
        and family, the form and amount of grant requested, the items 
        and services to be reimbursed, and evidence of eligibility for 
        medical assistance or alternative care program. 
           (f) Upon approval of an application by the local agency and 
        agreement on a support plan for the person or person's family, 
        the local agency shall make grants to the person or the person's 
        family.  The grant shall be in an amount for the direct costs of 
        the services or supports outlined in the service agreement.  
           (g) Reimbursable costs shall not include costs for 
        resources already available, such as special education classes, 
        day training and habilitation, case management, other services 
        to which the person is entitled, medical costs covered by 
        insurance or other health programs, or other resources usually 
        available at no cost to the person or the person's family. 
           (h) The state of Minnesota, the county boards participating 
        in the consumer support grant program, or the agencies acting on 
        behalf of the county boards in the implementation and 
        administration of the consumer support grant program shall not 
        be liable for damages, injuries, or liabilities sustained 
        through the purchase of support by the individual, the 
        individual's family, or the authorized representative under this 
        section with funds received through the consumer support grant 
        program.  Liabilities include but are not limited to:  workers' 
        compensation liability, the Federal Insurance Contributions Act 
        (FICA), or the Federal Unemployment Tax Act (FUTA).  For 
        purposes of this section, participating county boards and 
        agencies acting on behalf of county boards are exempt from the 
        provisions of section 268.04. 
           Sec. 13.  Minnesota Statutes 2000, section 256.476, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REIMBURSEMENT, ALLOCATIONS, AND REPORTING.] (a) 
        For the purpose of transferring persons to the consumer support 
        grant program from specific programs or services, such as the 
        developmental disability family support program and alternative 
        care program, personal care attendant assistant services, home 
        health aide services, or nursing facility private duty nursing 
        services, the amount of funds transferred by the commissioner 
        between the developmental disability family support program 
        account, the alternative care account, the medical assistance 
        account, or the consumer support grant account shall be based on 
        each county's participation in transferring persons to the 
        consumer support grant program from those programs and services. 
           (b) At the beginning of each fiscal year, county 
        allocations for consumer support grants shall be based on: 
           (1) the number of persons to whom the county board expects 
        to provide consumer supports grants; 
           (2) their eligibility for current program and services; 
           (3) the amount of nonfederal dollars expended on those 
        individuals for those programs and services or, in situations 
        where an individual is unable to obtain the support needed from 
        the program of origination due to the unavailability of service 
        providers at the time or the location where the supports are 
        needed, the allocation will be based on the county's best 
        estimate of the nonfederal dollars that would have been expended 
        if the services had been available allowed under subdivision 11; 
        and 
           (4) projected dates when persons will start receiving 
        grants.  County allocations shall be adjusted periodically by 
        the commissioner based on the actual transfer of persons or 
        service openings, and the nonfederal dollars associated with 
        those persons or service openings, to the consumer support grant 
        program. 
           (c) The amount of funds transferred by the commissioner 
        from the alternative care account and the medical assistance 
        account for an individual may be changed if it is determined by 
        the county or its agent that the individual's need for support 
        has changed. 
           (d) The authority to utilize funds transferred to the 
        consumer support grant account for the purposes of implementing 
        and administering the consumer support grant program will not be 
        limited or constrained by the spending authority provided to the 
        program of origination. 
           (e) The commissioner shall may use up to five percent of 
        each county's allocation, as adjusted, for payments to that 
        county for administrative expenses, to be paid as a 
        proportionate addition to reported direct service expenditures. 
           (f) Except as provided in this paragraph, The county 
        allocation for each individual or individual's family cannot 
        exceed 80 percent of the total nonfederal dollars expended on 
        the individual by the program of origination except for the 
        developmental disabilities family support grant program which 
        can be approved up to 100 percent of the nonfederal dollars and 
        in situations as described in paragraph (b), clause (3).  In 
        situations where exceptional need exists or the individual's 
        need for support increases, up to 100 percent of the nonfederal 
        dollars expended may be allocated to the county.  Allocations 
        that exceed 80 percent of the nonfederal dollars expended on the 
        individual by the program of origination must be approved by the 
        commissioner.  The remainder of the amount expended on the 
        individual by the program of origination will be used in the 
        following proportions:  half will be made available to the 
        consumer support grant program and participating counties for 
        consumer training, resource development, and other costs, and 
        half will be returned to the state general fund the amount 
        allowed under subdivision 11. 
           (g) The commissioner may recover, suspend, or withhold 
        payments if the county board, local agency, or grantee does not 
        comply with the requirements of this section. 
           (h) Grant funds unexpended by consumers shall return to the 
        state once a year.  The annual return of unexpended grant funds 
        shall occur in the quarter following the end of the state fiscal 
        year. 
           Sec. 14.  Minnesota Statutes 2000, section 256.476, 
        subdivision 8, is amended to read: 
           Subd. 8.  [COMMISSIONER RESPONSIBILITIES.] The commissioner 
        shall: 
           (1) transfer and allocate funds pursuant to this 
        section subdivision 11; 
           (2) determine allocations based on projected and actual 
        local agency use; 
           (3) monitor and oversee overall program spending; 
           (4) evaluate the effectiveness of the program; 
           (5) provide training and technical assistance for local 
        agencies and consumers to help identify potential applicants to 
        the program; and 
           (6) develop guidelines for local agency program 
        administration and consumer information; and 
           (7) apply for a federal waiver or take any other action 
        necessary to maximize federal funding for the program by 
        September 1, 1999. 
           Sec. 15.  Minnesota Statutes 2000, section 256.476, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [CONSUMER SUPPORT GRANT PROGRAM AFTER JULY 1, 
        2001.] (a) Effective July 1, 2001, the commissioner shall 
        allocate consumer support grant resources to serve additional 
        individuals based on a review of Medicaid authorization and 
        payment information of persons eligible for a consumer support 
        grant from the most recent fiscal year.  The commissioner shall 
        use the following methodology to calculate maximum allowable 
        monthly consumer support grant levels: 
           (1) for individuals whose program of origination is medical 
        assistance home care under section 256B.0627, the maximum 
        allowable monthly grant levels are calculated by: 
           (i) determining the nonfederal share of the average service 
        authorization for each home care rating; 
           (ii) calculating the overall ratio of actual payments to 
        service authorizations by program; 
           (iii) applying the overall ratio to the average service 
        authorization level of each home care rating; 
           (iv) adjusting the result for any authorized rate increases 
        provided by the legislature; and 
           (v) adjusting the result for the average monthly 
        utilization per recipient; and 
           (2) for persons with programs of origination other than the 
        program described in clause (1), the maximum grant level for an 
        individual shall not exceed the total of the nonfederal dollars 
        expended on the individual by the program of origination. 
           (b) Persons receiving consumer support grants prior to July 
        1, 2001, may continue to receive the grant amount established 
        prior to July 1, 2001. 
           (c) The commissioner may provide up to 200 exception 
        grants, including grants in use under paragraph (b).  Eligible 
        persons shall be provided an exception grant in priority order 
        based upon the date of the commissioner's receipt of the county 
        request.  The maximum allowable grant level for an exception 
        grant shall be based upon the nonfederal share of the average 
        service authorization from the most recent fiscal year for each 
        home care rating category.  The amount of each exception grant 
        shall be based upon the commissioner's determination of the 
        nonfederal dollars that would have been expended if services had 
        been available for an individual who is unable to obtain the 
        support needed from the program of origination due to the 
        unavailability of qualified service providers at the time or the 
        location where the supports are needed. 
           Sec. 16.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PRIVATE DUTY NURSING.] Medical assistance covers 
        private duty nursing services in a recipient's home.  Recipients 
        who are authorized to receive private duty nursing services in 
        their home may use approved hours outside of the home during 
        hours when normal life activities take them outside of their 
        home and when, without the provision of private duty nursing, 
        their health and safety would be jeopardized.  To use private 
        duty nursing services at school, the recipient or responsible 
        party must provide written authorization in the care plan 
        identifying the chosen provider and the daily amount of services 
        to be used at school.  Medical assistance does not cover private 
        duty nursing services for residents of a hospital, nursing 
        facility, intermediate care facility, or a health care facility 
        licensed by the commissioner of health, except as authorized in 
        section 256B.64 for ventilator-dependent recipients in hospitals 
        or unless a resident who is otherwise eligible is on leave from 
        the facility and the facility either pays for the private duty 
        nursing services or forgoes the facility per diem for the leave 
        days that private duty nursing services are used.  Total hours 
        of service and payment allowed for services outside the home 
        cannot exceed that which is otherwise allowed in an in-home 
        setting according to section 256B.0627.  All private duty 
        nursing services must be provided according to the limits 
        established under section 256B.0627.  Private duty nursing 
        services may not be reimbursed if the nurse is the spouse of the 
        recipient or the parent or foster care provider of a recipient 
        who is under age 18, or the recipient's legal guardian. 
           Sec. 17.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [PERSONAL CARE ASSISTANT SERVICES.] Medical 
        assistance covers personal care assistant services in a 
        recipient's home.  To qualify for personal care assistant 
        services, recipients or responsible parties must be able to 
        identify the recipient's needs, direct and evaluate task 
        accomplishment, and provide for health and safety.  Approved 
        hours may be used outside the home when normal life activities 
        take them outside the home and when, without the provision of 
        personal care, their health and safety would be jeopardized.  To 
        use personal care assistant services at school, the recipient or 
        responsible party must provide written authorization in the care 
        plan identifying the chosen provider and the daily amount of 
        services to be used at school.  Total hours for services, 
        whether actually performed inside or outside the recipient's 
        home, cannot exceed that which is otherwise allowed for personal 
        care assistant services in an in-home setting according to 
        section 256B.0627.  Medical assistance does not cover personal 
        care assistant services for residents of a hospital, nursing 
        facility, intermediate care facility, health care facility 
        licensed by the commissioner of health, or unless a resident who 
        is otherwise eligible is on leave from the facility and the 
        facility either pays for the personal care assistant services or 
        forgoes the facility per diem for the leave days that personal 
        care assistant services are used.  All personal care assistant 
        services must be provided according to section 256B.0627.  
        Personal care assistant services may not be reimbursed if the 
        personal care assistant is the spouse or legal guardian of the 
        recipient or the parent of a recipient under age 18, or the 
        responsible party or the foster care provider of a recipient who 
        cannot direct the recipient's own care unless, in the case of a 
        foster care provider, a county or state case manager visits the 
        recipient as needed, but not less than every six months, to 
        monitor the health and safety of the recipient and to ensure the 
        goals of the care plan are met.  Parents of adult recipients, 
        adult children of the recipient or adult siblings of the 
        recipient may be reimbursed for personal care assistant services 
        if they are not the recipient's legal guardian and, if they are 
        granted a waiver under section 256B.0627.  Until July 1, 2001, 
        and Notwithstanding the provisions of section 256B.0627, 
        subdivision 4, paragraph (b), clause (4), the noncorporate legal 
        guardian or conservator of an adult, who is not the responsible 
        party and not the personal care provider organization, may be 
        granted a hardship waiver under section 256B.0627, to be 
        reimbursed to provide personal care assistant services to the 
        recipient, and shall not be considered to have a service 
        provider interest for purposes of participation on the screening 
        team under section 256B.092, subdivision 7. 
           Sec. 18.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 19c, is amended to read: 
           Subd. 19c.  [PERSONAL CARE.] Medical assistance covers 
        personal care assistant services provided by an individual who 
        is qualified to provide the services according to subdivision 
        19a and section 256B.0627, where the services are prescribed by 
        a physician in accordance with a plan of treatment and are 
        supervised by the recipient under the fiscal agent option 
        according to section 256B.0627, subdivision 10, or a qualified 
        professional.  "Qualified professional" means a mental health 
        professional as defined in section 245.462, subdivision 18, or 
        245.4871, subdivision 27; or a registered nurse as defined in 
        sections 148.171 to 148.285.  As part of the assessment, the 
        county public health nurse will consult with assist the 
        recipient or responsible party and to identify the most 
        appropriate person to provide supervision of the personal care 
        assistant.  The qualified professional shall perform the duties 
        described in Minnesota Rules, part 9505.0335, subpart 4.  
           Sec. 19.  Minnesota Statutes 2000, section 256B.0625, 
        subdivision 20, is amended to read: 
           Subd. 20.  [MENTAL HEALTH CASE MANAGEMENT.] (a) To the 
        extent authorized by rule of the state agency, medical 
        assistance covers case management services to persons with 
        serious and persistent mental illness and children with severe 
        emotional disturbance.  Services provided under this section 
        must meet the relevant standards in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and 
        9505.0322, excluding subpart 10. 
           (b) Entities meeting program standards set out in rules 
        governing family community support services as defined in 
        section 245.4871, subdivision 17, are eligible for medical 
        assistance reimbursement for case management services for 
        children with severe emotional disturbance when these services 
        meet the program standards in Minnesota Rules, parts 9520.0900 
        to 9520.0926 and 9505.0322, excluding subparts 6 and 10. 
           (c) Medical assistance and MinnesotaCare payment for mental 
        health case management shall be made on a monthly basis.  In 
        order to receive payment for an eligible child, the provider 
        must document at least a face-to-face contact with the child, 
        the child's parents, or the child's legal representative.  To 
        receive payment for an eligible adult, the provider must 
        document: 
           (1) at least a face-to-face contact with the adult or the 
        adult's legal representative; or 
           (2) at least a telephone contact with the adult or the 
        adult's legal representative and document a face-to-face contact 
        with the adult or the adult's legal representative within the 
        preceding two months. 
           (d) Payment for mental health case management provided by 
        county or state staff shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), with separate rates calculated for child welfare and mental 
        health, and within mental health, separate rates for children 
        and adults. 
           (e) Payment for mental health 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. 
           (f) If the service is provided by a team which includes 
        contracted vendors and county or state staff, the costs for 
        county or state staff participation in 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 
        case management and a description of the roles of the team 
        members. 
           (g) The commissioner shall calculate the nonfederal share 
        of actual medical assistance and general assistance medical care 
        payments for each county, based on the higher of calendar year 
        1995 or 1996, by service date, project that amount forward to 
        1999, and transfer one-half of the result from medical 
        assistance and general assistance medical care to each county's 
        mental health grants under sections 245.4886 and 256E.12 for 
        calendar year 1999.  The annualized minimum amount added to each 
        county's mental health grant shall be $3,000 per year for 
        children and $5,000 per year for adults.  The commissioner may 
        reduce the statewide growth factor in order to fund these 
        minimums.  The annualized total amount transferred shall become 
        part of the base for future mental health grants for each county.
           (h) Any net increase in revenue to the county as a result 
        of the change in this section must be used to provide expanded 
        mental health services as defined in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, excluding inpatient and residential treatment.  For 
        adults, increased revenue may also be used for services and 
        consumer supports which are part of adult mental health projects 
        approved under Laws 1997, chapter 203, article 7, section 25.  
        For children, increased revenue may also be used for respite 
        care and nonresidential individualized rehabilitation services 
        as defined in section 245.492, subdivisions 17 and 23.  
        "Increased revenue" has the meaning given in Minnesota Rules, 
        part 9520.0903, subpart 3.  
           (i) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for mental health 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.  
           (j) The commissioner may suspend, reduce, or terminate the 
        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.  
           (k) The commissioner shall set aside a portion of the 
        federal funds earned under this section to repay the special 
        revenue maximization account under section 256.01, subdivision 
        2, clause (15).  The repayment is limited to: 
           (1) the costs of developing and implementing this section; 
        and 
           (2) programming the information systems. 
           (l) Notwithstanding section 256.025, subdivision 2, 
        payments to counties for 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. 
           (m) Notwithstanding section 256B.041, county payments for 
        the cost of mental health case management services provided by 
        county or state staff shall not be made to the state treasurer.  
        For the purposes of mental health case management services 
        provided by county or state 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. 
           (n) Case management services under this subdivision do not 
        include therapy, treatment, legal, or outreach services. 
           (o) 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 
        case management services under this subdivision is limited to 
        the last 30 180 days of the recipient's residency in that 
        facility and may not exceed more than two six months in a 
        calendar year. 
           (p) Payment for case management services under this 
        subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (q) By July 1, 2000, the commissioner shall evaluate the 
        effectiveness of the changes required by this section, including 
        changes in number of persons receiving mental health case 
        management, changes in hours of service per person, and changes 
        in caseload size. 
           (r) For each calendar year beginning with the calendar year 
        2001, the annualized amount of state funds for each county 
        determined under paragraph (g) shall be adjusted by the county's 
        percentage change in the average number of clients per month who 
        received case management under this section during the fiscal 
        year that ended six months prior to the calendar year in 
        question, in comparison to the prior fiscal year. 
           (s) For counties receiving the minimum allocation of $3,000 
        or $5,000 described in paragraph (g), the adjustment in 
        paragraph (r) shall be determined so that the county receives 
        the higher of the following amounts: 
           (1) a continuation of the minimum allocation in paragraph 
        (g); or 
           (2) an amount based on that county's average number of 
        clients per month who received case management under this 
        section during the fiscal year that ended six months prior to 
        the calendar year in question, in comparison to the prior fiscal 
        year, times the average statewide grant per person per month for 
        counties not receiving the minimum allocation. 
           (t) The adjustments in paragraphs (r) and (s) shall be 
        calculated separately for children and adults. 
           Sec. 20.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 34.  [TARGETED CASE MANAGEMENT.] For purposes of 
        subdivisions 43a to 43h, the following terms have the meanings 
        given them: 
           (1) "home care service recipients" means those individuals 
        receiving the following services under section 256B.0627:  
        skilled nursing visits, home health aide visits, private duty 
        nursing, personal care assistants, or therapies provided through 
        a home health agency; 
           (2) "home care targeted case management" means the 
        provision of targeted case management services for the purpose 
        of assisting home care service recipients to gain access to 
        needed services and supports so that they may remain in the 
        community; 
           (3) "institutions" means hospitals, consistent with Code of 
        Federal Regulations, title 42, section 440.10; regional 
        treatment center inpatient services, consistent with section 
        245.474; nursing facilities; and intermediate care facilities 
        for persons with mental retardation; 
           (4) "relocation targeted case management" means the 
        provision of targeted case management services for the purpose 
        of assisting recipients to gain access to needed services and 
        supports if they choose to move from an institution to the 
        community.  Relocation targeted case management may be provided 
        during the last 180 consecutive days of an eligible recipient's 
        institutional stay; and 
           (5) "targeted case management" means case management 
        services provided to help recipients gain access to needed 
        medical, social, educational, and other services and supports. 
           Sec. 21.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43a.  [ELIGIBILITY.] The following persons are 
        eligible for relocation targeted case management or home 
        care-targeted case management: 
           (1) medical assistance eligible persons residing in 
        institutions who choose to move into the community are eligible 
        for relocation targeted case management services; and 
           (2) medical assistance eligible persons receiving home care 
        services, who are not eligible for any other medical assistance 
        reimbursable case management service, are eligible for home 
        care-targeted case management services beginning January 1, 2003.
           Sec. 22.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43b.  [RELOCATION TARGETED CASE MANAGEMENT PROVIDER 
        QUALIFICATIONS.] The following qualifications and certification 
        standards must be met by providers of relocation targeted case 
        management: 
           (a) The commissioner must certify each provider of 
        relocation targeted case management before enrollment.  The 
        certification process shall examine the provider's ability to 
        meet the requirements in this subdivision and other federal and 
        state requirements of this service.  A certified relocation 
        targeted case management provider may subcontract with another 
        provider to deliver relocation targeted case management 
        services.  Subcontracted providers must demonstrate the ability 
        to provide the services outlined in subdivision 43d. 
           (b) A relocation targeted case management provider is an 
        enrolled medical assistance provider who is determined by the 
        commissioner to have all of the following characteristics: 
           (1) the legal authority to provide public welfare under 
        sections 393.01, subdivision 7; and 393.07; or a federally 
        recognized Indian tribe; 
           (2) the demonstrated capacity and experience to provide the 
        components of case management to coordinate and link community 
        resources needed by the eligible population; 
           (3) the administrative capacity and experience to serve the 
        target population for whom it will provide services and ensure 
        quality of services under state and federal requirements; 
           (4) the legal authority to provide complete investigative 
        and protective services under section 626.556, subdivision 10; 
        and child welfare and foster care services under section 393.07, 
        subdivisions 1 and 2; or a federally recognized Indian tribe; 
           (5) a financial management system that provides accurate 
        documentation of services and costs under state and federal 
        requirements; and 
           (6) the capacity to document and maintain individual case 
        records under state and federal requirements. 
        A provider of targeted case management under subdivision 20 may 
        be deemed a certified provider of relocation targeted case 
        management. 
           Sec. 23. Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43c.  [HOME CARE TARGETED CASE MANAGEMENT PROVIDER 
        QUALIFICATIONS.] The following qualifications and certification 
        standards must be met by providers of home care targeted case 
        management. 
           (a) The commissioner must certify each provider of home 
        care targeted case management before enrollment.  The 
        certification process shall examine the provider's ability to 
        meet the requirements in this subdivision and other state and 
        federal requirements of this service. 
           (b) A home care targeted case management provider is an 
        enrolled medical assistance provider who has a minimum of a 
        bachelor's degree or a license in a health or human services 
        field, and is determined by the commissioner to have all of the 
        following characteristics: 
           (1) the demonstrated capacity and experience to provide the 
        components of case management to coordinate and link community 
        resources needed by the eligible population; 
           (2) the administrative capacity and experience to serve the 
        target population for whom it will provide services and ensure 
        quality of services under state and federal requirements; 
           (3) a financial management system that provides accurate 
        documentation of services and costs under state and federal 
        requirements; 
           (4) the capacity to document and maintain individual case 
        records under state and federal requirements; and 
           (5) the capacity to coordinate with county administrative 
        functions. 
           Sec. 24.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43d.  [ELIGIBLE SERVICES.] Services eligible for 
        medical assistance reimbursement as targeted case management 
        include: 
           (1) assessment of the recipient's need for targeted case 
        management services; 
           (2) development, completion, and regular review of a 
        written individual service plan, which is based upon the 
        assessment of the recipient's needs and choices, and which will 
        ensure access to medical, social, educational, and other related 
        services and supports; 
           (3) routine contact or communication with the recipient, 
        recipient's family, primary caregiver, legal representative, 
        substitute care provider, service providers, or other relevant 
        persons identified as necessary to the development or 
        implementation of the goals of the individual service plan; 
           (4) coordinating referrals for, and the provision of, case 
        management services for the recipient with appropriate service 
        providers, consistent with section 1902(a)(23) of the Social 
        Security Act; 
           (5) coordinating and monitoring the overall service 
        delivery to ensure quality of services, appropriateness, and 
        continued need; 
           (6) completing and maintaining necessary documentation that 
        supports and verifies the activities in this subdivision; 
           (7) traveling to conduct a visit with the recipient or 
        other relevant person necessary to develop or implement the 
        goals of the individual service plan; and 
           (8) coordinating with the institution discharge planner in 
        the 180-day period before the recipient's discharge. 
           Sec. 25.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43e.  [TIME LINES.] The following time lines must be 
        met for assigning a case manager: 
           (1) for relocation targeted case management, an eligible 
        recipient must be assigned a case manager who visits the person 
        within 20 working days of requesting a case manager from their 
        county of financial responsibility as determined under chapter 
        256G.  If a county agency does not provide case management 
        services as required, the recipient may, after written notice to 
        the county agency, obtain targeted relocation case management 
        services from a home care targeted case management provider, as 
        defined in subdivision 43c; and 
           (2) for home care targeted case management, an eligible 
        recipient must be assigned a case manager within 20 working days 
        of requesting a case manager from a home care targeted case 
        management provider, as defined in subdivision 43c. 
           Sec. 26.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43f.  [EVALUATION.] The commissioner shall evaluate 
        the delivery of targeted case management, including, but not 
        limited to, access to case management services, consumer 
        satisfaction with case management services, and quality of case 
        management services. 
           Sec. 27.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43g.  [CONTACT DOCUMENTATION.] The case manager must 
        document each face-to-face and telephone contact with the 
        recipient and others involved in the recipient's individual 
        service plan. 
           Sec. 28.  Minnesota Statutes 2000, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 43h.  [PAYMENT RATES.] The commissioner shall set 
        payment rates for targeted case management under this 
        subdivision.  Case managers may bill according to the following 
        criteria: 
           (1) for relocation targeted case management, case managers 
        may bill for direct case management activities, including 
        face-to-face and telephone contacts, in the 180 days preceding 
        an eligible recipient's discharge from an institution; 
           (2) for home care targeted case management, case managers 
        may bill for direct case management activities, including 
        face-to-face and telephone contacts; and 
           (3) billings for targeted case management services under 
        this subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           Sec. 29.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) "Activities of daily 
        living" includes eating, toileting, grooming, dressing, bathing, 
        transferring, mobility, and positioning.  
           (b) "Assessment" means a review and evaluation of a 
        recipient's need for home care services conducted in person.  
        Assessments for private duty nursing shall be conducted by a 
        registered private duty nurse.  Assessments for home health 
        agency services shall be conducted by a home health agency 
        nurse.  Assessments for personal care assistant services shall 
        be conducted by the county public health nurse or a certified 
        public health nurse under contract with the county.  A 
        face-to-face assessment must include:  documentation of health 
        status, determination of need, evaluation of service 
        effectiveness, identification of appropriate services, service 
        plan development or modification, coordination of services, 
        referrals and follow-up to appropriate payers and community 
        resources, completion of required reports, recommendation of 
        service authorization, and consumer education.  Once the need 
        for personal care assistant services is determined under this 
        section, the county public health nurse or certified public 
        health nurse under contract with the county is responsible for 
        communicating this recommendation to the commissioner and the 
        recipient.  A face-to-face assessment for personal 
        care assistant services is conducted on those recipients who 
        have never had a county public health nurse assessment.  A 
        face-to-face assessment must occur at least annually or when 
        there is a significant change in the recipient's condition or 
        when there is a change in the need for personal care assistant 
        services.  A service update may substitute for the annual 
        face-to-face assessment when there is not a significant change 
        in recipient condition or a change in the need for personal care 
        assistant service.  A service update or review for temporary 
        increase includes a review of initial baseline data, evaluation 
        of service effectiveness, redetermination of service need, 
        modification of service plan and appropriate referrals, update 
        of initial forms, obtaining service authorization, and on going 
        consumer education.  Assessments for medical assistance home 
        care services for mental retardation or related conditions and 
        alternative care services for developmentally disabled home and 
        community-based waivered recipients may be conducted by the 
        county public health nurse to ensure coordination and avoid 
        duplication.  Assessments must be completed on forms provided by 
        the commissioner within 30 days of a request for home care 
        services by a recipient or responsible party. 
           (b) (c) "Care plan" means a written description of personal 
        care assistant services developed by the qualified 
        professional or the recipient's physician with the recipient or 
        responsible party to be used by the personal care assistant with 
        a copy provided to the recipient or responsible party. 
           (d) "Complex and regular private duty nursing care" means: 
           (1) complex care is private duty nursing provided to 
        recipients who are ventilator dependent or for whom a physician 
        has certified that were it not for private duty nursing the 
        recipient would meet the criteria for inpatient hospital 
        intensive care unit (ICU) level of care; and 
           (2) regular care is private duty nursing provided to all 
        other recipients. 
           (e) "Health-related functions" means functions that can be 
        delegated or assigned by a licensed health care professional 
        under state law to be performed by a personal care attendant. 
           (c) (f) "Home care services" means a health service, 
        determined by the commissioner as medically necessary, that is 
        ordered by a physician and documented in a service plan that is 
        reviewed by the physician at least once every 62 60 days for the 
        provision of home health services, or private duty nursing, or 
        at least once every 365 days for personal care.  Home care 
        services are provided to the recipient at the recipient's 
        residence that is a place other than a hospital or long-term 
        care facility or as specified in section 256B.0625.  
           (g) "Instrumental activities of daily living" includes meal 
        planning and preparation, managing finances, shopping for food, 
        clothing, and other essential items, performing essential 
        household chores, communication by telephone and other media, 
        and getting around and participating in the community. 
           (d) (h) "Medically necessary" has the meaning given in 
        Minnesota Rules, parts 9505.0170 to 9505.0475.  
           (e) (i) "Personal care assistant" means a person who:  
           (1) is at least 18 years old, except for persons 16 to 18 
        years of age who participated in a related school-based job 
        training program or have completed a certified home health aide 
        competency evaluation; 
           (2) is able to effectively communicate with the recipient 
        and personal care provider organization; 
           (3) effective July 1, 1996, has completed one of the 
        training requirements as specified in Minnesota Rules, part 
        9505.0335, subpart 3, items A to D; 
           (4) has the ability to, and provides covered personal 
        care assistant services according to the recipient's care plan, 
        responds appropriately to recipient needs, and reports changes 
        in the recipient's condition to the supervising qualified 
        professional or physician; 
           (5) is not a consumer of personal care assistant services; 
        and 
           (6) is subject to criminal background checks and procedures 
        specified in section 245A.04.  
           (f) (j) "Personal care provider organization" means an 
        organization enrolled to provide personal care assistant 
        services under the medical assistance program that complies with 
        the following:  (1) owners who have a five percent interest or 
        more, and managerial officials are subject to a background study 
        as provided in section 245A.04.  This applies to currently 
        enrolled personal care provider organizations and those agencies 
        seeking enrollment as a personal care provider organization.  An 
        organization will be barred from enrollment if an owner or 
        managerial official of the organization has been convicted of a 
        crime specified in section 245A.04, or a comparable crime in 
        another jurisdiction, unless the owner or managerial official 
        meets the reconsideration criteria specified in section 245A.04; 
        (2) the organization must maintain a surety bond and liability 
        insurance throughout the duration of enrollment and provides 
        proof thereof.  The insurer must notify the department of human 
        services of the cancellation or lapse of policy; and (3) the 
        organization must maintain documentation of services as 
        specified in Minnesota Rules, part 9505.2175, subpart 7, as well 
        as evidence of compliance with personal care assistant training 
        requirements. 
           (g) (k) "Responsible party" means an individual residing 
        with a recipient of personal care assistant services who is 
        capable of providing the supportive care necessary to assist the 
        recipient to live in the community, is at least 18 years old, 
        and is not a personal care assistant.  Responsible parties who 
        are parents of minors or guardians of minors or incapacitated 
        persons may delegate the responsibility to another adult during 
        a temporary absence of at least 24 hours but not more than six 
        months.  The person delegated as a responsible party must be 
        able to meet the definition of responsible party, except that 
        the delegated responsible party is required to reside with the 
        recipient only while serving as the responsible party.  Foster 
        care license holders may be designated the responsible party for 
        residents of the foster care home if case management is provided 
        as required in section 256B.0625, subdivision 19a.  For persons 
        who, as of April 1, 1992, are sharing personal care assistant 
        services in order to obtain the availability of 24-hour 
        coverage, an employee of the personal care provider organization 
        may be designated as the responsible party if case management is 
        provided as required in section 256B.0625, subdivision 19a. 
           (h) (l) "Service plan" means a written description of the 
        services needed based on the assessment developed by the nurse 
        who conducts the assessment together with the recipient or 
        responsible party.  The service plan shall include a description 
        of the covered home care services, frequency and duration of 
        services, and expected outcomes and goals.  The recipient and 
        the provider chosen by the recipient or responsible party must 
        be given a copy of the completed service plan within 30 calendar 
        days of the request for home care services by the recipient or 
        responsible party. 
           (i) (m) "Skilled nurse visits" are provided in a 
        recipient's residence under a plan of care or service plan that 
        specifies a level of care which the nurse is qualified to 
        provide.  These services are: 
           (1) nursing services according to the written plan of care 
        or service plan and accepted standards of medical and nursing 
        practice in accordance with chapter 148; 
           (2) services which due to the recipient's medical condition 
        may only be safely and effectively provided by a registered 
        nurse or a licensed practical nurse; 
           (3) assessments performed only by a registered nurse; and 
           (4) teaching and training the recipient, the recipient's 
        family, or other caregivers requiring the skills of a registered 
        nurse or licensed practical nurse. 
           (n) "Telehomecare" means the use of telecommunications 
        technology by a home health care professional to deliver home 
        health care services, within the professional's scope of 
        practice, to a patient located at a site other than the site 
        where the practitioner is located. 
           Sec. 30.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SERVICES COVERED.] Home care services covered 
        under this section include:  
           (1) nursing services under section 256B.0625, subdivision 
        6a; 
           (2) private duty nursing services under section 256B.0625, 
        subdivision 7; 
           (3) home health aide services under section 256B.0625, 
        subdivision 6a; 
           (4) personal care assistant services under section 
        256B.0625, subdivision 19a; 
           (5) supervision of personal care assistant services 
        provided by a qualified professional under section 256B.0625, 
        subdivision 19a; 
           (6) consulting qualified professional of personal care 
        assistant services under the fiscal agent intermediary option as 
        specified in subdivision 10; 
           (7) face-to-face assessments by county public health nurses 
        for services under section 256B.0625, subdivision 19a; and 
           (8) service updates and review of temporary increases for 
        personal care assistant services by the county public health 
        nurse for services under section 256B.0625, subdivision 19a. 
           Sec. 31.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERSONAL CARE ASSISTANT SERVICES.] (a) The 
        personal care assistant services that are eligible for payment 
        are the following: services and supports furnished to an 
        individual, as needed, to assist in accomplishing activities of 
        daily living; instrumental activities of daily living; 
        health-related functions through hands-on assistance, 
        supervision, and cuing; and redirection and intervention for 
        behavior including observation and monitoring.  
           (b) Payment for services will be made within the limits 
        approved using the prior authorized process established in 
        subdivision 5. 
           (c) The amount and type of services authorized shall be 
        based on an assessment of the recipient's needs in these areas: 
           (1) bowel and bladder care; 
           (2) skin care to maintain the health of the skin; 
           (3) repetitive maintenance range of motion, muscle 
        strengthening exercises, and other tasks specific to maintaining 
        a recipient's optimal level of function; 
           (4) respiratory assistance; 
           (5) transfers and ambulation; 
           (6) bathing, grooming, and hairwashing necessary for 
        personal hygiene; 
           (7) turning and positioning; 
           (8) assistance with furnishing medication that is 
        self-administered; 
           (9) application and maintenance of prosthetics and 
        orthotics; 
           (10) cleaning medical equipment; 
           (11) dressing or undressing; 
           (12) assistance with eating and meal preparation and 
        necessary grocery shopping; 
           (13) accompanying a recipient to obtain medical diagnosis 
        or treatment; 
           (14) assisting, monitoring, or prompting the recipient to 
        complete the services in clauses (1) to (13); 
           (15) redirection, monitoring, and observation that are 
        medically necessary and an integral part of completing the 
        personal care assistant services described in clauses (1) to 
        (14); 
           (16) redirection and intervention for behavior, including 
        observation and monitoring; 
           (17) interventions for seizure disorders, including 
        monitoring and observation if the recipient has had a seizure 
        that requires intervention within the past three months; 
           (18) tracheostomy suctioning using a clean procedure if the 
        procedure is properly delegated by a registered nurse.  Before 
        this procedure can be delegated to a personal care assistant, a 
        registered nurse must determine that the tracheostomy suctioning 
        can be accomplished utilizing a clean rather than a sterile 
        procedure and must ensure that the personal care assistant has 
        been taught the proper procedure; and 
           (19) incidental household services that are an integral 
        part of a personal care service described in clauses (1) to (18).
        For purposes of this subdivision, monitoring and observation 
        means watching for outward visible signs that are likely to 
        occur and for which there is a covered personal care service or 
        an appropriate personal care intervention.  For purposes of this 
        subdivision, a clean procedure refers to a procedure that 
        reduces the numbers of microorganisms or prevents or reduces the 
        transmission of microorganisms from one person or place to 
        another.  A clean procedure may be used beginning 14 days after 
        insertion. 
           (b) (d) The personal care assistant services that are not 
        eligible for payment are the following:  
           (1) services not ordered by the physician; 
           (2) assessments by personal care assistant provider 
        organizations or by independently enrolled registered nurses; 
           (3) services that are not in the service plan; 
           (4) services provided by the recipient's spouse, legal 
        guardian for an adult or child recipient, or parent of a 
        recipient under age 18; 
           (5) services provided by a foster care provider of a 
        recipient who cannot direct the recipient's own care, unless 
        monitored by a county or state case manager under section 
        256B.0625, subdivision 19a; 
           (6) services provided by the residential or program license 
        holder in a residence for more than four persons; 
           (7) services that are the responsibility of a residential 
        or program license holder under the terms of a service agreement 
        and administrative rules; 
           (8) sterile procedures; 
           (9) injections of fluids into veins, muscles, or skin; 
           (10) services provided by parents of adult recipients, 
        adult children, or siblings of the recipient, unless these 
        relatives meet one of the following hardship criteria and the 
        commissioner waives this requirement: 
           (i) the relative resigns from a part-time or full-time job 
        to provide personal care for the recipient; 
           (ii) the relative goes from a full-time to a part-time job 
        with less compensation to provide personal care for the 
        recipient; 
           (iii) the relative takes a leave of absence without pay to 
        provide personal care for the recipient; 
           (iv) the relative incurs substantial expenses by providing 
        personal care for the recipient; or 
           (v) because of labor conditions, special language needs, or 
        intermittent hours of care needed, the relative is needed in 
        order to provide an adequate number of qualified personal care 
        assistants to meet the medical needs of the recipient; 
           (11) homemaker services that are not an integral part of a 
        personal care assistant services; 
           (12) home maintenance, or chore services; 
           (13) services not specified under paragraph (a); and 
           (14) services not authorized by the commissioner or the 
        commissioner's designee. 
           (e) The recipient or responsible party may choose to 
        supervise the personal care assistant or to have a qualified 
        professional, as defined in section 256B.0625, subdivision 19c, 
        provide the supervision.  As required under section 256B.0625, 
        subdivision 19c, the county public health nurse, as a part of 
        the assessment, will assist the recipient or responsible party 
        to identify the most appropriate person to provide supervision 
        of the personal care assistant.  Health-related delegated tasks 
        performed by the personal care assistant will be under the 
        supervision of a qualified professional or the direction of the 
        recipient's physician.  If the recipient has a qualified 
        professional, Minnesota Rules, part 9505.0335, subpart 4, 
        applies. 
           Sec. 32.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
        payments for home care services shall be limited according to 
        this subdivision.  
           (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
        recipient may receive the following home care services during a 
        calendar year: 
           (1) up to two face-to-face assessments to determine a 
        recipient's need for personal care assistant services; 
           (2) one service update done to determine a recipient's need 
        for personal care assistant services; and 
           (3) up to five nine skilled nurse visits.  
           (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
        services above the limits in paragraph (a) must receive the 
        commissioner's prior authorization, except when: 
           (1) the home care services were required to treat an 
        emergency medical condition that if not immediately treated 
        could cause a recipient serious physical or mental disability, 
        continuation of severe pain, or death.  The provider must 
        request retroactive authorization no later than five working 
        days after giving the initial service.  The provider must be 
        able to substantiate the emergency by documentation such as 
        reports, notes, and admission or discharge histories; 
           (2) the home care services were provided on or after the 
        date on which the recipient's eligibility began, but before the 
        date on which the recipient was notified that the case was 
        opened.  Authorization will be considered if the request is 
        submitted by the provider within 20 working days of the date the 
        recipient was notified that the case was opened; 
           (3) a third-party payor for home care services has denied 
        or adjusted a payment.  Authorization requests must be submitted 
        by the provider within 20 working days of the notice of denial 
        or adjustment.  A copy of the notice must be included with the 
        request; 
           (4) the commissioner has determined that a county or state 
        human services agency has made an error; or 
           (5) the professional nurse determines an immediate need for 
        up to 40 skilled nursing or home health aide visits per calendar 
        year and submits a request for authorization within 20 working 
        days of the initial service date, and medical assistance is 
        determined to be the appropriate payer. 
           (c)  [RETROACTIVE AUTHORIZATION.] A request for retroactive 
        authorization will be evaluated according to the same criteria 
        applied to prior authorization requests.  
           (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
        section 256B.0627, subdivision 1, paragraph (a), shall be 
        conducted initially, and at least annually thereafter, in person 
        with the recipient and result in a completed service plan using 
        forms specified by the commissioner.  Within 30 days of 
        recipient or responsible party request for home care services, 
        the assessment, the service plan, and other information 
        necessary to determine medical necessity such as diagnostic or 
        testing information, social or medical histories, and hospital 
        or facility discharge summaries shall be submitted to the 
        commissioner.  Notwithstanding the provisions of section 
        256B.0627, subdivision 12, the commissioner shall maximize 
        federal financial participation to pay for public health nurse 
        assessments for personal care services.  For personal care 
        assistant services: 
           (1) The amount and type of service authorized based upon 
        the assessment and service plan will follow the recipient if the 
        recipient chooses to change providers.  
           (2) If the recipient's medical need changes, the 
        recipient's provider may assess the need for a change in service 
        authorization and request the change from the county public 
        health nurse.  Within 30 days of the request, the public health 
        nurse will determine whether to request the change in services 
        based upon the provider assessment, or conduct a home visit to 
        assess the need and determine whether the change is appropriate. 
           (3) To continue to receive personal care assistant services 
        after the first year, the recipient or the responsible party, in 
        conjunction with the public health nurse, may complete a service 
        update on forms developed by the commissioner according to 
        criteria and procedures in subdivision 1.  
           (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
        commissioner's designee, shall review the assessment, service 
        update, request for temporary services, service plan, and any 
        additional information that is submitted.  The commissioner 
        shall, within 30 days after receiving a complete request, 
        assessment, and service plan, authorize home care services as 
        follows:  
           (1)  [HOME HEALTH SERVICES.] All home health services 
        provided by a licensed nurse or a home health aide must be prior 
        authorized by the commissioner or the commissioner's designee.  
        Prior authorization must be based on medical necessity and 
        cost-effectiveness when compared with other care options.  When 
        home health services are used in combination with personal care 
        and private duty nursing, the cost of all home care services 
        shall be considered for cost-effectiveness.  The commissioner 
        shall limit nurse and home health aide visits to no more than 
        one visit each per day.  The commissioner, or the commissioner's 
        designee, may authorize up to two skilled nurse visits per day. 
           (2)  [PERSONAL CARE ASSISTANT SERVICES.] (i) All personal 
        care assistant services and supervision by a qualified 
        professional, if requested by the recipient, must be prior 
        authorized by the commissioner or the commissioner's designee 
        except for the assessments established in paragraph (a).  The 
        amount of personal care assistant services authorized must be 
        based on the recipient's home care rating.  A child may not be 
        found to be dependent in an activity of daily living if because 
        of the child's age an adult would either perform the activity 
        for the child or assist the child with the activity and the 
        amount of assistance needed is similar to the assistance 
        appropriate for a typical child of the same age.  Based on 
        medical necessity, the commissioner may authorize: 
           (A) up to two times the average number of direct care hours 
        provided in nursing facilities for the recipient's comparable 
        case mix level; or 
           (B) up to three times the average number of direct care 
        hours provided in nursing facilities for recipients who have 
        complex medical needs or are dependent in at least seven 
        activities of daily living and need physical assistance with 
        eating or have a neurological diagnosis; or 
           (C) up to 60 percent of the average reimbursement rate, as 
        of July 1, 1991, for care provided in a regional treatment 
        center for recipients who have Level I behavior, plus any 
        inflation adjustment as provided by the legislature for personal 
        care service; or 
           (D) up to the amount the commissioner would pay, as of July 
        1, 1991, plus any inflation adjustment provided for home care 
        services, for care provided in a regional treatment center for 
        recipients referred to the commissioner by a regional treatment 
        center preadmission evaluation team.  For purposes of this 
        clause, home care services means all services provided in the 
        home or community that would be included in the payment to a 
        regional treatment center; or 
           (E) up to the amount medical assistance would reimburse for 
        facility care for recipients referred to the commissioner by a 
        preadmission screening team established under section 256B.0911 
        or 256B.092; and 
           (F) a reasonable amount of time for the provision of 
        supervision by a qualified professional of personal 
        care assistant services, if a qualified professional is 
        requested by the recipient or responsible party.  
           (ii) The number of direct care hours shall be determined 
        according to the annual cost report submitted to the department 
        by nursing facilities.  The average number of direct care hours, 
        as established by May 1, 1992, shall be calculated and 
        incorporated into the home care limits on July 1, 1992.  These 
        limits shall be calculated to the nearest quarter hour. 
           (iii) The home care rating shall be determined by the 
        commissioner or the commissioner's designee based on information 
        submitted to the commissioner by the county public health nurse 
        on forms specified by the commissioner.  The home care rating 
        shall be a combination of current assessment tools developed 
        under sections 256B.0911 and 256B.501 with an addition for 
        seizure activity that will assess the frequency and severity of 
        seizure activity and with adjustments, additions, and 
        clarifications that are necessary to reflect the needs and 
        conditions of recipients who need home care including children 
        and adults under 65 years of age.  The commissioner shall 
        establish these forms and protocols under this section and shall 
        use an advisory group, including representatives of recipients, 
        providers, and counties, for consultation in establishing and 
        revising the forms and protocols. 
           (iv) A recipient shall qualify as having complex medical 
        needs if the care required is difficult to perform and because 
        of recipient's medical condition requires more time than 
        community-based standards allow or requires more skill than 
        would ordinarily be required and the recipient needs or has one 
        or more of the following: 
           (A) daily tube feedings; 
           (B) daily parenteral therapy; 
           (C) wound or decubiti care; 
           (D) postural drainage, percussion, nebulizer treatments, 
        suctioning, tracheotomy care, oxygen, mechanical ventilation; 
           (E) catheterization; 
           (F) ostomy care; 
           (G) quadriplegia; or 
           (H) other comparable medical conditions or treatments the 
        commissioner determines would otherwise require institutional 
        care.  
           (v) A recipient shall qualify as having Level I behavior if 
        there is reasonable supporting evidence that the recipient 
        exhibits, or that without supervision, observation, or 
        redirection would exhibit, one or more of the following 
        behaviors that cause, or have the potential to cause: 
           (A) injury to the recipient's own body; 
           (B) physical injury to other people; or 
           (C) destruction of property. 
           (vi) Time authorized for personal care relating to Level I 
        behavior in subclause (v), items (A) to (C), shall be based on 
        the predictability, frequency, and amount of intervention 
        required. 
           (vii) A recipient shall qualify as having Level II behavior 
        if the recipient exhibits on a daily basis one or more of the 
        following behaviors that interfere with the completion of 
        personal care assistant services under subdivision 4, paragraph 
        (a): 
           (A) unusual or repetitive habits; 
           (B) withdrawn behavior; or 
           (C) offensive behavior. 
           (viii) A recipient with a home care rating of Level II 
        behavior in subclause (vii), items (A) to (C), shall be rated as 
        comparable to a recipient with complex medical needs under 
        subclause (iv).  If a recipient has both complex medical needs 
        and Level II behavior, the home care rating shall be the next 
        complex category up to the maximum rating under subclause (i), 
        item (B). 
           (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
        nursing services shall be prior authorized by the commissioner 
        or the commissioner's designee.  Prior authorization for private 
        duty nursing services shall be based on medical necessity and 
        cost-effectiveness when compared with alternative care options.  
        The commissioner may authorize medically necessary private duty 
        nursing services in quarter-hour units when: 
           (i) the recipient requires more individual and continuous 
        care than can be provided during a nurse visit; or 
           (ii) the cares are outside of the scope of services that 
        can be provided by a home health aide or personal care assistant.
           The commissioner may authorize: 
           (A) up to two times the average amount of direct care hours 
        provided in nursing facilities statewide for case mix 
        classification "K" as established by the annual cost report 
        submitted to the department by nursing facilities in May 1992; 
           (B) private duty nursing in combination with other home 
        care services up to the total cost allowed under clause (2); 
           (C) up to 16 hours per day if the recipient requires more 
        nursing than the maximum number of direct care hours as 
        established in item (A) and the recipient meets the hospital 
        admission criteria established under Minnesota Rules, parts 
        9505.0500 9505.0501 to 9505.0540.  
           The commissioner may authorize up to 16 hours per day of 
        medically necessary private duty nursing services or up to 24 
        hours per day of medically necessary private duty nursing 
        services until such time as the commissioner is able to make a 
        determination of eligibility for recipients who are 
        cooperatively applying for home care services under the 
        community alternative care program developed under section 
        256B.49, or until it is determined by the appropriate regulatory 
        agency that a health benefit plan is or is not required to pay 
        for appropriate medically necessary health care services.  
        Recipients or their representatives must cooperatively assist 
        the commissioner in obtaining this determination.  Recipients 
        who are eligible for the community alternative care program may 
        not receive more hours of nursing under this section than would 
        otherwise be authorized under section 256B.49.  
           (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
        ventilator-dependent, the monthly medical assistance 
        authorization for home care services shall not exceed what the 
        commissioner would pay for care at the highest cost hospital 
        designated as a long-term hospital under the Medicare program.  
        For purposes of this clause, home care services means all 
        services provided in the home that would be included in the 
        payment for care at the long-term hospital.  
        "Ventilator-dependent" means an individual who receives 
        mechanical ventilation for life support at least six hours per 
        day and is expected to be or has been dependent for at least 30 
        consecutive days.  
           (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
        or the commissioner's designee shall determine the time period 
        for which a prior authorization shall be effective.  If the 
        recipient continues to require home care services beyond the 
        duration of the prior authorization, the home care provider must 
        request a new prior authorization.  Under no circumstances, 
        other than the exceptions in paragraph (b), shall a prior 
        authorization be valid prior to the date the commissioner 
        receives the request or for more than 12 months.  A recipient 
        who appeals a reduction in previously authorized home care 
        services may continue previously authorized services, other than 
        temporary services under paragraph (h), pending an appeal under 
        section 256.045.  The commissioner must provide a detailed 
        explanation of why the authorized services are reduced in amount 
        from those requested by the home care provider.  
           (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
        the commissioner's designee shall determine the medical 
        necessity of home care services, the level of caregiver 
        according to subdivision 2, and the institutional comparison 
        according to this subdivision, the cost-effectiveness of 
        services, and the amount, scope, and duration of home care 
        services reimbursable by medical assistance, based on the 
        assessment, primary payer coverage determination information as 
        required, the service plan, the recipient's age, the cost of 
        services, the recipient's medical condition, and diagnosis or 
        disability.  The commissioner may publish additional criteria 
        for determining medical necessity according to section 256B.04. 
           (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
        The agency nurse, the independently enrolled private duty nurse, 
        or county public health nurse may request a temporary 
        authorization for home care services by telephone.  The 
        commissioner may approve a temporary level of home care services 
        based on the assessment, and service or care plan information, 
        and primary payer coverage determination information as required.
        Authorization for a temporary level of home care services 
        including nurse supervision is limited to the time specified by 
        the commissioner, but shall not exceed 45 days, unless extended 
        because the county public health nurse has not completed the 
        required assessment and service plan, or the commissioner's 
        determination has not been made.  The level of services 
        authorized under this provision shall have no bearing on a 
        future prior authorization. 
           (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
        Home care services provided in an adult or child foster care 
        setting must receive prior authorization by the department 
        according to the limits established in paragraph (a). 
           The commissioner may not authorize: 
           (1) home care services that are the responsibility of the 
        foster care provider under the terms of the foster care 
        placement agreement and administrative rules; 
           (2) personal care assistant services when the foster care 
        license holder is also the personal care provider or personal 
        care assistant unless the recipient can direct the recipient's 
        own care, or case management is provided as required in section 
        256B.0625, subdivision 19a; 
           (3) personal care assistant services when the responsible 
        party is an employee of, or under contract with, or has any 
        direct or indirect financial relationship with the personal care 
        provider or personal care assistant, unless case management is 
        provided as required in section 256B.0625, subdivision 19a; or 
           (4) personal care assistant and private duty nursing 
        services when the number of foster care residents is greater 
        than four unless the county responsible for the recipient's 
        foster placement made the placement prior to April 1, 1992, 
        requests that personal care assistant and private duty nursing 
        services be provided, and case management is provided as 
        required in section 256B.0625, subdivision 19a. 
           Sec. 33.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 7, is amended to read: 
           Subd. 7.  [NONCOVERED HOME CARE SERVICES.] The following 
        home care services are not eligible for payment under medical 
        assistance:  
           (1) skilled nurse visits for the sole purpose of 
        supervision of the home health aide; 
           (2) a skilled nursing visit: 
           (i) only for the purpose of monitoring medication 
        compliance with an established medication program for a 
        recipient; or 
           (ii) to administer or assist with medication 
        administration, including injections, prefilling syringes for 
        injections, or oral medication set-up of an adult recipient, 
        when as determined and documented by the registered nurse, the 
        need can be met by an available pharmacy or the recipient is 
        physically and mentally able to self-administer or prefill a 
        medication; 
           (3) home care services to a recipient who is eligible for 
        covered services including hospice, if elected by the recipient, 
        under the Medicare program or any other insurance held by the 
        recipient; 
           (4) services to other members of the recipient's household; 
           (5) a visit made by a skilled nurse solely to train other 
        home health agency workers; 
           (6) any home care service included in the daily rate of the 
        community-based residential facility where the recipient is 
        residing; 
           (7) nursing and rehabilitation therapy services that are 
        reasonably accessible to a recipient outside the recipient's 
        place of residence, excluding the assessment, counseling and 
        education, and personal assistant care; 
           (8) any home health agency service, excluding personal care 
        assistant services and private duty nursing services, which are 
        performed in a place other than the recipient's residence; and 
           (9) Medicare evaluation or administrative nursing visits on 
        dual-eligible recipients that do not qualify for Medicare visit 
        billing. 
           Sec. 34.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SHARED PERSONAL CARE ASSISTANT SERVICES.] (a) 
        Medical assistance payments for shared personal care assistance 
        services shall be limited according to this subdivision. 
           (b) Recipients of personal care assistant services may 
        share staff and the commissioner shall provide a rate system for 
        shared personal care assistant services.  For two persons 
        sharing services, the rate paid to a provider shall not exceed 
        1-1/2 times the rate paid for serving a single individual, and 
        for three persons sharing services, the rate paid to a provider 
        shall not exceed twice the rate paid for serving a single 
        individual.  These rates apply only to situations in which all 
        recipients were present and received shared services on the date 
        for which the service is billed.  No more than three persons may 
        receive shared services from a personal care assistant in a 
        single setting. 
           (c) Shared service is the provision of personal 
        care assistant services by a personal care assistant to two or 
        three recipients at the same time and in the same setting.  For 
        the purposes of this subdivision, "setting" means: 
           (1) the home or foster care home of one of the individual 
        recipients; or 
           (2) a child care program in which all recipients served by 
        one personal care assistant are participating, which is licensed 
        under chapter 245A or operated by a local school district or 
        private school; or 
           (3) outside the home or foster care home of one of the 
        recipients when normal life activities take the recipients 
        outside the home.  
           The provisions of this subdivision do not apply when a 
        personal care assistant is caring for multiple recipients in 
        more than one setting. 
           (d) The recipient or the recipient's responsible party, in 
        conjunction with the county public health nurse, shall determine:
           (1) whether shared personal care assistant services is an 
        appropriate option based on the individual needs and preferences 
        of the recipient; and 
           (2) the amount of shared services allocated as part of the 
        overall authorization of personal care assistant services. 
           The recipient or the responsible party, in conjunction with 
        the supervising qualified professional, if a qualified 
        professional is requested by any one of the recipients or 
        responsible parties, shall arrange the setting and grouping of 
        shared services based on the individual needs and preferences of 
        the recipients.  Decisions on the selection of recipients to 
        share services must be based on the ages of the recipients, 
        compatibility, and coordination of their care needs. 
           (e) The following items must be considered by the recipient 
        or the responsible party and the supervising qualified 
        professional, if a qualified professional has been requested by 
        any one of the recipients or responsible parties, and documented 
        in the recipient's health service record: 
           (1) the additional qualifications needed by the personal 
        care assistant to provide care to several recipients in the same 
        setting; 
           (2) the additional training and supervision needed by the 
        personal care assistant to ensure that the needs of the 
        recipient are met appropriately and safely.  The provider must 
        provide on-site supervision by a qualified professional within 
        the first 14 days of shared services, and monthly thereafter, if 
        supervision by a qualified provider has been requested by any 
        one of the recipients or responsible parties; 
           (3) the setting in which the shared services will be 
        provided; 
           (4) the ongoing monitoring and evaluation of the 
        effectiveness and appropriateness of the service and process 
        used to make changes in service or setting; and 
           (5) a contingency plan which accounts for absence of the 
        recipient in a shared services setting due to illness or other 
        circumstances and staffing contingencies. 
           (f) The provider must offer the recipient or the 
        responsible party the option of shared or one-on-one personal 
        care assistant services.  The recipient or the responsible party 
        can withdraw from participating in a shared services arrangement 
        at any time. 
           (g) In addition to documentation requirements under 
        Minnesota Rules, part 9505.2175, a personal care provider must 
        meet documentation requirements for shared personal care 
        assistant services and must document the following in the health 
        service record for each individual recipient sharing services: 
           (1) permission by the recipient or the recipient's 
        responsible party, if any, for the maximum number of shared 
        services hours per week chosen by the recipient; 
           (2) permission by the recipient or the recipient's 
        responsible party, if any, for personal care assistant services 
        provided outside the recipient's residence; 
           (3) permission by the recipient or the recipient's 
        responsible party, if any, for others to receive shared services 
        in the recipient's residence; 
           (4) revocation by the recipient or the recipient's 
        responsible party, if any, of the shared service authorization, 
        or the shared service to be provided to others in the 
        recipient's residence, or the shared service to be provided 
        outside the recipient's residence; 
           (5) supervision of the shared personal care assistant 
        services by the qualified professional, if a qualified 
        professional is requested by one of the recipients or 
        responsible parties, including the date, time of day, number of 
        hours spent supervising the provision of shared services, 
        whether the supervision was face-to-face or another method of 
        supervision, changes in the recipient's condition, shared 
        services scheduling issues and recommendations; 
           (6) documentation by the qualified professional, if a 
        qualified professional is requested by one of the recipients or 
        responsible parties, of telephone calls or other discussions 
        with the personal care assistant regarding services being 
        provided to the recipient who has requested the supervision; and 
           (7) daily documentation of the shared services provided by 
        each identified personal care assistant including: 
           (i) the names of each recipient receiving shared services 
        together; 
           (ii) the setting for the shared services, including the 
        starting and ending times that the recipient received shared 
        services; and 
           (iii) notes by the personal care assistant regarding 
        changes in the recipient's condition, problems that may arise 
        from the sharing of services, scheduling issues, care issues, 
        and other notes as required by the qualified professional, if a 
        qualified professional is requested by one of the recipients or 
        responsible parties. 
           (h) Unless otherwise provided in this subdivision, all 
        other statutory and regulatory provisions relating to personal 
        care assistant services apply to shared services. 
           (i) In the event that supervision by a qualified 
        professional has been requested by one or more recipients, but 
        not by all of the recipients, the supervision duties of the 
        qualified professional shall be limited to only those recipients 
        who have requested the supervision. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of hours authorized for an individual recipient.
           Sec. 35.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 10, is amended to read: 
           Subd. 10.  [FISCAL AGENT INTERMEDIARY OPTION AVAILABLE FOR 
        PERSONAL CARE ASSISTANT SERVICES.] (a) "Fiscal agent option" is 
        an option that allows the recipient to: 
           (1) use a fiscal agent instead of a personal care provider 
        organization; 
           (2) supervise the personal care assistant; and 
           (3) use a consulting professional. 
           The commissioner may allow a recipient of personal care 
        assistant services to use a fiscal agent 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 agent 
        intermediary option. 
           (b) The recipient or responsible party shall: 
           (1) hire, and terminate the personal care assistant and 
        consulting professional, with the fiscal agent recruit, hire, 
        and terminate a qualified professional, if a qualified 
        professional is requested by the recipient or responsible party; 
           (2) recruit the personal care assistant and consulting 
        professional and orient and train the personal care assistant in 
        areas that do not require professional delegation as determined 
        by the county public health nurse verify and document the 
        credentials of the qualified professional, if a qualified 
        professional is requested by the recipient or responsible party; 
           (3) supervise and evaluate the personal care assistant in 
        areas that do not require professional delegation as determined 
        in the assessment; 
           (4) cooperate with a consulting develop a service plan 
        based on physician orders and public health nurse assessment 
        with the assistance of a qualified professional and implement 
        recommendations pertaining to the health and safety of the 
        recipient, if a qualified professional is requested by the 
        recipient or responsible party, that addresses the health and 
        safety of the recipient; 
           (5) hire a qualified professional to train and supervise 
        the performance of delegated tasks done by (4) recruit, hire, 
        and terminate the personal care assistant; 
           (6) monitor services and verify in writing the hours worked 
        by the personal care assistant and the consulting (5) orient and 
        train the personal care assistant with assistance as needed from 
        the qualified professional; 
           (7) develop and revise a care plan with assistance from a 
        consulting (6) supervise and evaluate the personal care 
        assistant with assistance as needed from the recipient's 
        physician or the qualified professional; 
           (8) verify and document the credentials of the consulting 
        (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 
           (9) (8) enter into a written agreement, as specified in 
        paragraph (f). 
           (c) The duties of the fiscal agent intermediary shall be to:
           (1) bill the medical assistance program for personal care 
        assistant and consulting qualified professional services; 
           (2) request and secure background checks on personal care 
        assistants and consulting qualified professionals according to 
        section 245A.04; 
           (3) pay the personal care assistant and consulting 
        qualified professional based on actual hours of services 
        provided; 
           (4) withhold and pay all applicable federal and state 
        taxes; 
           (5) verify and document keep records of hours worked by the 
        personal care assistant and consulting 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 
        agent intermediary; and 
           (8) enter into a written agreement as specified in 
        paragraph (f) before services are provided. 
           (d) The fiscal agent intermediary: 
           (1) may not be related to the recipient, consulting 
        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 consulting qualified professional to the 
        extent specified in this section. 
           The fiscal agent intermediary or owners of the entity that 
        provides fiscal agent 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 consulting qualified professional 
        providing assistance to the recipient shall meet the 
        qualifications specified in section 256B.0625, subdivision 19c.  
        The consulting qualified professional shall assist the recipient 
        in developing and revising a plan to meet the 
        recipient's assessed needs, and supervise the performance of 
        delegated tasks, as determined by the public health nurse as 
        assessed by the public health nurse.  In performing this 
        function, the consulting qualified professional must visit the 
        recipient in the recipient's home at least once annually.  
        The consulting qualified professional must report to the local 
        county public health nurse concerns relating to the health and 
        safety of the recipient, and any suspected abuse, neglect, or 
        financial exploitation of the recipient to the appropriate 
        authorities.  
           (f) The fiscal agent intermediary, recipient or responsible 
        party, personal care assistant, and consulting 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 those providing professional consultation the qualified 
        professional; 
           (3) the administrative fee of the fiscal agent 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 those providing professional consultation the 
        qualified professional. 
           (g) The rates paid for personal care assistant services, 
        qualified professional assistance services, and fiscal agency 
        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 agent intermediary 
        specified in paragraph (f), the remainder of the rates paid to 
        the fiscal agent intermediary must be used to pay for the salary 
        and benefits for the personal care assistant or those providing 
        professional consultation 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 agent 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.  The 
        county public health nurse shall determine the services that 
        require professional delegation, if any, and the amount and 
        frequency of related supervision; 
           (4) the recipient cannot select the shared services option 
        as specified in subdivision 8; 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 agent intermediary option if: 
           (1) it has been determined by the consulting 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 agent intermediary 
        option shall not affect the recipient's authorized level of 
        personal care assistant services as determined in subdivision 5. 
           Sec. 36.  Minnesota Statutes 2000, section 256B.0627, 
        subdivision 11, is amended to read: 
           Subd. 11.  [SHARED PRIVATE DUTY NURSING CARE OPTION.] (a) 
        Medical assistance payments for shared private duty nursing 
        services by a private duty nurse shall be limited according to 
        this subdivision.  For the purposes of this section, "private 
        duty nursing agency" means an agency licensed under chapter 144A 
        to provide private duty nursing services. 
           (b) Recipients of private duty nursing services may share 
        nursing staff and the commissioner shall provide a rate 
        methodology for shared private duty nursing.  For two persons 
        sharing nursing care, the rate paid to a provider shall not 
        exceed 1.5 times the nonwaivered regular private duty nursing 
        rates paid for serving a single individual who is not ventilator 
        dependent, by a registered nurse or licensed practical nurse.  
        These rates apply only to situations in which both recipients 
        are present and receive shared private duty nursing care on the 
        date for which the service is billed.  No more than two persons 
        may receive shared private duty nursing services from a private 
        duty nurse in a single setting. 
           (c) Shared private duty nursing care is the provision of 
        nursing services by a private duty nurse to two recipients at 
        the same time and in the same setting.  For the purposes of this 
        subdivision, "setting" means: 
           (1) the home or foster care home of one of the individual 
        recipients; or 
           (2) a child care program licensed under chapter 245A or 
        operated by a local school district or private school; or 
           (3) an adult day care service licensed under chapter 245A; 
        or 
           (4) outside the home or foster care home of one of the 
        recipients when normal life activities take the recipients 
        outside the home.  
           This subdivision does not apply when a private duty nurse 
        is caring for multiple recipients in more than one setting. 
           (d) The recipient or the recipient's legal representative, 
        and the recipient's physician, in conjunction with the home 
        health care agency, shall determine: 
           (1) whether shared private duty nursing care is an 
        appropriate option based on the individual needs and preferences 
        of the recipient; and 
           (2) the amount of shared private duty nursing services 
        authorized as part of the overall authorization of nursing 
        services. 
           (e) The recipient or the recipient's legal representative, 
        in conjunction with the private duty nursing agency, shall 
        approve the setting, grouping, and arrangement of shared private 
        duty nursing care based on the individual needs and preferences 
        of the recipients.  Decisions on the selection of recipients to 
        share services must be based on the ages of the recipients, 
        compatibility, and coordination of their care needs. 
           (f) The following items must be considered by the recipient 
        or the recipient's legal representative and the private duty 
        nursing agency, and documented in the recipient's health service 
        record: 
           (1) the additional training needed by the private duty 
        nurse to provide care to two recipients in the same setting and 
        to ensure that the needs of the recipients are met appropriately 
        and safely; 
           (2) the setting in which the shared private duty nursing 
        care will be provided; 
           (3) the ongoing monitoring and evaluation of the 
        effectiveness and appropriateness of the service and process 
        used to make changes in service or setting; 
           (4) a contingency plan which accounts for absence of the 
        recipient in a shared private duty nursing setting due to 
        illness or other circumstances; 
           (5) staffing backup contingencies in the event of employee 
        illness or absence; and 
           (6) arrangements for additional assistance to respond to 
        urgent or emergency care needs of the recipients. 
           (g) The provider must offer the recipient or responsible 
        party the option of shared or one-on-one private duty nursing 
        services.  The recipient or responsible party can withdraw from 
        participating in a shared service arrangement at any time. 
           (h) The private duty nursing agency must document the 
        following in the health service record for each individual 
        recipient sharing private duty nursing care: 
           (1) permission by the recipient or the recipient's legal 
        representative for the maximum number of shared nursing care 
        hours per week chosen by the recipient; 
           (2) permission by the recipient or the recipient's legal 
        representative for shared private duty nursing services provided 
        outside the recipient's residence; 
           (3) permission by the recipient or the recipient's legal 
        representative for others to receive shared private duty nursing 
        services in the recipient's residence; 
           (4) revocation by the recipient or the recipient's legal 
        representative of the shared private duty nursing care 
        authorization, or the shared care to be provided to others in 
        the recipient's residence, or the shared private duty nursing 
        services to be provided outside the recipient's residence; and 
           (5) daily documentation of the shared private duty nursing 
        services provided by each identified private duty nurse, 
        including: 
           (i) the names of each recipient receiving shared private 
        duty nursing services together; 
           (ii) the setting for the shared services, including the 
        starting and ending times that the recipient received shared 
        private duty nursing care; and 
           (iii) notes by the private duty nurse regarding changes in 
        the recipient's condition, problems that may arise from the 
        sharing of private duty nursing services, and scheduling and 
        care issues. 
           (i) Unless otherwise provided in this subdivision, all 
        other statutory and regulatory provisions relating to private 
        duty nursing services apply to shared private duty nursing 
        services. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of private duty nursing hours authorized for an 
        individual recipient under subdivision 5. 
           Sec. 37.  Minnesota Statutes 2000, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [CONSUMER-DIRECTED HOME CARE DEMONSTRATION 
        PROJECT.] (a) Upon the receipt of federal waiver authority, the 
        commissioner shall implement a consumer-directed home care 
        demonstration project.  The consumer-directed home care 
        demonstration project must demonstrate and evaluate the outcomes 
        of a consumer-directed service delivery alternative to improve 
        access, increase consumer control and accountability over 
        available resources, and enable the use of supports that are 
        more individualized and cost-effective for eligible medical 
        assistance recipients receiving certain medical assistance home 
        care services.  The consumer-directed home care demonstration 
        project will be administered locally by county agencies, tribal 
        governments, or administrative entities under contract with the 
        state in regions where counties choose not to provide this 
        service. 
           (b) Grant awards for persons who have been receiving 
        medical assistance covered personal care, home health aide, or 
        private duty nursing services for a period of 12 consecutive 
        months or more prior to enrollment in the consumer-directed home 
        care demonstration project will be established on a case-by-case 
        basis using historical service expenditure data.  An average 
        monthly expenditure for each continuing enrollee will be 
        calculated based on historical expenditures made on behalf of 
        the enrollee for personal care, home health aide, or private 
        duty nursing services during the 12 month period directly prior 
        to enrollment in the project.  The grant award will equal 90 
        percent of the average monthly expenditure. 
           (c) Grant awards for project enrollees who have been 
        receiving medical assistance covered personal care, home health 
        aide, or private duty nursing services for a period of less than 
        12 consecutive months prior to project enrollment will be 
        calculated on a case-by-case basis using the service 
        authorization in place at the time of enrollment.  The total 
        number of units of personal care, home health aide, or private 
        duty nursing services the enrollee has been authorized to 
        receive will be converted to the total cost of the authorized 
        services in a given month using the statewide average service 
        payment rates.  To determine an estimated monthly expenditure, 
        the total authorized monthly personal care, home health aide or 
        private duty nursing service costs will be reduced by a 
        percentage rate equivalent to the difference between the 
        statewide average service authorization and the statewide 
        average utilization rate for each of the services by medical 
        assistance eligibles during the most recent fiscal year for 
        which 12 months of data is available.  The grant award will 
        equal 90 percent of the estimated monthly expenditure. 
           (d) The state of Minnesota, county agencies, tribal 
        governments, or administrative entities under contract with the 
        state that participate in the implementation and administration 
        of the consumer-directed home care demonstration project, shall 
        not be liable for damages, injuries, or liabilities sustained 
        through the purchase of support by the individual, the 
        individual's family, legal representative, or the authorized 
        representative under this section with funds received through 
        the consumer-directed home care demonstration project.  
        Liabilities include but are not limited to:  workers' 
        compensation liability, the Federal Insurance Contributions Act 
        (FICA), or the Federal Unemployment Tax Act (FUTA). 
           (e) With federal approval, the commissioner may adjust 
        methodologies in paragraphs (b) and (c) to simplify program 
        administration, improve consistency between state and federal 
        programs, and maximize federal financial participation. 
           Sec. 38.  Minnesota Statutes 2000, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [TELEHOMECARE; SKILLED NURSE VISITS.] Medical 
        assistance covers skilled nurse visits according to section 
        256B.0625, subdivision 6a, provided via telehomecare, for 
        services which do not require hands-on care between the home 
        care nurse and recipient.  The provision of telehomecare must be 
        made via live, two-way interactive audiovisual technology and 
        may be augmented by utilizing store-and-forward technologies.  
        Store-and-forward technology includes telehomecare services that 
        do not occur in real time via synchronous transmissions, and 
        that do not require a face-to-face encounter with the recipient 
        for all or any part of any such telehomecare visit.  
        Individually identifiable patient data obtained through 
        real-time or store-and-forward technology must be maintained as 
        health records according to section 144.335.  If the video is 
        used for research, training, or other purposes unrelated to the 
        care of the patient, the identity of the patient must be 
        concealed.  A communication between the home care nurse and 
        recipient that consists solely of a telephone conversation, 
        facsimile, electronic mail, or a consultation between two health 
        care practitioners, is not to be considered a telehomecare visit.
        Multiple daily skilled nurse visits provided via telehomecare 
        are allowed.  Coverage of telehomecare is limited to two visits 
        per day.  All skilled nurse visits provided via telehomecare 
        must be prior authorized by the commissioner or the 
        commissioner's designee and will be covered at the same 
        allowable rate as skilled nurse visits provided in-person. 
           Sec. 39.  Minnesota Statutes 2000, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [THERAPIES THROUGH HOME HEALTH AGENCIES.] (a)  
        [PHYSICAL THERAPY.] Medical assistance covers physical therapy 
        and related services, including specialized maintenance 
        therapy.  Services provided by a physical therapy assistant 
        shall be reimbursed at the same rate as services performed by a 
        physical therapist when the services of the physical therapy 
        assistant are provided under the direction of a physical 
        therapist who is on the premises.  Services provided by a 
        physical therapy assistant that are provided under the direction 
        of a physical therapist who is not on the premises shall be 
        reimbursed at 65 percent of the physical therapist rate.  
        Direction of the physical therapy assistant must be provided by 
        the physical therapist as described in Minnesota Rules, part 
        9505.0390, subpart 1, item B.  The physical therapist and 
        physical therapist assistant may not both bill for services 
        provided to a recipient on the same day. 
           (b)  [OCCUPATIONAL THERAPY.] Medical assistance covers 
        occupational therapy and related services, including specialized 
        maintenance therapy.  Services provided by an occupational 
        therapy assistant shall be reimbursed at the same rate as 
        services performed by an occupational therapist when the 
        services of the occupational therapy assistant are provided 
        under the direction of the occupational therapist who is on the 
        premises.  Services provided by an occupational therapy 
        assistant under the direction of an occupational therapist who 
        is not on the premises shall be reimbursed at 65 percent of the 
        occupational therapist rate.  Direction of the occupational 
        therapy assistant must be provided by the occupational therapist 
        as described in Minnesota Rules, part 9505.0390, subpart 1, item 
        B.  The occupational therapist and occupational therapist 
        assistant may not both bill for services provided to a recipient 
        on the same day. 
           Sec. 40.  Minnesota Statutes 2000, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [HARDSHIP CRITERIA; PRIVATE DUTY NURSING.] (a) 
        Payment is allowed for extraordinary services that require 
        specialized nursing skills and are provided by parents of minor 
        children, spouses, and legal guardians who are providing private 
        duty nursing care under the following conditions: 
           (1) the provision of these services is not legally required 
        of the parents, spouses, or legal guardians; 
           (2) the services are necessary to prevent hospitalization 
        of the recipient; and 
           (3) the recipient is eligible for state plan home care or a 
        home and community-based waiver and one of the following 
        hardship criteria are met: 
           (i) the parent, spouse, or legal guardian resigns from a 
        part-time or full-time job to provide nursing care for the 
        recipient; or 
           (ii) the parent, spouse, or legal guardian goes from a 
        full-time to a part-time job with less compensation to provide 
        nursing care for the recipient; or 
           (iii) the parent, spouse, or legal guardian takes a leave 
        of absence without pay to provide nursing care for the 
        recipient; or 
           (iv) because of labor conditions, special language needs, 
        or intermittent hours of care needed, the parent, spouse, or 
        legal guardian is needed in order to provide adequate private 
        duty nursing services to meet the medical needs of the recipient.
           (b) Private duty nursing may be provided by a parent, 
        spouse, or legal guardian who is a nurse licensed in Minnesota.  
        Private duty nursing services provided by a parent, spouse, or 
        legal guardian cannot be used in lieu of nursing services 
        covered and available under liable third-party payors, including 
        Medicare.  The private duty nursing provided by a parent, 
        spouse, or legal guardian must be included in the service plan.  
        Authorized skilled nursing services provided by the parent, 
        spouse, or legal guardian may not exceed 50 percent of the total 
        approved nursing hours, or eight hours per day, whichever is 
        less, up to a maximum of 40 hours per week.  Nothing in this 
        subdivision precludes the parent's, spouse's, or legal 
        guardian's obligation of assuming the nonreimbursed family 
        responsibilities of emergency backup caregiver and primary 
        caregiver. 
           (c) A parent or a spouse may not be paid to provide private 
        duty nursing care if the parent or spouse fails to pass a 
        criminal background check according to section 245A.04, or if it 
        has been determined by the home health agency, the case manager, 
        or the physician that the private duty nursing care provided by 
        the parent, spouse, or legal guardian is unsafe. 
           Sec. 41.  Minnesota Statutes 2000, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [QUALITY ASSURANCE PLAN FOR PERSONAL CARE 
        ASSISTANT SERVICES.] The commissioner shall establish a quality 
        assurance plan for personal care assistant services that 
        includes: 
           (1) performance-based provider agreements; 
           (2) meaningful consumer input, which may include consumer 
        surveys, that measure the extent to which participants receive 
        the services and supports described in the individual plan and 
        participant satisfaction with such services and supports; 
           (3) ongoing monitoring of the health and well-being of 
        consumers; and 
           (4) an ongoing public process for development, 
        implementation, and review of the quality assurance plan.  
           Sec. 42.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision 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) 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) 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) 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) 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) 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) 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. 
           Sec. 43.  Minnesota Statutes 2000, section 256B.0916, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [STATEWIDE AVAILABILITY OF CONSUMER-DIRECTED 
        COMMUNITY SUPPORT SERVICES.] (a) The commissioner shall submit 
        to the federal Health Care Financing Administration by August 1, 
        2001, an amendment to the home and community-based waiver for 
        persons with mental retardation or related conditions to make 
        consumer-directed community support services available in every 
        county of the state by January 1, 2002. 
           (b) If a county declines to meet the requirements for 
        provision of consumer-directed community supports, the 
        commissioner shall contract with another county, a group of 
        counties, or a private agency to plan for and administer 
        consumer-directed community supports in that county. 
           (c) The state of Minnesota, county agencies, tribal 
        governments, or administrative entities under contract to 
        participate in the implementation and administration of the home 
        and community-based waiver for persons with mental retardation 
        or a related condition, shall not be liable for damages, 
        injuries, or liabilities sustained through the purchase of 
        support by the individual, the individual's family, legal 
        representative, or the authorized representative with funds 
        received through the consumer-directed community support service 
        under this section.  Liabilities include but are not limited 
        to:  workers' compensation liability, the Federal Insurance 
        Contributions Act (FICA), or the Federal Unemployment Tax Act 
        (FUTA). 
           Sec. 44.  Minnesota Statutes 2000, section 256B.0916, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ANNUAL REPORT BY COMMISSIONER.] Beginning 
        October 1, 1999, and each October 1 November 1, 2001, and each 
        November 1 thereafter, the commissioner shall issue an annual 
        report on county and state use of available resources for the 
        home and community-based waiver for persons with mental 
        retardation or related conditions.  For each county or county 
        partnership, the report shall include: 
           (1) the amount of funds allocated but not used; 
           (2) the county specific allowed reserve amount approved and 
        used; 
           (3) the number, ages, and living situations of individuals 
        screened and waiting for services; 
           (4) the urgency of need for services to begin within one, 
        two, or more than two years for each individual; 
           (5) the services needed; 
           (6) the number of additional persons served by approval of 
        increased capacity within existing allocations; 
           (7) results of action by the commissioner to streamline 
        administrative requirements and improve county resource 
        management; and 
           (8) additional action that would decrease the number of 
        those eligible and waiting for waivered services. 
        The commissioner shall specify intended outcomes for the program 
        and the degree to which these specified outcomes are attained. 
           Sec. 45.  Minnesota Statutes 2000, section 256B.0916, 
        subdivision 9, is amended to read: 
           Subd. 9.  [LEGAL REPRESENTATIVE PARTICIPATION EXCEPTION.] 
        The commissioner, in cooperation with representatives of 
        counties, service providers, service recipients, family members, 
        legal representatives and advocates, shall develop criteria to 
        allow legal representatives to be reimbursed for providing 
        specific support services to meet the person's needs when a plan 
        which assures health and safety has been agreed upon and carried 
        out by the legal representative, the person, and the county.  
        Legal representatives providing support under consumer-directed 
        community support services pursuant to section 256B.092, 
        subdivision 4, the home and community-based waiver for persons 
        with mental retardation or related conditions or the consumer 
        support grant program pursuant to section 256B.092, subdivision 
        7 256.476, shall not be considered to have a direct or indirect 
        service provider interest under section 256B.092, subdivision 7, 
        if a health and safety plan which meets the criteria established 
        has been agreed upon and implemented.  By October 1, 1999 August 
        1, 2001, the commissioner shall submit, for federal approval, 
        amendments to allow legal representatives to provide support and 
        receive reimbursement under the consumer-directed community 
        support services section of the home and community-based waiver 
        plan. 
           Sec. 46.  Minnesota Statutes 2000, section 256B.092, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEDERAL WAIVERS.] (a) The commissioner shall 
        apply for any federal waivers necessary to secure, to the extent 
        allowed by law, federal financial participation under United 
        States Code, title 42, sections 1396 et seq., as amended, for 
        the provision of services to persons who, in the absence of the 
        services, would need the level of care provided in a regional 
        treatment center or a community intermediate care facility for 
        persons with mental retardation or related conditions.  The 
        commissioner may seek amendments to the waivers or apply for 
        additional waivers under United States Code, title 42, sections 
        1396 et seq., as amended, to contain costs.  The commissioner 
        shall ensure that payment for the cost of providing home and 
        community-based alternative services under the federal waiver 
        plan shall not exceed the cost of intermediate care services 
        including day training and habilitation services that would have 
        been provided without the waivered services.  
           (b) The commissioner, in administering home and 
        community-based waivers for persons with mental retardation and 
        related conditions, shall ensure that day services for eligible 
        persons are not provided by the person's residential service 
        provider, unless the person or the person's legal representative 
        is offered a choice of providers and agrees in writing to 
        provision of day services by the residential service provider.  
        The individual service plan for individuals who choose to have 
        their residential service provider provide their day services 
        must describe how health, safety, and protection needs will be 
        met by frequent and regular contact with persons other than the 
        residential service provider. 
           Sec. 47.  Minnesota Statutes 2000, section 256B.093, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TRAUMATIC BRAIN INJURY PROGRAM DUTIES.] The 
        department shall fund administrative case management under this 
        subdivision using medical assistance administrative funds.  The 
        traumatic brain injury program duties include: 
           (1) recommending to the commissioner in consultation with 
        the medical review agent according to Minnesota Rules, parts 
        9505.0500 to 9505.0540, the approval or denial of medical 
        assistance funds to pay for out-of-state placements for 
        traumatic brain injury services and in-state traumatic brain 
        injury services provided by designated Medicare long-term care 
        hospitals; 
           (2) coordinating the traumatic brain injury home and 
        community-based waiver; 
           (3) approving traumatic brain injury waiver eligibility or 
        care plans or both; 
           (4) providing ongoing technical assistance and consultation 
        to county and facility case managers to facilitate care plan 
        development for appropriate, accessible, and cost-effective 
        medical assistance services; 
           (5) (4) providing technical assistance to promote statewide 
        development of appropriate, accessible, and cost-effective 
        medical assistance services and related policy; 
           (6) (5) providing training and outreach to facilitate 
        access to appropriate home and community-based services to 
        prevent institutionalization; 
           (7) (6) facilitating appropriate admissions, continued stay 
        review, discharges, and utilization review for neurobehavioral 
        hospitals and other specialized institutions; 
           (8) (7) providing technical assistance on the use of prior 
        authorization of home care services and coordination of these 
        services with other medical assistance services; 
           (9) (8) developing a system for identification of nursing 
        facility and hospital residents with traumatic brain injury to 
        assist in long-term planning for medical assistance services.  
        Factors will include, but are not limited to, number of 
        individuals served, length of stay, services received, and 
        barriers to community placement; and 
           (10) (9) providing information, referral, and case 
        consultation to access medical assistance services for 
        recipients without a county or facility case manager.  Direct 
        access to this assistance may be limited due to the structure of 
        the program. 
           Sec. 48.  Minnesota Statutes 2000, section 256B.095, is 
        amended to read: 
           256B.095 [THREE-YEAR QUALITY ASSURANCE PILOT PROJECT 
        ESTABLISHED.] 
           Effective July 1, 1998, an alternative quality assurance 
        licensing system pilot project for programs for persons with 
        developmental disabilities is established in Dodge, Fillmore, 
        Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Steele, 
        Wabasha, and Winona counties for the purpose of improving the 
        quality of services provided to persons with developmental 
        disabilities.  A county, at its option, may choose to have all 
        programs for persons with developmental disabilities located 
        within the county licensed under chapter 245A using standards 
        determined under the alternative quality assurance licensing 
        system pilot project or may continue regulation of these 
        programs under the licensing system operated by the 
        commissioner.  The pilot project expires on June 30, 2001 2005. 
           Sec. 49.  Minnesota Statutes 2000, section 256B.0951, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] The region 10 quality 
        assurance commission is established.  The commission consists of 
        at least 14 but not more than 21 members as follows:  at least 
        three but not more than five members representing advocacy 
        organizations; at least three but not more than five members 
        representing consumers, families, and their legal 
        representatives; at least three but not more than five members 
        representing service providers; at least three but not more than 
        five members representing counties; and the commissioner of 
        human services or the commissioner's designee.  Initial 
        membership of the commission shall be recruited and approved by 
        the region 10 stakeholders group.  Prior to approving the 
        commission's membership, the stakeholders group shall provide to 
        the commissioner a list of the membership in the stakeholders 
        group, as of February 1, 1997, a brief summary of meetings held 
        by the group since July 1, 1996, and copies of any materials 
        prepared by the group for public distribution.  The first 
        commission shall establish membership guidelines for the 
        transition and recruitment of membership for the commission's 
        ongoing existence.  Members of the commission who do not receive 
        a salary or wages from an employer for time spent on commission 
        duties may receive a per diem payment when performing commission 
        duties and functions.  All members may be reimbursed for 
        expenses related to commission activities.  Notwithstanding the 
        provisions of section 15.059, subdivision 5, the commission 
        expires on June 30, 2001 2005. 
           Sec. 50.  Minnesota Statutes 2000, section 256B.0951, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSION DUTIES.] (a) By October 1, 1997, the 
        commission, in cooperation with the commissioners of human 
        services and health, shall do the following:  (1) approve an 
        alternative quality assurance licensing system based on the 
        evaluation of outcomes; (2) approve measurable outcomes in the 
        areas of health and safety, consumer evaluation, education and 
        training, providers, and systems that shall be evaluated during 
        the alternative licensing process; and (3) establish variable 
        licensure periods not to exceed three years based on outcomes 
        achieved.  For purposes of this subdivision, "outcome" means the 
        behavior, action, or status of a person that can be observed or 
        measured and can be reliably and validly determined. 
           (b) By January 15, 1998, the commission shall approve, in 
        cooperation with the commissioner of human services, a training 
        program for members of the quality assurance teams established 
        under section 256B.0952, subdivision 4. 
           (c) The commission and the commissioner shall establish an 
        ongoing review process for the alternative quality assurance 
        licensing system.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  
           (d) The commission shall contract with an independent 
        entity to conduct a financial review of the alternative quality 
        assurance pilot project.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  The review shall 
        include an evaluation of possible budgetary savings within the 
        department of human services as a result of implementation of 
        the alternative quality assurance pilot project.  If a federal 
        waiver is approved under subdivision 7, the financial review 
        shall also evaluate possible savings within the department of 
        health.  This review must be completed by December 15, 2000. 
           (e) The commission shall submit a report to the legislature 
        by January 15, 2001, on the results of the review process for 
        the alternative quality assurance pilot project, a summary of 
        the results of the independent financial review, and a 
        recommendation on whether the pilot project should be extended 
        beyond June 30, 2001. 
           (f) The commissioner, in consultation with the commission, 
        shall examine the feasibility of expanding the project to other 
        populations or geographic areas and identify barriers to 
        expansion.  The commissioner shall report findings and 
        recommendations to the legislature by December 15, 2004. 
           Sec. 51.  Minnesota Statutes 2000, section 256B.0951, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COMMISSION'S AUTHORITY TO RECOMMEND VARIANCES OF 
        LICENSING STANDARDS.] The commission may recommend to the 
        commissioners of human services and health variances from the 
        standards governing licensure of programs for persons with 
        developmental disabilities in order to improve the quality of 
        services by implementing an alternative developmental 
        disabilities licensing system if the commission determines that 
        the alternative licensing system does not adversely affect the 
        health or safety of persons being served by the licensed program 
        nor compromise the qualifications of staff to provide services. 
           Sec. 52.  Minnesota Statutes 2000, section 256B.0951, 
        subdivision 5, is amended to read: 
           Subd. 5.  [VARIANCE OF CERTAIN STANDARDS PROHIBITED.] The 
        safety standards, rights, or procedural protections under 
        sections 245.825; 245.91 to 245.97; 245A.04, subdivisions 3, 3a, 
        3b, and 3c; 245A.09, subdivision 2, paragraph (c), clauses (2) 
        and (5); 245A.12; 245A.13; 252.41, subdivision 9; 256B.092, 
        subdivisions 1b, clause (7), and 10; 626.556; 626.557, and 
        procedures for the monitoring of psychotropic medications shall 
        not be varied under the alternative licensing system pilot 
        project.  The commission may make recommendations to the 
        commissioners of human services and health or to the legislature 
        regarding alternatives to or modifications of the rules and 
        procedures referenced in this subdivision. 
           Sec. 53.  Minnesota Statutes 2000, section 256B.0951, 
        subdivision 7, is amended to read: 
           Subd. 7.  [WAIVER OF RULES.] The commissioner of health may 
        exempt residents of intermediate care facilities for persons 
        with mental retardation (ICFs/MR) who participate in the 
        three-year 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.  The 
        commissioners of health and human services shall apply for any 
        necessary waivers as soon as practicable and shall submit the 
        concept paper to the federal government by June 1, 1998.  
           Sec. 54.  Minnesota Statutes 2000, section 256B.0951, is 
        amended by adding a subdivision 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. 
           Sec. 55.  Minnesota Statutes 2000, section 256B.0951, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [EVALUATION.] The commission, in consultation 
        with the commissioner of human services, shall conduct an 
        evaluation of the alternative quality assurance system, and 
        present a report to the commissioner by June 30, 2004. 
           Sec. 56.  Minnesota Statutes 2000, section 256B.0952, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION.] By January 15, 1998, each 
        affected county shall notify the commission and the 
        commissioners of human services and health as to whether it 
        chooses to implement on July 1, 1998, the alternative licensing 
        system for the pilot project.  A county that does not implement 
        the alternative licensing system on July 1, 1998, may give 
        notice to the commission and the commissioners by January 15, 
        1999, or January 15, 2000, that it will implement the 
        alternative licensing system on the following July 1.  A county 
        that implements the alternative licensing system commits to 
        participate until June 30, 2001.  For each year of the project, 
        region 10 counties shall give notice to the commission and 
        commissioners of human services and health by March 15 of intent 
        to join the quality assurance alternative licensing system, 
        effective July 1 of that year.  A county choosing to participate 
        in the alternative licensing system commits to participate until 
        June 30, 2005.  Counties participating in the quality assurance 
        alternative licensing system as of January 1, 2001, shall notify 
        the commission and the commissioners of human services and 
        health by March 15, 2001, of intent to continue participation.  
        Counties that elect to continue participation must participate 
        in the alternative licensing system until June 30, 2005. 
           Sec. 57.  Minnesota Statutes 2000, section 256B.0952, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPOINTMENT OF QUALITY ASSURANCE MANAGER.] (a) A 
        county or group of counties that chooses to participate in the 
        alternative licensing system shall designate a quality assurance 
        manager and shall establish quality assurance teams in 
        accordance with subdivision 5.  The manager shall recruit, 
        train, and assign duties to the quality assurance team members.  
        In assigning team members to conduct the quality assurance 
        process at a facility, program, or service, the manager shall 
        take into account the size of the service provider, the number 
        of services to be reviewed, the skills necessary for team 
        members to complete the process, and other relevant factors.  
        The manager shall ensure that no team member has a financial, 
        personal, or family relationship with the facility, program, or 
        service being reviewed or with any clients of the facility, 
        program, or service. 
           (b) Quality assurance teams shall report the findings of 
        their quality assurance reviews to the quality assurance manager.
        The quality assurance manager shall provide the report from the 
        quality assurance team to the county and, upon request, to the 
        commissioners of human services and health, and shall provide a 
        summary of the report to the quality assurance review council.  
           Sec. 58.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [AUTHORITY.] (a) The commissioner is authorized 
        to apply for home and community-based service waivers, as 
        authorized under section 1915(c) of the Social Security Act to 
        serve persons under the age of 65 who are determined to require 
        the level of care provided in a nursing home and persons who 
        require the level of care provided in a hospital.  The 
        commissioner shall apply for the home and community-based 
        waivers in order to:  (i) promote the support of persons with 
        disabilities in the most integrated settings; (ii) expand the 
        availability of services for persons who are eligible for 
        medical assistance; (iii) promote cost-effective options to 
        institutional care; and (iv) obtain federal financial 
        participation.  
           (b) The provision of waivered services to medical 
        assistance recipients with disabilities shall comply with the 
        requirements outlined in the federally approved applications for 
        home and community-based services and subsequent amendments, 
        including provision of services according to a service plan 
        designed to meet the needs of the individual.  For purposes of 
        this section, the approved home and community-based application 
        is considered the necessary federal requirement. 
           (c) The commissioner shall provide interested persons 
        serving on agency advisory committees and task forces, and 
        others upon request, with notice of, and an opportunity to 
        comment on, any changes or amendments to the federally approved 
        applications for home and community-based waivers, prior to 
        their submission to the federal health care financing 
        administration. 
           (d) The commissioner shall seek approval, as authorized 
        under section 1915(c) of the Social Security Act, to allow 
        medical assistance eligibility under this section for children 
        under age 21 without deeming of parental income or assets. 
           (e) The commissioner shall seek approval, as authorized 
        under section 1915(c) of the Social Act, to allow medical 
        assistance eligibility under this section for individuals under 
        age 65 without deeming the spouse's income or assets. 
           Sec. 59.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [INFORMED CHOICE.] Persons who are determined 
        likely to require the level of care provided in a nursing 
        facility or hospital shall be informed of the home and 
        community-based support alternatives to the provision of 
        inpatient hospital services or nursing facility services.  Each 
        person must be given the choice of either institutional or home 
        and community-based services using the provisions described in 
        section 256B.77, subdivision 2, paragraph (p). 
           Sec. 60.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [CASE MANAGEMENT.] (a) Each recipient of a home 
        and community-based waiver shall be provided case management 
        services by qualified vendors as described in the federally 
        approved waiver application.  The case management service 
        activities provided will include: 
           (1) assessing the needs of the individual within 20 working 
        days of a recipient's request; 
           (2) developing the written individual service plan within 
        ten working days after the assessment is completed; 
           (3) informing the recipient or the recipient's legal 
        guardian or conservator of service options; 
           (4) assisting the recipient in the identification of 
        potential service providers; 
           (5) assisting the recipient to access services; 
           (6) coordinating, evaluating, and monitoring of the 
        services identified in the service plan; 
           (7) completing the annual reviews of the service plan; and 
           (8) informing the recipient or legal representative of the 
        right to have assessments completed and service plans developed 
        within specified time periods, and to appeal county action or 
        inaction under section 256.045, subdivision 3. 
           (b) The case manager may delegate certain aspects of the 
        case management service activities to another individual 
        provided there is oversight by the case manager.  The case 
        manager may not delegate those aspects which require 
        professional judgment including assessments, reassessments, and 
        care plan development. 
           Sec. 61.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [ASSESSMENT AND REASSESSMENT.] (a) Assessments 
        of each recipient's strengths, informal support systems, and 
        need for services shall be completed within 20 working days of 
        the recipient's request.  Reassessment of each recipient's 
        strengths, support systems, and need for services shall be 
        conducted at least every 12 months and at other times when there 
        has been a significant change in the recipient's functioning. 
           (b) Persons with mental retardation or a related condition 
        who apply for services under the nursing facility level waiver 
        programs shall be screened for the appropriate level of care 
        according to section 256B.092. 
           (c) Recipients who are found eligible for home and 
        community-based services under this section before their 65th 
        birthday may remain eligible for these services after their 65th 
        birthday if they continue to meet all other eligibility factors. 
           Sec. 62.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [INDIVIDUALIZED SERVICE PLAN.] Each recipient of 
        home and community-based waivered services shall be provided a 
        copy of the written service plan which: 
           (1) is developed and signed by the recipient within ten 
        working days of the completion of the assessment; 
           (2) meets the assessed needs of the recipient; 
           (3) reasonably ensures the health and safety of the 
        recipient; 
           (4) promotes independence; 
           (5) allows for services to be provided in the most 
        integrated settings; and 
           (6) provides for an informed choice, as defined in section 
        256B.77, subdivision 2, paragraph (p), of service and support 
        providers. 
           Sec. 63.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [SERVICES AND SUPPORTS.] (a) Services and 
        supports included in the home and community-based waivers for 
        persons with disabilities shall meet the requirements set out in 
        United States Code, title 42, section 1396n.  The services and 
        supports, which are offered as alternatives to institutional 
        care, shall promote consumer choice, community inclusion, 
        self-sufficiency, and self-determination. 
           (b) Beginning January 1, 2003, the commissioner shall 
        simplify and improve access to home and community-based waivered 
        services, to the extent possible, through the establishment of a 
        common service menu that is available to eligible recipients 
        regardless of age, disability type, or waiver program. 
           (c) Consumer directed community support services shall be 
        offered as an option to all persons eligible for services under 
        subdivision 11, by January 1, 2002. 
           (d) Services and supports shall be arranged and provided 
        consistent with individualized written plans of care for 
        eligible waiver recipients. 
           (e) The state of Minnesota and county agencies that 
        administer home and community-based waivered services for 
        persons with disabilities, shall not be liable for damages, 
        injuries, or liabilities sustained through the purchase of 
        supports by the individual, the individual's family, legal 
        representative, or the authorized representative with funds 
        received through the consumer-directed community support service 
        under this section.  Liabilities include but are not limited 
        to:  workers' compensation liability, the Federal Insurance 
        Contributions Act (FICA), or the Federal Unemployment Tax Act 
        (FUTA). 
           Sec. 64.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [COST OF SERVICES AND SUPPORTS.] (a) The 
        commissioner shall ensure that the average per capita 
        expenditures estimated in any fiscal year for home and 
        community-based waiver recipients does not exceed the average 
        per capita expenditures that would have been made to provide 
        institutional services for recipients in the absence of the 
        waiver. 
           (b) The commissioner shall implement on January 1, 2002, 
        one or more aggregate, need-based methods for allocating to 
        local agencies the home and community-based waivered service 
        resources available to support recipients with disabilities in 
        need of the level of care provided in a nursing facility or a 
        hospital.  The commissioner shall allocate resources to single 
        counties and county partnerships in a manner that reflects 
        consideration of: 
           (1) an incentive-based payment process for achieving 
        outcomes; 
           (2) the need for a state-level risk pool; 
           (3) the need for retention of management responsibility at 
        the state agency level; and 
           (4) a phase-in strategy as appropriate. 
           (c) Until the allocation methods described in paragraph (b) 
        are implemented, the annual allowable reimbursement level of 
        home and community-based waiver services shall be the greater of:
           (1) the statewide average payment amount which the 
        recipient is assigned under the waiver reimbursement system in 
        place on June 30, 2001, modified by the percentage of any 
        provider rate increase appropriated for home and community-based 
        services; or 
           (2) an amount approved by the commissioner based on the 
        recipient's extraordinary needs that cannot be met within the 
        current allowable reimbursement level.  The increased 
        reimbursement level must be necessary to allow the recipient to 
        be discharged from an institution or to prevent imminent 
        placement in an institution.  The additional reimbursement may 
        be used to secure environmental modifications; assistive 
        technology and equipment; and increased costs for supervision, 
        training, and support services necessary to address the 
        recipient's extraordinary needs.  The commissioner may approve 
        an increased reimbursement level for up to one year of the 
        recipient's relocation from an institution or up to six months 
        of a determination that a current waiver recipient is at 
        imminent risk of being placed in an institution. 
           (d) Beginning July 1, 2001, medically necessary private 
        duty nursing services will be authorized under this section as 
        complex and regular care according to section 256B.0627.  The 
        rate established by the commissioner for registered nurse or 
        licensed practical nurse services under any home and 
        community-based waiver as of January 1, 2001, shall not be 
        reduced. 
           Sec. 65.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [PAYMENTS.] The commissioner shall reimburse 
        approved vendors from the medical assistance account for the 
        costs of providing home and community-based services to eligible 
        recipients using the invoice processing procedures of the 
        Medicaid management information system (MMIS).  Recipients will 
        be screened and authorized for services according to the 
        federally approved waiver application and its subsequent 
        amendments. 
           Sec. 66.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [HEALTH AND WELFARE.] The commissioner of human 
        services shall take the necessary safeguards to protect the 
        health and welfare of individuals provided services under the 
        waiver. 
           Sec. 67.  Minnesota Statutes 2000, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 20.  [TRAUMATIC BRAIN INJURY AND RELATED CONDITIONS.] 
        The commissioner shall seek to amend the traumatic brain injury 
        waiver to include, as eligible persons, individuals with an 
        acquired or degenerative disease diagnosis where cognitive 
        impairment is present, such as multiple sclerosis. 
           Sec. 68.  Minnesota Statutes 2000, section 256D.35, is 
        amended by adding a subdivision to read: 
           Subd. 11a.  [INSTITUTION.] "Institution" means a hospital, 
        consistent with Code of Federal Regulations, title 42, section 
        440.10; regional treatment center inpatient services, consistent 
        with section 245.474; a nursing facility; and an intermediate 
        care facility for persons with mental retardation. 
           Sec. 69.  Minnesota Statutes 2000, section 256D.35, is 
        amended by adding a subdivision to read: 
           Subd. 18a.  [SHELTER COSTS.] "Shelter costs" means rent, 
        manufactured home lot rentals; monthly principal, interest, 
        insurance premiums, and property taxes due for mortgages or 
        contract for deed costs; costs for utilities, including heating, 
        cooling, electricity, water, and sewerage; garbage collection 
        fees; and the basic service fee for one telephone. 
           Sec. 70.  Minnesota Statutes 2000, section 256D.44, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL NEEDS.] In addition to the state 
        standards of assistance established in subdivisions 1 to 4, 
        payments are allowed for the following special needs of 
        recipients of Minnesota supplemental aid who are not residents 
        of a nursing home, a regional treatment center, or a group 
        residential housing facility. 
           (a) The county agency shall pay a monthly allowance for 
        medically prescribed diets payable under the Minnesota family 
        investment program if the cost of those additional dietary needs 
        cannot be met through some other maintenance benefit.  
           (b) Payment for nonrecurring special needs must be allowed 
        for necessary home repairs or necessary repairs or replacement 
        of household furniture and appliances using the payment standard 
        of the AFDC program in effect on July 16, 1996, for these 
        expenses, as long as other funding sources are not available.  
           (c) A fee for guardian or conservator service is allowed at 
        a reasonable rate negotiated by the county or approved by the 
        court.  This rate shall not exceed five percent of the 
        assistance unit's gross monthly income up to a maximum of $100 
        per month.  If the guardian or conservator is a member of the 
        county agency staff, no fee is allowed. 
           (d) The county agency shall continue to pay a monthly 
        allowance of $68 for restaurant meals for a person who was 
        receiving a restaurant meal allowance on June 1, 1990, and who 
        eats two or more meals in a restaurant daily.  The allowance 
        must continue until the person has not received Minnesota 
        supplemental aid for one full calendar month or until the 
        person's living arrangement changes and the person no longer 
        meets the criteria for the restaurant meal allowance, whichever 
        occurs first. 
           (e) A fee of ten percent of the recipient's gross income or 
        $25, whichever is less, is allowed for representative payee 
        services provided by an agency that meets the requirements under 
        SSI regulations to charge a fee for representative payee 
        services.  This special need is available to all recipients of 
        Minnesota supplemental aid regardless of their living 
        arrangement.  
           (f) Notwithstanding the language in this subdivision, an 
        amount equal to the maximum allotment authorized by the federal 
        Food Stamp Program for a single individual which is in effect on 
        the first day of January of the previous year will be added to 
        the standards of assistance established in subdivisions 1 to 4 
        for individuals under the age of 65 who are relocating from an 
        institution and who are shelter needy.  An eligible individual 
        who receives this benefit prior to age 65 may continue to 
        receive the benefit after the age of 65. 
           "Shelter needy" means that the assistance unit incurs 
        monthly shelter costs that exceed 40 percent of the assistance 
        unit's gross income before the application of this special needs 
        standard.  "Gross income" for the purposes of this section is 
        the applicant's or recipient's income as defined in section 
        256D.35, subdivision 10, or the standard specified in 
        subdivision 3, whichever is greater.  A recipient of a federal 
        or state housing subsidy, that limits shelter costs to a 
        percentage of gross income, shall not be considered shelter 
        needy for purposes of this paragraph. 
           Sec. 71.  [256I.07] [RESPITE CARE PILOT PROJECT FOR FAMILY 
        ADULT FOSTER CARE PROVIDERS.] 
           Subdivision 1.  [PROGRAM ESTABLISHED.] The state recognizes 
        the importance of developing and maintaining quality family 
        foster care resources.  In order to accomplish that goal, the 
        commissioner shall establish a two-year respite care pilot 
        project for family adult foster care providers in three 
        counties.  This pilot project is intended to provide support to 
        caregivers of family adult foster care residents.  The 
        commissioner shall establish a state-funded pilot project to 
        accomplish the provisions in subdivisions 2 to 4. 
           Subd. 2.  [ELIGIBILITY.] A family adult foster care home 
        provider as defined under section 144D.01, subdivision 7, who 
        has been licensed for six months is eligible for up to 30 days 
        of respite care per calendar year.  In cases of emergency, a 
        county social services agency may waive the six-month licensing 
        requirement.  In order to be eligible to receive respite 
        payment, a provider must take time off away from their foster 
        care residents.  
           Subd. 3.  [PAYMENT STRUCTURE.] (a) The rate of payment for 
        respite care for an adult foster care resident eligible for only 
        group residential housing shall be based on the current monthly 
        group residential housing base room and board rate and the 
        current maximum monthly group residential housing difficulty of 
        care rate. 
           (b) The rate of payment for respite care for an adult 
        foster care resident eligible for alternative care funds shall 
        be based on the resident's alternative care foster care rate. 
           (c) The rate of payment for respite care for an adult 
        foster care resident eligible for Medicaid home and 
        community-based services waiver funds shall be based on the 
        group residential housing base room and board rate. 
           (d) The total amount available to pay for respite care for 
        a family adult foster care provider shall be based on the number 
        of residents currently served in the foster care home.  Respite 
        care must be paid for on a per diem basis and for a full day. 
           Subd. 4.  [PRIVATE PAY RESIDENTS.] Payment for respite care 
        for private pay foster care residents must be arranged between 
        the provider and the resident or the resident's family. 
           Sec. 72.  Laws 1999, chapter 152, section 1, is amended to 
        read: 
           Section 1.  [TASK FORCE.] 
           A day training and habilitation task force is established.  
        Task force membership shall consist of representatives of the 
        commissioner of human services, counties, service consumers, and 
        vendors of day training and habilitation as defined in Minnesota 
        Statutes, section 252.41, subdivision 9, including at least one 
        representative from each association representing day training 
        and habilitation vendors.  Appointments to the task force shall 
        be made by the commissioner of human services and technical 
        assistance shall be provided by the department of human services.
           Sec. 73.  [SEMI-INDEPENDENT LIVING SERVICES (SILS) STUDY.] 
           The commissioner of human services, in consultation with 
        county representatives and other interested persons, shall 
        develop recommendations revising the funding methodology for 
        SILS as defined in Minnesota Statutes, section 252.275, 
        subdivisions 3, 4, 4b, and 4c, and report by January 15, 2002, 
        to the chair of the house of representatives health and human 
        services finance committee and the chair of the senate health, 
        human services and corrections budget division. 
           Sec. 74.  [WAIVER REQUEST REGARDING SPOUSAL INCOME.] 
           By September 1, 2001, the commissioner of human services 
        shall seek federal approval to allow recipients of home and 
        community-based waivers authorized under Minnesota Statutes, 
        section 256B.49, to choose either a waiver of deeming of spousal 
        income or the spousal impoverishment protections authorized 
        under United States Code, title 42, section 1396r-5, with the 
        addition of a recipient's maintenance needs in an amount equal 
        to the Minnesota supplemental aid equivalent rate as defined in 
        Minnesota Statutes, section 256I.03, subdivision 5, plus the 
        personal needs allowance as defined in Minnesota Statutes, 
        section 256B.35, subdivision 1, paragraph (a).  Recipient 
        maintenance needs shall be adjusted under this provision each 
        July 1. 
           Sec. 75.  [FEDERAL WAIVER REQUESTS.] 
           The commissioner of human services shall submit to the 
        federal Health Care Financing Administration by September 1, 
        2001, a request for a home and community-based services waiver 
        for day services, including:  community inclusion, supported 
        employment, and day training and habilitation services defined 
        in Minnesota Statutes, section 252.41, subdivision 3, clause 
        (1), for persons eligible for the waiver under Minnesota 
        Statutes, section 256B.092. 
           Sec. 76. [REPEALER.] 
           (a) Minnesota Statutes 2000, section 256B.0951, subdivision 
        6, is repealed. 
           (b) Minnesota Statutes 2000, sections 145.9245; 256.476, 
        subdivision 7; 256B.0912; 256B.0915, subdivisions 3a, 3b, and 
        3c; and 256B.49, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10, 
        are repealed. 
           (c) Laws 1995, chapter 178, article 2, section 48, 
        subdivision 6, is repealed. 
           (d) Minnesota Rules, parts 9505.2455; 9505.2458; 9505.2460; 
        9505.2465; 9505.2470; 9505.2473; 9505.2475; 9505.2480; 
        9505.2485; 9505.2486; 9505.2490; 9505.2495; 9505.2496; 
        9505.2500; 9505.3010; 9505.3015; 9505.3020; 9505.3025; 
        9505.3030; 9505.3035; 9505.3040; 9505.3065; 9505.3085; 
        9505.3135; 9505.3500; 9505.3510; 9505.3520; 9505.3530; 
        9505.3535; 9505.3540; 9505.3545; 9505.3550; 9505.3560; 
        9505.3570; 9505.3575; 9505.3580; 9505.3585; 9505.3600; 
        9505.3610; 9505.3620; 9505.3622; 9505.3624; 9505.3626; 
        9505.3630; 9505.3635; 9505.3640; 9505.3645; 9505.3650; 
        9505.3660; and 9505.3670, are repealed. 
           Sec. 77.  [EFFECTIVE DATE.] 
           Section 23 is effective January 1, 2003. 

                                   ARTICLE 4
                              CONSUMER INFORMATION 
           Section 1.  [144A.35] [EXPANSION OF BED DISTRIBUTION 
        STUDY.] 
           The commissioner of human services, shall monitor and 
        analyze the distribution of older adult services, including, but 
        not limited to, nursing home beds, senior housing, housing with 
        services units, and home and community-based services in the 
        different geographic areas of the state.  The study shall 
        include an analysis of the impact of amendments to the nursing 
        home moratorium law which would allow for transfers of nursing 
        home beds within the state.  The commissioner of human services 
        shall submit to the legislature, beginning June 1, 2002, and 
        each January 15 thereafter, an assessment of the distribution of 
        long-term health care services by geographic area, with 
        particular attention to service deficits or problems, and 
        corrective action plans. 
           Sec. 2.  Minnesota Statutes 2000, section 256.975, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [CONSUMER INFORMATION AND ASSISTANCE; SENIOR 
        LINKAGE.] (a) The Minnesota board on aging shall operate a 
        statewide information and assistance service to aid older 
        Minnesotans and their families in making informed choices about 
        long-term care options and health care benefits.  Language 
        services to persons with limited English language skills may be 
        made available.  The service, known as Senior LinkAge Line, must 
        be available during business hours through a statewide toll-free 
        number and must also be available through the Internet. 
           (b) The service must assist older adults, caregivers, and 
        providers in accessing information about choices in long-term 
        care services that are purchased through private providers or 
        available through public options.  The service must: 
           (1) develop a comprehensive database that includes detailed 
        listings in both consumer- and provider-oriented formats; 
           (2) make the database accessible on the Internet and 
        through other telecommunication and media-related tools; 
           (3) link callers to interactive long-term care screening 
        tools and make these tools available through the Internet by 
        integrating the tools with the database; 
           (4) develop community education materials with a focus on 
        planning for long-term care and evaluating independent living, 
        housing, and service options; 
           (5) conduct an outreach campaign to assist older adults and 
        their caregivers in finding information on the Internet and 
        through other means of communication; 
           (6) implement a messaging system for overflow callers and 
        respond to these callers by the next business day; 
           (7) link callers with county human services and other 
        providers to receive more in-depth assistance and consultation 
        related to long-term care options; and 
           (8) link callers with quality profiles for nursing 
        facilities and other providers developed by the commissioner of 
        health. 
           (c) The Minnesota board on aging shall conduct an 
        evaluation of the effectiveness of the statewide information and 
        assistance, and submit this evaluation to the legislature by 
        December 1, 2002.  The evaluation must include an analysis of 
        funding adequacy, gaps in service delivery, continuity in 
        information between the service and identified linkages, and 
        potential use of private funding to enhance the service. 
           Sec. 3.  [256.9754] [COMMUNITY SERVICES DEVELOPMENT GRANTS 
        PROGRAM.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Community" means a town, township, city, or targeted 
        neighborhood within a city, or a consortium of towns, townships, 
        cities, or targeted neighborhoods within cities. 
           (b) "Older adult services" means any services available 
        under the elderly waiver program or alternative care grant 
        programs; nursing facility services; transportation services; 
        respite services; and other community-based services identified 
        as necessary either to maintain lifestyle choices for older 
        Minnesotans, or to promote independence. 
           (c) "Older adult" refers to individuals 65 years of age and 
        older. 
           Subd. 2.  [CREATION.] The community services development 
        grants program is created under the administration of the 
        commissioner of human services.  
           Subd. 3.  [PROVISION OF GRANTS.] The commissioner shall 
        make grants available to communities, providers of older adult 
        services identified in subdivision 1, or to a consortium of 
        providers of older adult services, to establish older adult 
        services.  Grants may be provided for capital and other costs 
        including, but not limited to, start-up and training costs, 
        equipment, and supplies related to older adult services or other 
        residential or service alternatives to nursing facility care.  
        Grants may also be made to renovate current buildings, provide 
        transportation services, fund programs that would allow older 
        adults or disabled individuals to stay in their own homes by 
        sharing a home, fund programs that coordinate and manage formal 
        and informal services to older adults in their homes to enable 
        them to live as independently as possible in their own homes as 
        an alternative to nursing home care, or expand state-funded 
        programs in the area. 
           Subd. 4.  [ELIGIBILITY.] Grants may be awarded only to 
        communities and providers or to a consortium of providers that 
        have a local match of 50 percent of the costs for the project in 
        the form of donations, local tax dollars, in-kind donations, 
        fundraising, or other local matches. 
           Subd. 5.  [GRANT PREFERENCE.] The commissioner of human 
        services shall give preference when awarding grants under this 
        section to areas where nursing facility closures have occurred 
        or are occurring.  The commissioner may award grants to the 
        extent grant funds are available and to the extent applications 
        are approved by the commissioner.  Denial of approval of an 
        application in one year does not preclude submission of an 
        application in a subsequent year.  The maximum grant amount is 
        limited to $750,000. 
           Sec. 4.  Minnesota Statutes 2000, section 256B.0911, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE AND GOAL.] (a) The purpose of the 
        preadmission screening program long-term care consultation 
        services is to assist persons with long-term or chronic care 
        needs in making long-term care decisions and selecting options 
        that meet their needs and reflect their preferences.  The 
        availability of, and access to, information and other types of 
        assistance is also intended to prevent or delay certified 
        nursing facility placements by assessing applicants and 
        residents and offering cost-effective alternatives appropriate 
        for the person's needs and to provide transition assistance 
        after admission.  Further, the goal of the program these 
        services is to contain costs associated with unnecessary 
        certified nursing facility admissions.  The commissioners of 
        human services and health shall seek to maximize use of 
        available federal and state funds and establish the broadest 
        program possible within the funding available. 
           (b) These services must be coordinated with services 
        provided under sections 256.975, subdivision 7, and 256.9772, 
        and with services provided by other public and private agencies 
        in the community to offer a variety of cost-effective 
        alternatives to persons with disabilities and elderly persons.  
        The county agency providing long-term care consultation services 
        shall encourage the use of volunteers from families, religious 
        organizations, social clubs, and similar civic and service 
        organizations to provide community-based services. 
           Sec. 5.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [DEFINITIONS.] For purposes of this section, the 
        following definitions apply: 
           (a) "Long-term care consultation services" means: 
           (1) providing information and education to the general 
        public regarding availability of the services authorized under 
        this section; 
           (2) an intake process that provides access to the services 
        described in this section; 
           (3) assessment of the health, psychological, and social 
        needs of referred individuals; 
           (4) assistance in identifying services needed to maintain 
        an individual in the least restrictive environment; 
           (5) providing recommendations on cost-effective community 
        services that are available to the individual; 
           (6) development of an individual's community support plan; 
           (7) providing information regarding eligibility for 
        Minnesota health care programs; 
           (8) preadmission screening to determine the need for a 
        nursing facility level of care; 
           (9) preliminary determination of Minnesota health care 
        programs eligibility for individuals who need a nursing facility 
        level of care, with appropriate referrals for final 
        determination; 
           (10) providing recommendations for nursing facility 
        placement when there are no cost-effective community services 
        available; and 
           (11) assistance to transition people back to community 
        settings after facility admission. 
           (b) "Minnesota health care programs" means the medical 
        assistance program under chapter 256B, the alternative care 
        program under section 256B.0913, and the prescription drug 
        program under section 256.955. 
           Sec. 6.  Minnesota Statutes 2000, section 256B.0911, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PERSONS RESPONSIBLE FOR CONDUCTING THE 
        PREADMISSION SCREENING LONG-TERM CARE CONSULTATION TEAM.] (a) A 
        local screening long-term care consultation team shall be 
        established by the county board of commissioners.  Each local 
        screening consultation team shall consist of screeners who are a 
        at least one social worker and a at least one public health 
        nurse from their respective county agencies.  The board may 
        designate public health or social services as the lead agency 
        for long-term care consultation services.  If a county does not 
        have a public health nurse available, it may request approval 
        from the commissioner to assign a county registered nurse with 
        at least one year experience in home care to participate on the 
        team.  The screening team members must confer regarding the most 
        appropriate care for each individual screened.  Two or more 
        counties may collaborate to establish a joint local screening 
        consultation team or teams. 
           (b) In assessing a person's needs, screeners shall have a 
        physician available for consultation and shall consider the 
        assessment of the individual's attending physician, if any.  The 
        individual's physician shall be included if the physician 
        chooses to participate.  Other personnel may be included on the 
        team as deemed appropriate by the county agencies.  The team is 
        responsible for providing long-term care consultation services 
        to all persons located in the county who request the services, 
        regardless of eligibility for Minnesota health care programs. 
           Sec. 7.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [ASSESSMENT AND SUPPORT PLANNING.] (a) Persons 
        requesting assessment, services planning, or other assistance 
        intended to support community-based living must be visited by a 
        long-term care consultation team within ten working days after 
        the date on which an assessment was requested or recommended.  
        Assessments must be conducted according to paragraphs (b) to (g).
           (b) The county may utilize a team of either the social 
        worker or public health nurse, or both, to conduct the 
        assessment in a face-to-face interview.  The consultation team 
        members must confer regarding the most appropriate care for each 
        individual screened or assessed. 
           (c) The long-term care consultation team must assess the 
        health and social needs of the person, using an assessment form 
        provided by the commissioner. 
           (d) The team must conduct the assessment in a face-to-face 
        interview with the person being assessed and the person's legal 
        representative, if applicable. 
           (e) The team must provide the person, or the person's legal 
        representative, with written recommendations for facility- or 
        community-based services.  The team must document that the most 
        cost-effective alternatives available were offered to the 
        individual.  For purposes of this requirement, "cost-effective 
        alternatives" means community services and living arrangements 
        that cost the same as or less than nursing facility care. 
           (f) If the person chooses to use community-based services, 
        the team must provide the person or the person's legal 
        representative with a written community support plan, regardless 
        of whether the individual is eligible for Minnesota health care 
        programs.  The person may request assistance in developing a 
        community support plan without participating in a complete 
        assessment. 
           (g) The team must give the person receiving assessment or 
        support planning, or the person's legal representative, 
        materials supplied by the commissioner containing the following 
        information: 
           (1) the purpose of preadmission screening and assessment; 
           (2) information about Minnesota health care programs; 
           (3) the person's freedom to accept or reject the 
        recommendations of the team; 
           (4) the person's right to confidentiality under the 
        Minnesota Government Data Practices Act, chapter 13; and 
           (5) the person's right to appeal the decision regarding the 
        need for nursing facility level of care or the county's final 
        decisions regarding public programs eligibility according to 
        section 256.045, subdivision 3. 
           Sec. 8.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [TRANSITION ASSISTANCE.] (a) A long-term care 
        consultation team shall provide assistance to persons residing 
        in a nursing facility, hospital, regional treatment center, or 
        intermediate care facility for persons with mental retardation 
        who request or are referred for assistance.  Transition 
        assistance must include assessment, community support plan 
        development, referrals to Minnesota health care programs, and 
        referrals to programs that provide assistance with housing. 
           (b) The county shall develop transition processes with 
        institutional social workers and discharge planners to ensure 
        that: 
           (1) persons admitted to facilities receive information 
        about transition assistance that is available; 
           (2) the assessment is completed for persons within ten 
        working days of the date of request or recommendation for 
        assessment; and 
           (3) there is a plan for transition and follow-up for the 
        individual's return to the community.  The plan must require 
        notification of other local agencies when a person who may 
        require assistance is screened by one county for admission to a 
        facility located in another county. 
           (c) If a person who is eligible for a Minnesota health care 
        program is admitted to a nursing facility, the nursing facility 
        must include a consultation team member or the case manager in 
        the discharge planning process. 
           Sec. 9.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [PREADMISSION SCREENING ACTIVITIES RELATED TO 
        NURSING FACILITY ADMISSIONS.] (a) All applicants to Medicaid 
        certified nursing facilities, including certified boarding care 
        facilities, must be screened prior to admission regardless of 
        income, assets, or funding sources for nursing facility care, 
        except as described in subdivision 4b.  The purpose of the 
        screening is to determine the need for nursing facility level of 
        care as described in paragraph (d) and to complete activities 
        required under federal law related to mental illness and mental 
        retardation as outlined in paragraph (b). 
           (b) A person who has a diagnosis or possible diagnosis of 
        mental illness, mental retardation, or a related condition must 
        receive a preadmission screening before admission regardless of 
        the exemptions outlined in subdivision 4b, paragraph (b), to 
        identify the need for further evaluation and specialized 
        services, unless the admission prior to screening is authorized 
        by the local mental health authority or the local developmental 
        disabilities case manager, or unless authorized by the county 
        agency according to Public Law Number 100-508.  
           The following criteria apply to the preadmission screening: 
           (1) the county must use forms and criteria developed by the 
        commissioner to identify persons who require referral for 
        further evaluation and determination of the need for specialized 
        services; and 
           (2) the evaluation and determination of the need for 
        specialized services must be done by: 
           (i) a qualified independent mental health professional, for 
        persons with a primary or secondary diagnosis of a serious 
        mental illness; or 
           (ii) a qualified mental retardation professional, for 
        persons with a primary or secondary diagnosis of mental 
        retardation or related conditions.  For purposes of this 
        requirement, a qualified mental retardation professional must 
        meet the standards for a qualified mental retardation 
        professional under Code of Federal Regulations, title 42, 
        section 483.430. 
           (c) The local county mental health authority or the state 
        mental retardation authority under Public Law Numbers 100-203 
        and 101-508 may prohibit admission to a nursing facility if the 
        individual does not meet the nursing facility level of care 
        criteria or needs specialized services as defined in Public Law 
        Numbers 100-203 and 101-508.  For purposes of this section, 
        "specialized services" for a person with mental retardation or a 
        related condition means active treatment as that term is defined 
        under Code of Federal Regulations, title 42, section 483.440 
        (a)(1). 
           (d) The determination of the need for nursing facility 
        level of care must be made according to criteria developed by 
        the commissioner.  In assessing a person's needs, consultation 
        team members shall have a physician available for consultation 
        and shall consider the assessment of the individual's attending 
        physician, if any.  The individual's physician must be included 
        if the physician chooses to participate.  Other personnel may be 
        included on the team as deemed appropriate by the county. 
           Sec. 10.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision 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. 
           (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. 
           Sec. 11.  Minnesota Statutes 2000, section 256B.0911, is 
        amended by adding a subdivision to read: 
           Subd. 4c.  [SCREENING REQUIREMENTS.] (a) A person may be 
        screened for nursing facility admission by telephone or in a 
        face-to-face screening interview.  Consultation team members 
        shall identify each individual's needs using the following 
        categories: 
           (1) the person needs no face-to-face screening interview to 
        determine the need for nursing facility level of care based on 
        information obtained from other health care professionals; 
           (2) the person needs an immediate face-to-face screening 
        interview to determine the need for nursing facility level of 
        care and complete activities required under subdivision 4a; or 
           (3) the person may be exempt from screening requirements as 
        outlined in subdivision 4b, but will need transitional 
        assistance after admission or in-person follow-along after a 
        return home. 
           (b) Persons admitted on a nonemergency basis to a 
        Medicaid-certified nursing facility must be screened prior to 
        admission. 
           (c) The long-term care consultation team shall recommend a 
        case mix classification for persons admitted to a certified 
        nursing facility when sufficient information is received to make 
        that classification.  The nursing facility is authorized to 
        conduct all case mix assessments for persons who have been 
        screened prior to admission for whom the county did not 
        recommend a case mix classification.  The nursing facility is 
        authorized to conduct all case mix assessments for persons 
        admitted to the facility prior to a preadmission screening.  The 
        county retains the responsibility of distributing appropriate 
        case mix forms to the nursing facility. 
           (d) The county screening or intake activity must include 
        processes to identify persons who may require transition 
        assistance as described in subdivision 3b. 
           Sec. 12.  Minnesota Statutes 2000, section 256B.0911, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SIMPLIFICATION OF FORMS ADMINISTRATIVE 
        ACTIVITY.] The commissioner shall minimize the number of forms 
        required in the preadmission screening process provision of 
        long-term care consultation services and shall limit the 
        screening document to items necessary for care community support 
        plan approval, reimbursement, program planning, evaluation, and 
        policy development. 
           Sec. 13.  Minnesota Statutes 2000, section 256B.0911, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PAYMENT FOR PREADMISSION SCREENING LONG-TERM 
        CARE CONSULTATION SERVICES.] (a) The total screening payment for 
        each county must be paid monthly by certified nursing facilities 
        in the county.  The monthly amount to be paid by each nursing 
        facility for each fiscal year must be determined by dividing the 
        county's annual allocation for screenings long-term care 
        consultation services by 12 to determine the monthly payment and 
        allocating the monthly payment to each nursing facility based on 
        the number of licensed beds in the nursing facility.  Payments 
        to counties in which there is no certified nursing facility must 
        be made by increasing the payment rate of the two facilities 
        located nearest to the county seat. 
           (b) The commissioner shall include the total annual payment 
        for screening determined under paragraph (a) for each nursing 
        facility reimbursed under section 256B.431 or 256B.434 according 
        to section 256B.431, subdivision 2b, paragraph (g), or 256B.435. 
           (c) In the event of the layaway, delicensure and 
        decertification, or removal from layaway of 25 percent or more 
        of the beds in a facility, the commissioner may adjust the per 
        diem payment amount in paragraph (b) and may adjust the monthly 
        payment amount in paragraph (a). The effective date of an 
        adjustment made under this paragraph shall be on or after the 
        first day of the month following the effective date of the 
        layaway, delicensure and decertification, or removal from 
        layaway. 
           (d) Payments for screening activities long-term care 
        consultation services are available to the county or counties to 
        cover staff salaries and expenses to provide the screening 
        function services described in subdivision 1a.  The lead agency 
        county shall employ, or contract with other agencies to employ, 
        within the limits of available funding, sufficient personnel 
        to conduct the preadmission screening activity provide long-term 
        care consultation services while meeting the state's long-term 
        care outcomes and objectives as defined in section 256B.0917, 
        subdivision 1.  The local agency county shall be accountable for 
        meeting local objectives as approved by the commissioner in the 
        CSSA biennial plan. 
           (d) (e) Notwithstanding section 256B.0641, overpayments 
        attributable to payment of the screening costs under the medical 
        assistance program may not be recovered from a facility.  
           (e) (f) The commissioner of human services shall amend the 
        Minnesota medical assistance plan to include reimbursement for 
        the local screening consultation teams. 
           (g) The county may bill, as case management services, 
        assessments, support planning, and follow-along provided to 
        persons determined to be eligible for case management under 
        Minnesota health care programs.  No individual or family member 
        shall be charged for an initial assessment or initial support 
        plan development provided under subdivision 3a or 3b. 
           Sec. 14.  Minnesota Statutes 2000, section 256B.0911, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] 
        (a) Medical assistance reimbursement for nursing facilities 
        shall be authorized for a medical assistance recipient only if a 
        preadmission screening has been conducted prior to admission or 
        the local county agency has authorized an exemption.  Medical 
        assistance reimbursement for nursing facilities shall not be 
        provided for any recipient who the local screener has determined 
        does not meet the level of care criteria for nursing facility 
        placement or, if indicated, has not had a level II PASARR OBRA 
        evaluation as required under the federal Omnibus Budget 
        Reconciliation Act of 1987 completed unless an admission for a 
        recipient with mental illness is approved by the local mental 
        health authority or an admission for a recipient with mental 
        retardation or related condition is approved by the state mental 
        retardation authority. 
           (b) The nursing facility must not bill a person who is not 
        a medical assistance recipient for resident days that preceded 
        the date of completion of screening activities as required under 
        subdivisions 4a, 4b, and 4c.  The nursing facility must include 
        unreimbursed resident days in the nursing facility resident day 
        totals reported to the commissioner. 
           (c) The commissioner shall make a request to the health 
        care financing administration for a waiver allowing screening 
        team approval of Medicaid payments for certified nursing 
        facility care.  An individual has a choice and makes the final 
        decision between nursing facility placement and community 
        placement after the screening team's recommendation, except as 
        provided in paragraphs (b) and (c) subdivision 4a, paragraph (c).
           (c) The local county mental health authority or the state 
        mental retardation authority under Public Law Numbers 100-203 
        and 101-508 may prohibit admission to a nursing facility, if the 
        individual does not meet the nursing facility level of care 
        criteria or needs specialized services as defined in Public Law 
        Numbers 100-203 and 101-508.  For purposes of this section, 
        "specialized services" for a person with mental retardation or a 
        related condition means "active treatment" as that term is 
        defined in Code of Federal Regulations, title 42, section 
        483.440(a)(1). 
           (e) Appeals from the screening team's recommendation or the 
        county agency's final decision shall be made according to 
        section 256.045, subdivision 3. 
           Sec. 15.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE AND GOALS.] The purpose of the 
        alternative care program is to provide funding for or access to 
        home and community-based services for frail elderly persons, in 
        order to limit nursing facility placements.  The program is 
        designed to support frail elderly persons in their desire to 
        remain in the community as independently and as long as possible 
        and to support informal caregivers in their efforts to provide 
        care for frail elderly people.  Further, the goals of the 
        program are: 
           (1) to contain medical assistance expenditures by providing 
        funding care in the community at a cost the same or less than 
        nursing facility costs; and 
           (2) to maintain the moratorium on new construction of 
        nursing home beds. 
           Sec. 16.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY FOR SERVICES.] Alternative care 
        services are available to all frail older Minnesotans.  This 
        includes: 
           (1) persons who are receiving medical assistance and served 
        under the medical assistance program or the Medicaid waiver 
        program; 
           (2) persons age 65 or older who are not eligible for 
        medical assistance without a spenddown or waiver obligation but 
        who would be eligible for medical assistance within 180 days of 
        admission to a nursing facility and served under subject to 
        subdivisions 4 to 13; and 
           (3) persons who are paying for their services out-of-pocket.
           Sec. 17.  Minnesota Statutes 2000, 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 screened by the county screening 
        team or, if previously screened and served under the alternative 
        care program, assessed by the local county social worker or 
        public health nurse 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 financially eligible for medical 
        assistance within 180 days of admission to a nursing facility; 
           (4) the person meets the asset transfer requirements of is 
        not ineligible for the medical assistance program due to an 
        asset transfer penalty; 
           (5) the screening team would recommend nursing facility 
        admission or continued stay for the person if alternative care 
        services were not available; 
           (6) the person needs services that are not available at 
        that time in the county funded through other county, state, or 
        federal funding sources; and 
           (7) (6) the monthly cost of the alternative care services 
        funded by the program for this person does not exceed 75 percent 
        of the statewide average monthly medical assistance payment for 
        nursing facility care at the individual's case mix 
        classification 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 adaptations 
        environmental modifications are or will be purchased for an 
        alternative care services recipient, the costs may be prorated 
        on a monthly basis throughout the year in which they are 
        purchased 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 calculated described in this paragraph. 
           (b) Individuals who meet the criteria in paragraph (a) and 
        who have been approved for alternative care funding are called 
        180-day eligible clients. 
           (c) The statewide average payment for nursing facility care 
        is the statewide average monthly nursing facility rate in effect 
        on July 1 of the fiscal year in which the cost is incurred, less 
        the statewide average monthly income of nursing facility 
        residents who are age 65 or older and who are medical assistance 
        recipients in the month of March of the previous fiscal year.  
        This monthly limit does not prohibit the 180-day eligible client 
        from paying for additional services needed or desired.  
           (d) In determining the total costs of alternative care 
        services for one month, the costs of all services funded by the 
        alternative care program, including supplies and equipment, must 
        be included. 
           (e) 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, unless authorized by the commissioner 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, the 
        county must bill 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 services reimbursable under the federally approved elderly 
        waiver program 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.  
           (f) (c) Alternative care funding is not available for a 
        person who resides in a licensed nursing home or, certified 
        boarding care home, hospital, or intermediate care facility, 
        except for case management services which are being 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. 18.  Minnesota Statutes 2000, 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; 
           (14) chore services; 
           (15) companion services; 
           (16) nutrition services; 
           (17) training for direct informal caregivers; 
           (18) telemedicine devices to monitor recipients in their 
        own homes as an alternative to hospital care, nursing home care, 
        or home visits; and 
           (19) other services including which includes discretionary 
        funds and direct cash payments to clients, approved by the 
        county agency following approval by the commissioner, subject to 
        the provisions of paragraph (m) (j).  Total annual payments for "
        other services" for all clients within a county may not exceed 
        either ten 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 only to supplement and not to supplant services available 
        through other public assistance or services programs. 
           (c) Unless specified in statute, the service definitions 
        and standards for alternative care services shall be the same as 
        the service definitions and standards defined 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 daily rate shall be negotiated 
        between the county agency and the foster care provider.  The 
        rate established under this section shall not exceed 75 percent 
        of the state average monthly nursing home payment for the case 
        mix classification to which the individual receiving foster care 
        is assigned, and it must allow for other alternative care 
        services to be authorized by the case manager.  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 may be provided by a personal 
        care provider organization. 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 of 
        the client who meets the relative hardship waiver requirement as 
        defined in section 256B.0627, subdivision 4, paragraph (b), 
        clause (10), to provide personal care services, but must ensure 
        nursing if the county agency ensures supervision of this service 
        by a registered nurse or mental health practitioner.  Covered 
        personal care services defined in section 256B.0627, subdivision 
        4, must meet applicable standards in Minnesota Rules, part 
        9505.0335. 
           (f) A county may use alternative care funds to purchase 
        medical supplies and equipment without prior approval from the 
        commissioner when:  (1) there is no other funding source; (2) 
        the supplies and equipment are specified in the individual's 
        care plan as medically necessary to enable the individual to 
        remain in the community according to the criteria in Minnesota 
        Rules, part 9505.0210, item A; and (3) the supplies and 
        equipment represent an effective and appropriate use of 
        alternative care funds.  A county may use alternative care funds 
        to purchase supplies and equipment from a non-Medicaid certified 
        vendor if the cost for the items is less than that of a Medicaid 
        vendor.  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) 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 center 
        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.  
           (h) (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.  
           Individuals receiving assisted living services will 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.  
           (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. 
           (i) (h) For establishments registered under chapter 144D, 
        assisted living services under this section means either the 
        services described and licensed 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. 
           (j) For the purposes of this section, reimbursement (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.  The 
        rate 
           (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 medical assistance nursing 
        facility payment rate of the case mix resident class to which 
        the 180-day alternative care eligible client would be assigned 
        under Minnesota Rules, parts 9549.0050 to 9549.0059, unless the 
        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 are provided by a home care 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 are 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). 
           (k) For purposes of this section, companion services are 
        defined as nonmedical care, supervision and oversight, provided 
        to a functionally impaired adult.  Companions may assist the 
        individual with such tasks as meal preparation, laundry and 
        shopping, but do not perform these activities as discrete 
        services.  The provision of companion services does not entail 
        hands-on medical care.  Providers may also perform light 
        housekeeping tasks which are incidental to the care and 
        supervision of the recipient.  This service must be approved by 
        the case manager as part of the care plan.  Companion services 
        must be provided by individuals or organizations who are under 
        contract with the local agency to provide the service.  Any 
        person related to the waiver recipient by blood, marriage or 
        adoption cannot be reimbursed under this service.  Persons 
        providing companion services will be monitored by the case 
        manager. 
           (l) For purposes of this section, training for direct 
        informal caregivers is defined as a classroom or home course of 
        instruction which may include:  transfer and lifting skills, 
        nutrition, personal and physical cares, home safety in a home 
        environment, stress reduction and management, behavioral 
        management, long-term care decision making, care coordination 
        and family dynamics.  The training is provided to an informal 
        unpaid caregiver of a 180-day eligible client which enables the 
        caregiver to deliver care in a home setting with high levels of 
        quality.  The training must be approved by the case manager as 
        part of the individual care plan.  Individuals, agencies, and 
        educational facilities which provide caregiver training and 
        education will be monitored by the case manager. 
           (m) (j) A county agency may make payment from their 
        alternative care program allocation for "other services" 
        provided to an alternative care program recipient if those 
        services prevent, shorten, or delay institutionalization.  These 
        services may which include use of "discretionary funds" for 
        services that are not otherwise defined in this section and 
        direct cash payments to the recipient client for the purpose of 
        purchasing the recipient's 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 (7) (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 under section 256.476, subdivision 2, paragraph 
        (g), or for a client who.  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) any service approved under this section must be a 
        service which meets the purpose and goals of the program as 
        listed in subdivision 1; 
           (4) cash payments must also meet the criteria of and are 
        governed by the procedures and liability protection established 
        in section 256.476, subdivision 4, paragraphs (b) through (h), 
        and recipients of cash grants must meet the requirements in 
        section 256.476, subdivision 10; and 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 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 
           (5) (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. 19.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ALTERNATIVE CARE PROGRAM ADMINISTRATION.] The 
        alternative care program is administered by the county agency.  
        This agency is the lead agency responsible for the local 
        administration of the alternative care program as described in 
        this section.  However, it may contract with the public health 
        nursing service to be the lead agency.  The commissioner may 
        contract with federally recognized Indian tribes with a 
        reservation in Minnesota to serve as the lead agency responsible 
        for the local administration of the alternative care program as 
        described in the contract. 
           Sec. 20.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CASE MANAGEMENT.] Providers of case management 
        services for persons receiving services funded by the 
        alternative care program must meet the qualification 
        requirements and standards specified in section 256B.0915, 
        subdivision 1b.  The case manager must ensure the health and 
        safety of the individual client and not approve alternative care 
        funding for a client in any setting in which the case manager 
        cannot reasonably ensure the client's health and safety.  The 
        case manager is responsible for the cost-effectiveness of the 
        alternative care individual care plan and must not approve any 
        care plan in which the cost of services funded by alternative 
        care and client contributions exceeds the limit specified in 
        section 256B.0915, subdivision 3, paragraph (b).  The county may 
        allow a case manager employed by the county to delegate certain 
        aspects of the case management activity to another individual 
        employed by the county provided there is oversight of the 
        individual by the case manager.  The case manager may not 
        delegate those aspects which require professional judgment 
        including assessments, reassessments, and care plan development. 
           Sec. 21.  Minnesota Statutes 2000, 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 180-day 
        eligible 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 to the commissioner verifying that the 
        individual's alternative care is not available at that time 
        through any other public assistance or service program.  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 termination 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. 22.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CONTRACTING PROVISIONS FOR PROVIDERS.] The lead 
        agency shall document to the commissioner that the agency made 
        reasonable efforts to inform potential providers of the 
        anticipated need for services under the alternative care program 
        or waiver programs under sections 256B.0915 and 256B.49, 
        including a minimum of 14 days' written advance notice of the 
        opportunity to be selected as a service provider and an annual 
        public meeting with providers to explain and review the criteria 
        for selection.  The lead agency shall also document to the 
        commissioner that the agency allowed potential providers an 
        opportunity to be selected to contract with the county agency.  
        Funds reimbursed to counties under this subdivision Alternative 
        care funds paid to service providers are subject to audit by the 
        commissioner for fiscal and utilization control.  
           The lead agency must select providers for contracts or 
        agreements using the following criteria and other criteria 
        established by the county: 
           (1) the need for the particular services offered by the 
        provider; 
           (2) the population to be served, including the number of 
        clients, the length of time services will be provided, and the 
        medical condition of clients; 
           (3) the geographic area to be served; 
           (4) quality assurance methods, including appropriate 
        licensure, certification, or standards, and supervision of 
        employees when needed; 
           (5) rates for each service and unit of service exclusive of 
        county administrative costs; 
           (6) evaluation of services previously delivered by the 
        provider; and 
           (7) contract or agreement conditions, including billing 
        requirements, cancellation, and indemnification. 
           The county must evaluate its own agency services under the 
        criteria established for other providers.  The county shall 
        provide a written statement of the reasons for not selecting 
        providers. 
           Sec. 23.  Minnesota Statutes 2000, 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 180-day alternative care eligible clients.  Prior to 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) Prior to 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.  The 
        allocation for fiscal year 1992 shall be calculated using a base 
        that is adjusted to exclude the medical assistance share of 
        alternative care expenditures.  The adjusted base is calculated 
        by multiplying each county's allocation for fiscal year 1991 by 
        the percentage of county alternative care expenditures for 
        180-day eligible clients.  The percentage is determined based on 
        expenditures for services rendered in fiscal year 1989 or 
        calendar year 1989, whichever is greater.  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 county alternative care program expenditures for 
        180-day eligible clients as defined in paragraph (b) are 95 
        percent or more of its 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 county alternative care program expenditures for 
        180-day eligible clients as defined in paragraph (b) are less 
        than 95 percent of its 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) For fiscal year 1992 only, a county may receive an 
        increased allocation if annualized service costs for the month 
        of May 1991 for 180-day eligible clients are greater than the 
        allocation otherwise determined.  A county may apply for this 
        increase by reporting projected expenditures for May to the 
        commissioner by June 1, 1991.  The amount of the allocation may 
        exceed the amount calculated in paragraph (b).  The projected 
        expenditures for May must be based on actual 180-day eligible 
        client caseload and the individual cost of clients' care plans.  
        If a county does not report its expenditures for May, the amount 
        in paragraph (c) or (d) shall be used. 
           (f) Calculations for paragraphs (c) and (d) are to be made 
        as follows:  for each county, the determination of 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 by June 1 of that year.  Calculations for 
        paragraphs (c) and (d) must also include the funds transferred 
        to the consumer support grant program for clients who have 
        transferred to that program from April 1 through March 31 in the 
        base year.  
           (g) For the biennium ending June 30, 2001, the allocation 
        of state funds to county agencies shall be calculated as 
        described in paragraphs (c) and (d).  If the annual legislative 
        appropriation for the alternative care program is inadequate to 
        fund the combined county allocations for fiscal year 2000 or 
        2001 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 paragraph 
        (f) paragraphs (c) and (d). 
           Sec. 24.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 11, is amended to read: 
           Subd. 11.  [TARGETED FUNDING.] (a) The purpose of targeted 
        funding is to make additional money available to counties with 
        the greatest need.  Targeted funds are not intended to be 
        distributed equitably among all counties, but rather, allocated 
        to those with long-term care strategies that meet state goals. 
           (b) The funds available for targeted funding shall be the 
        total appropriation for each fiscal year minus county 
        allocations determined under subdivision 10 as adjusted for any 
        inflation increases provided in appropriations for the biennium. 
           (c) The commissioner shall allocate targeted funds to 
        counties that demonstrate to the satisfaction of the 
        commissioner that they have developed feasible plans to increase 
        alternative care spending.  In making targeted funding 
        allocations, the commissioner shall use the following priorities:
           (1) counties that received a lower allocation in fiscal 
        year 1991 than in fiscal year 1990.  Counties remain in this 
        priority until they have been restored to their fiscal year 1990 
        level plus inflation; 
           (2) counties that sustain a base allocation reduction for 
        failure to spend 95 percent of the allocation if they 
        demonstrate that the base reduction should be restored; 
           (3) counties that propose projects to divert community 
        residents from nursing home placement or convert nursing home 
        residents to community living; and 
           (4) counties that can otherwise justify program growth by 
        demonstrating the existence of waiting lists, demographically 
        justified needs, or other unmet needs. 
           (d) Counties that would receive targeted funds according to 
        paragraph (c) must demonstrate to the commissioner's 
        satisfaction that the funds would be appropriately spent by 
        showing how the funds would be used to further the state's 
        alternative care goals as described in subdivision 1, and that 
        the county has the administrative and service delivery 
        capability to use them.  
           (e) The commissioner shall request applications by June 1 
        each year, for county agencies to apply for targeted funds by 
        November 1 of each year.  The counties selected for targeted 
        funds shall be notified of the amount of their additional 
        funding by August 1 of each year.  Targeted funds allocated to a 
        county agency in one year shall be treated as part of the 
        county's base allocation for that year in determining 
        allocations for subsequent years.  No reallocations between 
        counties shall be made. 
           (f) The allocation for each year after fiscal year 1992 
        shall be determined using the previous fiscal year's allocation, 
        including any targeted funds, as the base and then applying the 
        criteria under subdivision 10, paragraphs (c), (d), and (f), to 
        the current year's expenditures. 
           Sec. 25.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CLIENT PREMIUMS.] (a) A premium is required for 
        all 180-day 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 
        medical assistance income standard 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 a medical assistance recipient, but has 
        been approved for alternative care-funded assisted living 
        services; 
           (5) a person is found eligible for alternative care, but is 
        not yet receiving alternative care services; or 
           (6) (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 and forward the amounts collected to 
        the commissioner in the manner and at the times prescribed by 
        the commissioner.  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.  If a client fails or refuses to pay the premium 
        due, 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. 26.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 13, is amended to read: 
           Subd. 13.  [COUNTY BIENNIAL PLAN.] The county biennial plan 
        for the preadmission screening program long-term care 
        consultation services under section 256B.0911, the alternative 
        care program under this section, and waivers for the elderly 
        under section 256B.0915, and waivers for the disabled under 
        section 256B.49, shall be incorporated into the biennial 
        Community Social Services Act plan and shall meet the 
        regulations and timelines of that plan.  This county biennial 
        plan shall include: 
           (1) information on the administration of the preadmission 
        screening program; 
           (2) information on the administration of the home and 
        community-based services waivers for the elderly under section 
        256B.0915, and for the disabled under section 256B.49; and 
           (3) information on the administration of the alternative 
        care program. 
           Sec. 27.  Minnesota Statutes 2000, section 256B.0913, 
        subdivision 14, is amended to read: 
           Subd. 14.  [REIMBURSEMENT PAYMENT AND RATE ADJUSTMENTS.] (a)
        Reimbursement Payment for expenditures for the provided 
        alternative care services as approved by the client's case 
        manager shall be through the invoice processing procedures of 
        the department's Medicaid Management Information System (MMIS).  
        To receive reimbursement 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) If a county collects less than 50 percent of the client 
        premiums due under subdivision 12, the commissioner may withhold 
        up to three percent of the county's final alternative care 
        program allocation determined under subdivisions 10 and 11. 
           (c) The county shall negotiate individual rates with 
        vendors and may be reimbursed authorize service payment for 
        actual costs up to the greater of the county's current approved 
        rate or 60 percent of the maximum rate in fiscal year 1994 and 
        65 percent of the maximum rate in fiscal year 1995 for each 
        alternative care service.  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. 
           (d) On July 1, 1993, the commissioner shall increase the 
        maximum rate for home delivered meals to $4.50 per meal.  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. 28.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 1d, is amended to read: 
           Subd. 1d.  [POSTELIGIBILITY TREATMENT OF INCOME AND 
        RESOURCES FOR ELDERLY WAIVER.] (a) Notwithstanding the 
        provisions of section 256B.056, the commissioner shall make the 
        following amendment to the medical assistance elderly waiver 
        program effective July 1, 1999, or upon federal approval, 
        whichever is later. 
           A recipient's maintenance needs will be an amount equal to 
        the Minnesota supplemental aid equivalent rate as defined in 
        section 256I.03, subdivision 5, plus the medical assistance 
        personal needs allowance as defined in section 256B.35, 
        subdivision 1, paragraph (a), when applying posteligibility 
        treatment of income rules to the gross income of elderly waiver 
        recipients, except for individuals whose income is in excess of 
        the special income standard according to Code of Federal 
        Regulations, title 42, section 435.236.  Recipient maintenance 
        needs shall be adjusted under this provision each July 1. 
           (b) The commissioner of human services shall secure 
        approval of additional elderly waiver slots sufficient to serve 
        persons who will qualify under the revised income standard 
        described in paragraph (a) before implementing section 
        256B.0913, subdivision 16. 
           (c) In implementing this subdivision, the commissioner 
        shall consider allowing persons who would otherwise be eligible 
        for the alternative care program but would qualify for the 
        elderly waiver with a spenddown to remain on the alternative 
        care program. 
           Sec. 29.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, REIMBURSEMENT 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 statewide 
        average payment weighted average monthly nursing facility rate 
        of the case mix resident class to which the elderly waiver 
        client would be assigned under the medical assistance case mix 
        reimbursement system.  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 
        adaptations environmental modifications are or will be purchased 
        for an elderly waiver services recipient client, the costs may 
        be prorated on a monthly basis throughout the year in which they 
        are purchased for up to 12 consecutive months beginning with the 
        month of purchase.  If the monthly cost of a recipient's other 
        waivered services exceeds the monthly limit established in this 
        paragraph (b), the annual cost of the all waivered services 
        shall be determined.  In this event, the annual cost of all 
        waivered services shall not exceed 12 times the monthly 
        limit calculated in this paragraph.  The statewide average 
        payment rate is calculated by determining the statewide average 
        monthly nursing home rate, effective July 1 of the fiscal year 
        in which the cost is incurred, less the statewide average 
        monthly income of nursing home residents who are age 65 or 
        older, and who are medical assistance recipients in the month of 
        March of the previous state fiscal year.  The annual cost 
        divided by 12 of elderly or disabled waivered services 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 or 
        disabled waivered services shall be the greater of the monthly 
        payment for:  (i), 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; or (ii) the 
        statewide average payment of the case mix resident class to 
        which the resident would be assigned under the medical 
        assistance case mix reimbursement system, provided that 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 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.  
           (c) (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. 
           (d) For both the elderly waiver and the nursing facility 
        disabled waiver, a county may purchase extended supplies and 
        equipment without prior approval from the commissioner when 
        there is no other funding source and the supplies and equipment 
        are specified in the individual's care plan as medically 
        necessary to enable the individual to remain in the community 
        according to the criteria in Minnesota Rules, part 9505.0210, 
        items A and B.  (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.  
           (e) (g) The adult foster care daily rate for the elderly 
        and disabled waivers 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 rate established under this 
        section shall not exceed the state average monthly nursing home 
        payment for the case mix classification to which the individual 
        receiving foster care is assigned; the rate must allow for other 
        waiver and medical assistance home care services to be 
        authorized by the case manager.  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). 
           (f) The assisted living and residential care service rates 
        for elderly and community alternatives for disabled individuals 
        (CADI) waivers shall be made to the vendor as a monthly rate 
        negotiated with the county agency based on an individualized 
        service plan for each resident.  The rate shall not exceed the 
        nonfederal share of the greater of either the statewide or any 
        of the geographic groups' weighted average monthly medical 
        assistance nursing facility payment rate of the case mix 
        resident class to which the elderly or disabled client would be 
        assigned under Minnesota Rules, parts 9549.0050 to 9549.0059, 
        unless the services are provided by a home care provider 
        licensed by the department of health and are provided in a 
        building that is registered as a housing with services 
        establishment under chapter 144D and that provides 24-hour 
        supervision.  For alternative care assisted living projects 
        established under Laws 1988, chapter 689, article 2, section 
        256, monthly rates may not exceed 65 percent of the greater of 
        either the statewide or any of the geographic groups' weighted 
        average monthly medical assistance nursing facility payment rate 
        for the case mix resident class to which the elderly or disabled 
        client would be assigned under Minnesota Rules, parts 9549.0050 
        to 9549.0059.  The rate may not cover direct rent or food costs. 
           (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). 
           (g) (i) The county shall negotiate individual service rates 
        with vendors and may be reimbursed authorize payment for actual 
        costs up to the greater of the county's current approved rate or 
        60 percent of the maximum rate in fiscal year 1994 and 65 
        percent of the maximum rate in fiscal year 1995 for each service 
        within each program.  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.  
           (h) On July 1, 1993, the commissioner shall increase the 
        maximum rate for home-delivered meals to $4.50 per meal. 
           (i) (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. 
           (j) (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. 
           (k) For the community alternatives for disabled individuals 
        waiver, and nursing facility disabled waivers, county may use 
        waiver funds for the cost of minor adaptations to a client's 
        residence or vehicle without prior approval from the 
        commissioner if there is no other source of funding and the 
        adaptation: 
           (1) is necessary to avoid institutionalization; 
           (2) has no utility apart from the needs of the client; and 
           (3) meets the criteria in Minnesota Rules, part 9505.0210, 
        items A and B.  
        For purposes of this subdivision, "residence" means the client's 
        own home, the client's family residence, or a family foster 
        home.  For purposes of this subdivision, "vehicle" means the 
        client's vehicle, the client's family vehicle, or the client's 
        family foster home vehicle. 
           (l) The commissioner shall establish a maximum rate unit 
        for baths provided by an adult day care provider that are not 
        included in the provider's contractual daily or hourly rate. 
        This maximum rate must equal the home health aide extended rate 
        and shall be paid for baths provided to clients served under the 
        elderly and disabled waivers. 
           Sec. 30.  Minnesota Statutes 2000, section 256B.0915, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REASSESSMENTS FOR WAIVER CLIENTS.] A 
        reassessment of a client served under the elderly or disabled 
        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. 31.  Minnesota Statutes 2000, section 256B.0917, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CONTRACT.] (a) The commissioner of human 
        services shall execute a contract with Living at Home/Block 
        Nurse Program, Inc. (LAH/BN, Inc.).  The contract shall require 
        LAH/BN, Inc. to: 
           (1) develop criteria for and award grants to establish 
        community-based organizations that will implement 
        living-at-home/block nurse programs throughout the state; 
           (2) award grants to enable current living-at-home/block 
        nurse programs to continue to implement the combined 
        living-at-home/block nurse program model; 
           (3) serve as a state technical assistance center to assist 
        and coordinate the living-at-home/block nurse programs 
        established; and 
           (4) manage contracts with individual living-at-home/block 
        nurse programs. 
           (b) The contract shall be effective July 1, 1997, and 
        section 16B.17 shall not apply. 
           Sec. 32.  Minnesota Statutes 2000, section 256B.0917, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [COMMUNITY SERVICE GRANTS.] The commissioner 
        shall award contracts for grants to public and private nonprofit 
        agencies to establish services that strengthen a community's 
        ability to provide a system of home and community-based services 
        for elderly persons.  The commissioner shall use a request for 
        proposal process.  The commissioner shall give preference when 
        awarding grants under this section to areas where nursing 
        facility closures have occurred or are occurring.  The 
        commissioner shall consider grants for: 
           (1) caregiver support and respite care projects under 
        subdivision 6; 
           (2) on-site coordination under section 256.9731; 
           (3) the living-at-home/block nurse grant under subdivisions 
        7 to 10; and 
           (4) services identified as needed for community transition. 
           Sec. 33.  [RESPITE CARE.] 
           The Minnesota board on aging shall report to the 
        legislature by February 1, 2002, on the provision of in-home and 
        out-of-home respite care services on a sliding scale basis under 
        the federal Older Americans Act. 
           Sec. 34.  [REPEALER.] 
           (a) Minnesota Statutes 2000, sections 256B.0911, 
        subdivisions 2, 2a, 4, and 9; 256B.0913, subdivisions 3, 15a, 
        15b, 15c, and 16; and 256B.0915, subdivisions 3a, 3b, and 3c, 
        are repealed. 
           (b) Minnesota Rules, parts 9505.2390; 9505.2395; 9505.2396; 
        9505.2400; 9505.2405; 9505.2410; 9505.2413; 9505.2415; 
        9505.2420; 9505.2425; 9505.2426; 9505.2430; 9505.2435; 
        9505.2440; 9505.2445; 9505.2450; 9505.2455; 9505.2458; 
        9505.2460; 9505.2465; 9505.2470; 9505.2473; 9505.2475; 
        9505.2480; 9505.2485; 9505.2486; 9505.2490; 9505.2495; 
        9505.2496; and 9505.2500, are repealed. 

                                   ARTICLE 5 
                 LONG-TERM CARE SYSTEM REFORM AND REIMBURSEMENT 
           Section 1.  Minnesota Statutes 2000, section 144.0721, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPROPRIATENESS AND QUALITY.] Until the 
        date of implementation of the revised case mix system based on 
        the minimum data set, the commissioner of health shall assess 
        the appropriateness and quality of care and services furnished 
        to private paying residents in nursing homes and boarding care 
        homes that are certified for participation in the medical 
        assistance program under United States Code, title 42, sections 
        1396-1396p.  These assessments shall be conducted until the date 
        of implementation of the revised case mix system based on the 
        minimum data set, in accordance with section 144.072, with the 
        exception of provisions requiring recommendations for changes in 
        the level of care provided to the private paying residents. 
           Sec. 2.  [144.0724] [RESIDENT REIMBURSEMENT 
        CLASSIFICATION.] 
           Subdivision 1.  [RESIDENT REIMBURSEMENT 
        CLASSIFICATIONS.] The commissioner of health shall establish 
        resident reimbursement classifications based upon the 
        assessments of residents of nursing homes and boarding care 
        homes conducted under this section and according to section 
        256B.438.  The reimbursement classifications established under 
        this section shall be implemented after June 30, 2002, but no 
        later than January 1, 2003. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given. 
           (a) [ASSESSMENT REFERENCE DATE.] "Assessment reference 
        date" means the last day of the minimum data set observation 
        period.  The date sets the designated endpoint of the common 
        observation period, and all minimum data set items refer back in 
        time from that point. 
           (b) [CASE MIX INDEX.] "Case mix index" means the weighting 
        factors assigned to the RUG-III classifications. 
           (c) [INDEX MAXIMIZATION.] "Index maximization" means 
        classifying a resident who could be assigned to more than one 
        category, to the category with the highest case mix index. 
           (d) [MINIMUM DATA SET.] "Minimum data set" means the 
        assessment instrument specified by the Health Care Financing 
        Administration and designated by the Minnesota department of 
        health. 
           (e) [REPRESENTATIVE.] "Representative" means a person who 
        is the resident's guardian or conservator, the person authorized 
        to pay the nursing home expenses of the resident, a 
        representative of the nursing home ombudsman's office whose 
        assistance has been requested, or any other individual 
        designated by the resident. 
           (f) [RESOURCE UTILIZATION GROUPS OR RUG.] "Resource 
        utilization groups" or "RUG" means the system for grouping a 
        nursing facility's residents according to their clinical and 
        functional status identified in data supplied by the facility's 
        minimum data set. 
           Subd. 3.  [RESIDENT REIMBURSEMENT CLASSIFICATIONS.] (a) 
        Resident reimbursement classifications shall be based on the 
        minimum data set, version 2.0 assessment instrument, or its 
        successor version mandated by the Health Care Financing 
        Administration that nursing facilities are required to complete 
        for all residents.  The commissioner of health shall establish 
        resident classes according to the 34 group, resource utilization 
        groups, version III or RUG-III model.  Resident classes must be 
        established based on the individual items on the minimum data 
        set and must be completed according to the facility manual for 
        case mix classification issued by the Minnesota department of 
        health.  The facility manual for case mix classification shall 
        be drafted by the Minnesota department of health and presented 
        to the chairs of health and human services legislative 
        committees by December 31, 2001. 
           (b) Each resident must be classified based on the 
        information from the minimum data set according to general 
        domains in clauses (1) to (7): 
           (1) extensive services where a resident requires 
        intravenous feeding or medications, suctioning, tracheostomy 
        care, or is on a ventilator or respirator; 
           (2) rehabilitation where a resident requires physical, 
        occupational, or speech therapy; 
           (3) special care where a resident has cerebral palsy; 
        quadriplegia; multiple sclerosis; pressure ulcers; fever with 
        vomiting, weight loss, or dehydration; tube feeding and aphasia; 
        or is receiving radiation therapy; 
           (4) clinically complex status where a resident has burns, 
        coma, septicemia, pneumonia, internal bleeding, chemotherapy, 
        wounds, kidney failure, urinary tract infections, oxygen, or 
        transfusions; 
           (5) impaired cognition where a resident has poor cognitive 
        performance; 
           (6) behavior problems where a resident exhibits wandering, 
        has hallucinations, or is physically or verbally abusive toward 
        others, unless the resident's other condition would place the 
        resident in other categories; and 
           (7) reduced physical functioning where a resident has no 
        special clinical conditions. 
           (c) The commissioner of health shall establish resident 
        classification according to a 34 group model based on the 
        information on the minimum data set and within the general 
        domains listed in paragraph (b), clauses (1) to (7).  Detailed 
        descriptions of each resource utilization group shall be defined 
        in the facility manual for case mix classification issued by the 
        Minnesota department of health.  The 34 groups are described as 
        follows: 
           (1) SE3:  requires four or five extensive services; 
           (2) SE2:  requires two or three extensive services; 
           (3) SE1:  requires one extensive service; 
           (4) RAD:  requires rehabilitation services and is dependent 
        in activity of daily living (ADL) at a count of 17 or 18; 
           (5) RAC:  requires rehabilitation services and ADL count is 
        14 to 16; 
           (6) RAB:  requires rehabilitation services and ADL count is 
        ten to 13; 
           (7) RAA:  requires rehabilitation services and ADL count is 
        four to nine; 
           (8) SSC:  requires special care and ADL count is 17 or 18; 
           (9) SSB:  requires special care and ADL count is 15 or 16; 
           (10) SSA:  requires special care and ADL count is seven to 
        14; 
           (11) CC2:  clinically complex with depression and ADL count 
        is 17 or 18; 
           (12) CC1:  clinically complex with no depression and ADL 
        count is 17 or 18; 
           (13) CB2:  clinically complex with depression and ADL count 
        is 12 to 16; 
           (14) CB1:  clinically complex with no depression and ADL 
        count is 12 to 16; 
           (15) CA2:  clinically complex with depression and ADL count 
        is four to 11; 
           (16) CA1:  clinically complex with no depression and ADL 
        count is four to 11; 
           (17) IB2:  impaired cognition with nursing rehabilitation 
        and ADL count is six to ten; 
           (18) IB1:  impaired cognition with no nursing 
        rehabilitation and ADL count is six to ten; 
           (19) IA2:  impaired cognition with nursing rehabilitation 
        and ADL count is four or five; 
           (20) IA1:  impaired cognition with no nursing 
        rehabilitation and ADL count is four or five; 
           (21) BB2:  behavior problems with nursing rehabilitation 
        and ADL count is six to ten; 
           (22) BB1:  behavior problems with no nursing rehabilitation 
        and ADL count is six to ten; 
           (23) BA2:  behavior problems with nursing rehabilitation 
        and ADL count is four to five; 
           (24) BA1:  behavior problems with no nursing rehabilitation 
        and ADL count is four to five; 
           (25) PE2:  reduced physical functioning with nursing 
        rehabilitation and ADL count is 16 to 18; 
           (26) PE1:  reduced physical functioning with no nursing 
        rehabilitation and ADL count is 16 to 18; 
           (27) PD2:  reduced physical functioning with nursing 
        rehabilitation and ADL count is 11 to 15; 
           (28) PD1:  reduced physical functioning with no nursing 
        rehabilitation and ADL count is 11 to 15; 
           (29) PC2:  reduced physical functioning with nursing 
        rehabilitation and ADL count is nine or ten; 
           (30) PC1:  reduced physical functioning with no nursing 
        rehabilitation and ADL count is nine or ten; 
           (31) PB2:  reduced physical functioning with nursing 
        rehabilitation and ADL count is six to eight; 
           (32) PB1:  reduced physical functioning with no nursing 
        rehabilitation and ADL count is six to eight; 
           (33) PA2:  reduced physical functioning with nursing 
        rehabilitation and ADL count is four or five; and 
           (34) PA1:  reduced physical functioning with no nursing 
        rehabilitation and ADL count is four or five. 
           Subd. 4.  [RESIDENT ASSESSMENT SCHEDULE.] (a) A facility 
        must conduct and electronically submit to the commissioner of 
        health case mix assessments that conform with the assessment 
        schedule defined by the Code of Federal Regulations, title 42, 
        section 483.20, and published by the United States Department of 
        Health and Human Services, Health Care Financing Administration, 
        in the Long Term Care Assessment Instrument User's Manual, 
        version 2.0, October 1995, and subsequent clarifications made in 
        the Long-Term Care Assessment Instrument Questions and Answers, 
        version 2.0, August 1996.  The commissioner of health may 
        substitute successor manuals or question and answer documents 
        published by the United States Department of Health and Human 
        Services, Health Care Financing Administration, to replace or 
        supplement the current version of the manual or document. 
           (b) The assessments used to determine a case mix 
        classification for reimbursement include the following: 
           (1) a new admission assessment must be completed by day 14 
        following admission; 
           (2) an annual assessment must be completed within 366 days 
        of the last comprehensive assessment; 
           (3) a significant change assessment must be completed 
        within 14 days of the identification of a significant change; 
        and 
           (4) the second quarterly assessment following either a new 
        admission assessment, an annual assessment, or a significant 
        change assessment.  Each quarterly assessment must be completed 
        within 92 days of the previous assessment. 
           Subd. 5.  [SHORT STAYS.] (a) A facility must submit to the 
        commissioner of health an initial admission assessment for all 
        residents who stay in the facility less than 14 days. 
           (b) Notwithstanding the admission assessment requirements 
        of paragraph (a), a facility may elect to accept a default rate 
        with a case mix index of 1.0 for all facility residents who stay 
        less than 14 days in lieu of submitting an initial assessment.  
        Facilities may make this election to be effective on the day of 
        implementation of the revised case mix system. 
           (c) After implementation of the revised case mix system, 
        nursing facilities must elect one of the options described in 
        paragraphs (a) and (b) on the annual report to the commissioner 
        of human services filed for each report year ending September 
        30.  The election shall be effective on the following July 1. 
           (d) For residents who are admitted or readmitted and leave 
        the facility on a frequent basis and for whom readmission is 
        expected, the resident may be discharged on an extended leave 
        status.  This status does not require reassessment each time the 
        resident returns to the facility unless a significant change in 
        the resident's status has occurred since the last assessment.  
        The case mix classification for these residents is determined by 
        the facility election made in paragraphs (a) and (b). 
           Subd. 6.  [PENALTIES FOR LATE OR NONSUBMISSION.] A facility 
        that fails to complete or submit an assessment for a RUG-III 
        classification within seven days of the time requirements in 
        subdivisions 4 and 5 is subject to a reduced rate for that 
        resident.  The reduced rate shall be the lowest rate for that 
        facility.  The reduced rate is effective on the day of admission 
        for new admission assessments or on the day that the assessment 
        was due for all other assessments and continues in effect until 
        the first day of the month following the date of submission of 
        the resident's assessment. 
           Subd. 7.  [NOTICE OF RESIDENT REIMBURSEMENT 
        CLASSIFICATION.] (a) A facility must elect between the options 
        in clauses (1) and (2) to provide notice to a resident of the 
        resident's case mix classification. 
           (1) The commissioner of health shall provide to a nursing 
        facility a notice for each resident of the reimbursement 
        classification established under subdivision 1.  The notice must 
        inform the resident of the classification that was assigned, the 
        opportunity to review the documentation supporting the 
        classification, the opportunity to obtain clarification from the 
        commissioner, and the opportunity to request a reconsideration 
        of the classification.  The commissioner must send notice of 
        resident classification by first class mail.  A nursing facility 
        is responsible for the distribution of the notice to each 
        resident, to the person responsible for the payment of the 
        resident's nursing home expenses, or to another person 
        designated by the resident.  This notice must be distributed 
        within three working days after the facility's receipt of the 
        notice from the commissioner of health. 
           (2) A facility may choose to provide a classification 
        notice, as prescribed by the commissioner of health, to a 
        resident upon receipt of the confirmation of the case mix 
        classification calculated by a facility or a corrected case mix 
        classification as indicated on the final validation report from 
        the commissioner.  A nursing facility is responsible for the 
        distribution of the notice to each resident, to the person 
        responsible for the payment of the resident's nursing home 
        expenses, or to another person designated by the resident.  This 
        notice must be distributed within three working days after the 
        facility's receipt of the validation report from the 
        commissioner.  If a facility elects this option, the 
        commissioner of health shall provide the facility with a list of 
        residents and their case mix classifications as determined by 
        the commissioner.  A nursing facility may make this election to 
        be effective on the day of implementation of the revised case 
        mix system. 
           (3) After implementation of the revised case mix system, a 
        nursing facility shall elect a notice of resident reimbursement 
        classification procedure as described in clause (1) or (2) on 
        the annual report to the commissioner of human services filed 
        for each report year ending September 30.  The election will be 
        effective the following July 1. 
           (b) If a facility submits a correction to an assessment 
        conducted under subdivision 3 that results in a change in case 
        mix classification, the facility shall give written notice to 
        the resident or the resident's representative about the item 
        that was corrected and the reason for the correction.  The 
        notice of corrected assessment may be provided at the same time 
        that the resident or resident's representative is provided the 
        resident's corrected notice of classification. 
           Subd. 8.  [REQUEST FOR RECONSIDERATION OF RESIDENT 
        CLASSIFICATIONS.] (a) The resident, or resident's 
        representative, or the nursing facility or boarding care home 
        may request that the commissioner of health reconsider the 
        assigned reimbursement classification.  The request for 
        reconsideration must be submitted in writing to the commissioner 
        within 30 days of the day the resident or the resident's 
        representative receives the resident classification notice.  The 
        request for reconsideration must include the name of the 
        resident, the name and address of the facility in which the 
        resident resides, the reasons for the reconsideration, the 
        requested classification changes, and documentation supporting 
        the requested classification.  The documentation accompanying 
        the reconsideration request is limited to documentation which 
        establishes that the needs of the resident at the time of the 
        assessment justify a classification which is different than the 
        classification established by the commissioner of health. 
           (b) Upon request, the nursing facility must give the 
        resident or the resident's representative a copy of the 
        assessment form and the other documentation that was given to 
        the commissioner of health to support the assessment findings.  
        The nursing facility shall also provide access to and a copy of 
        other information from the resident's record that has been 
        requested by or on behalf of the resident to support a 
        resident's reconsideration request.  A copy of any requested 
        material must be provided within three working days of receipt 
        of a written request for the information.  If a facility fails 
        to provide the material within this time, it is subject to the 
        issuance of a correction order and penalty assessment under 
        sections 144.653 and 144A.10.  Notwithstanding those sections, 
        any correction order issued under this subdivision must require 
        that the nursing facility immediately comply with the request 
        for information and that as of the date of the issuance of the 
        correction order, the facility shall forfeit to the state a $100 
        fine for the first day of noncompliance, and an increase in the 
        $100 fine by $50 increments for each day the noncompliance 
        continues. 
           (c) In addition to the information required under 
        paragraphs (a) and (b), a reconsideration request from a nursing 
        facility must contain the following information:  (i) the date 
        the reimbursement classification notices were received by the 
        facility; (ii) the date the classification notices were 
        distributed to the resident or the resident's representative; 
        and (iii) a copy of a notice sent to the resident or to the 
        resident's representative.  This notice must inform the resident 
        or the resident's representative that a reconsideration of the 
        resident's classification is being requested, the reason for the 
        request, that the resident's rate will change if the request is 
        approved by the commissioner, the extent of the change, that 
        copies of the facility's request and supporting documentation 
        are available for review, and that the resident also has the 
        right to request a reconsideration.  If the facility fails to 
        provide the required information with the reconsideration 
        request, the request must be denied, and the facility may not 
        make further reconsideration requests on that specific 
        reimbursement classification. 
           (d) Reconsideration by the commissioner must be made by 
        individuals not involved in reviewing the assessment, audit, or 
        reconsideration that established the disputed classification.  
        The reconsideration must be based upon the initial assessment 
        and upon the information provided to the commissioner under 
        paragraphs (a) and (b).  If necessary for evaluating the 
        reconsideration request, the commissioner may conduct on-site 
        reviews.  Within 15 working days of receiving the request for 
        reconsideration, the commissioner shall affirm or modify the 
        original resident classification.  The original classification 
        must be modified if the commissioner determines that the 
        assessment resulting in the classification did not accurately 
        reflect the needs or assessment characteristics of the resident 
        at the time of the assessment.  The resident and the nursing 
        facility or boarding care home shall be notified within five 
        working days after the decision is made.  A decision by the 
        commissioner under this subdivision is the final administrative 
        decision of the agency for the party requesting reconsideration. 
           (e) The resident classification established by the 
        commissioner shall be the classification that applies to the 
        resident while the request for reconsideration is pending. 
           (f) The commissioner may request additional documentation 
        regarding a reconsideration necessary to make an accurate 
        reconsideration determination. 
           Subd. 9.  [AUDIT AUTHORITY.] (a) The commissioner shall 
        audit the accuracy of resident assessments performed under 
        section 256B.438 through desk audits, on-site review of 
        residents and their records, and interviews with staff and 
        families.  The commissioner shall reclassify a resident if the 
        commissioner determines that the resident was incorrectly 
        classified. 
           (b) The commissioner is authorized to conduct on-site 
        audits on an unannounced basis. 
           (c) A facility must grant the commissioner access to 
        examine the medical records relating to the resident assessments 
        selected for audit under this subdivision.  The commissioner may 
        also observe and speak to facility staff and residents. 
           (d) The commissioner shall consider documentation under the 
        time frames for coding items on the minimum data set as set out 
        in the Resident Assessment Instrument Manual published by the 
        Health Care Financing Administration. 
           (e) The commissioner shall develop an audit selection 
        procedure that includes the following factors: 
           (1) The commissioner may target facilities that demonstrate 
        an atypical pattern of scoring minimum data set items, 
        nonsubmission of assessments, late submission of assessments, or 
        a previous history of audit changes of greater than 35 percent.  
        The commissioner shall select at least 20 percent of the most 
        current assessments submitted to the state for audit.  Audits of 
        assessments selected in the targeted facilities must focus on 
        the factors leading to the audit.  If the number of targeted 
        assessments selected does not meet the threshold of 20 percent 
        of the facility residents, then a stratified sample of the 
        remainder of assessments shall be drawn to meet the quota.  If 
        the total change exceeds 35 percent, the commissioner may 
        conduct an expanded audit up to 100 percent of the remaining 
        current assessments. 
           (2) Facilities that are not a part of the targeted group 
        shall be placed in a general pool from which facilities will be 
        selected on a random basis for audit.  Every facility shall be 
        audited annually.  If a facility has two successive audits in 
        which the percentage of change is five percent or less and the 
        facility has not been the subject of a targeted audit in the 
        past 36 months, the facility may be audited biannually.  A 
        stratified sample of 15 percent of the most current assessments 
        shall be selected for audit.  If more than 20 percent of the 
        RUGS-III classifications after the audit are changed, the audit 
        shall be expanded to a second 15 percent sample.  If the total 
        change between the first and second samples exceed 35 percent, 
        the commissioner may expand the audit to all of the remaining 
        assessments. 
           (3) If a facility qualifies for an expanded audit, the 
        commissioner may audit the facility again within six months.  If 
        a facility has two expanded audits within a 24-month period, 
        that facility will be audited at least every six months for the 
        next 18 months. 
           (4) The commissioner may conduct special audits if the 
        commissioner determines that circumstances exist that could 
        alter or affect the validity of case mix classifications of 
        residents.  These circumstances include, but are not limited to, 
        the following:  
           (i) frequent changes in the administration or management of 
        the facility; 
           (ii) an unusually high percentage of residents in a 
        specific case mix classification; 
           (iii) a high frequency in the number of reconsideration 
        requests received from a facility; 
           (iv) frequent adjustments of case mix classifications as 
        the result of reconsiderations or audits; 
           (v) a criminal indictment alleging provider fraud; or 
           (vi) other similar factors that relate to a facility's 
        ability to conduct accurate assessments. 
           (f) Within 15 working days of completing the audit process, 
        the commissioner shall mail the written results of the audit to 
        the facility, along with a written notice for each resident 
        affected to be forwarded by the facility.  The notice must 
        contain the resident's classification and a statement informing 
        the resident, the resident's authorized representative, and the 
        facility of their right to review the commissioner's documents 
        supporting the classification and to request a reconsideration 
        of the classification.  This notice must also include the 
        address and telephone number of the area nursing home ombudsman. 
           Subd. 10.  [TRANSITION.] After implementation of this 
        section, reconsiderations requested for classifications made 
        under section 144.0722, subdivision 1, shall be determined under 
        section 144.0722, subdivision 3. 
           Sec. 3.  Minnesota Statutes 2000, section 144A.071, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FINDINGS.] The legislature declares that a 
        moratorium on the licensure and medical assistance certification 
        of new nursing home beds and construction projects that 
        exceed $750,000 $1,000,000 is necessary to control nursing home 
        expenditure growth and enable the state to meet the needs of its 
        elderly by providing high quality services in the most 
        appropriate manner along a continuum of care.  
           Sec. 4.  Minnesota Statutes 2000, 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 also 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. 
           (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. 5.  Minnesota Statutes 2000, section 144A.071, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MORATORIUM.] The commissioner of health, in 
        coordination with the commissioner of human services, shall deny 
        each request for new licensed or certified nursing home or 
        certified boarding care beds except as provided in subdivision 3 
        or 4a, or section 144A.073.  "Certified bed" means a nursing 
        home bed or a boarding care bed certified by the commissioner of 
        health for the purposes of the medical assistance program, under 
        United States Code, title 42, sections 1396 et seq.  
           The commissioner of human services, in coordination with 
        the commissioner of health, shall deny any request to issue a 
        license under section 252.28 and chapter 245A to a nursing home 
        or boarding care home, if that license would result in an 
        increase in the medical assistance reimbursement amount.  
           In addition, the commissioner of health must not approve 
        any construction project whose cost exceeds $750,000 $1,000,000, 
        unless: 
           (a) any construction costs exceeding $750,000 $1,000,000 
        are not added to the facility's appraised value and are not 
        included in the facility's payment rate for reimbursement under 
        the medical assistance program; or 
           (b) the project: 
           (1) has been approved through the process described in 
        section 144A.073; 
           (2) meets an exception in subdivision 3 or 4a; 
           (3) is necessary to correct violations of state or federal 
        law issued by the commissioner of health; 
           (4) is necessary to repair or replace a portion of the 
        facility that was damaged by fire, lightning, groundshifts, or 
        other such hazards, including environmental hazards, provided 
        that the provisions of subdivision 4a, clause (a), are met; 
           (5) as of May 1, 1992, the facility has submitted to the 
        commissioner of health written documentation evidencing that the 
        facility meets the "commenced construction" definition as 
        specified in subdivision 1a, clause (d), or that substantial 
        steps have been taken prior to April 1, 1992, relating to the 
        construction project.  "Substantial steps" require that the 
        facility has made arrangements with outside parties relating to 
        the construction project and include the hiring of an architect 
        or construction firm, submission of preliminary plans to the 
        department of health or documentation from a financial 
        institution that financing arrangements for the construction 
        project have been made; or 
           (6) is being proposed by a licensed nursing facility that 
        is not certified to participate in the medical assistance 
        program and will not result in new licensed or certified beds. 
           Prior to the final plan approval of any construction 
        project, the commissioner of health shall be provided with an 
        itemized cost estimate for the project construction costs.  If a 
        construction project is anticipated to be completed in phases, 
        the total estimated cost of all phases of the project shall be 
        submitted to the commissioner and shall be considered as one 
        construction project.  Once the construction project is 
        completed and prior to the final clearance by the commissioner, 
        the total project construction costs for the construction 
        project shall be submitted to the commissioner.  If the final 
        project construction cost exceeds the dollar threshold in this 
        subdivision, the commissioner of human services shall not 
        recognize any of the project construction costs or the related 
        financing costs in excess of this threshold in establishing the 
        facility's property-related payment rate. 
           The dollar thresholds for construction projects are as 
        follows:  for construction projects other than those authorized 
        in clauses (1) to (6), the dollar threshold 
        is $750,000 $1,000,000.  For projects authorized after July 1, 
        1993, under clause (1), the dollar threshold is the cost 
        estimate submitted with a proposal for an exception under 
        section 144A.073, plus inflation as calculated according to 
        section 256B.431, subdivision 3f, paragraph (a).  For projects 
        authorized under clauses (2) to (4), the dollar threshold is the 
        itemized estimate project construction costs submitted to the 
        commissioner of health at the time of final plan approval, plus 
        inflation as calculated according to section 256B.431, 
        subdivision 3f, paragraph (a). 
           The commissioner of health shall adopt rules to implement 
        this section or to amend the emergency rules for granting 
        exceptions to the moratorium on nursing homes under section 
        144A.073.  
           Sec. 6.  Minnesota Statutes 2000, section 144A.071, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
        best interest of the state to ensure that nursing homes and 
        boarding care homes continue to meet the physical plant 
        licensing and certification requirements by permitting certain 
        construction projects.  Facilities should be maintained in 
        condition to satisfy the physical and emotional needs of 
        residents while allowing the state to maintain control over 
        nursing home expenditure growth. 
           The commissioner of health in coordination with the 
        commissioner of human services, may approve the renovation, 
        replacement, upgrading, or relocation of a nursing home or 
        boarding care home, under the following conditions: 
           (a) to license or certify beds in a new facility 
        constructed to replace a facility or to make repairs in an 
        existing facility that was destroyed or damaged after June 30, 
        1987, by fire, lightning, or other hazard provided:  
           (i) destruction was not caused by the intentional act of or 
        at the direction of a controlling person of the facility; 
           (ii) at the time the facility was destroyed or damaged the 
        controlling persons of the facility maintained insurance 
        coverage for the type of hazard that occurred in an amount that 
        a reasonable person would conclude was adequate; 
           (iii) the net proceeds from an insurance settlement for the 
        damages caused by the hazard are applied to the cost of the new 
        facility or repairs; 
           (iv) the new facility is constructed on the same site as 
        the destroyed facility or on another site subject to the 
        restrictions in section 144A.073, subdivision 5; 
           (v) the number of licensed and certified beds in the new 
        facility does not exceed the number of licensed and certified 
        beds in the destroyed facility; and 
           (vi) the commissioner determines that the replacement beds 
        are needed to prevent an inadequate supply of beds. 
        Project construction costs incurred for repairs authorized under 
        this clause shall not be considered in the dollar threshold 
        amount defined in subdivision 2; 
           (b) to license or certify beds that are moved from one 
        location to another within a nursing home facility, provided the 
        total costs of remodeling performed in conjunction with the 
        relocation of beds does not exceed $750,000 $1,000,000; 
           (c) to license or certify beds in a project recommended for 
        approval under section 144A.073; 
           (d) to license or certify beds that are moved from an 
        existing state nursing home to a different state facility, 
        provided there is no net increase in the number of state nursing 
        home beds; 
           (e) to certify and license as nursing home beds boarding 
        care beds in a certified boarding care facility if the beds meet 
        the standards for nursing home licensure, or in a facility that 
        was granted an exception to the moratorium under section 
        144A.073, and if the cost of any remodeling of the facility does 
        not exceed $750,000 $1,000,000.  If boarding care beds are 
        licensed as nursing home beds, the number of boarding care beds 
        in the facility must not increase beyond the number remaining at 
        the time of the upgrade in licensure.  The provisions contained 
        in section 144A.073 regarding the upgrading of the facilities do 
        not apply to facilities that satisfy these requirements; 
           (f) to license and certify up to 40 beds transferred from 
        an existing facility owned and operated by the Amherst H. Wilder 
        Foundation in the city of St. Paul to a new unit at the same 
        location as the existing facility that will serve persons with 
        Alzheimer's disease and other related disorders.  The transfer 
        of beds may occur gradually or in stages, provided the total 
        number of beds transferred does not exceed 40.  At the time of 
        licensure and certification of a bed or beds in the new unit, 
        the commissioner of health shall delicense and decertify the 
        same number of beds in the existing facility.  As a condition of 
        receiving a license or certification under this clause, the 
        facility must make a written commitment to the commissioner of 
        human services that it will not seek to receive an increase in 
        its property-related payment rate as a result of the transfers 
        allowed under this paragraph; 
           (g) to license and certify nursing home beds to replace 
        currently licensed and certified boarding care beds which may be 
        located either in a remodeled or renovated boarding care or 
        nursing home facility or in a remodeled, renovated, newly 
        constructed, or replacement nursing home facility within the 
        identifiable complex of health care facilities in which the 
        currently licensed boarding care beds are presently located, 
        provided that the number of boarding care beds in the facility 
        or complex are decreased by the number to be licensed as nursing 
        home beds and further provided that, if the total costs of new 
        construction, replacement, remodeling, or renovation exceed ten 
        percent of the appraised value of the facility or $200,000, 
        whichever is less, the facility makes a written commitment to 
        the commissioner of human services that it will not seek to 
        receive an increase in its property-related payment rate by 
        reason of the new construction, replacement, remodeling, or 
        renovation.  The provisions contained in section 144A.073 
        regarding the upgrading of facilities do not apply to facilities 
        that satisfy these requirements; 
           (h) to license as a nursing home and certify as a nursing 
        facility a facility that is licensed as a boarding care facility 
        but not certified under the medical assistance program, but only 
        if the commissioner of human services certifies to the 
        commissioner of health that licensing the facility as a nursing 
        home and certifying the facility as a nursing facility will 
        result in a net annual savings to the state general fund of 
        $200,000 or more; 
           (i) to certify, after September 30, 1992, and prior to July 
        1, 1993, existing nursing home beds in a facility that was 
        licensed and in operation prior to January 1, 1992; 
           (j) to license and certify new nursing home beds to replace 
        beds in a facility acquired by the Minneapolis community 
        development agency as part of redevelopment activities in a city 
        of the first class, provided the new facility is located within 
        three miles of the site of the old facility.  Operating and 
        property costs for the new facility must be determined and 
        allowed under section 256B.431 or 256B.434; 
           (k) to license and certify up to 20 new nursing home beds 
        in a community-operated hospital and attached convalescent and 
        nursing care facility with 40 beds on April 21, 1991, that 
        suspended operation of the hospital in April 1986.  The 
        commissioner of human services shall provide the facility with 
        the same per diem property-related payment rate for each 
        additional licensed and certified bed as it will receive for its 
        existing 40 beds; 
           (l) to license or certify beds in renovation, replacement, 
        or upgrading projects as defined in section 144A.073, 
        subdivision 1, so long as the cumulative total costs of the 
        facility's remodeling projects do not 
        exceed $750,000 $1,000,000; 
           (m) to license and certify beds that are moved from one 
        location to another for the purposes of converting up to five 
        four-bed wards to single or double occupancy rooms in a nursing 
        home that, as of January 1, 1993, was county-owned and had a 
        licensed capacity of 115 beds; 
           (n) to allow a facility that on April 16, 1993, was a 
        106-bed licensed and certified nursing facility located in 
        Minneapolis to layaway all of its licensed and certified nursing 
        home beds.  These beds may be relicensed and recertified in a 
        newly-constructed teaching nursing home facility affiliated with 
        a teaching hospital upon approval by the legislature.  The 
        proposal must be developed in consultation with the interagency 
        committee on long-term care planning.  The beds on layaway 
        status shall have the same status as voluntarily delicensed and 
        decertified beds, except that beds on layaway status remain 
        subject to the surcharge in section 256.9657.  This layaway 
        provision expires July 1, 1998; 
           (o) to allow a project which will be completed in 
        conjunction with an approved moratorium exception project for a 
        nursing home in southern Cass county and which is directly 
        related to that portion of the facility that must be repaired, 
        renovated, or replaced, to correct an emergency plumbing problem 
        for which a state correction order has been issued and which 
        must be corrected by August 31, 1993; 
           (p) to allow a facility that on April 16, 1993, was a 
        368-bed licensed and certified nursing facility located in 
        Minneapolis to layaway, upon 30 days prior written notice to the 
        commissioner, up to 30 of the facility's licensed and certified 
        beds by converting three-bed wards to single or double 
        occupancy.  Beds on layaway status shall have the same status as 
        voluntarily delicensed and decertified beds except that beds on 
        layaway status remain subject to the surcharge in section 
        256.9657, remain subject to the license application and renewal 
        fees under section 144A.07 and shall be subject to a $100 per 
        bed reactivation fee.  In addition, at any time within three 
        years of the effective date of the layaway, the beds on layaway 
        status may be: 
           (1) relicensed and recertified upon relocation and 
        reactivation of some or all of the beds to an existing licensed 
        and certified facility or facilities located in Pine River, 
        Brainerd, or International Falls; provided that the total 
        project construction costs related to the relocation of beds 
        from layaway status for any facility receiving relocated beds 
        may not exceed the dollar threshold provided in subdivision 2 
        unless the construction project has been approved through the 
        moratorium exception process under section 144A.073; 
           (2) relicensed and recertified, upon reactivation of some 
        or all of the beds within the facility which placed the beds in 
        layaway status, if the commissioner has determined a need for 
        the reactivation of the beds on layaway status. 
           The property-related payment rate of a facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (c).  The property-related payment rate for a facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than three years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (q) to license and certify beds in a renovation and 
        remodeling project to convert 12 four-bed wards into 24 two-bed 
        rooms, expand space, and add improvements in a nursing home 
        that, as of January 1, 1994, met the following conditions:  the 
        nursing home was located in Ramsey county; had a licensed 
        capacity of 154 beds; and had been ranked among the top 15 
        applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process; 
           (r) to license and certify up to 117 beds that are 
        relocated from a licensed and certified 138-bed nursing facility 
        located in St. Paul to a hospital with 130 licensed hospital 
        beds located in South St. Paul, provided that the nursing 
        facility and hospital are owned by the same or a related 
        organization and that prior to the date the relocation is 
        completed the hospital ceases operation of its inpatient 
        hospital services at that hospital.  After relocation, the 
        nursing facility's status under section 256B.431, subdivision 
        2j, shall be the same as it was prior to relocation.  The 
        nursing facility's property-related payment rate resulting from 
        the project authorized in this paragraph shall become effective 
        no earlier than April 1, 1996.  For purposes of calculating the 
        incremental change in the facility's rental per diem resulting 
        from this project, the allowable appraised value of the nursing 
        facility portion of the existing health care facility physical 
        plant prior to the renovation and relocation may not exceed 
        $2,490,000; 
           (s) to license and certify two beds in a facility to 
        replace beds that were voluntarily delicensed and decertified on 
        June 28, 1991; 
           (t) to allow 16 licensed and certified beds located on July 
        1, 1994, in a 142-bed nursing home and 21-bed boarding care home 
        facility in Minneapolis, notwithstanding the licensure and 
        certification after July 1, 1995, of the Minneapolis facility as 
        a 147-bed nursing home facility after completion of a 
        construction project approved in 1993 under section 144A.073, to 
        be laid away upon 30 days' prior written notice to the 
        commissioner.  Beds on layaway status shall have the same status 
        as voluntarily delicensed or decertified beds except that they 
        shall remain subject to the surcharge in section 256.9657.  The 
        16 beds on layaway status may be relicensed as nursing home beds 
        and recertified at any time within five years of the effective 
        date of the layaway upon relocation of some or all of the beds 
        to a licensed and certified facility located in Watertown, 
        provided that the total project construction costs related to 
        the relocation of beds from layaway status for the Watertown 
        facility may not exceed the dollar threshold provided in 
        subdivision 2 unless the construction project has been approved 
        through the moratorium exception process under section 144A.073. 
           The property-related payment rate of the facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (c).  The property-related payment rate for the facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than five years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (u) to license and certify beds that are moved within an 
        existing area of a facility or to a newly constructed addition 
        which is built for the purpose of eliminating three- and 
        four-bed rooms and adding space for dining, lounge areas, 
        bathing rooms, and ancillary service areas in a nursing home 
        that, as of January 1, 1995, was located in Fridley and had a 
        licensed capacity of 129 beds; 
           (v) to relocate 36 beds in Crow Wing county and four beds 
        from Hennepin county to a 160-bed facility in Crow Wing county, 
        provided all the affected beds are under common ownership; 
           (w) to license and certify a total replacement project of 
        up to 49 beds located in Norman county that are relocated from a 
        nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 26, paragraphs (a) and (b), 
        shall not apply until the second rate year after the settle-up 
        cost report is filed.  Property-related reimbursement rates 
        shall be determined under section 256B.431, taking into account 
        any federal or state flood-related loans or grants provided to 
        the facility; 
           (x) to license and certify a total replacement project of 
        up to 129 beds located in Polk county that are relocated from a 
        nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 26, paragraphs (a) and (b), 
        shall not apply until the second rate year after the settle-up 
        cost report is filed.  Property-related reimbursement rates 
        shall be determined under section 256B.431, taking into account 
        any federal or state flood-related loans or grants provided to 
        the facility; 
           (y) to license and certify beds in a renovation and 
        remodeling project to convert 13 three-bed wards into 13 two-bed 
        rooms and 13 single-bed rooms, expand space, and add 
        improvements in a nursing home that, as of January 1, 1994, met 
        the following conditions:  the nursing home was located in 
        Ramsey county, was not owned by a hospital corporation, had a 
        licensed capacity of 64 beds, and had been ranked among the top 
        15 applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process; 
           (z) to license and certify up to 150 nursing home beds to 
        replace an existing 285 bed nursing facility located in St. 
        Paul.  The replacement project shall include both the renovation 
        of existing buildings and the construction of new facilities at 
        the existing site.  The reduction in the licensed capacity of 
        the existing facility shall occur during the construction 
        project as beds are taken out of service due to the construction 
        process.  Prior to the start of the construction process, the 
        facility shall provide written information to the commissioner 
        of health describing the process for bed reduction, plans for 
        the relocation of residents, and the estimated construction 
        schedule.  The relocation of residents shall be in accordance 
        with the provisions of law and rule; 
           (aa) to allow the commissioner of human services to license 
        an additional 36 beds to provide residential services for the 
        physically handicapped under Minnesota Rules, parts 9570.2000 to 
        9570.3400, in a 198-bed nursing home located in Red Wing, 
        provided that the total number of licensed and certified beds at 
        the facility does not increase; 
           (bb) to license and certify a new facility in St. Louis 
        county with 44 beds constructed to replace an existing facility 
        in St. Louis county with 31 beds, which has resident rooms on 
        two separate floors and an antiquated elevator that creates 
        safety concerns for residents and prevents nonambulatory 
        residents from residing on the second floor.  The project shall 
        include the elimination of three- and four-bed rooms; 
           (cc) to license and certify four beds in a 16-bed certified 
        boarding care home in Minneapolis to replace beds that were 
        voluntarily delicensed and decertified on or before March 31, 
        1992.  The licensure and certification is conditional upon the 
        facility periodically assessing and adjusting its resident mix 
        and other factors which may contribute to a potential 
        institution for mental disease declaration.  The commissioner of 
        human services shall retain the authority to audit the facility 
        at any time and shall require the facility to comply with any 
        requirements necessary to prevent an institution for mental 
        disease declaration, including delicensure and decertification 
        of beds, if necessary; or 
           (dd) to license and certify 72 beds in an existing facility 
        in Mille Lacs county with 80 beds as part of a renovation 
        project.  The renovation must include construction of an 
        addition to accommodate ten residents with beginning and 
        midstage dementia in a self-contained living unit; creation of 
        three resident households where dining, activities, and support 
        spaces are located near resident living quarters; designation of 
        four beds for rehabilitation in a self-contained area; 
        designation of 30 private rooms; and other improvements.; 
           (ee) to license and certify beds in a facility that has 
        undergone replacement or remodeling as part of a planned closure 
        under section 256B.437; 
           (ff) to license and certify a total replacement project of 
        up to 124 beds located in Wilkin county that are in need of 
        relocation from a nursing home significantly damaged by flood.  
        The operating cost payment rates for the new nursing facility 
        shall be determined based on the interim and settle-up payment 
        provisions of Minnesota Rules, part 9549.0057, and the 
        reimbursement provisions of section 256B.431, except that 
        section 256B.431, subdivision 26, paragraphs (a) and (b), shall 
        not apply until the second rate year after the settle-up cost 
        report is filed.  Property-related reimbursement rates shall be 
        determined under section 256B.431, taking into account any 
        federal or state flood-related loans or grants provided to the 
        facility; 
           (gg) to allow the commissioner of human services to license 
        an additional nine beds to provide residential services for the 
        physically handicapped under Minnesota Rules, parts 9570.2000 to 
        9570.3400, in a 240-bed nursing home located in Duluth, provided 
        that the total number of licensed and certified beds at the 
        facility does not increase; 
           (hh) to license and certify up to 120 new nursing facility 
        beds to replace beds in a facility in Anoka county, which was 
        licensed for 98 beds as of July 1, 2000, provided the new 
        facility is located within four miles of the existing facility 
        and is in Anoka county.  Operating and property rates shall be 
        determined and allowed under section 256B.431 and Minnesota 
        Rules, parts 9549.0010 to 9549.0080, or section 256B.434 or 
        256B.435.  The provisions of section 256B.431, subdivision 26, 
        paragraphs (a) and (b), do not apply until the second rate year 
        following settle-up; or 
           (ii) to transfer up to 98 beds of a 129-licensed bed 
        facility located in Anoka county that, as of March 25, 2001, is 
        in the active process of closing, to a 122-licensed bed 
        nonprofit nursing facility located in the city of Columbia 
        Heights or its affiliate.  The transfer is effective when the 
        receiving facility notifies the commissioner in writing of the 
        number of beds accepted.  The commissioner shall place all 
        transferred beds on layaway status held in the name of the 
        receiving facility.  The layaway adjustment provisions of 
        section 256B.431, subdivision 30, do not apply to this layaway.  
        The receiving facility may only remove the beds from layaway for 
        recertification and relicensure at the receiving facility's 
        current site, or at a newly constructed facility located in 
        Anoka county.  The receiving facility must receive statutory 
        authorization before removing these beds from layaway status. 
           Sec. 7.  Minnesota Statutes 2000, section 144A.073, 
        subdivision 2, as amended by Laws 2001, chapter 161, section 22, 
        is amended to read: 
           Subd. 2.  [REQUEST FOR PROPOSALS.] At the authorization by 
        the legislature of additional medical assistance expenditures 
        for exceptions to the moratorium on nursing homes, the 
        commissioner shall publish in the State Register a request for 
        proposals for nursing home projects to be licensed or certified 
        under section 144A.071, subdivision 4a, clause (c).  The public 
        notice of this funding and the request for proposals must 
        specify how the approval criteria will be prioritized by the 
        commissioner.  The notice must describe the information that 
        must accompany a request and state that proposals must be 
        submitted to the commissioner within 90 days of the date of 
        publication.  The notice must include the amount of the 
        legislative appropriation available for the additional costs to 
        the medical assistance program of projects approved under this 
        section.  If no money is appropriated for a year, the 
        commissioner shall publish a notice to that effect, and no 
        proposals shall be requested.  If money is appropriated, the 
        commissioner shall initiate the application and review process 
        described in this section at least twice each biennium and up to 
        four times each biennium, according to dates established by 
        rule.  Authorized funds shall be allocated proportionally to the 
        number of processes.  Funds not encumbered by an earlier process 
        within a biennium shall carry forward to subsequent iterations 
        of the process.  Authorization for expenditures does not carry 
        forward into the following biennium.  To be considered for 
        approval, a proposal must include the following information: 
           (1) whether the request is for renovation, replacement, 
        upgrading, conversion, or relocation; 
           (2) a description of the problem the project is designed to 
        address; 
           (3) a description of the proposed project; 
           (4) an analysis of projected costs of the nursing facility 
        proposal, which are not required to exceed the cost threshold 
        referred to in section 144A.071, subdivision 1, to be considered 
        under this section, including initial construction and 
        remodeling costs; site preparation costs; technology costs; 
        financing costs, including the current estimated long-term 
        financing costs of the proposal, which consists of estimates of 
        the amount and sources of money, reserves if required under the 
        proposed funding mechanism, annual payments schedule, interest 
        rates, length of term, closing costs and fees, insurance costs, 
        and any completed marketing study or underwriting review; and 
        estimated operating costs during the first two years after 
        completion of the project; 
           (5) for proposals involving replacement of all or part of a 
        facility, the proposed location of the replacement facility and 
        an estimate of the cost of addressing the problem through 
        renovation; 
           (6) for proposals involving renovation, an estimate of the 
        cost of addressing the problem through replacement; 
           (7) the proposed timetable for commencing construction and 
        completing the project; 
           (8) a statement of any licensure or certification issues, 
        such as certification survey deficiencies; 
           (9) the proposed relocation plan for current residents if 
        beds are to be closed so that the department of human services 
        can estimate the total costs of a proposal; and 
           (10) other information required by permanent rule of the 
        commissioner of health in accordance with subdivisions 4 and 8. 
           Sec. 8.  Minnesota Statutes 2000, section 144A.073, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CRITERIA FOR REVIEW.] The following criteria 
        shall be used in a consistent manner to compare, evaluate, and 
        rank all proposals submitted.  Except for the criteria specified 
        in clause (3), the application of criteria listed under this 
        subdivision shall not reflect any distinction based on the 
        geographic location of the proposed project: 
           (1) the extent to which the proposal furthers state 
        long-term care goals, including the goals stated in section 
        144A.31, and including the goal of enhancing the availability 
        and use of alternative care services and the goal of reducing 
        the number of long-term care resident rooms with more than two 
        beds; 
           (2) the proposal's long-term effects on state costs 
        including the cost estimate of the project according to section 
        144A.071, subdivision 5a; 
           (3) the extent to which the proposal promotes equitable 
        access to long-term care services in nursing homes through 
        redistribution of the nursing home bed supply, as measured by 
        the number of beds relative to the population 85 or older, 
        projected to the year 2000 by the state demographer, and 
        according to items (i) to (iv): 
           (i) reduce beds in counties where the supply is high, 
        relative to the statewide mean, and increase beds in counties 
        where the supply is low, relative to the statewide mean; 
           (ii) adjust the bed supply so as to create the greatest 
        benefits in improving the distribution of beds; 
           (iii) adjust the existing bed supply in counties so that 
        the bed supply in a county moves toward the statewide mean; and 
           (iv) adjust the existing bed supply so that the 
        distribution of beds as projected for the year 2020 would be 
        consistent with projected need, based on the methodology 
        outlined in the interagency long-term care committee's 1993 
        nursing home bed distribution study; 
           (4) the extent to which the project improves conditions 
        that affect the health or safety of residents, such as narrow 
        corridors, narrow door frames, unenclosed fire exits, and wood 
        frame construction, and similar provisions contained in fire and 
        life safety codes and licensure and certification rules; 
           (5) the extent to which the project improves conditions 
        that affect the comfort or quality of life of residents in a 
        facility or the ability of the facility to provide efficient 
        care, such as a relatively high number of residents in a room; 
        inadequate lighting or ventilation; poor access to bathing or 
        toilet facilities; a lack of available ancillary space for 
        dining rooms, day rooms, or rooms used for other activities; 
        problems relating to heating, cooling, or energy efficiency; 
        inefficient location of nursing stations; narrow corridors; or 
        other provisions contained in the licensure and certification 
        rules; 
           (6) the extent to which the applicant demonstrates the 
        delivery of quality care, as defined in state and federal 
        statutes and rules, to residents as evidenced by the two most 
        recent state agency certification surveys and the applicants' 
        response to those surveys; 
           (7) the extent to which the project removes the need for 
        waivers or variances previously granted by either the licensing 
        agency, certifying agency, fire marshal, or local government 
        entity; and 
           (8) the extent to which the project increases the number of 
        private or single bed rooms; and 
           (9) other factors that may be developed in permanent rule 
        by the commissioner of health that evaluate and assess how the 
        proposed project will further promote or protect the health, 
        safety, comfort, treatment, or well-being of the facility's 
        residents. 
           Sec. 9.  [144A.161] [NURSING FACILITY RESIDENT RELOCATION.] 
           Subdivision 1.  [DEFINITIONS.] The definitions in this 
        subdivision apply to subdivisions 2 to 10. 
           (a) "Closure" means the cessation of operations of a 
        facility and the delicensure and decertification of all beds 
        within the facility. 
           (b) "Curtailment," "reduction," or "change" refers to any 
        change in operations which would result in or encourage the 
        relocation of residents. 
           (c) "Facility" means a nursing home licensed pursuant to 
        this chapter, or a certified boarding care home licensed 
        pursuant to sections 144.50 to 144.56. 
           (d) "Licensee" means the owner of the facility or the 
        owner's designee or the commissioner of health for a facility in 
        receivership.  
           (e) "Local agency" means the county or multicounty social 
        service agency authorized under sections 393.01 and 393.07, as 
        the agency responsible for providing social services for the 
        county in which the nursing home is located. 
           (f) "Plan" means a process developed under subdivision 3, 
        paragraph (b), for the closure, curtailment, reduction, or 
        change in operations in a facility and the subsequent relocation 
        of residents. 
           (g) "Relocation" means the discharge of a resident and 
        movement of the resident to another facility or living 
        arrangement as a result of the closing, curtailment, reduction, 
        or change in operations of a nursing home or boarding care home. 
           Subd. 2.  [INITIAL NOTICE FROM LICENSEE.] (a) A licensee 
        shall notify the following parties in writing when there is an 
        intent to close or curtail, reduce, or change operations which 
        would result in or encourage the relocation of residents:  
           (1) the commissioner of health; 
           (2) the commissioner of human services; 
           (3) the local agency; 
           (4) the office of the ombudsman for older Minnesotans; and 
           (5) the office of the ombudsman for mental health and 
        mental retardation.  
           (b) The written notice shall include the names, telephone 
        numbers, facsimile numbers, and e-mail addresses of the persons 
        in the facility responsible for coordinating the licensee's 
        efforts in the planning process, and the number of residents 
        potentially affected by the closure or curtailment, reduction, 
        or change in operations. 
           Subd. 3.  [PLANNING PROCESS.] (a) The local agency shall, 
        within five working days of receiving initial notice of the 
        licensee's intent to close or curtail, reduce, or change 
        operations, provide the licensee and all parties identified in 
        subdivision 2, paragraph (a), with the names, telephone numbers, 
        facsimile numbers, and e-mail addresses of those persons 
        responsible for coordinating local agency efforts in the 
        planning process. 
           (b) Within ten working days of receipt of the notice under 
        paragraph (a), the local agency and licensee shall meet to 
        develop the relocation plan.  The local agency shall inform the 
        departments of health and human services, the office of the 
        ombudsman for older Minnesotans, and the office of the ombudsman 
        for mental health and mental retardation of the date, time, and 
        location of the meeting so that their representatives may 
        attend.  The relocation plan must be completed within 45 days of 
        receipt of the initial notice.  However, the plan may be 
        finalized on an earlier schedule agreed to by all parties.  To 
        the extent practicable, consistent with requirements to protect 
        the safety and health of residents, the commissioner may 
        authorize the planning process under this subdivision to occur 
        concurrent with the 60-day notice required under subdivision 
        5a.  The plan shall: 
           (1) identify the expected date of closure, curtailment, 
        reduction, or change in operations; 
           (2) outline the process for public notification of the 
        closure, curtailment, reduction, or change in operations; 
           (3) identify efforts that will be made to include other 
        stakeholders in the relocation process; 
           (4) outline the process to ensure 60-day advance written 
        notice to residents, family members, and designated 
        representatives; 
           (5) present an aggregate description of the resident 
        population remaining to be relocated and the population's needs; 
           (6) outline the individual resident assessment process to 
        be utilized; 
           (7) identify an inventory of available relocation options, 
        including home and community-based services; 
           (8) identify a timeline for submission of the list 
        identified in subdivision 5c, paragraph (b); and 
           (9) identify a schedule for the timely completion of each 
        element of the plan.  
           (c) All parties to the plan shall refrain from any public 
        notification of the intent to close or curtail, reduce, or 
        change operations until a relocation plan has been established.  
        If the planning process occurs concurrently with the 60-day 
        notice period, this requirement does not apply once 60-day 
        notice is given. 
           Subd. 4.  [RESPONSIBILITIES OF LICENSEE FOR RESIDENT 
        RELOCATIONS.] The licensee shall provide for the safe, orderly, 
        and appropriate relocation of residents.  The licensee and 
        facility staff shall cooperate with representatives from the 
        local agency, the department of health, the department of human 
        services, the office of ombudsman for older Minnesotans, and 
        ombudsman for mental health and mental retardation in planning 
        for and implementing the relocation of residents. 
           Subd. 5.  [LICENSEE RESPONSIBILITIES PRIOR TO 
        RELOCATION.] (a) The licensee shall establish an 
        interdisciplinary team responsible for coordinating and 
        implementing the plan.  The interdisciplinary team shall include 
        representatives from the local agency, the office of ombudsman 
        for older Minnesotans, facility staff that provide direct care 
        services to the residents, and facility administration. 
           (b) The licensee shall provide a list to the local agency 
        that includes the following information on each resident to be 
        relocated: 
           (1) name; 
           (2) date of birth; 
           (3) social security number; 
           (4) medical assistance identification number; 
           (5) all diagnoses; and 
           (6) the name and contact information for the resident's 
        family or other designated representative. 
           (c) The licensee shall consult with the local agency on the 
        availability and development of available resources and on the 
        resident relocation process. 
           Subd. 5a.  [LICENSEE RESPONSIBILITIES TO PROVIDE 
        NOTICE.] At least 60 days before the proposed date of closing, 
        curtailment, reduction, or change in operations as agreed to in 
        the plan, the licensee shall send a written notice of closure or 
        curtailment, reduction, or change in operations to each resident 
        being relocated, the resident's family member or designated 
        representative, and the resident's attending physician.  The 
        notice must include the following: 
           (1) the date of the proposed closure, curtailment, 
        reduction, or change in operations; 
           (2) the name, address, telephone number, facsimile number, 
        and e-mail address of the individual or individuals in the 
        facility responsible for providing assistance and information; 
           (3) notification of upcoming meetings for residents, 
        families and designated representatives, and resident and family 
        councils to discuss the relocation of residents; 
           (4) the name, address, and telephone number of the local 
        agency contact person; and 
           (5) the name, address, and telephone number of the office 
        of ombudsman for older Minnesotans and the ombudsman for mental 
        health and mental retardation. 
           The notice must comply with all applicable state and 
        federal requirements for notice of transfer or discharge of 
        nursing home residents. 
           Subd. 5b.  [LICENSEE RESPONSIBILITY REGARDING MEDICAL 
        INFORMATION.] The licensee shall request the attending physician 
        provide or arrange for the release of medical information needed 
        to update resident medical records and prepare all required 
        forms and discharge summaries. 
           Subd. 5c.  [LICENSEE RESPONSIBILITY REGARDING PLACEMENT 
        INFORMATION.] (a) The licensee shall provide sufficient 
        preparation to residents to ensure safe, orderly, and 
        appropriate discharge and relocation.  The licensee shall assist 
        residents in finding placements that respond to personal 
        preferences, such as desired geographic location.  
           (b) The licensee shall prepare a resource list with several 
        relocation options for each resident.  The list must contain the 
        following information for each relocation option, when 
        applicable: 
           (1) the name, address, and telephone and facsimile numbers 
        of each facility with appropriate, available beds or services; 
           (2) the certification level of the available beds; 
           (3) the types of services available; and 
           (4) the name, address, and telephone and facsimile numbers 
        of appropriate available home and community-based placements, 
        services, and settings or other options for individuals with 
        special needs.  
        The list shall be made available to residents and their families 
        or designated representatives, and upon request to the office of 
        ombudsman for older Minnesotans, the ombudsman for mental health 
        and mental retardation, and the local agency. 
           (c) The Senior LinkAge line may make available via a Web 
        site the name, address, and telephone and facsimile numbers of 
        each facility with available beds, the certification level of 
        the available beds, the types of services available, and the 
        number of beds that are available as updated daily by the listed 
        facilities.  The licensee must provide residents, their families 
        or designated representatives, the office of the ombudsman for 
        older Minnesotans, the office of the ombudsman for mental health 
        and mental retardation, and the local agency with the toll-free 
        number and Web site address for the Senior LinkAge line.  
           Subd. 5d.  [LICENSEE RESPONSIBILITY TO MEET WITH RESIDENTS 
        AND FAMILIES.] Following the establishment of the plan, the 
        licensee shall conduct meetings with residents, families and 
        designated representatives, and resident and family councils to 
        notify them of the process for resident relocation.  
        Representatives from the local county social services agency, 
        the office of ombudsman for older Minnesotans, the ombudsman for 
        mental health and mental retardation, the commissioner of 
        health, and the commissioner of human services shall receive 
        advance notice of the meetings.  
           Subd. 5e.  [LICENSEE RESPONSIBILITY FOR SITE VISITS.] The 
        licensee shall assist residents desiring to make site visits to 
        facilities with available beds or other appropriate living 
        options to which the resident may relocate, unless it is 
        medically inadvisable, as documented by the attending physician 
        in the resident's care record.  The licensee shall provide or 
        arrange transportation for site visits to facilities or other 
        living options within a 50-mile radius to which the resident may 
        relocate, or within a larger radius if no suitable options are 
        available within 50 miles.  The licensee shall provide available 
        written materials to residents on a potential new facility or 
        living option. 
           Subd. 5f.  [LICENSEE RESPONSIBILITY FOR PERSONAL PROPERTY, 
        PERSONAL FUNDS, AND TELEPHONE SERVICE.] (a) The licensee shall 
        complete an inventory of resident personal possessions and 
        provide a copy of the final inventory to the resident and the 
        resident's designated representative prior to relocation.  The 
        licensee shall be responsible for the transfer of the resident's 
        possessions for all relocations within a 50-mile radius of the 
        facility, or within a larger radius if no suitable options are 
        available within 50 miles.  The licensee shall complete the 
        transfer of resident possessions in a timely manner, but no 
        later than the date of the actual physical relocation of the 
        resident. 
           (b) The licensee shall complete a final accounting of 
        personal funds held in trust by the facility and provide a copy 
        of this accounting to the resident and the resident's family or 
        the resident's designated representative.  The licensee shall be 
        responsible for the transfer of all personal funds held in trust 
        by the facility.  The licensee shall complete the transfer of 
        all personal funds in a timely manner. 
           (c) The licensee shall assist residents with the transfer 
        and reconnection of service for telephones or, for residents who 
        are deaf or blind, other personal communication devices or 
        services.  The licensee shall pay the costs associated with 
        reestablishing service for telephones or other personal 
        communication devices or services, such as connection fees or 
        other one-time charges.  The transfer or reconnection of 
        personal communication devices or services shall be completed in 
        a timely manner. 
           Subd. 5g.  [LICENSEE RESPONSIBILITIES FOR FINAL NOTICE AND 
        RECORDS TRANSFER.] (a) The licensee shall provide the resident, 
        the resident's family or designated representative, and the 
        resident's attending physician final written notice prior to the 
        relocation of the resident.  The notice must: 
           (1) be provided seven days prior to the actual relocation, 
        unless the resident agrees to waive the right to advance notice; 
        and 
           (2) identify the date of the anticipated relocation and the 
        destination to which the resident is being relocated. 
           (b) The licensee shall provide the receiving facility or 
        other health, housing, or care entity with complete and accurate 
        resident records including information on family members, 
        designated representatives, guardians, social service 
        caseworkers, or other contact information.  These records must 
        also include all information necessary to provide appropriate 
        medical care and social services.  This includes, but is not 
        limited to, information on preadmission screening, Level I and 
        Level II screening, minimum data set (MDS), and all other 
        assessments, resident diagnoses, social, behavioral, and 
        medication information. 
           (c) For residents with special care needs, the licensee 
        shall consult with the receiving facility or other placement 
        entity and provide staff training or other preparation as needed 
        to assist in providing for the special needs.  
           Subd. 6.  [RESPONSIBILITIES OF THE LICENSEE DURING 
        RELOCATION.] (a) The licensee shall make arrangements or provide 
        for the transportation of residents to the new facility or 
        placement within a 50-mile radius, or within a larger radius if 
        no suitable options are available within 50 miles.  The licensee 
        shall provide a staff person to accompany the resident during 
        transportation, upon request of the resident, the resident's 
        family, or designated representative.  The discharge and 
        relocation of residents must comply with all applicable state 
        and federal requirements and must be conducted in a safe, 
        orderly, and appropriate manner.  The licensee must ensure that 
        there is no disruption in providing meals, medications, or 
        treatments of a resident during the relocation process.  
           (b) Beginning the week following development of the initial 
        relocation plan, the licensee shall submit biweekly status 
        reports to the commissioners of health and human services or 
        their designees and to the local agency.  The initial status 
        report must identify: 
           (1) the relocation plan developed; 
           (2) the interdisciplinary team members; and 
           (3) the number of residents to be relocated. 
           (c) Subsequent status reports must identify: 
           (1) any modifications to the plan; 
           (2) any change of interdisciplinary team members; 
           (3) the number of residents relocated; 
           (4) the destination to which residents have been relocated; 
           (5) the number of residents remaining to be relocated; and 
           (6) issues or problems encountered during the process and 
        resolution of these issues. 
           Subd. 7.  [RESPONSIBILITIES OF THE LICENSEE FOLLOWING 
        RELOCATION.] The licensee shall retain or make arrangements for 
        the retention of all remaining resident records for the period 
        required by law.  The licensee shall provide the department of 
        health access to these records.  The licensee shall notify the 
        department of health of the location of any resident records 
        that have not been transferred to the new facility or other 
        health care entity. 
           Subd. 8.  [RESPONSIBILITIES OF THE LOCAL AGENCY.] (a) The 
        local agency shall participate in the meeting as outlined in 
        subdivision 3, paragraph (b), to develop a relocation plan. 
           (b) The local agency shall designate a representative to 
        the interdisciplinary team established by the licensee 
        responsible for coordinating the relocation efforts. 
           (c) The local agency shall serve as a resource in the 
        relocation process. 
           (d) Concurrent with the notice sent to residents from the 
        licensee as provided in subdivision 5a, the local agency shall 
        provide written notice to residents, family, or designated 
        representatives describing: 
           (1) the county's role in the relocation process and in the 
        follow-up to relocations; 
           (2) a local agency contact name, address, and telephone 
        number; and 
           (3) the name, address, and telephone number of the office 
        of ombudsman for older Minnesotans and the ombudsman for mental 
        health and mental retardation. 
           (e) The local agency designee shall meet with appropriate 
        facility staff to coordinate any assistance in the relocation 
        process.  This coordination shall include participating in group 
        meetings with residents, families, and designated 
        representatives to explain the relocation process. 
           (f) The local agency shall monitor compliance with all 
        components of the plan.  If the licensee is not in compliance, 
        the local agency shall notify the commissioners of the 
        department of health and the department of human services. 
           (g) Except as requested by the resident, family member, or 
        designated representative and within the parameters of the 
        Vulnerable Adults Act, the local agency may halt a relocation 
        that it deems inappropriate or dangerous to the health or safety 
        of a resident.  The local agency shall pursue remedies to 
        protect the resident during the relocation process, including, 
        but not limited to, assisting the resident with filing an appeal 
        of transfer or discharge, notification of all appropriate 
        licensing boards and agencies, and other remedies available to 
        the county under section 626.557, subdivision 10. 
           (h) A member of the local agency staff shall visit 
        residents relocated within 100 miles of the county within 30 
        days after the relocation.  Local agency staff shall interview 
        the resident and family or designated representative, observe 
        the resident on site, and review and discuss pertinent medical 
        or social records with appropriate facility staff to: 
           (1) assess the adjustment of the resident to the new 
        placement; 
           (2) recommend services or methods to meet any special needs 
        of the resident; and 
           (3) identify residents at risk. 
           (i) The local agency may conduct subsequent follow-up 
        visits in cases where the adjustment of the resident to the new 
        placement is in question. 
           (j) Within 60 days of the completion of the follow-up 
        visits, the local agency shall submit a written summary of the 
        follow-up work to the department of health and the department of 
        human services in a manner approved by the commissioners. 
           (k) The local agency shall submit to the department of 
        health and the department of human services a report of any 
        issues that may require further review or monitoring. 
           (l) The local agency shall be responsible for the safe and 
        orderly relocation of residents in cases where an emergent need 
        arises or when the licensee has abrogated its responsibilities 
        under the plan. 
           Subd. 9.  [PENALTIES.] Upon the recommendation of the 
        commissioner of health, the commissioner of human services may 
        eliminate a closure rate adjustment under subdivision 10 for 
        violations of this section. 
           Subd. 10.  [FACILITY CLOSURE RATE ADJUSTMENT.] Upon the 
        request of a closing facility, the commissioner of human 
        services must allow the facility a closure rate adjustment equal 
        to a 50 percent payment rate increase to reimburse relocation 
        costs or other costs related to facility closure.  This rate 
        increase is effective on the date the facility's occupancy 
        decreases to 90 percent of capacity days after the written 
        notice of closure is distributed under subdivision 5 and shall 
        remain in effect for a period of up to 60 days.  The 
        commissioner shall delay the implementation of rate adjustments 
        under section 256B.437, subdivisions 3, paragraph (b), and 6, 
        paragraph (a), to offset the cost of this rate adjustment. 
           Subd. 11.  [COUNTY COSTS.] The commissioner of human 
        services shall allocate up to $450 in total state and federal 
        funds per nursing facility bed that is closing, within the 
        limits of the appropriation specified for this purpose, to be 
        used for relocation costs incurred by counties for resident 
        relocation under this section or planned closures under section 
        256B.437.  To be eligible for this allocation, a county in which 
        a nursing facility closes must provide to the commissioner a 
        detailed statement in a form provided by the commissioner of 
        additional costs, not to exceed $450 in total state and federal 
        funds per bed closed, that are directly incurred related to the 
        county's role in the relocation process. 
           Sec. 10.  [144A.162] [TRANSFER OF RESIDENTS WITHIN 
        FACILITIES.] 
           The licensee shall provide for the safe, orderly, and 
        appropriate transfer of residents within the facility.  In 
        situations where there is a curtailment, reduction, capital 
        improvement, or change in operations within a facility, the 
        licensee shall minimize the number of intra-facility transfers 
        needed to complete the project or change in operations, consider 
        individual resident needs and preferences, and provide 
        reasonable accommodation for individual resident requests 
        regarding their room transfer.  The licensee shall provide 
        notice to the office of ombudsman for older Minnesotans and, 
        when appropriate, the office of ombudsman for mental health and 
        mental retardation, in advance of any notice to residents and 
        family, when all of the following circumstances apply: 
           (1) the transfers of residents within the facility are 
        being proposed due to curtailment, reduction, capital 
        improvements or change in operations; 
           (2) the transfers of residents within the facility are not 
        temporary moves to accommodate physical plan upgrades or 
        renovation; and 
           (3) the transfers involve multiple residents being moved 
        simultaneously. 
           Sec. 11.  [144A.1888] [REUSE OF FACILITIES.] 
           Notwithstanding any local ordinance related to development, 
        planning, or zoning to the contrary, the conversion or reuse of 
        a nursing home that closes or that curtails, reduces, or changes 
        operations shall be considered a conforming use permitted under 
        local law, provided that the facility is converted to another 
        long-term care service approved by a regional planning group 
        under section 256B.437 that serves a smaller number of persons 
        than the number of persons served before the closure or 
        curtailment, reduction, or change in operations. 
           Sec. 12.  [144A.36] [TRANSITION PLANNING GRANTS.] 
           Subdivision 1.  [DEFINITIONS.] "Eligible nursing home" 
        means any nursing home licensed under sections 144A.01 to 
        144A.16 and 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. 
           Subd. 2.  [GRANTS AUTHORIZED.] (a) The commissioner shall 
        establish a program of transition planning grants to assist 
        eligible nursing homes in implementing the provisions in 
        paragraphs (b) and (c).  
           (b) Transition planning grants may be used by nursing homes 
        to develop strategic plans which identify the appropriate 
        institutional and noninstitutional settings necessary to meet 
        the older adult service needs of the community.  
           (c) At a minimum, a strategic plan must consist of: 
           (1) a needs assessment to determine what older adult 
        services are needed and desired by the community; 
           (2) an assessment of the appropriate settings in which to 
        provide needed older adult services; 
           (3) an assessment identifying currently available services 
        and their settings in the community; and 
           (4) a transition plan to achieve the needed outcome 
        identified by the assessment. 
           Subd. 3.  [ALLOCATION OF GRANTS.] (a) Eligible nursing 
        homes must apply to the commissioner no later than September 1 
        of each fiscal year for grants awarded in that fiscal year.  A 
        grant shall be awarded upon signing of a grant contract. 
           (b) The commissioner must make a final decision on the 
        funding of each application within 60 days of the deadline for 
        receiving applications. 
           Subd. 4.  [EVALUATION.] The commissioner shall evaluate the 
        overall effectiveness of the grant program.  The commissioner 
        may collect, from the nursing homes receiving grants, the 
        information necessary to evaluate the grant program.  
        Information related to the financial condition of individual 
        nursing homes shall be classified as nonpublic data. 
           Sec. 13.  [144A.37] [ALTERNATIVE NURSING HOME SURVEY 
        PROCESS.] 
           Subdivision 1.  [ALTERNATIVE NURSING HOME SURVEY 
        SCHEDULES.] (a) The commissioner of health shall implement 
        alternative procedures for the nursing home survey process as 
        authorized under this section.  
           (b) These alternative survey process procedures seek to:  
        (1) use department resources more effectively and efficiently to 
        target problem areas; (2) use other existing or new mechanisms 
        to provide objective assessments of quality and to measure 
        quality improvement; (3) provide for frequent collaborative 
        interaction of facility staff and surveyors rather than a 
        punitive approach; and (4) reward a nursing home that has 
        performed very well by extending intervals between full surveys. 
           (c) The commissioner shall pursue changes in federal law 
        necessary to accomplish this process and shall apply for any 
        necessary federal waivers or approval.  If a federal waiver is 
        approved, the commissioner shall promptly submit, to the house 
        and senate committees with jurisdiction over health and human 
        services policy and finance, fiscal estimates for implementing 
        the alternative survey process waiver.  The commissioner shall 
        also pursue any necessary federal law changes during the 107th 
        Congress. 
           (d) The alternative nursing home survey schedule and 
        related educational activities shall not be implemented until 
        funding is appropriated by the legislature. 
           Subd. 2.  [SURVEY INTERVALS.] The commissioner of health 
        must extend the time period between standard surveys up to 30 
        months based on the criteria established in subdivision 4.  In 
        using the alternative survey schedule, the requirement for the 
        statewide average to not exceed 12 months does not apply. 
           Subd. 3.  [COMPLIANCE HISTORY.] The commissioner shall 
        develop a process for identifying the survey cycles for skilled 
        nursing facilities based upon the compliance history of the 
        facility.  This process can use a range of months for survey 
        intervals.  At a minimum, the process must be based on 
        information from the last two survey cycles and shall take into 
        consideration any deficiencies issued as the result of a survey 
        or a complaint investigation during the interval.  A skilled 
        nursing facility with a finding of substandard quality of care 
        or a finding of immediate jeopardy is not entitled to a survey 
        interval greater than 12 months.  The commissioner shall alter 
        the survey cycle for a specific skilled nursing facility based 
        on findings identified through the completion of a survey, a 
        monitoring visit, or a complaint investigation.  The 
        commissioner must also take into consideration information other 
        than the facility's compliance history. 
           Subd. 4.  [CRITERIA FOR SURVEY INTERVAL 
        CLASSIFICATION.] (a) The commissioner shall provide public 
        notice of the classification process and shall identify the 
        selected survey cycles for each skilled nursing facility.  The 
        classification system must be based on an analysis of the 
        findings made during the past two standard survey intervals, but 
        it only takes one survey or complaint finding to modify the 
        interval. 
           (b) The commissioner shall also take into consideration 
        information obtained from residents and family members in each 
        skilled nursing facility and from other sources such as 
        employees and ombudsmen in determining the appropriate survey 
        intervals for facilities. 
           Subd. 5.  [REQUIRED MONITORING.] (a) The commissioner shall 
        conduct at least one monitoring visit on an annual basis for 
        every skilled nursing facility which has been selected for a 
        survey cycle greater than 12 months.  The commissioner shall 
        develop protocols for the monitoring visits which shall be less 
        extensive than the requirements for a standard survey.  The 
        commissioner shall use the criteria in paragraph (b) to 
        determine whether additional monitoring visits to a facility 
        will be required.  
           (b) The criteria shall include, but not be limited to, the 
        following: 
           (1) changes in ownership, administration of the facility, 
        or direction of the facility's nursing service; 
           (2) changes in the facility's quality indicators which 
        might evidence a decline in the facility's quality of care; 
           (3) reductions in staffing or an increase in the 
        utilization of temporary nursing personnel; and 
           (4) complaint information or other information that 
        identifies potential concerns for the quality of the care and 
        services provided in the skilled nursing facility. 
           Subd. 6.  [SURVEY REQUIREMENTS FOR FACILITIES NOT APPROVED 
        FOR EXTENDED SURVEY INTERVALS.] The commissioner shall establish 
        a process for surveying and monitoring of facilities which 
        require a survey interval of less than 15 months.  This 
        information shall identify the steps that the commissioner must 
        take to monitor the facility in addition to the standard survey. 
           Subd. 7.  [IMPACT ON SURVEY AGENCY'S BUDGET.] The 
        implementation of an alternative survey process for the state 
        must not result in any reduction of funding that would have been 
        provided to the state survey agency for survey and enforcement 
        activity based upon the completion of full standard surveys for 
        each skilled nursing facility in the state. 
           Subd. 8.  [EDUCATIONAL ACTIVITIES.] The commissioner shall 
        expand the state survey agency's ability to conduct training and 
        educational efforts for skilled nursing facilities, residents 
        and family members, residents and family councils, long-term 
        care ombudsman programs, and the general public. 
           Subd. 9.  [EVALUATION.] The commissioner shall develop a 
        process for the evaluation of the effectiveness of an 
        alternative survey process conducted under this section. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  [144A.38] [INNOVATIONS IN QUALITY DEMONSTRATION 
        GRANTS.] 
           Subdivision 1.  [PROGRAM ESTABLISHED.] The commissioner of 
        health and the commissioner of human services shall establish a 
        long-term care grant program that demonstrates best practices 
        and innovation for long-term care service delivery and housing.  
        The grants must fund demonstrations that create new means and 
        models for serving the elderly or demonstrate creativity in 
        service provision through the scope of their program or service. 
           Subd. 2.  [ELIGIBILITY.] Grants may only be made to those 
        who provide direct service or housing to the elderly within the 
        state.  Grants may only be made for projects that show 
        innovations and measurable improvement in resident care, quality 
        of life, use of technology, or customer satisfaction. 
           Subd. 3.  [AWARDING OF GRANTS.] (a) Applications for grants 
        must be made to the commissioners on forms prescribed by the 
        commissioners. 
           (b) The commissioners shall review applications and award 
        grants based on the following criteria: 
           (1) improvement in direct care to residents; 
           (2) increase in efficiency through the use of technology; 
           (3) increase in quality of care through the use of 
        technology; 
           (4) increase in the access and delivery of service; 
           (5) enhancement of nursing staff training; 
           (6) the effectiveness of the project as a demonstration; 
        and 
           (7) the immediate transferability of the project to scale. 
           (c) In reviewing applications and awarding grants, the 
        commissioners shall consult with long-term care providers, 
        consumers of long-term care, long-term care researchers, and 
        staff of other state agencies. 
           (d) Grants for eligible projects may not exceed $100,000. 
           Sec. 15.  Minnesota Statutes 2000, section 256B.431, 
        subdivision 2e, is amended to read: 
           Subd. 2e.  [CONTRACTS FOR SERVICES FOR VENTILATOR-DEPENDENT 
        PERSONS.] The commissioner may contract 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 assessed at case mix classification 
        K; 
           (3) the person has been hospitalized for at least six 
        months and no longer requires inpatient acute care hospital 
        services; and 
           (4) (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.  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 a Minnesota nursing the facility, as 
        initially established by the commissioner for the rate year for 
        case mix classification K.  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.  
        The negotiated adjustment shall not affect the payment rate 
        charged to private paying residents under the provisions of 
        section 256B.48, subdivision 1. 
           Sec. 16.  Minnesota Statutes 2000, section 256B.431, 
        subdivision 17, is amended to read: 
           Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
        (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
        for rate periods beginning on October 1, 1992, and for rate 
        years beginning after June 30, 1993, a nursing facility that (1) 
        has completed a construction project approved under section 
        144A.071, subdivision 4a, clause (m); (2) has completed a 
        construction project approved under section 144A.071, 
        subdivision 4a, and effective after June 30, 1995; or (3) has 
        completed a renovation, replacement, or upgrading project 
        approved under the moratorium exception process in section 
        144A.073 shall be reimbursed for costs directly identified to 
        that project as provided in subdivision 16 and this subdivision. 
           (b) Notwithstanding Minnesota Rules, part 9549.0060, 
        subparts 5, item A, subitems (1) and (3), and 7, item D, 
        allowable interest expense on debt shall include: 
           (1) interest expense on debt related to the cost of 
        purchasing or replacing depreciable equipment, excluding 
        vehicles, not to exceed six percent of the total historical cost 
        of the project; and 
           (2) interest expense on debt related to financing or 
        refinancing costs, including costs related to points, loan 
        origination fees, financing charges, legal fees, and title 
        searches; and issuance costs including bond discounts, bond 
        counsel, underwriter's counsel, corporate counsel, printing, and 
        financial forecasts.  Allowable debt related to items in this 
        clause shall not exceed seven percent of the total historical 
        cost of the project.  To the extent these costs are financed, 
        the straight-line amortization of the costs in this clause is 
        not an allowable cost; and 
           (3) interest on debt incurred for the establishment of a 
        debt reserve fund, net of the interest earned on the debt 
        reserve fund. 
           (c) Debt incurred for costs under paragraph (b) is not 
        subject to Minnesota Rules, part 9549.0060, subpart 5, item A, 
        subitem (5) or (6). 
           (d) The incremental increase in a nursing facility's rental 
        rate, determined under Minnesota Rules, parts 9549.0010 to 
        9549.0080, and this section, resulting from the acquisition of 
        allowable capital assets, and allowable debt and interest 
        expense under this subdivision shall be added to its 
        property-related payment rate and shall be effective on the 
        first day of the month following the month in which the 
        moratorium project was completed. 
           (e) Notwithstanding subdivision 3f, paragraph (a), for rate 
        periods beginning on October 1, 1992, and for rate years 
        beginning after June 30, 1993, the replacement-costs-new per bed 
        limit to be used in Minnesota Rules, part 9549.0060, subpart 4, 
        item B, for a nursing facility that has completed a renovation, 
        replacement, or upgrading project that has been approved under 
        the moratorium exception process in section 144A.073, or that 
        has completed an addition to or replacement of buildings, 
        attached fixtures, or land improvements for which the total 
        historical cost exceeds the lesser of $150,000 or ten percent of 
        the most recent appraised value, must be $47,500 per licensed 
        bed in multiple-bed rooms and $71,250 per licensed bed in a 
        single-bed room.  These amounts must be adjusted annually as 
        specified in subdivision 3f, paragraph (a), beginning January 1, 
        1993. 
           (f) For purposes of this paragraph, a total replacement 
        means the complete replacement of the nursing facility's 
        physical plant through the construction of a new physical plant, 
        the transfer of the nursing facility's license from one physical 
        plant location to another, or a new building addition to 
        relocate beds from three- and four-bed wards.  For total 
        replacement projects completed on or after July 1, 1992, the 
        commissioner shall compute the incremental change in the nursing 
        facility's rental per diem, for rate years beginning on or after 
        July 1, 1995, by replacing its appraised value, including the 
        historical capital asset costs, and the capital debt and 
        interest costs with the new nursing facility's allowable capital 
        asset costs and the related allowable capital debt and interest 
        costs.  If the new nursing facility has decreased its licensed 
        capacity, the aggregate investment per bed limit in subdivision 
        3a, paragraph (c), shall apply.  If the new nursing facility has 
        retained a portion of the original physical plant for nursing 
        facility usage, then a portion of the appraised value prior to 
        the replacement must be retained and included in the calculation 
        of the incremental change in the nursing facility's rental per 
        diem.  For purposes of this part, the original nursing facility 
        means the nursing facility prior to the total replacement 
        project.  The portion of the appraised value to be retained 
        shall be calculated according to clauses (1) to (3): 
           (1) The numerator of the allocation ratio shall be the 
        square footage of the area in the original physical plant which 
        is being retained for nursing facility usage. 
           (2) The denominator of the allocation ratio shall be the 
        total square footage of the original nursing facility physical 
        plant. 
           (3) Each component of the nursing facility's allowable 
        appraised value prior to the total replacement project shall be 
        multiplied by the allocation ratio developed by dividing clause 
        (1) by clause (2). 
           In the case of either type of total replacement as 
        authorized under section 144A.071 or 144A.073, the provisions of 
        this subdivision shall also apply.  For purposes of the 
        moratorium exception authorized under section 144A.071, 
        subdivision 4a, paragraph (s), if the total replacement involves 
        the renovation and use of an existing health care facility 
        physical plant, the new allowable capital asset costs and 
        related debt and interest costs shall include first the 
        allowable capital asset costs and related debt and interest 
        costs of the renovation, to which shall be added the allowable 
        capital asset costs of the existing physical plant prior to the 
        renovation, and if reported by the facility, the related 
        allowable capital debt and interest costs. 
           (g) Notwithstanding Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), for a total replacement, as 
        defined in paragraph (f), authorized under section 144A.071 or 
        144A.073 after July 1, 1999, or any building project that is a 
        relocation, renovation, upgrading, or conversion authorized 
        under section 144A.073, completed on or after July 1, 2001, the 
        replacement-costs-new per bed limit shall be $74,280 per 
        licensed bed in multiple-bed rooms, $92,850 per licensed bed in 
        semiprivate rooms with a fixed partition separating the resident 
        beds, and $111,420 per licensed bed in single rooms.  Minnesota 
        Rules, part 9549.0060, subpart 11, item C, subitem (2), does not 
        apply.  These amounts must be adjusted annually as specified in 
        subdivision 3f, paragraph (a), beginning January 1, 2000.  
           (h) For a total replacement, as defined in paragraph (f), 
        authorized under section 144A.073 for a 96-bed nursing home in 
        Carlton county, the replacement-costs-new per bed limit shall be 
        $74,280 per licensed bed in multiple-bed rooms, $92,850 per 
        licensed bed in semiprivate rooms with a fixed partition 
        separating the resident's beds, and $111,420 per licensed bed in 
        a single room.  Minnesota Rules, part 9549.0060, subpart 11, 
        item C, subitem (2), does not apply.  The resulting maximum 
        allowable replacement-costs-new multiplied by 1.25 shall 
        constitute the project's dollar threshold for purposes of 
        application of the limit set forth in section 144A.071, 
        subdivision 2.  The commissioner of health may waive the 
        requirements of section 144A.073, subdivision 3b, paragraph (b), 
        clause (2), on the condition that the other requirements of that 
        paragraph are met. 
           (i) For a renovation authorized under section 144A.073 for 
        a 65-bed nursing home in St. Louis county, the incremental 
        increase in rental rate for purposes of paragraph (d) shall be 
        $8.16, and the total replacement cost, allowable appraised 
        value, allowable debt, and allowable interest shall be increased 
        according to the incremental increase. 
           (j) For a total replacement, as defined in paragraph (f), 
        authorized under section 144A.073 involving a new building 
        addition that relocates beds from three-bed wards for an 80-bed 
        nursing home in Redwood county, the replacement-costs-new per 
        bed limit shall be $74,280 per licensed bed for multiple-bed 
        rooms; $92,850 per licensed bed for semiprivate rooms with a 
        fixed partition separating the beds; and $111,420 per licensed 
        bed for single rooms.  These amounts shall be adjusted annually, 
        beginning January 1, 2001.  Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), does not apply.  The resulting 
        maximum allowable replacement-costs-new multiplied by 1.25 shall 
        constitute the project's dollar threshold for purposes of 
        application of the limit set forth in section 144A.071, 
        subdivision 2.  The commissioner of health may waive the 
        requirements of section 144A.073, subdivision 3b, paragraph (b), 
        clause (2), on the condition that the other requirements of that 
        paragraph are met. 
           Sec. 17.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 31.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
        1, 2001, AND JULY 1, 2002.] For the rate years beginning July 1, 
        2001, and July 1, 2002, the commissioner shall provide to each 
        nursing facility reimbursed under this section or section 
        256B.434 an adjustment equal to 3.0 percent of the total 
        operating payment rate.  The operating payment rates in effect 
        on June 30, 2001, shall include the adjustment in subdivision 
        2i, paragraph (c). 
           Sec. 18.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 32.  [PAYMENT DURING FIRST 90 DAYS.] (a) For rate 
        years beginning on or after July 1, 2001, the total payment rate 
        for a facility reimbursed under this section, section 256B.434, 
        or any other section for the first 90 paid days after admission 
        shall be: 
           (1) for the first 30 paid days, the rate shall be 120 
        percent of the facility's medical assistance rate for each case 
        mix class; and 
           (2) for the next 60 paid days after the first 30 paid days, 
        the rate shall be 110 percent of the facility's medical 
        assistance rate for each case mix class. 
           (b) Beginning with the 91st paid day after admission, the 
        payment rate shall be the rate otherwise determined under this 
        section, section 256B.434, or any other section. 
           (c) This subdivision applies to admissions occurring on or 
        after July 1, 2001. 
           Sec. 19.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision 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 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 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. 20.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 34.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
        1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
        July 1, 2001, and July 1, 2002, two-thirds of the money 
        resulting from the rate adjustment under subdivision 31 and 
        one-half of the money resulting from the rate adjustment under 
        subdivisions 32 and 33 must be used to increase the wages and 
        benefits and pay associated costs of all employees except 
        management fees, the administrator, and central office staff. 
           (b) Money received by a facility as a result of the rate 
        adjustments provided in subdivisions 31 to 33, which must be 
        used as provided in paragraph (a), must be used only for wage 
        and benefit increases implemented on or after July 1, 2001, or 
        July 1, 2002, respectively, and must not be used for wage 
        increases implemented prior to those dates. 
           (c) Nursing facilities may apply for the portions of the 
        rate adjustments under subdivisions 31 to 33, which must be used 
        as provided in paragraph (a).  The application must be made to 
        the commissioner and contain a plan by which the nursing 
        facility will distribute to employees of the nursing facility 
        the funds, which must be used as provided in paragraph (a).  For 
        nursing facilities in which the employees are represented by an 
        exclusive bargaining representative, an agreement negotiated and 
        agreed to by the employer and the exclusive bargaining 
        representative constitutes the plan.  A negotiated agreement may 
        constitute the plan only if the agreement is finalized after the 
        date of enactment of all increases for the rate year.  The 
        commissioner shall review the plan to ensure that the rate 
        adjustments are used as provided in paragraph (a).  To be 
        eligible, a facility must submit its plan for the wage and 
        benefit distribution by December 31 each year.  If a facility's 
        plan for wage and benefit distribution is effective for its 
        employees after July 1 of the year that the funds are available, 
        the portion of the rate adjustments, which must be used as 
        provided in paragraph (a), are effective the same date as its 
        plan. 
           (d) A hospital-attached nursing facility may include costs 
        in their distribution plan for wages and benefits and associated 
        costs of employees in the organization's shared services 
        departments, provided that: 
           (1) the nursing facility and the hospital share common 
        ownership; and 
           (2) adjustments for hospital services using the 
        diagnostic-related grouping payment rates per admission under 
        Medicare are less than three percent during the 12 months prior 
        to the effective date of these rate adjustments. 
           If a hospital-attached facility meets the qualifications in 
        this paragraph, the difference between the rate adjustments 
        approved for nursing facility services and the rate increase 
        approved for hospital services may be permitted as a 
        distribution in the hospital-attached facility's plan regardless 
        of whether the use of those funds is shown as being attributable 
        to employee hours worked in the nursing facility or employee 
        hours worked in the hospital. 
           For the purposes of this paragraph, a hospital-attached 
        nursing facility is one that meets the definition under 
        subdivision 2j, or, in the case of a facility reimbursed under 
        section 256B.434, met this definition at the time their last 
        payment rate was established under Minnesota Rules, parts 
        9549.0010 to 9549.0080, and this section. 
           (e) A copy of the approved distribution plan must be made 
        available to all employees by giving each employee a copy or by 
        posting it in an area of the nursing facility to which all 
        employees have access.  If an employee does not receive the wage 
        and benefit adjustment described in the facility's approved plan 
        and is unable to resolve the problem with the facility's 
        management or through the employee's union representative, the 
        employee may contact the commissioner at an address or telephone 
        number provided by the commissioner and included in the approved 
        plan.  
           (f) Notwithstanding section 256B.48, subdivision 1, clause 
        (a), upon the request of a nursing facility, the commissioner 
        may authorize the facility to raise per diem rates for 
        private-pay residents on July 1 by the amount anticipated to be 
        required upon implementation of the rate adjustments allowable 
        under subdivisions 31 to 33.  The commissioner shall require any 
        amounts collected under this paragraph, which must be used as 
        provided in paragraph (a), to be placed in an escrow account 
        established for this purpose with a financial institution that 
        provides deposit insurance until the medical assistance rate is 
        finalized.  The commissioner shall conduct audits as necessary 
        to ensure that: 
           (1) the amounts collected are retained in escrow until 
        medical assistance rates are increased to reflect the 
        wage-related adjustment; and 
           (2) any amounts collected from private-pay residents in 
        excess of the final medical assistance rate are repaid to the 
        private-pay residents with interest at the rate used by the 
        commissioner of revenue for the late payment of taxes and in 
        effect on the date the distribution plan is approved by the 
        commissioner of human services. 
           Sec. 21.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 35.  [EXCLUSION OF RAW FOOD COST ADJUSTMENT.] For 
        rate years beginning on or after July 1, 2001, in calculating a 
        nursing facility's operating cost per diem for the purposes of 
        constructing an array, determining a median, or otherwise 
        performing a statistical measure of nursing facility payment 
        rates to be used to determine future rate increases under this 
        section, section 256B.434, or any other section, the 
        commissioner shall exclude adjustments for raw food costs under 
        subdivision 2b, paragraph (h), that are related to providing 
        special diets based on religious beliefs. 
           Sec. 22.  Minnesota Statutes 2000, section 256B.433, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [EXEMPTION FROM REQUIREMENT FOR SEPARATE THERAPY 
        BILLING.] The provisions of subdivision 3 do not apply to 
        nursing facilities that are reimbursed according to the 
        provisions of section 256B.431 and are located in a county 
        participating in the prepaid medical assistance program.  
        Nursing facilities that are reimbursed according to the 
        provisions of section 256B.434 and are located in a county 
        participating in the prepaid medical assistance program are 
        exempt from the maximum therapy rent revenue provisions of 
        subdivision 3, paragraph (c). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 23.  Minnesota Statutes 2000, section 256B.434, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
        nursing facilities which have their payment rates determined 
        under this section rather than section 256B.431, the 
        commissioner shall establish a rate under this subdivision.  The 
        nursing facility must enter into a written contract with the 
        commissioner. 
           (b) A nursing facility's case mix payment rate for the 
        first rate year of a facility's contract under this section is 
        the payment rate the facility would have received under section 
        256B.431. 
           (c) A nursing facility's case mix payment rates for the 
        second and subsequent years of a facility's contract under this 
        section are the previous rate year's contract payment rates plus 
        an inflation adjustment and, for facilities reimbursed under 
        this section or section 256B.431, an adjustment to include the 
        cost of any increase in health department licensing fees for the 
        facility taking effect on or after July 1, 2001.  The index for 
        the inflation adjustment must be based on the change in the 
        Consumer Price Index-All Items (United States City average) 
        (CPI-U) forecasted by Data Resources, Inc., as forecasted in the 
        fourth quarter of the calendar year preceding the rate year.  
        The inflation adjustment must be based on the 12-month period 
        from the midpoint of the previous rate year to the midpoint of 
        the rate year for which the rate is being determined.  For the 
        rate years beginning on July 1, 1999, and July 1, 2000, July 1, 
        2001, and July 1, 2002, this paragraph shall apply only to the 
        property-related payment rate, except that adjustments to 
        include the cost of any increase in health department licensing 
        fees taking effect on or after July 1, 2001, shall be provided.  
        In determining the amount of the property-related payment rate 
        adjustment under this paragraph, the commissioner shall 
        determine the proportion of the facility's rates that are 
        property-related based on the facility's most recent cost report.
           (d) The commissioner shall develop additional 
        incentive-based payments of up to five percent above the 
        standard contract rate for achieving outcomes specified in each 
        contract.  The specified facility-specific outcomes must be 
        measurable and approved by the commissioner.  The commissioner 
        may establish, for each contract, various levels of achievement 
        within an outcome.  After the outcomes have been specified the 
        commissioner shall assign various levels of payment associated 
        with achieving the outcome.  Any incentive-based payment cancels 
        if there is a termination of the contract.  In establishing the 
        specified outcomes and related criteria the commissioner shall 
        consider the following state policy objectives: 
           (1) improved cost effectiveness and quality of life as 
        measured by improved clinical outcomes; 
           (2) successful diversion or discharge to community 
        alternatives; 
           (3) decreased acute care costs; 
           (4) improved consumer satisfaction; 
           (5) the achievement of quality; or 
           (6) any additional outcomes proposed by a nursing facility 
        that the commissioner finds desirable. 
           Sec. 24.  Minnesota Statutes 2000, section 256B.434, is 
        amended by adding a subdivision to read: 
           Subd. 4c.  [FACILITY RATE INCREASES EFFECTIVE JANUARY 1, 
        2002.] For the rate period beginning January 1, 2002, and for 
        the rate year beginning July 1, 2002, a nursing facility in 
        Morrison county licensed for 83 beds as of March 1, 2001, shall 
        receive an increase of $2.54 in each case mix payment rate to 
        offset property tax payments due as a result of the facility's 
        conversion from nonprofit to for-profit status.  The increase 
        under this subdivision shall be added following the 
        determination under this chapter of the payment rate for the 
        rate year beginning July 1, 2001, and shall be included in the 
        facility's total payment rates for the purposes of determining 
        future rates under this section or any other section. 
           Sec. 25.  Minnesota Statutes 2000, section 256B.434, is 
        amended by adding a subdivision to read: 
           Subd. 4d.  [FACILITY RATE INCREASES EFFECTIVE JULY 1, 
        2001.] For the rate year beginning July 1, 2001, a nursing 
        facility in Hennepin county licensed for 302 beds shall receive 
        an increase of 29 cents in each case mix payment rate to correct 
        an error in the cost-reporting system that occurred prior to the 
        date that the facility entered the alternative payment 
        demonstration project.  The increase under this subdivision 
        shall be added following the determination under this chapter of 
        the payment rate for the rate year beginning July 1, 2001, and 
        shall be included in the facility's total payment rates for the 
        purposes of determining future rates under this section or any 
        other section. 
           Sec. 26.  Minnesota Statutes 2000, section 256B.434, is 
        amended by adding a subdivision to read: 
           Subd. 4e.  [RATE INCREASE EFFECTIVE JULY 1, 2001.] A 
        nursing facility in Anoka county licensed for 98 beds as of July 
        1, 2000, shall receive a total increase of $10 in each case mix 
        rate for the rate year beginning July 1, 2001, as a result of 
        increases provided under this subdivision and section 256B.431, 
        subdivision 33.  The increases under this subdivision shall be 
        added prior to the determination under section 256B.431, 
        subdivision 33, of the payment rate for the rate year beginning 
        July 1, 2001, and shall be included in the facility's total 
        payment rate for purposes of determining future rates under this 
        section or any other section through June 30, 2004. 
           Sec. 27.  [256B.437] [NURSING FACILITY VOLUNTARY CLOSURES; 
        PLANNING AND DEVELOPMENT OF COMMUNITY-BASED ALTERNATIVES.] 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to subdivisions 2 to 9. 
           (b) "Closure" means the cessation of operations of a 
        nursing facility and delicensure and decertification of all beds 
        within the facility. 
           (c) "Closure plan" means a plan to close a nursing facility 
        and reallocate a portion of the resulting savings to provide 
        planned closure rate adjustments at other facilities. 
           (d) "Commencement of closure" means the date on which 
        residents and designated representatives are notified of a 
        planned closure as provided in section 144A.161, subdivision 5a, 
        as part of an approved closure plan. 
           (e) "Completion of closure" means the date on which the 
        final resident of the nursing facility designated for closure in 
        an approved closure plan is discharged from the facility. 
           (f) "Partial closure" means the delicensure and 
        decertification of a portion of the beds within the facility. 
           (g) "Planned closure rate adjustment" means an increase in 
        a nursing facility's operating rates resulting from a planned 
        closure or a planned partial closure of another facility. 
           Subd. 2.  [PLANNING AND DEVELOPMENT OF COMMUNITY-BASED 
        SERVICES.] (a) The commissioner of human services shall 
        establish a process to adjust the capacity and distribution of 
        long-term care services to equalize the supply and demand for 
        different types of services.  This process must include 
        community planning, expansion or establishment of needed 
        services, and analysis of voluntary nursing facility closures. 
           (b) The purpose of this process is to support the planning 
        and development of community-based services.  This process must 
        support early intervention, advocacy, and consumer protection 
        while providing resources and incentives for expanded county 
        planning and for nursing facilities to transition to meet 
        community needs. 
           (c) The process shall support and facilitate expansion of 
        community-based services under the county-administered 
        alternative care program under section 256B.0913 and waivers for 
        elderly under section 256B.0915, including, but not limited to, 
        the development of supportive services such as housing and 
        transportation.  The process shall utilize community assessments 
        and planning developed for the community health services plan 
        and plan update and for the community social services act plan, 
        and other relevant information. 
           (d) The commissioners of health and human services as 
        appropriate shall provide, by July 15, 2001, available data 
        necessary for the county, including, but not limited to, data on 
        nursing facility bed distribution, housing with services 
        options, the closure of nursing facilities that occur outside of 
        the planned closure process, and approval of planned closures in 
        the county and contiguous counties. 
           (e) Each county shall submit to the commissioner of human 
        services, by October 15, 2001, a gaps analysis that identifies 
        local service needs, pending development of services, and any 
        other issues that would contribute to or impede further 
        development of community-based services.  The gaps analysis must 
        also be sent to the local area agency on aging and, if 
        applicable, local SAIL projects, for review and comment.  The 
        review and comment must assess needs across county boundaries.  
        The area agencies on aging and SAIL projects must provide the 
        commissioner and the counties with their review and analyses by 
        November 15, 2001. 
           (f) The addendum to the biennial plan shall be submitted 
        annually, beginning December 31, 2001, and each December 31 
        thereafter, and shall include recommendations for development of 
        community-based services.  Both planning and implementation 
        shall be implemented within the amount of funding made available 
        to the county board for these purposes. 
           (g) The plan, within the funding allocated, shall: 
           (1) include the gaps analysis required by paragraph (e); 
           (2) involve providers, consumers, cities, townships, 
        businesses, and area agencies on aging in the planning process; 
           (3) address the availability of alternative care and 
        elderly waiver services for eligible recipients; 
           (4) address the development of other supportive services, 
        such as transit, housing, and workforce and economic 
        development; and 
           (5) estimate the cost and timelines for development. 
           (h) The biennial plan addendum shall be coordinated with 
        the county mental health plan for inclusion in the community 
        health services plan and included as an addendum to the 
        community social services plan. 
           (i) The county board having financial responsibility for 
        persons present in another county shall cooperate with that 
        county for planning and development of services. 
           (j) The county board shall cooperate in planning and 
        development of community-based services with other counties, as 
        necessary, and coordinate planning for long-term care services 
        that involve more than one county, within the funding allocated 
        for these purposes. 
           (k) The commissioners of health and human services, in 
        cooperation with county boards, shall report to the legislature 
        by February 1 of each year, beginning February 1, 2002, 
        regarding the development of community-based services, 
        transition or closure of nursing facilities, and specific gaps 
        in services in identified geographic areas that may require 
        additional resources or flexibility, as documented by the 
        process in this subdivision and reported to the commissioners by 
        December 31 of each year. 
           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) 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 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 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.  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 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) 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.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. 
           Subd. 4.  [CRITERIA FOR REVIEW OF APPLICATION.] In 
        reviewing and approving closure proposals, the commissioner 
        shall consider, but not be limited to, the following criteria: 
           (1) improved quality of care and quality of life for 
        consumers; 
           (2) closure of a nursing facility that has a poor physical 
        plant, which may be evidenced by the conditions referred to in 
        section 144A.073, subdivision 4, clauses (4) and (5); 
           (3) the existence of excess nursing facility beds, measured 
        in terms of beds per thousand persons aged 85 or older.  The 
        excess must be measured in reference to: 
           (i) the county in which the facility is located; 
           (ii) the county and all contiguous counties; 
           (iii) the region in which the facility is located; or 
           (iv) the facility's service area; 
        the facility shall indicate in its application the service area 
        it believes is appropriate for this measurement.  A facility in 
        a county that is in the lowest quartile of counties with 
        reference to beds per thousand persons aged 85 or older is not 
        in an area of excess capacity; 
           (4) low-occupancy rates, provided that the unoccupied beds 
        are not the result of a personnel shortage.  In analyzing 
        occupancy rates, the commissioner shall examine waiting lists in 
        the applicant facility and at facilities in the surrounding 
        area, as determined under clause (3); 
           (5) evidence of coordination between the community planning 
        process and the facility application.  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; 
           (6) proposed usage of funds available from a planned 
        closure rate adjustment for care-related purposes; 
           (7) innovative use planned for the closed facility's 
        physical plant; 
           (8) evidence that the proposal serves the interests of the 
        state; and 
           (9) evidence of other factors that affect the viability of 
        the facility, including excessive nursing pool costs. 
           Subd. 5.  [REVIEW AND APPROVAL OF APPLICATIONS.] (a) The 
        commissioner of human services, in consultation with the 
        commissioner of health, shall approve or disapprove an 
        application within 30 days after receiving it.  The commissioner 
        may appoint an advisory review panel composed of representatives 
        of counties, SAIL projects, consumers, and providers to review 
        proposals and provide comments and recommendations to the 
        committee.  The commissioners of human services and health shall 
        provide staff and technical assistance to the committee for the 
        review and analysis of proposals. 
           (b) Approval of a planned closure expires 18 months after 
        approval by the commissioner of human services, unless 
        commencement of closure has begun. 
           (c) The commissioner of human services may change any 
        provision of the application to which the applicant, the 
        regional planning group, and the commissioner agree. 
           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. 
           Subd. 7.  [OTHER RATE ADJUSTMENTS.] Facilities receiving 
        planned closure rate adjustments remain eligible for any 
        applicable rate adjustments provided under section 256B.431, 
        256B.434, or any other section. 
           Subd. 8.  [COUNTY COSTS.] The commissioner of human 
        services shall allocate funds for relocation costs incurred by 
        counties for planned closures under this section as provided 
        under section 144A.161, subdivision 11. 
           Sec. 28.  [256B.438] [IMPLEMENTATION OF A CASE MIX SYSTEM 
        FOR NURSING FACILITIES BASED ON THE MINIMUM DATA SET.] 
           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. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given. 
           (a) [ASSESSMENT REFERENCE DATE.] "Assessment reference 
        date" has the meaning given in section 144.0724, subdivision 2, 
        paragraph (a). 
           (b) [CASE MIX INDEX.] "Case mix index" has the meaning 
        given in section 144.0724, subdivision 2, paragraph (b). 
           (c) [INDEX MAXIMIZATION.] "Index maximization" has the 
        meaning given in section 144.0724, subdivision 2, paragraph (c). 
           (d) [MINIMUM DATA SET.] "Minimum data set" has the meaning 
        given in section 144.0724, subdivision 2, paragraph (d). 
           (e) [REPRESENTATIVE.] "Representative" has the meaning 
        given in section 144.0724, subdivision 2, paragraph (e). 
           (f) [RESOURCE UTILIZATION GROUPS OR RUG.] "Resource 
        utilization groups" or "RUG" has the meaning given in section 
        144.0724, subdivision 2, paragraph (f). 
           Subd. 3.  [CASE MIX INDICES.] (a) The commissioner of human 
        services shall assign a case mix index to each resident class 
        based on the Health Care Financing Administration's staff time 
        measurement study and adjusted for Minnesota-specific wage 
        indices.  The case mix indices assigned to each resident class 
        shall be published in the Minnesota State Register at least 120 
        days prior to the implementation of the 34 group, RUG-III 
        resident classification system. 
           (b) An index maximization approach shall be used to 
        classify residents. 
           (c) After implementation of the revised case mix system, 
        the commissioner of human services may annually rebase case mix 
        indices and base rates using more current data on average wage 
        rates and staff time measurement studies.  This rebasing shall 
        be calculated under subdivision 7, paragraph (b).  The 
        commissioner shall publish in the Minnesota State Register 
        adjusted case mix indices at least 45 days prior to the 
        effective date of the adjusted case mix indices. 
           Subd. 4.  [RESIDENT ASSESSMENT SCHEDULE.] (a) Nursing 
        facilities shall conduct and submit case mix assessments 
        according to the schedule established by the commissioner of 
        health under section 144.0724, subdivisions 4 and 5. 
           (b) The resident reimbursement classifications established 
        under section 144.0724, subdivision 3, shall be effective the 
        day of admission for new admission assessments.  The effective 
        date for significant change assessments shall be the assessment 
        reference date.  The effective date for annual and second 
        quarterly assessments shall be the first day of the month 
        following assessment reference date. 
           Subd. 5.  [NOTICE OF RESIDENT REIMBURSEMENT 
        CLASSIFICATION.] Nursing facilities shall provide notice to a 
        resident of the resident's case mix classification according to 
        procedures established by the commissioner of health under 
        section 144.0724, subdivision 7. 
           Subd. 6.  [RECONSIDERATION OF RESIDENT CLASSIFICATION.] Any 
        request for reconsideration of a resident classification must be 
        made under section 144.0724, subdivision 8. 
           Subd. 7.  [RATE DETERMINATION UPON TRANSITION TO RUG-III 
        PAYMENT RATES.] (a) The commissioner of human services shall 
        determine payment rates at the time of transition to the RUG 
        based payment model in a facility-specific, budget-neutral 
        manner.  The case mix indices as defined in subdivision 3 shall 
        be used to allocate the case mix adjusted component of total 
        payment across all case mix groups.  To transition from the 
        current calculation methodology to the RUG based methodology, 
        the commissioner of health shall report to the commissioner of 
        human services the resident days classified according to the 
        categories defined in subdivision 3 for the 12-month reporting 
        period ending September 30, 2001, for each nursing facility.  
        The commissioner of human services shall use this data to 
        compute the standardized days for the reporting period under the 
        RUG system. 
           (b) The commissioner of human services shall determine the 
        case mix adjusted component of the rate as follows: 
           (1) determine the case mix portion of the 11 case mix rates 
        in effect on June 30, 2002, or the 34 case mix rates in effect 
        on or after June 30, 2003; 
           (2) multiply each amount in clause (1) by the number of 
        resident days assigned to each group for the reporting period 
        ending September 30, 2001, or the most recent year for which 
        data is available; 
           (3) compute the sum of the amounts in clause (2); 
           (4) determine the total RUG standardized days for the 
        reporting period ending September 30, 2001, or the most recent 
        year for which data is available using the new indices 
        calculated under subdivision 3, paragraph (c); 
           (5) divide the amount in clause (3) by the amount in clause 
        (4) which shall be the average case mix adjusted component of 
        the rate under the RUG method; and 
           (6) multiply this average rate by the case mix weight in 
        subdivision 3 for each RUG group. 
           (c) The noncase mix component will be allocated to each RUG 
        group as a constant amount to determine the transition payment 
        rate.  Any other rate adjustments that are effective on or after 
        July 1, 2002, shall be applied to the transition rates 
        determined under this section. 
           Sec. 29.  [256B.439] [LONG-TERM CARE QUALITY PROFILES.] 
           Subdivision l.  [DEVELOPMENT AND IMPLEMENTATION OF QUALITY 
        PROFILES.] (a) The commissioner of human services, in 
        cooperation with the commissioner of health, shall develop and 
        implement a quality profile system for nursing facilities and, 
        beginning not later than July 1, 2003, other providers of 
        long-term care services, except when the quality profile system 
        would duplicate requirements under section 256B.5011, 256B.5012, 
        or 256B.5013.  The system must be developed and implemented to 
        the extent possible without the collection of significant 
        amounts of new data.  To the extent possible, the system must 
        incorporate or be coordinated with information on quality 
        maintained by area agencies on aging, long-term care trade 
        associations, and other entities.  The system must be designed 
        to provide information on quality to: 
           (1) consumers and their families to facilitate informed 
        choices of service providers; 
           (2) providers to enable them to measure the results of 
        their quality improvement efforts and compare quality 
        achievements with other service providers; and 
           (3) public and private purchasers of long-term care 
        services to enable them to purchase high-quality care. 
           (b) The system must be developed in consultation with the 
        long-term care task force, area agencies on aging, and 
        representatives of consumers, providers, and labor unions.  
        Within the limits of available appropriations, the commissioners 
        may employ consultants to assist with this project. 
           Subd. 2.  [QUALITY MEASUREMENT TOOLS.] The commissioners 
        shall identify and apply existing quality measurement tools to: 
           (1) emphasize quality of care and its relationship to 
        quality of life; and 
           (2) address the needs of various users of long-term care 
        services, including, but not limited to, short-stay residents, 
        persons with behavioral problems, persons with dementia, and 
        persons who are members of minority groups. 
        The tools must be identified and applied, to the extent 
        possible, without requiring providers to supply information 
        beyond current state and federal requirements. 
           Subd. 3.  [CONSUMER SURVEYS.] Following identification of 
        the quality measurement tool, the commissioners shall conduct 
        surveys of long-term care service consumers to develop quality 
        profiles of providers.  To the extent possible, surveys must be 
        conducted face-to-face by state employees or contractors.  At 
        the discretion of the commissioners, surveys may be conducted by 
        telephone or by provider staff.  Surveys must be conducted 
        periodically to update quality profiles of individual service 
        providers. 
           Subd. 4.  [DISSEMINATION OF QUALITY PROFILES.] By July 1, 
        2002, the commissioners shall implement a system to disseminate 
        the quality profiles developed from consumer surveys using the 
        quality measurement tool.  Profiles may be disseminated to the 
        Senior LinkAge line and to consumers, providers, and purchasers 
        of long-term care services through all feasible printed and 
        electronic outlets.  The commissioners may conduct a public 
        awareness campaign to inform potential users regarding profile 
        contents and potential uses. 
           Sec. 30.  Minnesota Statutes 2000, section 256B.5012, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [ICF/MR RATE INCREASES BEGINNING JULY 1, 2001, 
        AND JULY 1, 2002.] (a) For the rate years beginning July 1, 
        2001, and July 1, 2002, the commissioner shall make available to 
        each facility reimbursed under this section an adjustment to the 
        total operating payment rate of 3.5 percent.  Of this 
        adjustment, two-thirds must be used as provided under paragraph 
        (b) and one-third must be used for operating costs. 
           (b) The adjustment under this paragraph must be used to 
        increase the wages and benefits and pay associated costs of all 
        employees except administrative and central office employees, 
        provided that this increase must be used only for wage and 
        benefit increases implemented on or after the first day of the 
        rate year and must not be used for increases implemented prior 
        to that date. 
           (c) For each facility, the commissioner shall make 
        available an adjustment using the percentage specified in 
        paragraph (a) multiplied by the total payment rate, excluding 
        the property-related payment rate, in effect on the preceding 
        June 30.  The total payment rate shall include the adjustment 
        provided in section 256B.501, subdivision 12. 
           (d) A facility whose payment rates are governed by closure 
        agreements, receivership agreements, or Minnesota Rules, part 
        9553.0075, is not eligible for an adjustment otherwise granted 
        under this subdivision.  
           (e) A facility may apply for the payment rate adjustment 
        provided under paragraph (b).  The application must be made to 
        the commissioner and contain a plan by which the facility will 
        distribute the adjustment in paragraph (b) to employees of the 
        facility.  For facilities in which the employees are represented 
        by an exclusive bargaining representative, an agreement 
        negotiated and agreed to by the employer and the exclusive 
        bargaining representative constitutes the plan.  A negotiated 
        agreement may constitute the plan only if the agreement is 
        finalized after the date of enactment of all rate increases for 
        the rate year.  The commissioner shall review the plan to ensure 
        that the payment rate adjustment per diem is used as provided in 
        this subdivision.  To be eligible, a facility must submit its 
        plan by March 31, 2002, and March 31, 2003, respectively.  If a 
        facility's plan is effective for its employees after the first 
        day of the applicable rate year that the funds are available, 
        the payment rate adjustment per diem is effective the same date 
        as its plan. 
           (f) A copy of the approved distribution plan must be made 
        available to all employees by giving each employee a copy or by 
        posting it in an area of the facility to which all employees 
        have access.  If an employee does not receive the wage and 
        benefit adjustment described in the facility's approved plan and 
        is unable to resolve the problem with the facility's management 
        or through the employee's union representative, the employee may 
        contact the commissioner at an address or telephone number 
        provided by the commissioner and included in the approved plan. 
           Sec. 31.  Minnesota Statutes 2000, section 626.557, 
        subdivision 12b, is amended to read: 
           Subd. 12b.  [DATA MANAGEMENT.] (a)  [COUNTY DATA.] In 
        performing any of the duties of this section as a lead agency, 
        the county social service agency shall maintain appropriate 
        records.  Data collected by the county social service agency 
        under this section are welfare data under section 13.46.  
        Notwithstanding section 13.46, subdivision 1, paragraph (a), 
        data under this paragraph that are inactive investigative data 
        on an individual who is a vendor of services are private data on 
        individuals, as defined in section 13.02.  The identity of the 
        reporter may only be disclosed as provided in paragraph (c). 
           Data maintained by the common entry point are confidential 
        data on individuals or protected nonpublic data as defined in 
        section 13.02.  Notwithstanding section 138.163, the common 
        entry point shall destroy data three calendar years after date 
        of receipt. 
           (b)  [LEAD AGENCY DATA.] The commissioners of health and 
        human services shall prepare an investigation memorandum for 
        each report alleging maltreatment investigated under this 
        section.  During an investigation by the commissioner of health 
        or the commissioner of human services, data collected under this 
        section are confidential data on individuals or protected 
        nonpublic data as defined in section 13.02.  Upon completion of 
        the investigation, the data are classified as provided in 
        clauses (1) to (3) and paragraph (c). 
           (1) The investigation memorandum must contain the following 
        data, which are public: 
           (i) the name of the facility investigated; 
           (ii) a statement of the nature of the alleged maltreatment; 
           (iii) pertinent information obtained from medical or other 
        records reviewed; 
           (iv) the identity of the investigator; 
           (v) a summary of the investigation's findings; 
           (vi) statement of whether the report was found to be 
        substantiated, inconclusive, false, or that no determination 
        will be made; 
           (vii) a statement of any action taken by the facility; 
           (viii) a statement of any action taken by the lead agency; 
        and 
           (ix) when a lead agency's determination has substantiated 
        maltreatment, a statement of whether an individual, individuals, 
        or a facility were responsible for the substantiated 
        maltreatment, if known. 
           The investigation memorandum must be written in a manner 
        which protects the identity of the reporter and of the 
        vulnerable adult and may not contain the names or, to the extent 
        possible, data on individuals or private data listed in clause 
        (2). 
           (2) Data on individuals collected and maintained in the 
        investigation memorandum are private data, including: 
           (i) the name of the vulnerable adult; 
           (ii) the identity of the individual alleged to be the 
        perpetrator; 
           (iii) the identity of the individual substantiated as the 
        perpetrator; and 
           (iv) the identity of all individuals interviewed as part of 
        the investigation. 
           (3) Other data on individuals maintained as part of an 
        investigation under this section are private data on individuals 
        upon completion of the investigation. 
           (c)  [IDENTITY OF REPORTER.] The subject of the report may 
        compel disclosure of the name of the reporter only with the 
        consent of the reporter or upon a written finding by a court 
        that the report was false and there is evidence that the report 
        was made in bad faith.  This subdivision does not alter 
        disclosure responsibilities or obligations under the rules of 
        criminal procedure, except that where the identity of the 
        reporter is relevant to a criminal prosecution, the district 
        court shall do an in-camera review prior to determining whether 
        to order disclosure of the identity of the reporter. 
           (d)  [DESTRUCTION OF DATA.] Notwithstanding section 
        138.163, data maintained under this section by the commissioners 
        of health and human services must be destroyed under the 
        following schedule: 
           (1) data from reports determined to be false, two years 
        after the finding was made; 
           (2) data from reports determined to be inconclusive, four 
        years after the finding was made; 
           (3) data from reports determined to be substantiated, seven 
        years after the finding was made; and 
           (4) data from reports which were not investigated by a lead 
        agency and for which there is no final disposition, two years 
        from the date of the report. 
           (e)  [SUMMARY OF REPORTS.] The commissioners of health and 
        human services shall each annually prepare a summary of report 
        to the legislature and the governor on the number and type of 
        reports of alleged maltreatment involving licensed facilities 
        reported under this section, the number of those requiring 
        investigation under this section, and the resolution of those 
        investigations.  The report shall identify: 
           (1) whether and where backlogs of cases result in a failure 
        to conform with statutory time frames; 
           (2) where adequate coverage requires additional 
        appropriations and staffing; and 
           (3) any other trends that affect the safety of vulnerable 
        adults. 
           (f)  [RECORD RETENTION POLICY.] Each lead agency must have 
        a record retention policy. 
           (g)  [EXCHANGE OF INFORMATION.] Lead agencies, prosecuting 
        authorities, and law enforcement agencies may exchange not 
        public data, as defined in section 13.02, if the agency or 
        authority requesting the data determines that the data are 
        pertinent and necessary to the requesting agency in initiating, 
        furthering, or completing an investigation under this section.  
        Data collected under this section must be made available to 
        prosecuting authorities and law enforcement officials, local 
        county agencies, and licensing agencies investigating the 
        alleged maltreatment under this section.  The lead agency shall 
        exchange not public data with the vulnerable adult maltreatment 
        review panel established in section 256.021 if the data are 
        pertinent and necessary for a review requested under that 
        section.  Upon completion of the review, not public data 
        received by the review panel must be returned to the lead agency.
           (h)  [COMPLETION TIME.] Each lead agency shall keep records 
        of the length of time it takes to complete its investigations. 
           (i)  [NOTIFICATION OF OTHER AFFECTED PARTIES.] A lead 
        agency may notify other affected parties and their authorized 
        representative if the agency has reason to believe maltreatment 
        has occurred and determines the information will safeguard the 
        well-being of the affected parties or dispel widespread rumor or 
        unrest in the affected facility. 
           (j)  [FEDERAL REQUIREMENTS.] Under any notification 
        provision of this section, where federal law specifically 
        prohibits the disclosure of patient identifying information, a 
        lead agency may not provide any notice unless the vulnerable 
        adult has consented to disclosure in a manner which conforms to 
        federal requirements. 
           Sec. 32.  Laws 1995, chapter 207, article 3, section 21, as 
        amended by Laws 1999, chapter 245, article 3, section 43, is 
        amended to read:  
           Sec. 21.  [FACILITY CERTIFICATION.] 
           (a) Notwithstanding Minnesota Statutes, section 252.291, 
        subdivisions 1 and 2, the commissioner of health shall inspect 
        to certify a large community-based facility currently licensed 
        under Minnesota Rules, parts 9525.0215 to 9525.0355, for more 
        than 16 beds and located in Northfield.  The facility may be 
        certified for up to 44 beds.  The commissioner of health must 
        inspect to certify the facility as soon as possible after the 
        effective date of this section.  The commissioner of human 
        services shall work with the facility and affected counties to 
        relocate any current residents of the facility who do not meet 
        the admission criteria for an ICF/MR.  Until January 1, 1999, in 
        order to fund the ICF/MR services and relocations of current 
        residents authorized, the commissioner of human services may 
        transfer on a quarterly basis to the medical assistance account 
        from each affected county's community social service allocation, 
        an amount equal to the state share of medical assistance 
        reimbursement for the residential and day habilitation services 
        funded by medical assistance and provided to clients for whom 
        the county is financially responsible.  
           (b) After January 1, 1999, the commissioner of human 
        services shall fund the services under the state medical 
        assistance program and may transfer on a quarterly basis to the 
        medical assistance account from each affected county's community 
        social service allocation, an amount equal to one-half of the 
        state share of medical assistance reimbursement for the 
        residential and day habilitation services funded by medical 
        assistance and provided to clients for whom the county is 
        financially responsible.  
           (c) Effective July 1, 2001, the commissioner of human 
        services shall fund the entire state share of medical assistance 
        reimbursement for the residential and day habilitation services 
        funded by medical assistance and provided to clients for whom 
        counties are financially responsible from the medical assistance 
        account, and shall not make any transfer from the community 
        social service allocations of affected counties.  
           (d) For nonresidents of Minnesota seeking admission to the 
        facility, Rice county shall be notified in order to assure that 
        appropriate funding is guaranteed from their state or country of 
        residence. 
           Sec. 33.  Laws 1999, chapter 245, article 3, section 45, as 
        amended by Laws 2000, chapter 312, section 3, is amended to read:
           Sec. 45.  [STATE LICENSURE CONFLICTS WITH FEDERAL 
        REGULATIONS.] 
           (a) Notwithstanding the provisions of Minnesota Rules, part 
        4658.0520, an incontinent resident must be checked according to 
        a specific time interval written in the resident's care plan.  
        The resident's attending physician must authorize in writing any 
        interval longer than two hours unless the resident, if 
        competent, or a family member or legally appointed conservator, 
        guardian, or health care agent of a resident who is not 
        competent, agrees in writing to waive physician involvement in 
        determining this interval. 
           (b) This section expires July 1, 2001 2003. 
           Sec. 34.  Laws 2000, chapter 364, section 2, is amended to 
        read: 
           Sec. 2.  [MORATORIUM EXCEPTION PROCESS.] 
           For fiscal year the biennium beginning July 1, 2000 2001, 
        when approving nursing home moratorium exception projects under 
        Minnesota Statutes, section 144A.073, the commissioner of health 
        shall give priority to proposals a proposal to build a 
        replacement facilities facility in the city of Anoka or within 
        ten miles of the city of Anoka. 
           Sec. 35.  [DEVELOPMENT OF NEW NURSING FACILITY 
        REIMBURSEMENT SYSTEM.] 
           (a) The commissioner of human services shall develop and 
        report to the legislature by January 15, 2003, a system to 
        replace the current nursing facility reimbursement system 
        established under Minnesota Statutes, sections 256B.431, 
        256B.434, and 256B.435. 
           (b) The system must be developed in consultation with the 
        long-term care task force and with representatives of consumers, 
        providers, and labor unions.  Within the limits of available 
        appropriations, the commissioner may employ consultants to 
        assist with this project. 
           (c) The new reimbursement system must: 
           (1) provide incentives to enhance quality of life and 
        quality of care; 
           (2) recognize cost differences in the care of different 
        types of populations, including subacute care and dementia care; 
           (3) establish rates that are sufficient without being 
        excessive; 
           (4) be affordable for the state and for private-pay 
        residents; 
           (5) be sensitive to changing conditions in the long-term 
        care environment; 
           (6) avoid creating access problems related to insufficient 
        funding; 
           (7) allow providers maximum flexibility in their business 
        operations; 
           (8) recognize the need for capital investment to improve 
        physical plants; and 
           (9) provide incentives for the development and use of 
        private rooms. 
           (d) Notwithstanding Minnesota Statutes, section 256B.435, 
        the commissioner must not implement a performance-based 
        contracting system for nursing facilities prior to July 1, 2003. 
        The commissioner shall continue to reimburse nursing facilities 
        under Minnesota Statutes, section 256B.431 or 256B.434, until 
        otherwise directed by law. 
           (e) The commissioner of human services, in consultation 
        with the commissioner of health, shall conduct or contract for a 
        time study to determine staff time being spent on various case 
        mix categories; recommend adjustments to the case mix weights 
        based on the time study data; and determine whether current 
        staffing standards are adequate for providing quality care based 
        on professional best practice and consumer experience.  If the 
        commissioner determines the current standards are inadequate, 
        the commissioner shall determine an appropriate staffing 
        standard for the various case mix categories and the financial 
        implications of phasing into this standard over the next four 
        years. 
           Sec. 36.  [MINIMUM STAFFING STANDARDS REPORT.] 
           By January 15, 2002, the commissioner of health and the 
        commissioner of human services shall report to the legislature 
        on whether they should translate the minimum nurse staffing 
        requirement in Minnesota Statutes, section 144A.04, subdivision 
        7, paragraph (a), upon the transition to the RUG-III 
        classification system, or whether they should establish 
        different time-based standards, and how to accomplish either. 
           Sec. 37.  [PROVIDER RATE INCREASES.] 
           (a) The commissioner of human services shall increase 
        reimbursement rates by three percent each year of the biennium 
        for the providers listed in paragraph (b) and 3.5 percent for 
        the providers listed in paragraph (c).  The increases are 
        effective for services rendered on or after July 1 of each year. 
           (b) The three percent rate increases described in this 
        section must be provided to: 
           (1) home and community-based waivered services for persons 
        with mental retardation or related conditions under Minnesota 
        Statutes, section 256B.501; 
           (2) home and community-based waivered services for the 
        elderly under Minnesota Statutes, section 256B.0915; 
           (3) waivered services under community alternatives for 
        disabled individuals under Minnesota Statutes, section 256B.49; 
           (4) community alternative care waivered services under 
        Minnesota Statutes, section 256B.49; 
           (5) traumatic brain injury waivered services under 
        Minnesota Statutes, section 256B.49; 
           (6) nursing services and home health services under 
        Minnesota Statutes, section 256B.0625, subdivision 6a; 
           (7) personal care services and nursing supervision of 
        personal care services under Minnesota Statutes, section 
        256B.0625, subdivision 19a; 
           (8) private duty nursing services under Minnesota Statutes, 
        section 256B.0625, subdivision 7; 
           (9) day training and habilitation services for adults with 
        mental retardation or related conditions under Minnesota 
        Statutes, sections 252.40 to 252.46; 
           (10) alternative care services under Minnesota Statutes, 
        section 256B.0913; 
           (11) adult residential program grants under Minnesota 
        Rules, parts 9535.2000 to 9535.3000; 
           (12) adult and family community support grants under 
        Minnesota Rules, parts 9535.1700 to 9535.1760; 
           (13) the group residential housing supplementary service 
        rate under Minnesota Statutes, section 256I.05, subdivision 1a; 
           (14) adult mental health integrated fund grants under 
        Minnesota Statutes, section 245.4661; 
           (15) semi-independent living services under Minnesota 
        Statutes, section 252.275, including SILS funding under county 
        social services grants formerly funded under Minnesota Statutes, 
        chapter 256I; 
           (16) community support services for deaf and 
        hard-of-hearing adults with mental illness who use or wish to 
        use sign language as their primary means of communication; and 
           (17) living skills training programs for persons with 
        intractable epilepsy who need assistance in the transition to 
        independent living. 
           (c) The 3.5 percent rate increases described in this 
        section must be provided to day training and habilitation 
        services under Minnesota Statutes, chapter 256B. 
           (d) Providers that receive a rate increase under this 
        section shall use one-third of the additional revenue for 
        operating cost increases and two-thirds of the additional 
        revenue to increase wages and benefits and pay associated costs 
        for all employees other than the administrator and central 
        office staff.  For public employees, the portion of this 
        increase reserved to increase wages and benefits for certain 
        staff is available and pay rates shall be increased only to the 
        extent that they comply with laws governing public employees 
        collective bargaining.  Money received by a provider for pay 
        increases under this section must be used only for increases 
        implemented on or after the first day of the state fiscal year 
        in which the increase is available and must not be used for 
        increases implemented prior to that date. 
           (e) A copy of the provider's plan for complying with 
        paragraph (d) must be made available to all employees by giving 
        each employee a copy or by posting it in an area of the 
        provider's operation to which all employees have access.  If an 
        employee does not receive the adjustment described in the plan 
        and is unable to resolve the problem with the provider, the 
        employee may contact the employee's union representative.  If 
        the employee is not covered by a collective bargaining 
        agreement, the employee may contact the commissioner at a phone 
        number provided by the commissioner and included in the 
        provider's plan. 
           Sec. 38.  [REGULATORY FLEXIBILITY.] 
           (a) By September 1, 2001, the commissioners of health and 
        human services shall: 
           (1) develop a summary of federal nursing facility and 
        community long-term care regulations that hamper state 
        flexibility and place burdens on the goal of achieving 
        high-quality care and optimum outcomes for consumers of 
        services; and 
           (2) share this summary with the legislature, other states, 
        national groups that advocate for state interests with Congress, 
        and the Minnesota congressional delegation. 
           (b) The commissioners shall conduct ongoing follow-up with 
        the entities to which this summary is provided and with the 
        health care financing administration to achieve maximum 
        regulatory flexibility, including the possibility of pilot 
        projects to demonstrate regulatory flexibility on less than a 
        statewide basis. 
           Sec. 39.  [REPORT.] 
           By January 15, 2003, the commissioner of health and the 
        commissioner of human services shall report to the senate health 
        and family security committee and the house health and human 
        services policy committee on the number of closures that have 
        taken place under Minnesota Statutes, section 256B.437, and any 
        other nursing facility closures that may have taken place, 
        alternatives to nursing facility care that have been developed, 
        any problems with access to long-term care services that have 
        resulted, and any recommendations for continuation of the 
        regional long-term care planning process and the closure process 
        after June 30, 2003. 
           Sec. 40.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall delete any reference to 
        Minnesota Statutes, section 144A.16, in Minnesota Statutes and 
        Minnesota Rules. 
           Sec. 41.  [REPEALER.] 
           (a) Minnesota Statutes 2000, sections 144A.16; and 
        256B.434, subdivision 5, are repealed. 
           (b) Minnesota Rules, parts 4655.6810; 4655.6820; 4655.6830; 
        4658.1600; 4658.1605; 4658.1610; 4658.1690; 9546.0010; 
        9546.0020; 9546.0030; 9546.0040; 9546.0050; and 9546.0060, are 
        repealed. 

                                   ARTICLE 6 
                      WORKFORCE RECRUITMENT AND RETENTION 
           Section 1.  Minnesota Statutes 2000, section 116L.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [QUALIFYING CONSORTIUM.] "Qualifying consortium" 
        means an entity that may include includes a public or private 
        institution of higher education, work force center, county, and 
        one or more eligible employers, but must include a public or 
        private institution of higher education and one or more eligible 
        employers employer. 
           Sec. 2.  Minnesota Statutes 2000, section 116L.12, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GRANTS.] Within the limits of available 
        appropriations, the board shall make grants not to exceed 
        $400,000 each to qualifying consortia to operate local, 
        regional, or statewide training and retention programs.  Grants 
        may be made from TANF funds, general fund appropriations, and 
        any other funding sources available to the board, provided the 
        requirements of those funding sources are satisfied.  Grant 
        awards must establish specific, measurable outcomes and 
        timelines for achieving those outcomes. 
           Sec. 3.  Minnesota Statutes 2000, section 116L.12, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LOCAL MATCH REQUIREMENTS.] A consortium must 
        provide at least a 50 percent match from local resources for 
        money appropriated under this section.  The local match 
        requirement must be satisfied on an overall program basis but 
        need not be satisfied for each particular client.  The local 
        match requirement may be reduced for consortia that include a 
        relatively large number of small employers whose financial 
        contribution has been reduced in accordance with section 116L.15.
        In-kind services and expenditures under section 116L.13, 
        subdivision 2, may be used to meet this local match 
        requirement.  The grant application must specify the financial 
        contribution from each member of the consortium satisfy the 
        match requirements established in section 116L.02, paragraph (a).
           Sec. 4.  Minnesota Statutes 2000, section 116L.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MARKETING AND RECRUITMENT.] A qualifying 
        consortium must implement a marketing and outreach strategy to 
        recruit into the health care and human services fields persons 
        from one or more of the potential employee target groups.  
        Recruitment strategies must include: 
           (1) a screening process to evaluate whether potential 
        employees may be disqualified as the result of a required 
        background check or are otherwise unlikely to succeed in the 
        position for which they are being recruited; and 
           (2) a process for modifying course work to meet the 
        training needs of non-English-speaking persons, when appropriate.
           Sec. 5.  [116L.146] [EXPEDITED GRANT PROCESS.] 
           (a) The board may authorize grants not to exceed $50,000 
        each through an expedited grant approval process to: 
           (1) eligible employers to provide training programs for up 
        to 50 workers; or 
           (2) a public or private institution of higher education to: 
           (i) do predevelopment or curriculum development for 
        training programs prior to submission for program funding under 
        section 116L.12; 
           (ii) convert an existing curriculum for distance learning 
        through interactive television or other communication methods; 
        or 
           (iii) enable a training program to be offered when it would 
        otherwise be canceled due to an enrollment shortfall of one or 
        two students when the program is offered in a health-related 
        field with a documented worker shortage and is part of a 
        training program not exceeding two years in length. 
           (b) The board shall develop application procedures and 
        evaluation policies for grants made under this section. 
           Sec. 6.  Minnesota Statutes 2000, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 36.  [EMPLOYEE SCHOLARSHIP COSTS AND TRAINING IN 
        ENGLISH AS A SECOND LANGUAGE.] (a) For the period between July 
        1, 2001, and June 30, 2003, the commissioner shall provide to 
        each nursing facility reimbursed under this section, section 
        256B.434, or any other section, a scholarship per diem of 25 
        cents to the total operating payment rate to be used: 
           (1) for employee scholarships that satisfy the following 
        requirements: 
           (i) scholarships are available to all employees who work an 
        average of at least 20 hours per week at the facility except the 
        administrator, department supervisors, and registered nurses; 
        and 
           (ii) the course of study is expected to lead to career 
        advancement with the facility or in long-term care, including 
        medical care interpreter services and social work; and 
           (2) to provide job-related training in English as a second 
        language. 
           (b) A facility receiving a rate adjustment under this 
        subdivision may submit to the commissioner on a schedule 
        determined by the commissioner and on a form supplied by the 
        commissioner a calculation of the scholarship per diem, 
        including:  the amount received from this rate adjustment; the 
        amount used for training in English as a second language; the 
        number of persons receiving the training; the name of the person 
        or entity providing the training; and for each scholarship 
        recipient, the name of the recipient, the amount awarded, the 
        educational institution attended, the nature of the educational 
        program, the program completion date, and a determination of the 
        per diem amount of these costs based on actual resident days. 
           (c) On July 1, 2003, the commissioner shall remove the 25 
        cent scholarship per diem from the total operating payment rate 
        of each facility. 
           (d) For rate years beginning after June 30, 2003, the 
        commissioner shall provide to each facility the scholarship per 
        diem determined in paragraph (b). 
           Sec. 7.  [CHIP WAIVER.] 
           The commissioner of human services shall seek all waivers 
        necessary to obtain enhanced matching funds under the state 
        children's health insurance program established as title XXI of 
        the Social Security Act, United States Code, title 42, section 
        1397aa et seq. for a program to develop a long-term care 
        employee health insurance program.  Upon receipt of federal 
        approval, the commissioner, in consultation with the long-term 
        care task force, shall report to the legislature with 
        recommendations on implementing the program. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 8.  [REPEALER.] 
           Minnesota Statutes 2000, section 116L.12, subdivisions 2 
        and 7, are repealed. 

                                   ARTICLE 7 
                           REGULATION OF SUPPLEMENTAL 
                           NURSING SERVICES AGENCIES 
           Section 1.  Minnesota Statutes 2000, section 144.057, is 
        amended to read: 
           144.057 [BACKGROUND STUDIES ON LICENSEES AND SUPPLEMENTAL 
        NURSING SERVICES AGENCY PERSONNEL.] 
           Subdivision 1.  [BACKGROUND STUDIES REQUIRED.] The 
        commissioner of health shall contract with the commissioner of 
        human services to conduct background studies of: 
           (1) individuals providing services which have direct 
        contact, as defined under section 245A.04, subdivision 3, with 
        patients and residents in hospitals, boarding care homes, 
        outpatient surgical centers licensed under sections 144.50 to 
        144.58; nursing homes and home care agencies licensed under 
        chapter 144A; residential care homes licensed under chapter 
        144B, and board and lodging establishments that are registered 
        to provide supportive or health supervision services under 
        section 157.17; and 
           (2) beginning July 1, 1999, all other employees in nursing 
        homes licensed under chapter 144A, and boarding care homes 
        licensed under sections 144.50 to 144.58.  A disqualification of 
        an individual in this section shall disqualify the individual 
        from positions allowing direct contact or access to patients or 
        residents receiving services; 
           (3) individuals employed by a supplemental nursing services 
        agency, as defined under section 144A.70, who are providing 
        services in health care facilities; and 
           (4) controlling persons of a supplemental nursing services 
        agency, as defined under section 144A.70. 
           If a facility or program is licensed by the department of 
        human services and subject to the background study provisions of 
        chapter 245A and is also licensed by the department of health, 
        the department of human services is solely responsible for the 
        background studies of individuals in the jointly licensed 
        programs. 
           Subd. 2.  [RESPONSIBILITIES OF DEPARTMENT OF HUMAN 
        SERVICES.] The department of human services shall conduct the 
        background studies required by subdivision 1 in compliance with 
        the provisions of chapter 245A and Minnesota Rules, parts 
        9543.3000 to 9543.3090.  For the purpose of this section, the 
        term "residential program" shall include all facilities 
        described in subdivision 1.  The department of human services 
        shall provide necessary forms and instructions, shall conduct 
        the necessary background studies of individuals, and shall 
        provide notification of the results of the studies to the 
        facilities, supplemental nursing services agencies, individuals, 
        and the commissioner of health.  Individuals shall be 
        disqualified under the provisions of chapter 245A and Minnesota 
        Rules, parts 9543.3000 to 9543.3090.  If an individual is 
        disqualified, the department of human services shall notify the 
        facility, the supplemental nursing services agency, and the 
        individual and shall inform the individual of the right to 
        request a reconsideration of the disqualification by submitting 
        the request to the department of health. 
           Subd. 3.  [RECONSIDERATIONS.] The commissioner of health 
        shall review and decide reconsideration requests, including the 
        granting of variances, in accordance with the procedures and 
        criteria contained in chapter 245A and Minnesota Rules, parts 
        9543.3000 to 9543.3090.  The commissioner's decision shall be 
        provided to the individual and to the department of human 
        services.  The commissioner's decision to grant or deny a 
        reconsideration of disqualification is the final administrative 
        agency action, except for the provisions under section 245A.04, 
        subdivisions 3b, paragraphs (e) and (f); and 3c, paragraph (a). 
           [EFFECTIVE DATE.] This subdivision is effective January 1, 
        2002. 
           Subd. 4.  [RESPONSIBILITIES OF FACILITIES AND AGENCIES.] 
        Facilities and agencies described in subdivision 1 shall be 
        responsible for cooperating with the departments in implementing 
        the provisions of this section.  The responsibilities imposed on 
        applicants and licensees under chapter 245A and Minnesota Rules, 
        parts 9543.3000 to 9543.3090, shall apply to these 
        facilities and supplemental nursing services agencies.  The 
        provision of section 245A.04, subdivision 3, paragraph (e), 
        shall apply to applicants, licensees, registrants, or an 
        individual's refusal to cooperate with the completion of the 
        background studies.  Supplemental nursing services agencies 
        subject to the registration requirements in section 144A.71 must 
        maintain records verifying compliance with the background study 
        requirements under this section. 
           Sec. 2.  [144A.70] [REGISTRATION OF SUPPLEMENTAL NURSING 
        SERVICES AGENCIES; DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] As used in sections 144A.70 to 
        144A.74, the terms defined in this section have the meanings 
        given them. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of health. 
           Subd. 3.  [CONTROLLING PERSON.] "Controlling person" means 
        a business entity, officer, program administrator, or director 
        whose responsibilities include the direction of the management 
        or policies of a supplemental nursing services agency.  
        Controlling person also means an individual who, directly or 
        indirectly, beneficially owns an interest in a corporation, 
        partnership, or other business association that is a controlling 
        person. 
           Subd. 4.  [HEALTH CARE FACILITY.] "Health care facility" 
        means a hospital, boarding care home, or outpatient surgical 
        center licensed under sections 144.50 to 144.58; a nursing home 
        or home care agency licensed under this chapter; a housing with 
        services establishment registered under chapter 144D; or a board 
        and lodging establishment that is registered to provide 
        supportive or health supervision services under section 157.17. 
           Subd. 5.  [PERSON.] "Person" includes an individual, firm, 
        corporation, partnership, or association. 
           Subd. 6.  [SUPPLEMENTAL NURSING SERVICES 
        AGENCY.] "Supplemental nursing services agency" means a person, 
        firm, corporation, partnership, or association engaged for hire 
        in the business of providing or procuring temporary employment 
        in health care facilities for nurses, nursing assistants, nurse 
        aides, and orderlies.  Supplemental nursing services agency does 
        not include an individual who only engages in providing the 
        individual's services on a temporary basis to health care 
        facilities.  Supplemental nursing services agency also does not 
        include any nursing service agency that is limited to providing 
        temporary nursing personnel solely to one or more health care 
        facilities owned or operated by the same person, firm, 
        corporation, or partnership. 
           Sec. 3.  [144A.71] [SUPPLEMENTAL NURSING SERVICES AGENCY 
        REGISTRATION.] 
           Subdivision 1.  [DUTY TO REGISTER.] A person who operates a 
        supplemental nursing services agency shall register the agency 
        with the commissioner.  Each separate location of the business 
        of a supplemental nursing services agency shall register the 
        agency with the commissioner.  Each separate location of the 
        business of a supplemental nursing services agency shall have a 
        separate registration. 
           Subd. 2.  [APPLICATION INFORMATION AND FEE.] The 
        commissioner shall establish forms and procedures for processing 
        each supplemental nursing services agency registration 
        application.  An application for a supplemental nursing services 
        agency registration must include at least the following: 
           (1) the names and addresses of the owner or owners of the 
        supplemental nursing services agency; 
           (2) if the owner is a corporation, copies of its articles 
        of incorporation and current bylaws, together with the names and 
        addresses of its officers and directors; 
           (3) any other relevant information that the commissioner 
        determines is necessary to properly evaluate an application for 
        registration; and 
           (4) the annual registration fee for a supplemental nursing 
        services agency, which is $891. 
           Subd. 3.  [REGISTRATION NOT TRANSFERABLE.] A registration 
        issued by the commissioner according to this section is 
        effective for a period of one year from the date of its issuance 
        unless the registration is revoked or suspended under section 
        144A.72, subdivision 2, or unless the supplemental nursing 
        services agency is sold or ownership or management is 
        transferred.  When a supplemental nursing services agency is 
        sold or ownership or management is transferred, the registration 
        of the agency must be voided and the new owner or operator may 
        apply for a new registration. 
           Sec. 4.  [144A.72] [REGISTRATION REQUIREMENTS; PENALTIES.] 
           Subdivision 1.  [MINIMUM CRITERIA.] The commissioner shall 
        require that, as a condition of registration: 
           (1) the supplemental nursing services agency shall document 
        that each temporary employee provided to health care facilities 
        currently meets the minimum licensing, training, and continuing 
        education standards for the position in which the employee will 
        be working; 
           (2) the supplemental nursing services agency shall comply 
        with all pertinent requirements relating to the health and other 
        qualifications of personnel employed in health care facilities; 
           (3) the supplemental nursing services agency must not 
        restrict in any manner the employment opportunities of its 
        employees; 
           (4) the supplemental nursing services agency, when 
        supplying temporary employees to a health care facility, and 
        when requested by the facility to do so, shall agree that at 
        least 30 percent of the total personnel hours supplied are 
        during night, holiday, or weekend shifts; 
           (5) the supplemental nursing services agency shall carry 
        medical malpractice insurance to insure against the loss, 
        damage, or expense incident to a claim arising out of the death 
        or injury of any person as the result of negligence or 
        malpractice in the provision of health care services by the 
        supplemental nursing services agency or by any employee of the 
        agency; and 
           (6) the supplemental nursing services agency must not, in 
        any contract with any employee or health care facility, require 
        the payment of liquidated damages, employment fees, or other 
        compensation should the employee be hired as a permanent 
        employee of a health care facility. 
           Subd. 2.  [PENALTIES.] A pattern of failure to comply with 
        this section shall subject the supplemental nursing services 
        agency to revocation or nonrenewal of its registration.  
        Violations of section 144A.74 are subject to a fine equal to 200 
        percent of the amount billed or received in excess of the 
        maximum permitted under that section. 
           Sec. 5.  [144A.73] [COMPLAINT SYSTEM.] 
           The commissioner shall establish a system for reporting 
        complaints against a supplemental nursing services agency or its 
        employees.  Complaints may be made by any member of the public.  
        Written complaints must be forwarded to the employer of each 
        person against whom a complaint is made.  The employer shall 
        promptly report to the commissioner any corrective action taken. 
           Sec. 6.  [144A.74] [MAXIMUM CHARGES.] 
           A supplemental nursing services agency must not bill or 
        receive payments from a nursing home licensed under this chapter 
        at a rate higher than 150 percent of the weighted average wage 
        rate for the applicable employee classification for the 
        geographic group to which the nursing home is assigned under 
        Minnesota Rules, part 9549.0052.  The weighted average wage 
        rates must be determined by the commissioner of human services 
        and reported to the commissioner of health on an annual basis.  
        Facilities shall provide information necessary to determine 
        weighted average wage rates to the commissioner of human 
        services in a format requested by the commissioner.  The maximum 
        rate must include all charges for administrative fees, contract 
        fees, or other special charges in addition to the hourly rates 
        for the temporary nursing pool personnel supplied to a nursing 
        home. 
           [EFFECTIVE DATE.] This section is effective August 31, 2001.
           Sec. 7.  [256B.039] [REPORTING OF SUPPLEMENTAL NURSING 
        SERVICES AGENCY USE.] 
           Beginning March 1, 2002, the commissioner shall to report 
        to the legislature annually on the use of supplemental nursing 
        services, including the number of hours worked by supplemental 
        nursing services agency personnel and payments to supplemental 
        nursing services agencies. 

                                   ARTICLE 8 
                            LONG-TERM CARE INSURANCE 
           Section 1.  Minnesota Statutes 2000, section 62A.48, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LOSS RATIO.] The anticipated loss ratio for 
        long-term care policies must not be less than 65 percent for 
        policies issued on a group basis or 60 percent for policies 
        issued on an individual or mass-market basis.  This subdivision 
        does not apply to policies issued on or after January 1, 2002, 
        that comply with sections 62S.021 and 62S.081. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2000, section 62A.48, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [REGULATION OF PREMIUMS AND PREMIUM 
        INCREASES.] Policies issued under sections 62A.46 to 62A.56 on 
        or after January 1, 2002, must comply with sections 62S.021, 
        62S.081, 62S.265, and 62S.266 to the same extent as policies 
        issued under chapter 62S. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 3.  Minnesota Statutes 2000, section 62A.48, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [NONFORFEITURE BENEFITS.] Policies issued under 
        sections 62A.46 to 62A.56 on or after January 1, 2002, must 
        comply with section 62S.02, subdivision 2, to the same extent as 
        policies issued under chapter 62S. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  Minnesota Statutes 2000, section 62S.01, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [EXCEPTIONAL INCREASE.] (a) "Exceptional 
        increase" means only those premium rate increases filed by an 
        insurer as exceptional for which the commissioner determines 
        that the need for the premium rate increase is justified due to 
        changes in laws or rules applicable to long-term care coverage 
        in this state, or due to increased and unexpected utilization 
        that affects the majority of insurers of similar products. 
           (b) Except as provided in section 62S.265, exceptional 
        increases are subject to the same requirements as other premium 
        rate schedule increases.  The commissioner may request a review 
        by an independent actuary or a professional actuarial body of 
        the basis for a request that an increase be considered an 
        exceptional increase.  The commissioner, in determining that the 
        necessary basis for an exceptional increase exists, shall also 
        determine any potential offsets to higher claims costs. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2000, section 62S.01, is 
        amended by adding a subdivision to read: 
           Subd. 17a.  [INCIDENTAL.] "Incidental," as used in section 
        62S.265, subdivision 10, means that the value of the long-term 
        care benefits provided is less than ten percent of the total 
        value of the benefits provided over the life of the policy.  
        These values must be measured as of the date of issue. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2000, section 62S.01, is 
        amended by adding a subdivision to read: 
           Subd. 23a.  [QUALIFIED ACTUARY.] "Qualified actuary" means 
        a member in good standing of the American Academy of Actuaries. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2000, section 62S.01, is 
        amended by adding a subdivision to read: 
           Subd. 25a.  [SIMILAR POLICY FORMS.] "Similar policy forms" 
        means all of the long-term care insurance policies and 
        certificates issued by an insurer in the same long-term care 
        benefit classification as the policy form being considered.  
        Certificates of groups that meet the definition in section 
        62S.01, subdivision 15, clause (1), are not considered similar 
        to certificates or policies otherwise issued as long-term care 
        insurance, but are similar to other comparable certificates with 
        the same long-term care benefit classifications.  For purposes 
        of determining similar policy forms, long-term care benefit 
        classifications are defined as follows:  institutional long-term 
        care benefits only, noninstitutional long-term care benefits 
        only, or comprehensive long-term care benefits. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  [62S.021] [LONG-TERM CARE INSURANCE; INITIAL 
        FILING.] 
           Subdivision 1.  [APPLICABILITY.] This section applies to 
        any long-term care policy issued in this state on or after 
        January 1, 2002, under this chapter or sections 62A.46 to 62A.56.
           Subd. 2.  [REQUIRED SUBMISSION TO COMMISSIONER.] An insurer 
        shall provide the following information to the commissioner 30 
        days prior to making a long-term care insurance form available 
        for sale: 
           (1) a copy of the disclosure documents required in section 
        62S.081; and 
           (2) an actuarial certification consisting of at least the 
        following: 
           (i) a statement that the initial premium rate schedule is 
        sufficient to cover anticipated costs under moderately adverse 
        experience and that the premium rate schedule is reasonably 
        expected to be sustainable over the life of the form with no 
        future premium increases anticipated; 
           (ii) a statement that the policy design and coverage 
        provided have been reviewed and taken into consideration; 
           (iii) a statement that the underwriting and claims 
        adjudication processes have been reviewed and taken into 
        consideration; and 
           (iv) a complete description of the basis for contract 
        reserves that are anticipated to be held under the form, to 
        include: 
           (A) sufficient detail or sample calculations provided so as 
        to have a complete depiction of the reserve amounts to be held; 
           (B) a statement that the assumptions used for reserves 
        contain reasonable margins for adverse experience; 
           (C) a statement that the net valuation premium for renewal 
        years does not increase, except for attained age rating where 
        permitted; 
           (D) a statement that the difference between the gross 
        premium and the net valuation premium for renewal years is 
        sufficient to cover expected renewal expenses, or if such a 
        statement cannot be made, a complete description of the 
        situations in which this does not occur.  An aggregate 
        distribution of anticipated issues may be used as long as the 
        underlying gross premiums maintain a reasonably consistent 
        relationship.  If the gross premiums for certain age groups 
        appear to be inconsistent with this requirement, the 
        commissioner may request a demonstration under item (i) based on 
        a standard age distribution; and 
           (E) either a statement that the premium rate schedule is 
        not less than the premium rate schedule for existing similar 
        policy forms also available from the insurer except for 
        reasonable differences attributable to benefits, or a comparison 
        of the premium schedules for similar policy forms that are 
        currently available from the insurer with an explanation of the 
        differences. 
           Subd. 3.  [ACTUARIAL DEMONSTRATION.] The commissioner may 
        request an actuarial demonstration that benefits are reasonable 
        in relation to premiums.  The actuarial demonstration must 
        include either premium and claim experience on similar policy 
        forms, adjusted for any premium or benefit differences, relevant 
        and credible data from other studies, or both.  If the 
        commissioner asks for additional information under this 
        subdivision, the 30-day time limit in subdivision 2 does not 
        include the time during which the insurer is preparing the 
        requested information. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 9.  [62S.081] [REQUIRED DISCLOSURE OF RATING PRACTICES 
        TO CONSUMERS.] 
           Subdivision 1.  [APPLICATION.] This section applies as 
        follows: 
           (a) Except as provided in paragraph (b), this section 
        applies to any long-term care policy or certificate issued in 
        this state on or after January 1, 2002. 
           (b) For certificates issued on or after the effective date 
        of this section under a policy of group long-term care insurance 
        as defined in section 62S.01, subdivision 15, that was in force 
        on the effective date of this section, this section applies on 
        the policy anniversary following June 30, 2002. 
           Subd. 2.  [REQUIRED DISCLOSURES.] Other than policies for 
        which no applicable premium rate or rate schedule increases can 
        be made, insurers shall provide all of the information listed in 
        this subdivision to the applicant at the time of application or 
        enrollment, unless the method of application does not allow for 
        delivery at that time; in this case, an insurer shall provide 
        all of the information listed in this subdivision to the 
        applicant no later than at the time of delivery of the policy or 
        certificate: 
           (1) a statement that the policy may be subject to rate 
        increases in the future; 
           (2) an explanation of potential future premium rate 
        revisions and the policyholder's or certificate holder's option 
        in the event of a premium rate revision; 
           (3) the premium rate or rate schedules applicable to the 
        applicant that will be in effect until a request is made for an 
        increase; 
           (4) a general explanation of applying premium rate or rate 
        schedule adjustments that must include: 
           (i) a description of when premium rate or rate schedule 
        adjustments will be effective, for example the next anniversary 
        date or the next billing date; and 
           (ii) the right to a revised premium rate or rate schedule 
        as provided in clause (3) if the premium rate or rate schedule 
        is changed; and 
           (5)(i) information regarding each premium rate increase on 
        this policy form or similar policy forms over the past ten years 
        for this state or any other state that, at a minimum, identifies:
           (A) the policy forms for which premium rates have been 
        increased; 
           (B) the calendar years when the form was available for 
        purchase; and 
           (C) the amount or percent of each increase.  The percentage 
        may be expressed as a percentage of the premium rate prior to 
        the increase and may also be expressed as minimum and maximum 
        percentages if the rate increase is variable by rating 
        characteristics; 
           (ii) the insurer may, in a fair manner, provide additional 
        explanatory information related to the rate increases; 
           (iii) an insurer has the right to exclude from the 
        disclosure premium rate increases that apply only to blocks of 
        business acquired from other nonaffiliated insurers or the 
        long-term care policies acquired from other nonaffiliated 
        insurers when those increases occurred prior to the acquisition; 
           (iv) if an acquiring insurer files for a rate increase on a 
        long-term care policy form acquired from nonaffiliated insurers 
        or a block of policy forms acquired from nonaffiliated insurers 
        on or before the later of the effective date of this section, or 
        the end of a 24-month period following the acquisition of the 
        block of policies, the acquiring insurer may exclude that rate 
        increase from the disclosure.  However, the nonaffiliated 
        selling company must include the disclosure of that rate 
        increase according to item (i); and 
           (v) if the acquiring insurer in item (iv) files for a 
        subsequent rate increase, even within the 24-month period, on 
        the same policy form acquired from nonaffiliated insurers or 
        block of policy forms acquired from nonaffiliated insurers 
        referenced in item (iv), the acquiring insurer shall make all 
        disclosures required by this subdivision, including disclosure 
        of the earlier rate increase referenced in item (iv). 
           Subd. 3.  [ACKNOWLEDGMENT.] An applicant shall sign an 
        acknowledgment at the time of application, unless the method of 
        application does not allow for signature at that time, that the 
        insurer made the disclosure required under subdivision 2.  If, 
        due to the method of application, the applicant cannot sign an 
        acknowledgment at the time of application, the applicant shall 
        sign no later than at the time of delivery of the policy or 
        certificate. 
           Subd. 4.  [FORMS.] An insurer shall use the forms in 
        Appendices B and F of the Long-term Care Insurance Model 
        Regulation adopted by the National Association of Insurance 
        Commissioners to comply with the requirements of subdivisions 1 
        and 2. 
           Subd. 5.  [NOTICE OF INCREASE.] An insurer shall provide 
        notice of an upcoming premium rate schedule increase, after the 
        increase has been approved by the commissioner, to all 
        policyholders or certificate holders, if applicable, at least 45 
        days prior to the implementation of the premium rate schedule 
        increase by the insurer.  The notice must include the 
        information required by subdivision 2 when the rate increase is 
        implemented. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  Minnesota Statutes 2000, section 62S.26, is 
        amended to read: 
           62S.26 [LOSS RATIO.] 
           (a) The minimum loss ratio must be at least 60 percent, 
        calculated in a manner which provides for adequate reserving of 
        the long-term care insurance risk.  In evaluating the expected 
        loss ratio, the commissioner shall give consideration to all 
        relevant factors, including: 
           (1) statistical credibility of incurred claims experience 
        and earned premiums; 
           (2) the period for which rates are computed to provide 
        coverage; 
           (3) experienced and projected trends; 
           (4) concentration of experience within early policy 
        duration; 
           (5) expected claim fluctuation; 
           (6) experience refunds, adjustments, or dividends; 
           (7) renewability features; 
           (8) all appropriate expense factors; 
           (9) interest; 
           (10) experimental nature of the coverage; 
           (11) policy reserves; 
           (12) mix of business by risk classification; and 
           (13) product features such as long elimination periods, 
        high deductibles, and high maximum limits. 
           (b) This section does not apply to policies or certificates 
        that are subject to sections 62S.021, 62S.081, and 62S.265, and 
        that comply with those sections. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  [62S.265] [PREMIUM RATE SCHEDULE INCREASES.] 
           Subdivision 1.  [APPLICABILITY.] (a) Except as provided in 
        paragraph (b), this section applies to any long-term care policy 
        or certificate issued in this state on or after January 1, 2002, 
        under this chapter or sections 62A.46 to 62A.56. 
           (b) For certificates issued on or after the effective date 
        of this section under a group long-term care insurance policy as 
        defined in section 62S.01, subdivision 15, issued under this 
        chapter, that was in force on the effective date of this 
        section, this section applies on the policy anniversary 
        following June 30, 2002. 
           Subd. 2.  [NOTICE.] An insurer shall file a requested 
        premium rate schedule increase, including an exceptional 
        increase, to the commissioner for prior approval at least 60 
        days prior to the notice to the policyholders and shall include: 
           (1) all information required by section 62S.081; 
           (2) certification by a qualified actuary that: 
           (i) if the requested premium rate schedule increase is 
        implemented and the underlying assumptions, which reflect 
        moderately adverse conditions, are realized, no further premium 
        rate schedule increases are anticipated; and 
           (ii) the premium rate filing complies with this section; 
           (3) an actuarial memorandum justifying the rate schedule 
        change request that includes: 
           (i) lifetime projections of earned premiums and incurred 
        claims based on the filed premium rate schedule increase and the 
        method and assumptions used in determining the projected values, 
        including reflection of any assumptions that deviate from those 
        used for pricing other forms currently available for sale; 
           (A) annual values for the five years preceding and the 
        three years following the valuation date must be provided 
        separately; 
           (B) the projections must include the development of the 
        lifetime loss ratio, unless the rate increase is an exceptional 
        increase; 
           (C) the projections must demonstrate compliance with 
        subdivision 3; and 
           (D) for exceptional increases, the projected experience 
        must be limited to the increases in claims expenses attributable 
        to the approved reasons for the exceptional increase and, if the 
        commissioner determines that offsets to higher claim costs may 
        exist, the insurer shall use appropriate net projected 
        experience; 
           (ii) disclosure of how reserves have been incorporated in 
        this rate increase whenever the rate increase will trigger 
        contingent benefit upon lapse; 
           (iii) disclosure of the analysis performed to determine why 
        a rate adjustment is necessary, which pricing assumptions were 
        not realized and why, and what other actions taken by the 
        company have been relied upon by the actuary; 
           (iv) a statement that policy design, underwriting, and 
        claims adjudication practices have been taken into 
        consideration; and 
           (v) if it is necessary to maintain consistent premium rates 
        for new certificates and certificates receiving a rate increase, 
        the insurer shall file composite rates reflecting projections of 
        new certificates; 
           (4) a statement that renewal premium rate schedules are not 
        greater than new business premium rate schedules except for 
        differences attributable to benefits, unless sufficient 
        justification is provided to the commissioner; and 
           (5) sufficient information for review and approval of the 
        premium rate schedule increase by the commissioner. 
           Subd. 3.  [REQUIREMENTS PERTAINING TO RATE INCREASES.] All 
        premium rate schedule increases must be determined according to 
        the following requirements: 
           (1) exceptional increases must provide that 70 percent of 
        the present value of projected additional premiums from the 
        exceptional increase will be returned to policyholders in 
        benefits; 
           (2) premium rate schedule increases must be calculated so 
        that the sum of the accumulated value of incurred claims, 
        without the inclusion of active life reserves, and the present 
        value of future projected incurred claims, without the inclusion 
        of active life reserves, will not be less than the sum of the 
        following: 
           (i) the accumulated value of the initial earned premium 
        times 58 percent; 
           (ii) 85 percent of the accumulated value of prior premium 
        rate schedule increases on an earned basis; 
           (iii) the present value of future projected initial earned 
        premiums times 58 percent; and 
           (iv) 85 percent of the present value of future projected 
        premiums not in item (iii) on an earned basis; 
           (3) if a policy form has both exceptional and other 
        increases, the values in clause (2), items (ii) and (iv), must 
        also include 70 percent for exceptional rate increase amounts; 
        and 
           (4) all present and accumulated values used to determine 
        rate increases must use the maximum valuation interest rate for 
        contract reserves permitted for valuation of whole life 
        insurance policies issued in this state on the same date.  The 
        actuary shall disclose as part of the actuarial memorandum the 
        use of any appropriate averages. 
           Subd. 4.  [PROJECTIONS.] For each rate increase that is 
        implemented, the insurer shall file for approval by the 
        commissioner updated projections, as described in subdivision 2, 
        clause (3), item (i), annually for the next three years and 
        include a comparison of actual results to projected values.  The 
        commissioner may extend the period to greater than three years 
        if actual results are not consistent with projected values from 
        prior projections.  For group insurance policies that meet the 
        conditions in subdivision 11, the projections required by this 
        subdivision must be provided to the policyholder in lieu of 
        filing with the commissioner. 
           Subd. 5.  [LIFETIME PROJECTIONS.] If any premium rate in 
        the revised premium rate schedule is greater than 200 percent of 
        the comparable rate in the initial premium schedule, lifetime 
        projections, as described in subdivision 2, clause (3), item 
        (i), must be filed for approval by the commissioner every five 
        years following the end of the required period in subdivision 
        4.  For group insurance policies that meet the conditions in 
        subdivision 11, the projections required by this subdivision 
        must be provided to the policyholder in lieu of filing with the 
        commissioner. 
           Subd. 6.  [EFFECT OF ACTUAL EXPERIENCE.] (a) If the 
        commissioner has determined that the actual experience following 
        a rate increase does not adequately match the projected 
        experience and that the current projections under moderately 
        adverse conditions demonstrate that incurred claims will not 
        exceed proportions of premiums specified in subdivision 3, the 
        commissioner may require the insurer to implement any of the 
        following: 
           (1) premium rate schedule adjustments; or 
           (2) other measures to reduce the difference between the 
        projected and actual experience. 
           (b) In determining whether the actual experience adequately 
        matches the projected experience, consideration must be given to 
        subdivision 2, clause (3), item (v), if applicable. 
           Subd. 7.  [CONTINGENT BENEFIT UPON LAPSE.] If the majority 
        of the policies or certificates to which the increase is 
        applicable are eligible for the contingent benefit upon lapse, 
        the insurer shall file: 
           (1) a plan, subject to commissioner approval, for improved 
        administration or claims processing designed to eliminate the 
        potential for further deterioration of the policy form requiring 
        further premium rate schedule increases, or both, or a 
        demonstration that appropriate administration and claims 
        processing have been implemented or are in effect; otherwise, 
        the commissioner may impose the condition in subdivision 8, 
        paragraph (b); and 
           (2) the original anticipated lifetime loss ratio, and the 
        premium rate schedule increase that would have been calculated 
        according to subdivision 3 had the greater of the original 
        anticipated lifetime loss ratio or 58 percent been used in the 
        calculations described in subdivision 3, clause (2), items (i) 
        and (iii). 
           Subd. 8.  [PROJECTED LAPSE RATES.] (a) For a rate increase 
        filing that meets the following criteria, the commissioner shall 
        review, for all policies included in the filing, the projected 
        lapse rates and past lapse rates during the 12 months following 
        each increase to determine if significant adverse lapsation has 
        occurred or is anticipated: 
           (1) the rate increase is not the first rate increase 
        requested for the specific policy form or forms; 
           (2) the rate increase is not an exceptional increase; and 
           (3) the majority of the policies or certificates to which 
        the increase is applicable are eligible for the contingent 
        benefit upon lapse. 
           (b) If significant adverse lapsation has occurred, is 
        anticipated in the filing, or is evidenced in the actual results 
        as presented in the updated projections provided by the insurer 
        following the requested rate increase, the commissioner may 
        determine that a rate spiral exists.  Following the 
        determination that a rate spiral exists, the commissioner may 
        require the insurer to offer, without underwriting, to all 
        in-force insureds subject to the rate increase, the option to 
        replace existing coverage with one or more reasonably comparable 
        products being offered by the insurer or its affiliates.  The 
        offer must: 
           (1) be subject to the approval of the commissioner; 
           (2) be based upon actuarially sound principles, but not be 
        based upon attained age; and 
           (3) provide that maximum benefits under any new policy 
        accepted by an insured are reduced by comparable benefits 
        already paid under the existing policy. 
           (c) The insurer shall maintain the experience of all the 
        replacement insureds separate from the experience of insureds 
        originally issued the policy forms.  In the event of a request 
        for a rate increase on the policy form, the rate increase must 
        be limited to the lesser of the maximum rate increase determined 
        based on the combined experience and the maximum rate increase 
        determined based only upon the experience of the insureds 
        originally issued the form plus ten percent. 
           Subd. 9.  [PERSISTENT PRACTICE OF INADEQUATE INITIAL 
        RATES.] If the commissioner determines that the insurer has 
        exhibited a persistent practice of filing inadequate initial 
        premium rates for long-term care insurance, the commissioner 
        may, in addition to the provisions of subdivision 8, prohibit 
        the insurer from either of the following: 
           (1) filing and marketing comparable coverage for a period 
        of up to five years; or 
           (2) offering all other similar coverages and limiting 
        marketing of new applications to the products subject to recent 
        premium rate schedule increases. 
           Subd. 10.  [INCIDENTAL LONG-TERM CARE 
        BENEFITS.] Subdivisions 1 to 9 do not apply to policies for 
        which the long-term care benefits provided by the policy are 
        incidental, as defined in section 62S.01, subdivision 17a, if 
        the policy complies with all of the following provisions: 
           (1) the interest credited internally to determine cash 
        value accumulations, including long-term care, if any, are 
        guaranteed not to be less than the minimum guaranteed interest 
        rate for cash value accumulations without long-term care set 
        forth in the policy; 
           (2) the portion of the policy that provides insurance 
        benefits other than long-term care coverage meets the 
        nonforfeiture requirements as applicable in any of the following:
           (i) for life insurance, section 61A.25; 
           (ii) for individual deferred annuities, section 61A.245; 
        and 
           (iii) for variable annuities, section 61A.21; 
           (3) the policy meets the disclosure requirements of 
        sections 62S.10 and 62S.11 if the policy is governed by chapter 
        62S and of section 62A.50 if the policy is governed by sections 
        62A.46 to 62A.56; 
           (4) the portion of the policy that provides insurance 
        benefits other than long-term care coverage meets the 
        requirements as applicable in the following: 
           (i) policy illustrations to the extent required by state 
        law applicable to life insurance; 
           (ii) disclosure requirements in state law applicable to 
        annuities; and 
           (iii) disclosure requirements applicable to variable 
        annuities; and 
           (5) an actuarial memorandum is filed with the commissioner 
        that includes: 
           (i) a description of the basis on which the long-term care 
        rates were determined; 
           (ii) a description of the basis for the reserves; 
           (iii) a summary of the type of policy, benefits, 
        renewability, general marketing method, and limits on ages of 
        issuance; 
           (iv) a description and a table of each actuarial assumption 
        used.  For expenses, an insurer must include percent of premium 
        dollars per policy and dollars per unit of benefits, if any; 
           (v) a description and a table of the anticipated policy 
        reserves and additional reserves to be held in each future year 
        for active lives; 
           (vi) the estimated average annual premium per policy and 
        the average issue age; 
           (vii) a statement as to whether underwriting is performed 
        at the time of application.  The statement must indicate whether 
        underwriting is used and, if used, the statement shall include a 
        description of the type or types of underwriting used, such as 
        medical underwriting or functional assessment underwriting.  
        Concerning a group policy, the statement must indicate whether 
        the enrollee or any dependent will be underwritten and when 
        underwriting occurs; and 
           (viii) a description of the effect of the long-term care 
        policy provision on the required premiums, nonforfeiture values, 
        and reserves on the underlying insurance policy, both for active 
        lives and those in long-term care claim status. 
           Subd. 11.  [LARGE GROUP POLICIES.] Subdivisions 6 and 9 do 
        not apply to group long-term care insurance policies as defined 
        in section 62S.01, subdivision 15, where: 
           (1) the policies insure 250 or more persons, and the 
        policyholder has 5,000 or more eligible employees of a single 
        employer; or 
           (2) the policyholder, and not the certificate holders, pays 
        a material portion of the premium, which is not less than 20 
        percent of the total premium for the group in the calendar year 
        prior to the year in which a rate increase is filed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  [62S.266] [NONFORFEITURE BENEFIT REQUIREMENT.] 
           Subdivision 1.  [APPLICABILITY.] This section does not 
        apply to life insurance policies or riders containing 
        accelerated long-term care benefits. 
           Subd. 2.  [REQUIREMENT.] An insurer must offer each 
        prospective policyholder a nonforfeiture benefit in compliance 
        with the following requirements: 
           (1) a policy or certificate offered with nonforfeiture 
        benefits must have coverage elements, eligibility, benefit 
        triggers, and benefit length that are the same as coverage to be 
        issued without nonforfeiture benefits.  The nonforfeiture 
        benefit included in the offer must be the benefit described in 
        subdivision 5; and 
           (2) the offer must be in writing if the nonforfeiture 
        benefit is not otherwise described in the outline of coverage or 
        other materials given to the prospective policyholder. 
           Subd. 3.  [EFFECT OF REJECTION OF OFFER.] If the offer 
        required to be made under subdivision 2 is rejected, the insurer 
        shall provide the contingent benefit upon lapse described in 
        this section. 
           Subd. 4.  [CONTINGENT BENEFIT UPON LAPSE.] (a) After 
        rejection of the offer required under subdivision 2, for 
        individual and group policies without nonforfeiture benefits 
        issued after the effective date of this section, the insurer 
        shall provide a contingent benefit upon lapse. 
           (b) If a group policyholder elects to make the 
        nonforfeiture benefit an option to the certificate holder, a 
        certificate shall provide either the nonforfeiture benefit or 
        the contingent benefit upon lapse. 
           (c) The contingent benefit on lapse must be triggered every 
        time an insurer increases the premium rates to a level which 
        results in a cumulative increase of the annual premium equal to 
        or exceeding the percentage of the insured's initial annual 
        premium based on the insured's issue age provided in this 
        paragraph, and the policy or certificate lapses within 120 days 
        of the due date of the premium increase.  Unless otherwise 
        required, policyholders shall be notified at least 30 days prior 
        to the due date of the premium reflecting the rate increase. 
                 Triggers for a Substantial Premium Increase 
                            Percent Increase
             Issue Age      Over Initial Premium
             29 and Under            200
                30-34                190
                35-39                170
                40-44                150
                45-49                130
                50-54                110
                55-59                 90
                   60                 70
                   61                 66
                   62                 62
                   63                 58
                   64                 54
                   65                 50
                   66                 48
                   67                 46
                   68                 44
                   69                 42
                   70                 40
                   71                 38
                   72                 36
                   73                 34
                   74                 32
                   75                 30
                   76                 28
                   77                 26
                   78                 24
                   79                 22
                   80                 20
                   81                 19
                   82                 18
                   83                 17
                   84                 16
                   85                 15
                   86                 14
                   87                 13
                   88                 12
                   89                 11
               90 and over            10
           (d) On or before the effective date of a substantial 
        premium increase as defined in paragraph (c), the insurer shall: 
           (1) offer to reduce policy benefits provided by the current 
        coverage without the requirement of additional underwriting so 
        that required premium payments are not increased; 
           (2) offer to convert the coverage to a paid-up status with 
        a shortened benefit period according to the terms of subdivision 
        5.  This option may be elected at any time during the 120-day 
        period referenced in paragraph (c); and 
           (3) notify the policyholder or certificate holder that a 
        default or lapse at any time during the 120-day period 
        referenced in paragraph (c) is deemed to be the election of the 
        offer to convert in clause (2). 
           Subd. 5.  [NONFORFEITURE BENEFITS; REQUIREMENTS.] (a) 
        Benefits continued as nonforfeiture benefits, including 
        contingent benefits upon lapse, must be as described in this 
        subdivision. 
           (b) For purposes of this subdivision, "attained age rating" 
        is defined as a schedule of premiums starting from the issue 
        date which increases with age at least one percent per year 
        prior to age 50, and at least three percent per year beyond age 
        50. 
           (c) For purposes of this subdivision, the nonforfeiture 
        benefit must be of a shortened benefit period providing paid-up, 
        long-term care insurance coverage after lapse.  The same 
        benefits, amounts, and frequency in effect at the time of lapse, 
        but not increased thereafter, will be payable for a qualifying 
        claim, but the lifetime maximum dollars or days of benefits must 
        be determined as specified in paragraph (d). 
           (d) The standard nonforfeiture credit will be equal to 100 
        percent of the sum of all premiums paid, including the premiums 
        paid prior to any changes in benefits.  The insurer may offer 
        additional shortened benefit period options, so long as the 
        benefits for each duration equal or exceed the standard 
        nonforfeiture credit for that duration.  However, the minimum 
        nonforfeiture credit must not be less than 30 times the daily 
        nursing home benefit at the time of lapse.  In either event, the 
        calculation of the nonforfeiture credit is subject to the 
        limitation of this subdivision. 
           (e) The nonforfeiture benefit must begin not later than the 
        end of the third year following the policy or certificate issue 
        date.  The contingent benefit upon lapse must be effective 
        during the first three years as well as thereafter. 
           (f) Notwithstanding paragraph (e), for a policy or 
        certificate with attained age rating, the nonforfeiture benefit 
        must begin on the earlier of: 
           (1) the end of the tenth year following the policy or 
        certificate issue date; or 
           (2) the end of the second year following the date the 
        policy or certificate is no longer subject to attained age 
        rating. 
           (g) Nonforfeiture credits may be used for all care and 
        services qualifying for benefits under the terms of the policy 
        or certificate, up to the limits specified in the policy or 
        certificate. 
           Subd. 6.  [BENEFIT LIMIT.] All benefits paid by the insurer 
        while the policy or certificate is in premium-paying status and 
        in the paid-up status will not exceed the maximum benefits which 
        would be payable if the policy or certificate had remained in 
        premium-paying status. 
           Subd. 7.  [MINIMUM BENEFITS; INDIVIDUAL AND GROUP 
        POLICIES.] There must be no difference in the minimum 
        nonforfeiture benefits as required under this section for group 
        and individual policies. 
           Subd. 8.  [APPLICATION; EFFECTIVE DATES.] This section 
        becomes effective January 1, 2002, and applies as follows: 
           (a) Except as provided in paragraph (b), this section 
        applies to any long-term care policy issued in this state on or 
        after the effective date of this section. 
           (b) For certificates issued on or after the effective date 
        of this section, under a group long-term care insurance policy 
        that was in force on the effective date of this section, the 
        provisions of this section do not apply. 
           Subd. 9.  [EFFECT ON LOSS RATIO.] Premiums charged for a 
        policy or certificate containing nonforfeiture benefits or a 
        contingent benefit on lapse are subject to the loss ratio 
        requirements of section 62A.48, subdivision 4, or 62S.26, 
        treating the policy as a whole, except for policies or 
        certificates that are subject to sections 62S.021, 62S.081, and 
        62S.265 and that comply with those sections. 
           Subd. 10.  [PURCHASED BLOCKS OF BUSINESS.] To determine 
        whether contingent nonforfeiture upon lapse provisions are 
        triggered under subdivision 4, paragraph (c), a replacing 
        insurer that purchased or otherwise assumed a block or blocks of 
        long-term care insurance policies from another insurer shall 
        calculate the percentage increase based on the initial annual 
        premium paid by the insured when the policy was first purchased 
        from the original insurer. 
           Subd. 11.  [LEVEL PREMIUM CONTRACTS.] A nonforfeiture 
        benefit for qualified long-term care insurance contracts that 
        are level premium contracts must be offered that meets the 
        following requirements: 
           (1) the nonforfeiture provision must be appropriately 
        captioned; 
           (2) the nonforfeiture provision must provide a benefit 
        available in the event of a default in the payment of any 
        premiums and must state that the amount of the benefit may be 
        adjusted subsequent to being initially granted only as necessary 
        to reflect changes in claims, persistency, and interest as 
        reflected in changes in rates for premium paying contracts 
        approved by the commissioner for the same contract form; and 
           (3) the nonforfeiture provision must provide at least one 
        of the following: 
           (i) reduced paid-up insurance; 
           (ii) extended term insurance; 
           (iii) shortened benefit period; or 
           (iv) other similar offerings approved by the commissioner. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 13.  Minnesota Statutes 2000, section 256.975, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [PROMOTION OF LONG-TERM CARE INSURANCE.] Within 
        the limits of appropriations specifically for this purpose, the 
        Minnesota board on aging, either directly or through contract, 
        shall promote the provision of employer-sponsored, long-term 
        care insurance.  The board shall encourage private and public 
        sector employers to make long-term care insurance available to 
        employees, provide interested employers with information on the 
        long-term care insurance product offered to state employees, and 
        provide technical assistance to employers in designing long-term 
        care insurance products and contacting companies offering 
        long-term care insurance products. 

                                   ARTICLE 9 
                       MENTAL HEALTH AND CIVIL COMMITMENT 
           Section 1.  [62Q.471] [EXCLUSION FOR SUICIDE ATTEMPTS 
        PROHIBITED.] 
           (a) No health plan may exclude or reduce coverage for 
        health care for an enrollee that is otherwise covered under the 
        health plan, on the basis that the need for the health care 
        arose out of a suicide or suicide attempt by the enrollee. 
           (b) For purposes of this section, "health plan" has the 
        meaning given in section 62Q.01, subdivision 3, but includes the 
        coverages described in section 62A.011, clauses (7) and (10). 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2002, and applies to contracts issued or renewed on or after 
        that date. 
           Sec. 2.  [62Q.527] [COVERAGE OF NONFORMULARY DRUGS FOR 
        MENTAL ILLNESS AND EMOTIONAL DISTURBANCE.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the following terms have the meanings given to them. 
           (b) "Emotional disturbance" has the meaning given in 
        section 245.4871, subdivision 15. 
           (c) "Mental illness" has the meaning given in section 
        245.462, subdivision 20, paragraph (a). 
           (d) "Health plan" has the meaning given in section 62Q.01, 
        subdivision 3, but includes the coverages described in section 
        62A.011, subdivision 3, clauses (7) and (10).  
           Subd. 2.  [REQUIRED COVERAGE FOR ANTIPSYCHOTIC DRUGS.] (a) 
        A health plan that provides prescription drug coverage must 
        provide coverage for an antipsychotic drug prescribed to treat 
        emotional disturbance or mental illness regardless of whether 
        the drug is in the health plan's drug formulary, if the health 
        care provider prescribing the drug: 
           (1) indicates to the dispensing pharmacist, orally or in 
        writing according to section 151.21, that the prescription must 
        be dispensed as communicated; and 
           (2) certifies in writing to the health plan company that 
        the health care provider has considered all equivalent drugs in 
        the health plan's drug formulary and has determined that the 
        drug prescribed will best treat the patient's condition.  
           (b) The health plan is not required to provide coverage for 
        a drug if the drug was removed from the health plan's drug 
        formulary for safety reasons.  
           (c) For drugs cov