1.1                          A bill for an act 
  1.2             relating to health care; changing the indices used to 
  1.3             adjust hospital and nursing home reimbursement rates; 
  1.4             amending Minnesota Statutes 1994, sections 256.969, 
  1.5             subdivision 1; and 256B.431, subdivision 2l. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 256.969, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [HOSPITAL COST INDEX.] (a) The hospital 
  1.10  cost index shall be ~~obtained from an independent source and~~ 
  1.11  ~~shall represent a weighted average of historical, as limited to~~ 
  1.12  ~~statutory maximums, and projected cost change estimates~~ 
  1.13  ~~determined for expense categories to include wages and salaries,~~ 
  1.14  ~~employee benefits, medical and professional fees, raw food,~~ 
  1.15  ~~utilities, insurance including malpractice insurance, and other~~ 
  1.16  ~~applicable expenses as determined by the commissioner.  The~~ 
  1.17  ~~index shall reflect Minnesota cost category weights.  Individual~~ 
  1.18  ~~indices shall be specific to Minnesota if the commissioner~~ 
  1.19  ~~determines that sufficient accuracy of the hospital cost index~~ 
  1.20  ~~is achieved.~~ the change in the Consumer Price Index-All Items 
  1.21  (United States city average) (CPI-U) forecasted by Data 
  1.22  Resources, Inc.  The commissioner shall use the indices as 
  1.23  forecasted in the third quarter of the calendar year prior to 
  1.24  the rate year.  The hospital cost index may be used to adjust 
  1.25  the base year operating payment rate through the rate year on an 
  2.1   annually compounded basis.  Notwithstanding section 256.9695, 
  2.2   subdivision 3, paragraph (c), the hospital cost index shall not 
  2.3   be effective under the general assistance medical care program 
  2.4   and shall be limited to five percent under the medical 
  2.5   assistance program for admissions occurring during the biennium 
  2.6   ending June 30, 1995. 
  2.7      (b) For fiscal years beginning on or after July 1, 1993, 
  2.8   the commissioner of human services shall not provide automatic 
  2.9   annual inflation adjustments for hospital payment rates under 
  2.10  medical assistance, nor under general assistance medical care.  
  2.11  The commissioner of finance shall include as a budget change 
  2.12  request in each biennial detailed expenditure budget submitted 
  2.13  to the legislature under section 16A.11 annual adjustments in 
  2.14  hospital payment rates under medical assistance and general 
  2.15  assistance medical care, based upon the hospital cost index. 
  2.16     Sec. 2. Minnesota Statutes 1994, section 256B.431, 
  2.17  subdivision 2l, is amended to read: 
  2.18     Subd. 2l.  [INFLATION ADJUSTMENTS AFTER JULY 1, 1990.] (a) 
  2.19  For rate years beginning on or after July 1, 1990, the 
  2.20  forecasted composite price index for a nursing facility's 
  2.21  allowable operating cost per diems shall be determined using 
  2.22  Data Resources, Inc., forecast for change in the Nursing Home 
  2.23  Market Basket.  The commissioner of human services shall use the 
  2.24  indices as forecasted by Data Resources, Inc., in the fourth 
  2.25  quarter of the calendar year preceding the rate year. 
  2.26     (b) For rate years beginning on or after July 1, 1992, the 
  2.27  commissioner shall index the prior year's operating cost limits 
  2.28  by the percentage change in the Data Resources, Inc., Nursing 
  2.29  Home Market Basket between the midpoint of the current reporting 
  2.30  year and the midpoint of the previous reporting year.  The 
  2.31  commissioner shall use the indices as forecasted by Data 
  2.32  Resources, Inc., in the fourth quarter of the calendar year 
  2.33  preceding the rate year.  
  2.34     (c) For rate years beginning on or after July 1, 1993, the 
  2.35  commissioner shall not provide automatic annual inflation 
  2.36  adjustments for nursing facilities.  The commissioner of finance 
  3.1   shall include annual adjustments in operating costs for nursing 
  3.2   facilities as a budget change request in each biennial detailed 
  3.3   expenditure budget submitted to the legislature under section 
  3.4   16A.11.  
  3.5      (d) For rate years beginning on or after July 1, 1995, the 
  3.6   forecasted price index for a nursing facility's allowable 
  3.7   operating cost per diems shall be determined using the change in 
  3.8   the Consumer Price Index-All Items (United States city average) 
  3.9   (CPI-U)  forecasted by Data Resources, Inc.  The commissioner 
  3.10  shall use the indices as forecasted in the fourth quarter of the 
  3.11  calendar year preceding the rate year.