1.1                          A bill for an act 
  1.2             relating to human services; increasing the maximum 
  1.3             efficiency incentive for intermediate care facilities 
  1.4             for the mentally retarded; amending Minnesota Statutes 
  1.5             1994, section 256B.501, subdivision 5a. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 256B.501, 
  1.8   subdivision 5a, is amended to read: 
  1.9      Subd. 5a.  [CHANGES TO ICF/MR REIMBURSEMENT.] The 
  1.10  reimbursement rule changes in paragraphs (a) to (e) apply to 
  1.11  Minnesota Rules, parts 9553.0010 to 9553.0080, and this section, 
  1.12  and are effective for rate years beginning on or after October 
  1.13  1, ~~1993~~ 1995, unless otherwise specified. 
  1.14     (a) The maximum efficiency incentive shall be ~~$1.50~~ $2.00 
  1.15  per resident per day.  For rate years beginning on or after 
  1.16  October 1, 1996, the commissioner shall index the prior year's 
  1.17  maximum efficiency incentive by the percentage change in the 
  1.18  Data Resources, Inc., Nursing Home Market Basket between the 
  1.19  midpoint of the current reporting year and the midpoint of the 
  1.20  previous reporting year.  The commissioner shall use the indices 
  1.21  as forecasted by Data Resources, Inc. in the fourth quarter of 
  1.22  the calendar year preceding the rate year. 
  1.23     (b) If a facility's capital debt reduction allowance is 
  1.24  greater than 50 cents per resident per day, that facility's 
  1.25  capital debt reduction allowance in excess of 50 cents per 
  2.1   resident day shall be reduced by 25 percent. 
  2.2      (c) Beginning with the biennial reporting year which begins 
  2.3   January 1, 1993, a facility is no longer required to have a 
  2.4   certified audit of its financial statements.  The cost of a 
  2.5   certified audit shall not be an allowable cost in that reporting 
  2.6   year, nor in subsequent reporting years unless the facility 
  2.7   submits its certified audited financial statements in the manner 
  2.8   otherwise specified in this subdivision.  A nursing facility 
  2.9   which does not submit a certified audit must submit its working 
  2.10  trial balance. 
  2.11     (d) In addition to the approved pension or profit sharing 
  2.12  plans allowed by the reimbursement rule, the commissioner shall 
  2.13  allow those plans specified in Internal Revenue Code, sections 
  2.14  403(b) and 408(k). 
  2.15     (e) The commissioner shall allow as workers' compensation 
  2.16  insurance costs under this section, the costs of workers' 
  2.17  compensation coverage obtained under the following conditions: 
  2.18     (1) a plan approved by the commissioner of commerce as a 
  2.19  Minnesota group or individual self-insurance plan as provided in 
  2.20  sections 79A.03; 
  2.21     (2) a plan in which: 
  2.22     (i) the facility, directly or indirectly, purchases 
  2.23  workers' compensation coverage in compliance with section 
  2.24  176.181, subdivision 2, from an authorized insurance carrier; 
  2.25     (ii) a related organization to the facility reinsures the 
  2.26  workers' compensation coverage purchased, directly or 
  2.27  indirectly, by the facility; and 
  2.28     (iii) all of the conditions in clause (4) are met; 
  2.29     (3) a plan in which: 
  2.30     (i) the facility, directly or indirectly, purchases 
  2.31  workers' compensation coverage in compliance with section 
  2.32  176.181, subdivision 2, from an authorized insurance carrier; 
  2.33     (ii) the insurance premium is calculated retrospectively, 
  2.34  including a maximum premium limit, and paid using the paid loss 
  2.35  retro method; and 
  2.36     (iii) all of the conditions in clause (4) are met; 
  3.1      (4) additional conditions are: 
  3.2      (i) the reserves for the plan are maintained in an account 
  3.3   controlled and administered by a person which is not a related 
  3.4   organization to the facility; 
  3.5      (ii) the reserves for the plan cannot be used, directly or 
  3.6   indirectly, as collateral for debts incurred or other 
  3.7   obligations of the facility or related organizations to the 
  3.8   facility; 
  3.9      (iii) if the plan provides workers' compensation coverage 
  3.10  for non-Minnesota facilities, the plan's cost methodology must 
  3.11  be consistent among all facilities covered by the plan, and if 
  3.12  reasonable, is allowed notwithstanding any reimbursement laws 
  3.13  regarding cost allocation to the contrary; 
  3.14     (iv) central, affiliated, corporate, or nursing facility 
  3.15  costs related to their administration of the plan are costs 
  3.16  which must remain in the nursing facility's administrative cost 
  3.17  category, and must not be allocated to other cost categories; 
  3.18  and 
  3.19     (v) required security deposits, whether in the form of 
  3.20  cash, investments, securities, assets, letters of credit, or in 
  3.21  any other form are not allowable costs for purposes of 
  3.22  establishing the facilities payment rate; 
  3.23     (5) any costs allowed pursuant to clauses (1) to (3) are 
  3.24  subject to the following requirements: 
  3.25     (i) if the facility is sold or otherwise ceases operations, 
  3.26  the plan's reserves must be subject to an actuarially based 
  3.27  settle-up after 36 months from the date of sale or the date on 
  3.28  which operations ceased.  The facility's medical assistance 
  3.29  portion of the total excess plan reserves must be paid to the 
  3.30  state within 30 days following the date on which excess plan 
  3.31  reserves are determined; 
  3.32     (ii) any distribution of excess plan reserves made to or 
  3.33  withdrawals made by the facility or a related organization are 
  3.34  applicable credits and must be used to reduce the facility's 
  3.35  workers' compensation insurance costs in the reporting period in 
  3.36  which a distribution or withdrawal is received; and 
  4.1      (iii) if the plan is audited pursuant to the Medicare 
  4.2   program, the facility must provide a copy of Medicare's final 
  4.3   audit report, including attachments and exhibits, to the 
  4.4   commissioner within 30 days of receipt by the facility or any 
  4.5   related organization.  The commissioner shall implement the 
  4.6   audit findings associated with the plan upon receipt of 
  4.7   Medicare's final audit report.  The department's authority to 
  4.8   implement the audit findings is independent of its authority to 
  4.9   conduct a field audit; and 
  4.10     (6) the commissioner shall have authority to adopt 
  4.11  emergency rules to implement this paragraph.