1.1 	A bill for an act
1.2 	relating to human services; amending continuing care provisions, including 
1.3 	changes to medical assistance, nursing facilities, and data management;amending 
1.4 	Minnesota Statutes 2008, sections 252.282, subdivisions 3, 5; 256B.0657, 
1.5 	subdivisions 5, 8; 256B.0913, subdivisions 4, 5a, 12; 256B.0915, subdivision 
1.6 	2; 256B.431, subdivision 10; 256B.433, subdivision 1; 256B.438, subdivision 
1.7 	7; 256B.441, subdivisions 5, 11; 256B.5011, subdivision 2; 256B.5012, 
1.8 	subdivisions 6, 7; 256B.5013, subdivisions 1, 6; 626.557, subdivision 12b; 
1.9 	repealing Minnesota Statutes 2008, section 256B.5013, subdivisions 2, 3, 5.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2008, section 252.282, subdivision 3, is amended to read:
1.12 		Subd. 3.Recommendations. (a) Upon completion of the local system needs 
1.13 	planning assessment, the host county shall make recommendations by May 15, 2000, and 
1.14 	by July 1 every two years thereafter beginning in 2001. If no change is recommended, a 
1.15 	copy of the assessment along with corresponding documentation shall be provided to the 
1.16 	commissioner by July 1 prior to the contract year.
1.17 	(b) Except as provided in section 252.292, subdivision 4, recommendations 
1.18 	regarding closures, relocations, or downsizings that include a rate increase shall be 
1.19 	submitted to the statewide advisory committee for review, along with the assessment, plan, 
1.20 	and corresponding documentation that supports the payment rate adjustment request.  
1.21 	(c) (b) Recommendations for closures, relocations, and downsizings that do not 
1.22 	include a rate increase and for modification of existing services for which a change in the 
1.23 	framework of service delivery is necessary shall be provided to the commissioner by July 
1.24 	1 prior to the contract year or at least 90 days prior to the anticipated change, along with 
1.25 	the assessment and corresponding documentation.

2.1 	Sec. 2. Minnesota Statutes 2008, section 252.282, subdivision 5, is amended to read:
2.2 		Subd. 5.Responsibilities of commissioner. (a) In collaboration with counties and 
2.3 	providers, the commissioner shall ensure that services recognize the preferences and needs 
2.4 	of persons with developmental disabilities and related conditions through a recurring 
2.5 	systemic review and assessment of ICF/MR facilities within the state.
2.6 	(b) The commissioner shall publish a notice in the State Register no less than 
2.7 	biannually to announce the opportunity for counties or providers to submit requests for 
2.8 	payment rate adjustments associated with plans for downsizing, relocation, and closure of 
2.9 	ICF/MR facilities.
2.10 	(c) The commissioner shall designate funding parameters to counties and to the 
2.11 	statewide advisory committee for the overall implementation of system needs within the 
2.12 	fiscal resources allocated by the legislature.
2.13 	(d) (b) The commissioner shall contract with ICF/MR providers. Contracts shall 
2.14 	be for two-year periods.

2.15 	Sec. 3. Minnesota Statutes 2008, section 256B.0657, subdivision 5, is amended to read:
2.16 		Subd. 5.Self-directed supports option plan requirements. (a) The plan for the 
2.17 	self-directed supports option must meet the following requirements:
2.18 	(1) the plan must be completed using a person-centered process that:
2.19 	(i) builds upon the recipient's capacity to engage in activities that promote 
2.20 	community life;
2.21 	(ii) respects the recipient's preferences, choices, and abilities;
2.22 	(iii) involves families, friends, and professionals in the planning or delivery of 
2.23 	services or supports as desired or required by the recipient; and 
2.24 	(iv) addresses the need for personal care assistant services identified in the recipient's 
2.25 	self-directed supports option assessment;
2.26 	(2) the plan shall be developed by the recipient or by the guardian of an adult 
2.27 	recipient or by a parent or guardian of a minor child, with the assistance of an enrolled 
2.28 	medical assistance home care targeted case manager and may be assisted by a provider 
2.29 	who meets the requirements established for using a person-centered planning process and 
2.30 	shall be reviewed at least annually upon reassessment or when there is a significant change 
2.31 	in the recipient's condition; and 
2.32 	(3) the plan must include the total budget amount available divided into monthly 
2.33 	amounts that cover the number of months of personal care assistant services authorization 
2.34 	included in the budget. The amount used each month may vary, but additional funds shall 
3.1 	not be provided above the annual personal care assistant services authorized amount 
3.2 	unless a change in condition is documented.
3.3 	(b) The commissioner shall:
3.4 	(1) establish the format and criteria for the plan as well as the requirements for 
3.5 	providers who assist with plan development;
3.6 	(2) review the assessment and plan and, within 30 days after receiving the 
3.7 	assessment and plan, make a decision on approval of the plan;
3.8 	(3) notify the recipient, parent, or guardian of approval or denial of the plan and 
3.9 	provide notice of the right to appeal under section 256.045; and 
3.10 	(4) provide a copy of the plan to the fiscal support entity selected by the recipient.

3.11 	Sec. 4. Minnesota Statutes 2008, section 256B.0657, subdivision 8, is amended to read:
3.12 		Subd. 8.Self-directed budget requirements. The budget for the provision of the 
3.13 	self-directed service option shall be equal to the greater of either:
3.14 	(1) the annual amount of personal care assistant services under section 256B.0655
3.15 	that the recipient has used in the most recent 12-month period; or 
3.16 	(2) the amount determined using the consumer support grant methodology under 
3.17 	section 256.476, subdivision 11, except that the budget amount shall include the federal 
3.18 	and nonfederal share of the average service costs a budget allocation that is objective and 
3.19 	evidence-based utilizing valid, reliable cost data.

3.20 	Sec. 5. Minnesota Statutes 2008, section 256B.0913, subdivision 4, is amended to read:
3.21 		Subd. 4.Eligibility for funding for services for nonmedical assistance recipients.
 3.22 	(a) Funding for services under the alternative care program is available to persons who 
3.23 	meet the following criteria:
3.24 	(1) the person has been determined by a community assessment under section 
3.25 	256B.0911 to be a person who would require the level of care provided in a nursing 
3.26 	facility, but for the provision of services under the alternative care program;
3.27 	(2) the person is age 65 or older;
3.28 	(3) the person would be eligible for medical assistance within 135 days of admission 
3.29 	to a nursing facility;
3.30 	(4) the person is not ineligible for the payment of long-term care services by the 
3.31 	medical assistance program due to an asset transfer penalty under section 256B.0595 or 
3.32 	equity interest in the home exceeding $500,000 as stated in section 256B.056;
4.1 	(5) the person needs long-term care services that are not funded through other 
4.2 	state or federal funding, or other health insurance or other third-party insurance such as 
4.3 	long-term care insurance;
4.4 	(6) the monthly cost of the alternative care services funded by the program for 
4.5 	this person does not exceed 75 percent of the monthly limit described under section 
4.6 	256B.0915, subdivision 3a. This monthly limit does not prohibit the alternative care 
4.7 	client from payment for additional services, but in no case may the cost of additional 
4.8 	services purchased under this section exceed the difference between the client's monthly 
4.9 	service limit defined under section 256B.0915, subdivision 3, and the alternative care 
4.10 	program monthly service limit defined in this paragraph. If care-related supplies and 
4.11 	equipment or environmental modifications and adaptations are or will be purchased for 
4.12 	an alternative care services recipient, the costs may be prorated on a monthly basis for 
4.13 	up to 12 consecutive months beginning with the month of purchase. If the monthly cost 
4.14 	of a recipient's other alternative care services exceeds the monthly limit established in 
4.15 	this paragraph, the annual cost of the alternative care services shall be determined. In this 
4.16 	event, the annual cost of alternative care services shall not exceed 12 times the monthly 
4.17 	limit described in this paragraph; and
4.18 	(7) the person is making timely payments of the assessed monthly fee.
4.19 	A person is ineligible if payment of the fee is over 60 days past due, unless the person 
4.20 	agrees to:
4.21 	(i) the appointment of a representative payee;
4.22 	(ii) automatic payment from a financial account;
4.23 	(iii) the establishment of greater family involvement in the financial management of 
4.24 	payments; or
4.25 	(iv) another method acceptable to the lead agency to ensure prompt fee payments.
4.26 	The lead agency may extend the client's eligibility as necessary while making 
4.27 	arrangements to facilitate payment of past-due amounts and future premium payments. 
4.28 	Following disenrollment due to nonpayment of a monthly fee, eligibility shall not be 
4.29 	reinstated for a period of 30 days.
4.30 	(b) Alternative care funding under this subdivision is not available for a person 
4.31 	who is a medical assistance recipient or who would be eligible for medical assistance 
4.32 	without a spenddown or waiver obligation. A person whose initial application for medical 
4.33 	assistance and the elderly waiver program is being processed may be served under the 
4.34 	alternative care program for a period up to 60 days. If the individual is found to be eligible 
4.35 	for medical assistance, medical assistance must be billed for services payable under the 
4.36 	federally approved elderly waiver plan and delivered from the date the individual was 
5.1 	found eligible for the federally approved elderly waiver plan. Notwithstanding this 
5.2 	provision, alternative care funds may not be used to pay for any service the cost of which: 
5.3 	(i) is payable by medical assistance; (ii) is used by a recipient to meet a waiver obligation; 
5.4 	or (iii) is used to pay a medical assistance income spenddown for a person who is eligible 
5.5 	to participate in the federally approved elderly waiver program under the special income 
5.6 	standard provision.
5.7 	(c) Alternative care funding is not available for a person who resides in a licensed 
5.8 	nursing home, certified boarding care home, hospital, or intermediate care facility, except 
5.9 	for case management services which are provided in support of the discharge planning 
5.10 	process for a nursing home resident or certified boarding care home resident to assist with 
5.11 	a relocation process to a community-based setting.
5.12 	(d) Alternative care funding is not available for a person whose income is greater 
5.13 	than the maintenance needs allowance under section 256B.0915, subdivision 1d, but equal 
5.14 	to or less than 120 percent of the federal poverty guideline effective July 1 in the fiscal 
5.15 	year for which alternative care eligibility is determined, who would be eligible for the 
5.16 	elderly waiver with a waiver obligation.

5.17 	Sec. 6. Minnesota Statutes 2008, section 256B.0913, subdivision 5a, is amended to 
5.18 	read:
5.19 		Subd. 5a.Services; service definitions; service standards. (a) Unless specified in 
5.20 	statute, the services, service definitions, and standards for alternative care services shall 
5.21 	be the same as the services, service definitions, and standards specified in the federally 
5.22 	approved elderly waiver plan, except alternative care does not cover transitional support 
5.23 	services, assisted living services, adult foster care services, and residential care and 
5.24 	benefits defined under section 256B.0625 that meet primary and acute health care needs.
5.25 	(b) The lead agency must ensure that the funds are not used to supplant or 
5.26 	supplement services available through other public assistance or services programs, 
5.27 	including supplementation of client co-pays, deductibles, premiums, or other cost-sharing 
5.28 	arrangements for health-related benefits and services or entitlement programs and 
5.29 	services that are available to the person, but in which they have elected not to enroll. 
5.30 	The lead agency must ensure that the benefit department recovery system in the Medicaid 
5.31 	Management Information System (MMIS) has the necessary information on any other 
5.32 	health insurance or third-party insurance policy to which the client may have access. For a 
5.33 	provider of supplies and equipment when the monthly cost of the supplies and equipment 
5.34 	is less than $250, persons or agencies must be employed by or under a contract with the 
5.35 	lead agency or the public health nursing agency of the local board of health in order to 
6.1 	receive funding under the alternative care program. Supplies and equipment may be 
6.2 	purchased from a vendor not certified to participate in the Medicaid program if the cost for 
6.3 	the item is less than that of a Medicaid vendor.
6.4 	(c) Personal care services must meet the service standards defined in the federally 
6.5 	approved elderly waiver plan, except that a lead agency may contract with a client's 
6.6 	relative who meets the relative hardship waiver requirements or a relative who meets the 
6.7 	criteria and is also the responsible party under an individual service plan that ensures the 
6.8 	client's health and safety and supervision of the personal care services by a qualified 
6.9 	professional as defined in section 256B.0625, subdivision 19c. Relative hardship is 
6.10 	established by the lead agency when the client's care causes a relative caregiver to do any 
6.11 	of the following: resign from a paying job, reduce work hours resulting in lost wages, 
6.12 	obtain a leave of absence resulting in lost wages, incur substantial client-related expenses, 
6.13 	provide services to address authorized, unstaffed direct care time, or meet special needs of 
6.14 	the client unmet in the formal service plan.

6.15 	Sec. 7. Minnesota Statutes 2008, section 256B.0913, subdivision 12, is amended to 
6.16 	read:
6.17 		Subd. 12.Client fees. (a) A fee is required for all alternative care eligible clients 
6.18 	to help pay for the cost of participating in the program. The amount of the fee for the 
6.19 	alternative care client shall be determined as follows:
6.20 	(1) when the alternative care client's income less recurring and predictable medical 
6.21 	expenses is less than 100 percent of the federal poverty guideline effective on July 1 of 
6.22 	the state fiscal year in which the fee is being computed, and total assets are less than 
6.23 	$10,000, the fee is zero;
6.24 	(2) when the alternative care client's income less recurring and predictable medical 
6.25 	expenses is equal to or greater than 100 percent but less than 150 percent of the federal 
6.26 	poverty guideline effective on July 1 of the state fiscal year in which the fee is being 
6.27 	computed, and total assets are less than $10,000, the fee is five percent of the cost of 
6.28 	alternative care services;
6.29 	(3) when the alternative care client's income less recurring and predictable medical 
6.30 	expenses is equal to or greater than 150 percent but less than 200 percent of the federal 
6.31 	poverty guidelines effective on July 1 of the state fiscal year in which the fee is being 
6.32 	computed and assets are less than $10,000, the fee is 15 percent of the cost of alternative 
6.33 	care services;
6.34 	(4) when the alternative care client's income less recurring and predictable medical 
6.35 	expenses is equal to or greater than 200 percent of the federal poverty guidelines effective 
7.1 	on July 1 of the state fiscal year in which the fee is being computed and assets are less than 
7.2 	$10,000, the fee is 30 percent of the cost of alternative care services; and
7.3 	(5) when the alternative care client's assets are equal to or greater than $10,000, the 
7.4 	fee is 30 percent of the cost of alternative care services.
7.5 	For married persons, total assets are defined as the total marital assets less the 
7.6 	estimated community spouse asset allowance, under section 256B.059, if applicable. For 
7.7 	married persons, total income is defined as the client's income less the monthly spousal 
7.8 	allotment, under section 256B.058. 
7.9 	All alternative care services shall be included in the estimated costs for the purpose 
7.10 	of determining the fee.
7.11 	Fees are due and payable each month alternative care services are received unless the 
7.12 	actual cost of the services is less than the fee, in which case the fee is the lesser amount.
7.13 	(b) The fee shall be waived by the commissioner when:
7.14 	(1) a person is residing in a nursing facility;
7.15 	(2) a married couple is requesting an asset assessment under the spousal 
7.16 	impoverishment provisions;
7.17 	(3) a person is found eligible for alternative care, but is not yet receiving alternative 
7.18 	care services including case management services; or
7.19 	(4) a person has chosen to participate in a consumer-directed service plan for which 
7.20 	the cost is no greater than the total cost of the person's alternative care service plan less 
7.21 	the monthly fee amount that would otherwise be assessed.
7.22 	(c) The commissioner will bill and collect the fee from the client. Money collected 
7.23 	must be deposited in the general fund and is appropriated to the commissioner for the 
7.24 	alternative care program. The client must supply the lead agency with the client's Social 
7.25 	Security number at the time of application. The lead agency shall supply the commissioner 
7.26 	with the client's Social Security number and other information the commissioner requires 
7.27 	to collect the fee from the client. The commissioner shall collect unpaid fees using the 
7.28 	Revenue Recapture Act in chapter 270A and other methods available to the commissioner. 
7.29 	The commissioner may require lead agencies to inform clients of the collection procedures 
7.30 	that may be used by the state if a fee is not paid. This paragraph does not apply to 
7.31 	alternative care pilot projects authorized in Laws 1993, First Special Session chapter 1, 
7.32 	article 5, section 133, if a county operating under the pilot project reports the following 
7.33 	dollar amounts to the commissioner quarterly:
7.34 	(1) total fees billed to clients;
7.35 	(2) total collections of fees billed; and
7.36 	(3) balance of fees owed by clients.
8.1 	If a lead agency does not adhere to these reporting requirements, the commissioner may 
8.2 	terminate the billing, collecting, and remitting portions of the pilot project and require the 
8.3 	lead agency involved to operate under the procedures set forth in this paragraph.

8.4 	Sec. 8. Minnesota Statutes 2008, section 256B.0915, subdivision 2, is amended to read:
8.5 		Subd. 2.Spousal impoverishment policies. The commissioner shall apply:
8.6 	(1) the spousal impoverishment criteria as authorized under United States Code, title 
8.7 	42, section 1396r-5, and as implemented in sections 256B.0575, 256B.058, and 256B.059;, 
8.8 	except that individuals with income at or below the special income standard according 
8.9 	to Code of Federal Regulations, title 42, section 435.236, receive the maintenance needs 
8.10 	amount in subdivision 1d.
8.11 	(2) the personal needs allowance permitted in section 256B.0575; and
8.12 	(3) an amount equivalent to the group residential housing rate as set by section 
8.13 	256I.03, subdivision 5, and according to the approved federal waiver and medical 
8.14 	assistance state plan. 

8.15 	Sec. 9. Minnesota Statutes 2008, section 256B.431, subdivision 10, is amended to read:
8.16 		Subd. 10.Property rate adjustments and construction projects. A Nursing 
8.17 	facility's facilities completing a construction project that are eligible for a rate adjustment 
8.18 	under section 256B.434, subdivision 4f, that were not approved through the moratorium 
8.19 	exception process in section 144A.073 must request for from the commissioner a 
8.20 	property-related payment rate adjustment and the related supporting documentation of 
8.21 	project construction cost information must be submitted to the commissioner. If the 
8.22 	request is made within 60 days after the construction project's completion date to be 
8.23 	considered eligible for a property-related payment rate adjustment the effective date of 
8.24 	the rate adjustment is the first of the month following the completion date. If the request 
8.25 	is made more than 60 days after the completion date, the rate adjustment is effective on 
8.26 	the first of the month following the request. The commissioner shall provide a rate notice 
8.27 	reflecting the allowable costs within 60 days after receiving all the necessary information 
8.28 	to compute the rate adjustment. No sooner than the effective date of the rate adjustment 
8.29 	for the building construction project, a nursing facility may adjust its rates by the amount 
8.30 	anticipated to be allowed. Any amounts collected from private pay residents in excess of 
8.31 	the allowable rate must be repaid to private pay residents with interest at the rate used by 
8.32 	the commissioner of revenue for the late payment of taxes and in effect on the date the 
8.33 	rate increase is effective. Construction projects with completion dates within one year 
8.34 	of the completion date associated with the property rate adjustment request and phased 
9.1 	projects with project completion dates within three years of the last phase of the phased 
9.2 	project must be aggregated for purposes of the minimum thresholds in subdivisions 16 
9.3 	and 17, and the maximum threshold in section 144A.071, subdivision 2. "Construction 
9.4 	project" and "project construction costs" have the meanings given them in Minnesota 
9.5 	Statutes, section 144A.071, subdivision 1a. 

9.6 	Sec. 10. Minnesota Statutes 2008, section 256B.433, subdivision 1, is amended to read:
9.7 		Subdivision 1.Setting payment; monitoring use of therapy services. The 
9.8 	commissioner shall promulgate adopt rules pursuant to the Administrative Procedure Act 
9.9 	to set the amount and method of payment for ancillary materials and services provided to 
9.10 	recipients residing in nursing facilities. Payment for materials and services may be made to 
9.11 	either the nursing facility in the operating cost per diem, to the vendor of ancillary services 
9.12 	pursuant to Minnesota Rules, parts 9505.0170 to 9505.0475 or to a nursing facility 
9.13 	pursuant to Minnesota Rules, parts 9505.0170 to 9505.0475. Payment for the same or 
9.14 	similar service to a recipient shall not be made to both the nursing facility and the vendor. 
9.15 	The commissioner shall ensure the avoidance of double payments through audits and 
9.16 	adjustments to the nursing facility's annual cost report as required by section 256B.47, and 
9.17 	that charges and arrangements for ancillary materials and services are cost-effective and as 
9.18 	would be incurred by a prudent and cost-conscious buyer. Therapy services provided to 
9.19 	a recipient must be medically necessary and appropriate to the medical condition of the 
9.20 	recipient. If the vendor, nursing facility, or ordering physician cannot provide adequate 
9.21 	medical necessity justification, as determined by the commissioner, the commissioner may 
9.22 	recover or disallow the payment for the services and may require prior authorization for 
9.23 	therapy services as a condition of payment or may impose administrative sanctions to limit 
9.24 	the vendor, nursing facility, or ordering physician's participation in the medical assistance 
9.25 	program. If the provider number of a nursing facility is used to bill services provided by a 
9.26 	vendor of therapy services that is not related to the nursing facility by ownership, control, 
9.27 	affiliation, or employment status, no withholding of payment shall be imposed against the 
9.28 	nursing facility for services not medically necessary except for funds due the unrelated 
9.29 	vendor of therapy services as provided in subdivision 3, paragraph (c). For the purpose 
9.30 	of this subdivision, no monetary recovery may be imposed against the nursing facility 
9.31 	for funds paid to the unrelated vendor of therapy services as provided in subdivision 3, 
9.32 	paragraph (c), for services not medically necessary. For purposes of this section and 
9.33 	section 256B.47, therapy includes physical therapy, occupational therapy, speech therapy, 
9.34 	audiology, and mental health services that are covered services according to Minnesota 
9.35 	Rules, parts 9505.0170 to 9505.0475, and that could be reimbursed separately from the 
10.1 	nursing facility per diem. For purposes of this subdivision, "ancillary services" include 
10.2 	transportation defined as a covered service in section 256B.0625, subdivision 17.

10.3 	Sec. 11. Minnesota Statutes 2008, section 256B.438, subdivision 7, is amended to read:
10.4 		Subd. 7.Rate determination upon transition to RUG-III payment rates. (a) The 
10.5 	commissioner of human services shall determine payment rates at the time of transition to 
10.6 	the RUG based payment model in a facility-specific, budget-neutral manner. The case 
10.7 	mix indices as defined in subdivision 3 shall be used to allocate the case mix adjusted 
10.8 	component of total payment across all case mix groups. To transition from the current 
10.9 	calculation methodology to the RUG based methodology, the commissioner of health shall 
10.10 	report to the commissioner of human services the resident days classified according to the 
10.11 	categories defined in subdivision 3 for the 12-month reporting period ending September 
10.12 	30, 2001, for each nursing facility. The commissioner of human services shall use this 
10.13 	data to compute the standardized days for the reporting period under the RUG system.
10.14 	(b) The commissioner of human services shall determine the case mix adjusted 
10.15 	component of the rate as follows:
10.16 	(1) determine the case mix portion of the 11 case mix rates in effect on June 30, 
10.17 	2002, or the 34 case mix rates in effect on or after June 30, 2003;
10.18 	(2) multiply each amount in clause (1) by the number of resident days assigned to 
10.19 	each group for the reporting period ending September 30, 2001, or the most recent year 
10.20 	for which data is available;
10.21 	(3) compute the sum of the amounts in clause (2);
10.22 	(4) determine the total RUG standardized days for the reporting period ending 
10.23 	September 30, 2001, or the most recent year for which data is available using the new 
10.24 	indices calculated under subdivision 3, paragraph (c);
10.25 	(5) divide the amount in clause (3) by the amount in clause (4) which shall be the 
10.26 	average case mix adjusted component of the rate under the RUG method; and
10.27 	(6) multiply this average rate by the case mix weight in subdivision 3 for each 
10.28 	RUG group.
10.29 	(c) For the transition to MDS 3.0 and RUGs 4.0, scheduled to take place on October 
10.30 	1, 2009, or subsequent modification to the resident assessment or classification systems, 
10.31 	the commissioner shall determine the case mix adjusted component of the rate as follows:
10.32 	(1) determine the case mix portion of the RUGs 3.0 operating payment rates in effect 
10.33 	on September 30, 2009, or most recent year;
10.34 	(2) determine the number of resident days assigned to each group for the year ending 
10.35 	September 30, 2008, or most recent year;
11.1 	(3) multiply the amounts in clause (1) by the resident days in clause (2) and compute 
11.2 	the sum of the amounts;
11.3 	(4) adjust the values determined in clause (2) using data provided by CMS, including 
11.4 	the crosswalk and other statistical methods determined by the commissioner, to estimate 
11.5 	the distribution of the resident days under RUGs 4.0, and determine the estimated total 
11.6 	standardized days; and
11.7 	(5) divide the amount in clause (3) by the amount in clause (4) which shall be the 
11.8 	case mix adjusted component of the operating payment rate under the RUGs 4.0 method 
11.9 	associated with a RUGs weight of 1.00, and multiply this average rate by the RUGs 
11.10 	4.0 indices published by CMS.
11.11 	(c) (d) The noncase mix component will be allocated to each RUG group as a 
11.12 	constant amount to determine the transition payment rate. Any other rate adjustments that 
11.13 	are effective on or after July 1, 2002, shall be applied to the transition rates determined 
11.14 	under this section.

11.15 	Sec. 12. Minnesota Statutes 2008, section 256B.441, subdivision 5, is amended to read:
11.16 		Subd. 5.Administrative costs. "Administrative costs" means the direct costs for 
11.17 	administering the overall activities of the nursing home. These costs include salaries and 
11.18 	wages of the administrator, assistant administrator, business office employees, security 
11.19 	guards, and associated fringe benefits and payroll taxes, fees, contracts, or purchases 
11.20 	related to business office functions, licenses, and permits except as provided in the external 
11.21 	fixed costs category, employee recognition, travel including meals and lodging, all training
11.22 	except as specified in subdivision 11, voice and data communication or transmission, 
11.23 	office supplies, liability insurance and other forms of insurance not designated to other 
11.24 	areas, personnel recruitment, legal services, accounting services, management or business 
11.25 	consultants, data processing, information technology, Web site, central or home office 
11.26 	costs, business meetings and seminars, postage, fees for professional organizations, 
11.27 	subscriptions, security services, advertising, board of director's fees, working capital 
11.28 	interest expense, and bad debts and bad debt collection fees.

11.29 	Sec. 13. Minnesota Statutes 2008, section 256B.441, subdivision 11, is amended to 
11.30 	read:
11.31 		Subd. 11.Direct care costs. "Direct care costs" means costs for the wages of 
11.32 	nursing administration, staff education, direct care registered nurses, licensed practical 
11.33 	nurses, certified nursing assistants, trained medication aides, employees conducting 
11.34 	training in resident care topics and associated fringe benefits and payroll taxes; services 
12.1 	from a supplemental nursing services agency; supplies that are stocked at nursing stations 
12.2 	or on the floor and distributed or used individually, including, but not limited to: alcohol, 
12.3 	applicators, cotton balls, incontinence pads, disposable ice bags, dressings, bandages, 
12.4 	water pitchers, tongue depressors, disposable gloves, enemas, enema equipment, soap, 
12.5 	medication cups, diapers, plastic waste bags, sanitary products, thermometers, hypodermic 
12.6 	needles and syringes, clinical reagents or similar diagnostic agents, drugs that are not paid 
12.7 	on a separate fee schedule by the medical assistance program or any other payer, and 
12.8 	technology related to the provision of nursing care to residents, such as electronic charting 
12.9 	systems; costs of materials used for resident care training, and training courses outside of 
12.10 	the facility attended by direct care staff on resident care topics.

12.11 	Sec. 14. Minnesota Statutes 2008, section 256B.5011, subdivision 2, is amended to 
12.12 	read:
12.13 		Subd. 2.Contract provisions. (a) The service contract with each intermediate 
12.14 	care facility must include provisions for:
12.15 	(1) modifying payments when significant changes occur in the needs of the 
12.16 	consumers;
12.17 	(2) the establishment and use of a quality improvement plan. Using criteria and 
12.18 	options for performance measures developed by the commissioner, each intermediate care 
12.19 	facility must identify a minimum of one performance measure on which to focus its efforts 
12.20 	for quality improvement during the contract period;
12.21 	(3) (2) appropriate and necessary statistical information required by the 
12.22 	commissioner;
12.23 	(4) (3) annual aggregate facility financial information; and
12.24 	(5) (4) additional requirements for intermediate care facilities not meeting the 
12.25 	standards set forth in the service contract.
12.26 	(b) The commissioner of human services and the commissioner of health, in 
12.27 	consultation with representatives from counties, advocacy organizations, and the provider 
12.28 	community, shall review the consolidated standards under chapter 245B and the supervised 
12.29 	living facility rule under Minnesota Rules, chapter 4665, to determine what provisions 
12.30 	in Minnesota Rules, chapter 4665, may be waived by the commissioner of health for 
12.31 	intermediate care facilities in order to enable facilities to implement the performance 
12.32 	measures in their contract and provide quality services to residents without a duplication 
12.33 	of or increase in regulatory requirements.

13.1 	Sec. 15. Minnesota Statutes 2008, section 256B.5012, subdivision 6, is amended to 
13.2 	read:
13.3 		Subd. 6.ICF/MR rate increases October 1, 2005, and October 1, 2006. (a) For 
13.4 	the rate periods beginning October 1, 2005, and October 1, 2006, the commissioner shall 
13.5 	make available to each facility reimbursed under this section an adjustment to the total 
13.6 	operating payment rate of 2.2553 percent.
13.7 	(b) 75 percent of the money resulting from the rate adjustment under paragraph (a) 
13.8 	must be used to increase wages and benefits and pay associated costs for  employees, 
13.9 	except for administrative and central office employees. 75 percent of the money received 
13.10 	by a facility as a result of the rate adjustment provided in paragraph (a) must be used only 
13.11 	for wage, benefit, and staff increases implemented on or after the effective date of the rate 
13.12 	increase each year, and must not be used for increases implemented prior to that date. The 
13.13 	wage adjustment eligible employees may receive may vary based on merit, seniority, or 
13.14 	other factors determined by the provider.
13.15 	(c) For each facility, the commissioner shall make available an adjustment, based 
13.16 	on occupied beds,  using the percentage specified in paragraph (a) multiplied by the total 
13.17 	payment rate, including variable rate but excluding the property-related payment rate, in 
13.18 	effect on the preceding day. The total payment rate shall include the adjustment provided 
13.19 	in section 256B.501, subdivision 12.
13.20 	(d) A facility whose payment rates are governed by closure agreements,or 
13.21 	receivership agreements, or Minnesota Rules, part 9553.0075, is not eligible for an 
13.22 	adjustment otherwise granted under this subdivision.
13.23 	(e) A facility may apply for the portion of the payment rate adjustment provided 
13.24 	under paragraph (a) for employee wages and benefits and associated costs. The application 
13.25 	must be made to the commissioner and contain a plan by which the facility will distribute 
13.26 	the funds according to paragraph (b). For facilities in which the employees are represented 
13.27 	by an exclusive bargaining representative, an agreement negotiated and agreed to by the 
13.28 	employer and the exclusive bargaining representative constitutes the plan. A negotiated 
13.29 	agreement may constitute the plan only if the agreement is finalized after the date of 
13.30 	enactment of all rate increases for the rate year. The commissioner shall review the plan to 
13.31 	ensure that the payment rate adjustment per diem is used as provided in this subdivision. 
13.32 	To be eligible, a facility must submit its plan by March 31, 2006, and December 31, 
13.33 	2006, respectively. If a facility's plan is effective for its employees after the first day of 
13.34 	the applicable rate period that the funds are available, the payment rate adjustment per 
13.35 	diem is effective the same date as its plan.
14.1 	(f) A copy of the approved distribution plan must be made available to all employees 
14.2 	by giving each employee a copy or by posting it in an area of the facility to which all 
14.3 	employees have access. If an employee does not receive the wage and benefit adjustment 
14.4 	described in the facility's approved plan and is unable to resolve the problem with the 
14.5 	facility's management or through the employee's union representative, the employee 
14.6 	may contact the commissioner at an address or telephone number provided by the 
14.7 	commissioner and included in the approved plan.

14.8 	Sec. 16. Minnesota Statutes 2008, section 256B.5012, subdivision 7, is amended to 
14.9 	read:
14.10 		Subd. 7.ICF/MR rate increases effective October 1, 2007, and October 1, 2008.
 14.11 	(a) For the rate year beginning October 1, 2007, the commissioner shall make available to 
14.12 	each facility reimbursed under this section operating payment rate adjustments equal to 
14.13 	2.0 percent of the operating payment rates in effect on September 30, 2007. For the rate 
14.14 	year beginning October 1, 2008, the commissioner shall make available to each facility 
14.15 	reimbursed under this section operating payment rate adjustments equal to 2.0 percent 
14.16 	of the operating payment rates in effect on September 30, 2008. For each facility, the 
14.17 	commissioner shall make available an adjustment, based on occupied beds, using the 
14.18 	percentage specified in this paragraph multiplied by the total payment rate, including the 
14.19 	variable rate but excluding the property-related payment rate, in effect on the preceding 
14.20 	day. The total payment rate shall include the adjustment provided in section 256B.501, 
14.21 	subdivision 12. A facility whose payment rates are governed by closure agreements,
14.22 	or receivership agreements, or Minnesota Rules, part 9553.0075, is not eligible for an 
14.23 	adjustment otherwise granted under this subdivision.
14.24 	(b) Seventy-five percent of the money resulting from the rate adjustments under 
14.25 	paragraph (a) must be used for increases in compensation-related costs for employees 
14.26 	directly employed by the facility on or after the effective date of the rate adjustments, 
14.27 	except:
14.28 	(1) the administrator;
14.29 	(2) persons employed in the central office of a corporation that has an ownership 
14.30 	interest in the facility or exercises control over the facility; and 
14.31 	(3) persons paid by the facility under a management contract.
14.32 	(c) Two-thirds of the money available under paragraph (b) must be used for wage 
14.33 	increases for all employees directly employed by the facility on or after the effective 
14.34 	date of the rate adjustments, except those listed in paragraph (b), clauses (1) to (3). The 
14.35 	wage adjustment that employees receive under this paragraph must be paid as an equal 
15.1 	hourly percentage wage increase for all eligible employees. All wage increases under this 
15.2 	paragraph must be effective on the same date. Only costs associated with the portion of 
15.3 	the equal hourly percentage wage increase that goes to all employees shall qualify under 
15.4 	this paragraph. Costs associated with wage increases in excess of the amount of the equal 
15.5 	hourly percentage wage increase provided to all employees shall be allowed only for 
15.6 	meeting the requirements in paragraph (b). This paragraph shall not apply to employees 
15.7 	covered by a collective bargaining agreement.
15.8 	(d) The commissioner shall allow as compensation-related costs all costs for:
15.9 	(1) wages and salaries;
15.10 	(2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' 
15.11 	compensation;
15.12 	(3) the employer's share of health and dental insurance, life insurance, disability 
15.13 	insurance, long-term care insurance, uniform allowance, and pensions; and
15.14 	(4) other benefits provided, subject to the approval of the commissioner.
15.15 	(e) The portion of the rate adjustments under paragraph (a) that is not subject to the 
15.16 	requirements in paragraphs (b) and (c) shall be provided to facilities effective October 
15.17 	1 of each year.
15.18 	(f) Facilities may apply for the portion of the rate adjustments under paragraph 
15.19 	(a) that is subject to the requirements in paragraphs (b) and (c). The application 
15.20 	must be submitted to the commissioner within six months of the effective date of the 
15.21 	rate adjustments, and the facility must provide additional information required by 
15.22 	the commissioner within nine months of the effective date of the rate adjustments. 
15.23 	The commissioner must respond to all applications within three weeks of receipt. 
15.24 	The commissioner may waive the deadlines in this paragraph under extraordinary 
15.25 	circumstances, to be determined at the sole discretion of the commissioner. The 
15.26 	application must contain:
15.27 	(1) an estimate of the amounts of money that must be used as specified in paragraphs 
15.28 	(b) and (c);
15.29 	(2) a detailed distribution plan specifying the allowable compensation-related and 
15.30 	wage increases the facility will implement to use the funds available in clause (1);
15.31 	(3) a description of how the facility will notify eligible employees of the contents of 
15.32 	the approved application, which must provide for giving each eligible employee a copy of 
15.33 	the approved application, excluding the information required in clause (1), or posting a 
15.34 	copy of the approved application, excluding the information required in clause (1), for 
15.35 	a period of at least six weeks in an area of the facility to which all eligible employees 
15.36 	have access; and
16.1 	(4) instructions for employees who believe they have not received the 
16.2 	compensation-related or wage increases specified in clause (2), as approved by the 
16.3 	commissioner, and which must include a mailing address, e-mail address, and the 
16.4 	telephone number that may be used by the employee to contact the commissioner or the 
16.5 	commissioner's representative.
16.6 	(g) The commissioner shall ensure that cost increases in distribution plans under 
16.7 	paragraph (f), clause (2), that may be included in approved applications, comply with 
16.8 	requirements in clauses (1) to (4):
16.9 	(1) costs to be incurred during the applicable rate year resulting from wage and 
16.10 	salary increases effective after October 1, 2006, and prior to the first day of the facility's 
16.11 	payroll period that includes October 1 of each year shall be allowed if they were not used 
16.12 	in the prior year's application and they meet the requirements of paragraphs (b) and (c);
16.13 	(2) a portion of the costs resulting from tenure-related wage or salary increases 
16.14 	may be considered to be allowable wage increases, according to formulas that the 
16.15 	commissioner shall provide, where employee retention is above the average statewide 
16.16 	rate of retention of direct care employees;
16.17 	(3) the annualized amount of increases in costs for the employer's share of health 
16.18 	and dental insurance, life insurance, disability insurance, and workers' compensation shall 
16.19 	be allowable compensation-related increases if they are effective on or after April 1 of 
16.20 	the year in which the rate adjustments are effective and prior to April 1 of the following 
16.21 	year; and 
16.22 	(4) for facilities in which employees are represented by an exclusive bargaining 
16.23 	representative, the commissioner shall approve the application only upon receipt of a letter 
16.24 	of acceptance of the distribution plan, as regards members of the bargaining unit, signed 
16.25 	by the exclusive bargaining agent and dated after May 25, 2007. Upon receipt of the letter 
16.26 	of acceptance, the commissioner shall deem all requirements of this section as having 
16.27 	been met in regard to the members of the bargaining unit.
16.28 	(h) The commissioner shall review applications received under paragraph (f) and 
16.29 	shall provide the portion of the rate adjustments under paragraphs (b) and (c) if the 
16.30 	requirements of this subdivision have been met. The rate adjustments shall be effective 
16.31 	October 1 of each year. Notwithstanding paragraph (a), if the approved application 
16.32 	distributes less money than is available, the amount of the rate adjustment shall be reduced 
16.33 	so that the amount of money made available is equal to the amount to be distributed.

16.34 	Sec. 17. Minnesota Statutes 2008, section 256B.5013, subdivision 1, is amended to 
16.35 	read:
17.1 		Subdivision 1.Variable rate adjustments. (a) For rate years beginning on or after 
17.2 	October 1, 2000, when there is a documented increase in the needs of a current ICF/MR 
17.3 	recipient, the county of financial responsibility may recommend a variable rate to enable 
17.4 	the facility to meet the individual's increased needs. Variable rate adjustments made under 
17.5 	this subdivision replace payments for persons with special needs under section 256B.501, 
17.6 	subdivision 8, and payments for persons with special needs for crisis intervention services 
17.7 	under section 256B.501, subdivision 8a. Effective July 1, 2003, facilities with a base rate 
17.8 	above the 50th percentile of the statewide average reimbursement rate for a Class A 
17.9 	facility or Class B facility, whichever matches the facility licensure, are not eligible for a 
17.10 	variable rate adjustment. Variable rate adjustments may not exceed a 12-month period, 
17.11 	except when approved for purposes established in paragraph (b), clause (1). Variable rate 
17.12 	adjustments approved solely on the basis of changes on a developmental disabilities 
17.13 	screening document will end June 30, 2002. 
17.14 	(b) A variable rate may be recommended by the county of financial responsibility 
17.15 	for increased needs in the following situations:
17.16 	(1) a need for resources due to an individual's full or partial retirement from 
17.17 	participation in a day training and habilitation service when the individual: (i) has reached 
17.18 	the age of 65 or has a change in health condition that makes it difficult for the person 
17.19 	to participate in day training and habilitation services over an extended period of time 
17.20 	because it is medically contraindicated; and (ii) has expressed a desire for change through 
17.21 	the developmental disability screening process under section 256B.092; 
17.22 	(2) a need for additional resources for intensive short-term programming which is 
17.23 	necessary prior to an individual's discharge to a less restrictive, more integrated setting;
17.24 	(3) a demonstrated medical need that significantly impacts the type or amount of 
17.25 	services needed by the individual; or
17.26 	(4) a demonstrated behavioral need that significantly impacts the type or amount of 
17.27 	services needed by the individual.
17.28 	(c) The county of financial responsibility must justify the purpose, the projected 
17.29 	length of time, and the additional funding needed for the facility to meet the needs of 
17.30 	the individual.
17.31 	(d) The facility shall provide a quarterly an annual report to the county case manager 
17.32 	on the use of the variable rate funds and the status of the individual on whose behalf the 
17.33 	funds were approved. The county case manager will forward the facility's report with a 
17.34 	recommendation to the commissioner to approve or disapprove a continuation of the 
17.35 	variable rate.
18.1 	(e) Funds made available through the variable rate process that are not used by 
18.2 	the facility to meet the needs of the individual for whom they were approved shall be 
18.3 	returned to the state.

18.4 	Sec. 18. Minnesota Statutes 2008, section 256B.5013, subdivision 6, is amended to 
18.5 	read:
18.6 		Subd. 6.Commissioner's responsibilities. The commissioner shall:
18.7 	(1) make a determination to approve, deny, or modify a request for a variable rate 
18.8 	adjustment within 30 days of the receipt of the completed application;
18.9 	(2) notify the ICF/MR facility and county case manager of the duration and 
18.10 	conditions of variable rate adjustment approvals; and
18.11 	(3) modify MMIS II service agreements to reimburse ICF/MR facilities for approved 
18.12 	variable rates; .
18.13 	(4) provide notification of legislatively appropriated funding for facility closures, 
18.14 	downsizings, and relocations;
18.15 	(5) assess the fiscal impacts of the proposals for closures, downsizings, and 
18.16 	relocations forwarded for consideration through the state advisory committee; and
18.17 	(6) review the payment rate process on a biannual basis and make recommendations 
18.18 	to the legislature for necessary adjustments to the review and approval process.

18.19 	Sec. 19. Minnesota Statutes 2008, section 626.557, subdivision 12b, is amended to 
18.20 	read:
18.21 		Subd. 12b.Data management. (a) In performing any of the duties of this section as 
18.22 	a lead agency, the county social service agency shall maintain appropriate records. Data 
18.23 	collected by the county social service agency under this section are welfare data under 
18.24 	section 13.46. Notwithstanding section 13.46, subdivision 1, paragraph (a), data under this 
18.25 	paragraph that are inactive investigative data on an individual who is a vendor of services 
18.26 	are private data on individuals, as defined in section 13.02. The identity of the reporter 
18.27 	may only be disclosed as provided in paragraph (c).
18.28 	Data maintained by the common entry point are confidential data on individuals or 
18.29 	protected nonpublic data as defined in section 13.02. Notwithstanding section 138.163, 
18.30 	the common entry point shall destroy data maintain data for at least a period of three 
18.31 	calendar years after date of receipt.
18.32 	(b) The commissioners of health and human services shall prepare an investigation 
18.33 	memorandum for each report alleging maltreatment investigated under this section. 
18.34 	County social service agencies must maintain private data on individuals but are not 
19.1 	required to prepare an investigation memorandum. During an investigation by the 
19.2 	commissioner of health or the commissioner of human services, data collected under this 
19.3 	section are confidential data on individuals or protected nonpublic data as defined in 
19.4 	section 13.02. Upon completion of the investigation, the data are classified as provided in 
19.5 	clauses (1) to (3) and paragraph (c).
19.6 	(1) The investigation memorandum must contain the following data, which are 
19.7 	public:
19.8 	(i) the name of the facility investigated;
19.9 	(ii) a statement of the nature of the alleged maltreatment;
19.10 	(iii) pertinent information obtained from medical or other records reviewed;
19.11 	(iv) the identity of the investigator;
19.12 	(v) a summary of the investigation's findings;
19.13 	(vi) statement of whether the report was found to be substantiated, inconclusive, 
19.14 	false, or that no determination will be made;
19.15 	(vii) a statement of any action taken by the facility;
19.16 	(viii) a statement of any action taken by the lead agency; and
19.17 	(ix) when a lead agency's determination has substantiated maltreatment, a statement 
19.18 	of whether an individual, individuals, or a facility were responsible for the substantiated 
19.19 	maltreatment, if known.
19.20 	The investigation memorandum must be written in a manner which protects the 
19.21 	identity of the reporter and of the vulnerable adult and may not contain the names or, to 
19.22 	the extent possible, data on individuals or private data listed in clause (2).
19.23 	(2) Data on individuals collected and maintained in the investigation memorandum 
19.24 	are private data, including:
19.25 	(i) the name of the vulnerable adult;
19.26 	(ii) the identity of the individual alleged to be the perpetrator;
19.27 	(iii) the identity of the individual substantiated as the perpetrator; and
19.28 	(iv) the identity of all individuals interviewed as part of the investigation.
19.29 	(3) Other data on individuals maintained as part of an investigation under this section 
19.30 	are private data on individuals upon completion of the investigation.
19.31 	(c) The subject of the report may compel disclosure of the name of the reporter only 
19.32 	with the consent of the reporter or upon a written finding by a court that the report was 
19.33 	false and there is evidence that the report was made in bad faith. This subdivision does 
19.34 	not alter disclosure responsibilities or obligations under the Rules of Criminal Procedure, 
19.35 	except that where the identity of the reporter is relevant to a criminal prosecution, the 
20.1 	district court shall do an in-camera review prior to determining whether to order disclosure 
20.2 	of the identity of the reporter.
20.3 	(d) Notwithstanding section 138.163, data maintained under this section by the 
20.4 	commissioners of health and human services must be destroyed maintained under the 
20.5 	following schedule:
20.6 	(1) data from reports determined to be false, two maintained at least a period of three
20.7 	years after the finding was made;
20.8 	(2) data from reports determined to be inconclusive, maintained at least a period 
20.9 	of four years after the finding was made;
20.10 	(3) data from reports determined to be substantiated, maintained at least a period of 
20.11 	seven years after the finding was made; and
20.12 	(4) data from reports which were not investigated by a lead agency and for which 
20.13 	there is no final disposition, two maintained at least a period of three years from the 
20.14 	date of the report.
20.15 	(e) The commissioners of health and human services shall each annually report to 
20.16 	the legislature and the governor on the number and type of reports of alleged maltreatment 
20.17 	involving licensed facilities reported under this section, the number of those requiring 
20.18 	investigation under this section, and the resolution of those investigations. The report 
20.19 	shall identify:
20.20 	(1) whether and where backlogs of cases result in a failure to conform with statutory 
20.21 	time frames;
20.22 	(2) where adequate coverage requires additional appropriations and staffing; and
20.23 	(3) any other trends that affect the safety of vulnerable adults.
20.24 	(f) Each lead agency must have a record retention policy.
20.25 	(g) Lead agencies, prosecuting authorities, and law enforcement agencies may 
20.26 	exchange not public data, as defined in section 13.02, if the agency or authority requesting 
20.27 	the data determines that the data are pertinent and necessary to the requesting agency in 
20.28 	initiating, furthering, or completing an investigation under this section. Data collected 
20.29 	under this section must be made available to prosecuting authorities and law enforcement 
20.30 	officials, local county agencies, and licensing agencies investigating the alleged 
20.31 	maltreatment under this section. The lead agency shall exchange not public data with the 
20.32 	vulnerable adult maltreatment review panel established in section 256.021 if the data are 
20.33 	pertinent and necessary for a review requested under that section. Upon completion of the 
20.34 	review, not public data received by the review panel must be returned to the lead agency.
20.35 	(h) Each lead agency shall keep records of the length of time it takes to complete its 
20.36 	investigations.
21.1 	(i) A lead agency may notify other affected parties and their authorized representative 
21.2 	if the agency has reason to believe maltreatment has occurred and determines the 
21.3 	information will safeguard the well-being of the affected parties or dispel widespread 
21.4 	rumor or unrest in the affected facility.
21.5 	(j) Under any notification provision of this section, where federal law specifically 
21.6 	prohibits the disclosure of patient identifying information, a lead agency may not provide 
21.7 	any notice unless the vulnerable adult has consented to disclosure in a manner which 
21.8 	conforms to federal requirements.

21.9 	Sec. 20.  REPEALER.
 21.10 	Minnesota Statutes 2008, section 256B.5013, subdivisions 2, 3, and 5, are repealed.