1.1                          A bill for an act 
  1.2             relating to human services; adding to definition of 
  1.3             base level funding; adding provisions for local 
  1.4             children's mental health collaborative; changing 
  1.5             provisions for integrated fund task force; requiring 
  1.6             approval for a collaborative's integrated service 
  1.7             system; adding provisions for liens; directing 
  1.8             purchase of cost-effective coverage for AIDS patients; 
  1.9             changing GAMC exemption for Indian health service 
  1.10            facilities; establishing a medical assistance 
  1.11            qualifying trust; defining institutionalized spouse; 
  1.12            establishing a date for prohibited transfer of assets; 
  1.13            establishing homestead exception to transfer 
  1.14            prohibition; excluding organ transplant for medical 
  1.15            assistance coverage for emergency medical treatment 
  1.16            furnished to an alien; requiring notice to heirs; 
  1.17            defining undue hardship; establishing demonstration 
  1.18            projects for alternative integrated delivery systems 
  1.19            for acute and long-term services to the elderly; 
  1.20            amending Minnesota Statutes 1994, sections 245.492, 
  1.21            subdivisions 2, 6, 9, and 23; 245.493, subdivision 2; 
  1.22            245.4932, subdivisions 1, 2, 3, and 4; 245.494, 
  1.23            subdivisions 1 and 3; 245.495; 245.496, subdivision 3, 
  1.24            and by adding a subdivision; 256.015, subdivisions 1 
  1.25            and 2; 256.9353, subdivision 8; 256.9365; 256.969, 
  1.26            subdivisions 1, 10, 16, and 24; 256B.042, subdivision 
  1.27            2; 256B.056, subdivision 4, and by adding a 
  1.28            subdivision; 256B.0575; 256B.059, subdivisions 1, 3, 
  1.29            and 5; 256B.0595, subdivisions 1, 2, 3, and 4; 
  1.30            256B.06, subdivision 4; 256B.0625, subdivisions 5, 8, 
  1.31            8a, 13, 13a, 18, 37, and by adding a subdivision; 
  1.32            256B.0911, subdivision 2; 256B.0915, subdivision 2; 
  1.33            256B.15, subdivisions 1a, 2, and by adding a 
  1.34            subdivision; 256B.49, subdivision 1; 256B.69, 
  1.35            subdivision 4, and by adding a subdivision; 256D.03, 
  1.36            subdivisions 3, 3b, and 4; and 256D.425, by adding a 
  1.37            subdivision; proposing coding for new law in Minnesota 
  1.38            Statutes, chapters 245; and 256B; repealing Minnesota 
  1.39            Statutes 1994, section 256B.055, subdivision 12. 
  1.40  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.41     Section 1.  Minnesota Statutes 1994, section 245.492, 
  1.42  subdivision 2, is amended to read: 
  2.1      Subd. 2.  [BASE LEVEL FUNDING.] "Base level funding" means 
  2.2   funding received from state, federal, or local sources and 
  2.3   expended across the local system of care in fiscal year 1993 for 
  2.4   children's mental health services or, for special education 
  2.5   services, and other services for children with emotional or 
  2.6   behavioral disturbances and their families. 
  2.7   In subsequent years, base level funding may be adjusted to 
  2.8   reflect decreases in the numbers of children in the target 
  2.9   population. 
  2.10     Sec. 2.  Minnesota Statutes 1994, section 245.492, 
  2.11  subdivision 6, is amended to read: 
  2.12     Subd. 6.  [INITIAL OPERATIONAL TARGET POPULATION.] "Initial 
  2.13  Operational target population" means a population of children 
  2.14  that the local children's mental health collaborative agrees to 
  2.15  serve in the start-up phase and who meet fall within the 
  2.16  criteria for the target population.  The initial operational 
  2.17  target population may be less than the target population. 
  2.18     Sec. 3.  Minnesota Statutes 1994, section 245.492, 
  2.19  subdivision 9, is amended to read: 
  2.20     Subd. 9.  [INTEGRATED SERVICE SYSTEM.] "Integrated service 
  2.21  system" means a coordinated set of procedures established by the 
  2.22  local children's mental health collaborative for coordinating 
  2.23  services and actions across categorical systems and agencies 
  2.24  that results in: 
  2.25     (1) integrated funding; 
  2.26     (2) improved outreach, early identification, and 
  2.27  intervention across systems; 
  2.28     (3) strong collaboration between parents and professionals 
  2.29  in identifying children in the target population facilitating 
  2.30  access to the integrated system, and coordinating care and 
  2.31  services for these children; 
  2.32     (4) a coordinated assessment process across systems that 
  2.33  determines which children need multiagency care coordination and 
  2.34  wraparound services; 
  2.35     (5) multiagency plan of care; and 
  2.36     (6) wraparound individualized rehabilitation services. 
  3.1   Services provided by the integrated service system must meet the 
  3.2   requirements set out in sections 245.487 to 245.4887.  Children 
  3.3   served by the integrated service system must be economically and 
  3.4   culturally representative of children in the service delivery 
  3.5   area. 
  3.6      Sec. 4.  Minnesota Statutes 1994, section 245.492, 
  3.7   subdivision 23, is amended to read: 
  3.8      Subd. 23.  [WRAPAROUND INDIVIDUALIZED REHABILITATION 
  3.9   SERVICES.] "Wraparound Individualized rehabilitation services" 
  3.10  are alternative, flexible, coordinated, and highly 
  3.11  individualized services that are based on a multiagency plan of 
  3.12  care.  These services are designed to build on the strengths and 
  3.13  respond to the needs identified in the child's multiagency 
  3.14  assessment and to improve the child's ability to function in the 
  3.15  home, school, and community.  Wraparound Individualized 
  3.16  rehabilitation services may include, but are not limited to, 
  3.17  residential services, respite services, services that assist the 
  3.18  child or family in enrolling in or participating in recreational 
  3.19  activities, assistance in purchasing otherwise unavailable items 
  3.20  or services important to maintain a specific child in the 
  3.21  family, and services that assist the child to participate in 
  3.22  more traditional services and programs. 
  3.23     Sec. 5.  Minnesota Statutes 1994, section 245.493, 
  3.24  subdivision 2, is amended to read: 
  3.25     Subd. 2.  [GENERAL DUTIES OF THE LOCAL CHILDREN'S MENTAL 
  3.26  HEALTH COLLABORATIVES.] Each local children's mental health 
  3.27  collaborative must: 
  3.28     (1) notify the commissioner of human services within ten 
  3.29  days of formation by signing a collaborative agreement and 
  3.30  providing the commissioner with a copy of the signed agreement; 
  3.31     (2) identify a service delivery area and an initial 
  3.32  operational target population within that service delivery area. 
  3.33  The initial operational target population must be economically 
  3.34  and culturally representative of children in the service 
  3.35  delivery area to be served by the local children's mental health 
  3.36  collaborative.  The size of the initial operational target 
  4.1   population must also be economically viable for the service 
  4.2   delivery area; 
  4.3      (2) (3) seek to maximize federal revenues available to 
  4.4   serve children in the target population by designating local 
  4.5   expenditures for mental health services for these children and 
  4.6   their families that can be matched with federal dollars; 
  4.7      (3) (4) in consultation with the local children's advisory 
  4.8   council and the local coordinating council, if it is not the 
  4.9   local children's mental health collaborative, design, develop, 
  4.10  and ensure implementation of an integrated service system that 
  4.11  meets the requirements for state and federal reimbursement and 
  4.12  develop interagency agreements necessary to implement the 
  4.13  system; 
  4.14     (4) (5) expand membership to include representatives of 
  4.15  other services in the local system of care including prepaid 
  4.16  health plans under contract with the commissioner of human 
  4.17  services to serve the mental health needs of children in the 
  4.18  target population and their families; 
  4.19     (5) (6) create or designate a management structure for 
  4.20  fiscal and clinical responsibility and outcome evaluation; 
  4.21     (6) (7) spend funds generated by the local children's 
  4.22  mental health collaborative as required in sections 245.491 to 
  4.23  245.496; and 
  4.24     (7) (8) explore methods and recommend changes needed at the 
  4.25  state level to reduce duplication and promote coordination of 
  4.26  services including the use of uniform forms for reporting, 
  4.27  billing, and planning of services.; 
  4.28     (9) submit its integrated service system design to the 
  4.29  state coordinating council for approval within one year of 
  4.30  notifying the commissioner of human services of its formation; 
  4.31     (10) provide an annual report that includes the elements 
  4.32  listed in section 245.494, subdivision 2, and the 
  4.33  collaborative's planned timeline to expand its operational 
  4.34  target population to the state coordinating council; and 
  4.35     (11) expand its operational target population. 
  4.36     Each local children's mental health collaborative may 
  5.1   contract with the commissioner of human services to become a 
  5.2   medical assistance provider of mental health services according 
  5.3   to section 245.4933. 
  5.4      Sec. 6.  Minnesota Statutes 1994, section 245.4932, 
  5.5   subdivision 1, is amended to read: 
  5.6      Subdivision 1.  [PROVIDER COLLABORATIVE RESPONSIBILITIES.] 
  5.7   The children's mental health collaborative shall have the 
  5.8   following authority and responsibilities regarding federal 
  5.9   revenue enhancement: 
  5.10     (1) the collaborative must establish an integrated fund; 
  5.11     (2) the collaborative shall designate a lead county or 
  5.12  other qualified entity as the fiscal agency for reporting, 
  5.13  claiming, and receiving payments; 
  5.14     (2) (3) the collaborative or lead county may enter into 
  5.15  subcontracts with other counties, school districts, special 
  5.16  education cooperatives, municipalities, and other public and 
  5.17  nonprofit entities for purposes of identifying and claiming 
  5.18  eligible expenditures to enhance federal reimbursement; 
  5.19     (3) (4) the collaborative shall use any enhanced revenue 
  5.20  attributable to the activities of the collaborative, including 
  5.21  administrative and service revenue, solely to provide mental 
  5.22  health services or to expand the operational target population.  
  5.23  The lead county or other qualified entity may not use enhanced 
  5.24  federal revenue for any other purpose; 
  5.25     (5) the members of the collaborative must continue the base 
  5.26  level of expenditures, as defined in section 245.492, 
  5.27  subdivision 2, for services for children with emotional or 
  5.28  behavioral disturbances and their families from any state, 
  5.29  county, federal, or other public or private funding source 
  5.30  which, in the absence of the new federal reimbursement earned 
  5.31  under sections 245.491 to 245.496, would have been available for 
  5.32  those services.  The base year for purposes of this subdivision 
  5.33  shall be the accounting period closest to state fiscal year 
  5.34  1993; 
  5.35     (4) (6) the collaborative or lead county must develop and 
  5.36  maintain an accounting and financial management system adequate 
  6.1   to support all claims for federal reimbursement, including a 
  6.2   clear audit trail and any provisions specified in the 
  6.3   contract with the commissioner of human services; 
  6.4      (5) (7) the collaborative shall or its members may elect to 
  6.5   pay the nonfederal share of the medical assistance costs for 
  6.6   services designated by the collaborative; and 
  6.7      (6) (8) the lead county or other qualified entity may not 
  6.8   use federal funds or local funds designated as matching for 
  6.9   other federal funds to provide the nonfederal share of medical 
  6.10  assistance. 
  6.11     Sec. 7.  Minnesota Statutes 1994, section 245.4932, 
  6.12  subdivision 2, is amended to read: 
  6.13     Subd. 2.  [COMMISSIONER'S RESPONSIBILITIES.] (1) 
  6.14  Notwithstanding sections 256B.19, subdivision 1, and 256B.0625, 
  6.15  the commissioner shall be required to amend the state medical 
  6.16  assistance plan to include as covered services eligible for 
  6.17  medical assistance reimbursement, those services eligible for 
  6.18  reimbursement under federal law or waiver, which a collaborative 
  6.19  elects to provide and for which the collaborative elects to pay 
  6.20  the nonfederal share of the medical assistance costs. 
  6.21     (2) The commissioner may suspend, reduce, or terminate the 
  6.22  federal reimbursement to a provider collaborative that does not 
  6.23  meet the requirements of sections 245.493 to 245.496. 
  6.24     (3) The commissioner shall recover from the collaborative 
  6.25  any federal fiscal disallowances or sanctions for audit 
  6.26  exceptions directly attributable to the collaborative's actions 
  6.27  or the proportional share if federal fiscal disallowances or 
  6.28  sanctions are based on a statewide random sample. 
  6.29     Sec. 8.  Minnesota Statutes 1994, section 245.4932, 
  6.30  subdivision 3, is amended to read: 
  6.31     Subd. 3.  [PAYMENTS.] Notwithstanding section 256.025, 
  6.32  subdivision 2, payments under sections 245.493 to 245.496 to 
  6.33  providers for wraparound service expenditures and expenditures 
  6.34  for other services for which the collaborative elects to pay the 
  6.35  nonfederal share of medical assistance shall only be made of 
  6.36  federal earnings from services provided under sections 245.493 
  7.1   to 245.496. 
  7.2      Sec. 9.  Minnesota Statutes 1994, section 245.4932, 
  7.3   subdivision 4, is amended to read: 
  7.4      Subd. 4.  [CENTRALIZED DISBURSEMENT OF MEDICAL ASSISTANCE 
  7.5   PAYMENTS.] Notwithstanding section 256B.041, and except for 
  7.6   family community support services and therapeutic support of 
  7.7   foster care, county payments for the cost of wraparound services 
  7.8   and other services for which the collaborative elects to pay the 
  7.9   nonfederal share, for reimbursement under medical assistance, 
  7.10  shall not be made to the state treasurer.  For purposes of 
  7.11  wraparound individualized rehabilitation services under sections 
  7.12  245.493 to 245.496, the centralized disbursement of payments to 
  7.13  providers under section 256B.041 consists only of federal 
  7.14  earnings from services provided under sections 245.493 to 
  7.15  245.496. 
  7.16     Sec. 10.  [245.4933] [MEDICAL ASSISTANCE PROVIDER STATUS.] 
  7.17     Subdivision 1.  [REQUIREMENTS TO SERVE CHILDREN NOT 
  7.18  ENROLLED IN A PREPAID MEDICAL ASSISTANCE OR MINNESOTACARE HEALTH 
  7.19  PLAN.] (a) In order for a local children's mental health 
  7.20  collaborative to become a prepaid provider of medical assistance 
  7.21  services and be eligible to receive medical assistance 
  7.22  reimbursement, the collaborative must: 
  7.23     (1) enter into a contract with the commissioner of human 
  7.24  services to provide mental health services including inpatient, 
  7.25  outpatient, medication management, services under the 
  7.26  rehabilitation option, and related physician services; 
  7.27     (2) meet the applicable federal requirements; 
  7.28     (3) either carry stop-loss insurance or enter into a 
  7.29  risk-sharing agreement with the commissioner of human services; 
  7.30  and 
  7.31     (4) provide medically necessary medical assistance mental 
  7.32  health services to children in the target population who enroll 
  7.33  in the local children's mental health collaborative. 
  7.34     (b) Upon execution of the provider contract with the 
  7.35  commissioner of human services the local children's mental 
  7.36  health collaborative may: 
  8.1      (1) provide mental health services which are not medical 
  8.2   assistance state plan services in addition to the state plan 
  8.3   services described in the contract with the commissioner of 
  8.4   human services; and 
  8.5      (2) enter into subcontracts which meet the requirements of 
  8.6   Code of Federal Regulations, title 42, section 434.6, with other 
  8.7   providers of mental health services including prepaid health 
  8.8   plans established under section 256B.69. 
  8.9      Subd. 2.  [REQUIREMENTS TO SERVE CHILDREN ENROLLED IN A 
  8.10  PREPAID HEALTH PLAN.] A children's mental health collaborative 
  8.11  may serve children in the collaborative's target population who 
  8.12  are enrolled in a prepaid health plan under contract with the 
  8.13  commissioner of human services by contracting with one or more 
  8.14  such health plans to provide medical assistance or MinnesotaCare 
  8.15  mental health services to children enrolled in the health plan.  
  8.16  The collaborative and the health plan shall work cooperatively 
  8.17  to ensure the integration of physical and mental health services.
  8.18     Subd. 3.  [REQUIREMENTS TO SERVE CHILDREN WHO BECOME 
  8.19  ENROLLED IN A PREPAID HEALTH PLAN.] A children's mental health 
  8.20  collaborative may provide prepaid medical assistance or 
  8.21  MinnesotaCare mental health services to children who are not 
  8.22  enrolled in prepaid health plans until those children are 
  8.23  enrolled.  Publication of a request for proposals in the State 
  8.24  Register shall serve as notice to the collaborative of the 
  8.25  commissioner's intent to execute contracts for medical 
  8.26  assistance and MinnesotaCare services.  In order to become or 
  8.27  continue to be a provider of medical assistance or MinnesotaCare 
  8.28  services the collaborative may contract with one or more such 
  8.29  prepaid health plans after the collaborative's target population 
  8.30  is enrolled in a prepaid health plan.  The collaborative and the 
  8.31  health plan shall work cooperatively to ensure the integration 
  8.32  of physical and mental health services. 
  8.33     Subd. 4.  [COMMISSIONER'S DUTIES.] (a) The commissioner of 
  8.34  human services shall provide each children's mental health 
  8.35  collaborative considering whether to become a prepaid provider 
  8.36  of mental health services the commissioner's best estimate of a 
  9.1   capitated payment prior to an actuarial study based upon the 
  9.2   collaborative's operational target population.  The capitated 
  9.3   payment shall be adjusted annually, if necessary, for changes in 
  9.4   the operational target population. 
  9.5      (b) The commissioner shall negotiate risk adjustment and 
  9.6   reinsurance mechanisms with children's mental health 
  9.7   collaboratives that become medical assistance providers 
  9.8   including those that subcontract with prepaid health plans. 
  9.9      Subd. 5.  [NONCONTRACTING COLLABORATIVES.] A local 
  9.10  children's mental health collaborative that does not become a 
  9.11  prepaid provider of medical assistance or MinnesotaCare services 
  9.12  may provide services through individual members of a 
  9.13  noncontracting collaborative who have a medical assistance 
  9.14  provider agreement to eligible recipients who are not enrolled 
  9.15  in the health plan. 
  9.16     Subd. 6.  [INDIVIDUALIZED REHABILITATION SERVICES.] A 
  9.17  children's mental health collaborative with an integrated 
  9.18  service system approved by the state coordinating council may 
  9.19  become a medical assistance provider for the purpose of 
  9.20  obtaining prior authorization for and providing individualized 
  9.21  rehabilitation services. 
  9.22     Sec. 11.  Minnesota Statutes 1994, section 245.494, 
  9.23  subdivision 1, is amended to read: 
  9.24     Subdivision 1.  [STATE COORDINATING COUNCIL.] The state 
  9.25  coordinating council, in consultation with the integrated fund 
  9.26  task force, shall: 
  9.27     (1) assist local children's mental health collaboratives in 
  9.28  meeting the requirements of sections 245.491 to 245.496, by 
  9.29  seeking consultation and technical assistance from national 
  9.30  experts and coordinating presentations and assistance from these 
  9.31  experts to local children's mental health collaboratives; 
  9.32     (2) assist local children's mental health collaboratives in 
  9.33  identifying an economically viable initial operational target 
  9.34  population; 
  9.35     (3) develop methods to reduce duplication and promote 
  9.36  coordinated services including uniform forms for reporting, 
 10.1   billing, and planning of services; 
 10.2      (4) by September 1, 1994, develop a model multiagency plan 
 10.3   of care that can be used by local children's mental health 
 10.4   collaboratives in place of an individual education plan, 
 10.5   individual family community support plan, individual family 
 10.6   support plan, and an individual treatment plan; 
 10.7      (5) assist in the implementation and operation of local 
 10.8   children's mental health collaboratives by facilitating the 
 10.9   integration of funds, coordination of services, and measurement 
 10.10  of results, and by providing other assistance as needed; 
 10.11     (6) by July 1, 1993, develop a procedure for awarding 
 10.12  start-up funds.  Development of this procedure shall be exempt 
 10.13  from chapter 14; 
 10.14     (7) develop procedures and provide technical assistance to 
 10.15  allow local children's mental health collaboratives to integrate 
 10.16  resources for children's mental health services with other 
 10.17  resources available to serve children in the target population 
 10.18  in order to maximize federal participation and improve 
 10.19  efficiency of funding; 
 10.20     (8) ensure that local children's mental health 
 10.21  collaboratives and the services received through these 
 10.22  collaboratives meet the requirements set out in sections 245.491 
 10.23  to 245.496; 
 10.24     (9) identify base level funding from state and federal 
 10.25  sources across systems; 
 10.26     (10) explore ways to access additional federal funds and 
 10.27  enhance revenues available to address the needs of the target 
 10.28  population; 
 10.29     (11) develop a mechanism for identifying the state share of 
 10.30  funding for services to children in the target population and 
 10.31  for making these funds available on a per capita basis for 
 10.32  services provided through the local children's mental health 
 10.33  collaborative to children in the target population.  Each year 
 10.34  beginning January 1, 1994, forecast the growth in the state 
 10.35  share and increase funding for local children's mental health 
 10.36  collaboratives accordingly; 
 11.1      (12) identify barriers to integrated service systems that 
 11.2   arise from data practices and make recommendations including 
 11.3   legislative changes needed in the data practices act to address 
 11.4   these barriers; and 
 11.5      (13) annually review the expenditures of local children's 
 11.6   mental health collaboratives to ensure that funding for services 
 11.7   provided to the target population continues from sources other 
 11.8   than the federal funds earned under sections 245.491 to 245.496 
 11.9   and that federal funds earned are spent consistent with sections 
 11.10  245.491 to 245.496. 
 11.11     Sec. 12.  Minnesota Statutes 1994, section 245.494, 
 11.12  subdivision 3, is amended to read: 
 11.13     Subd. 3.  [DUTIES OF THE COMMISSIONER OF HUMAN SERVICES.] 
 11.14  The commissioner of human services, in consultation with the 
 11.15  integrated fund task force, shall: 
 11.16     (1) beginning January 1, in the first quarter of 1994, in 
 11.17  areas where a local children's mental health collaborative has 
 11.18  been established, based on an independent actuarial 
 11.19  analysis, separate identify all medical assistance, general 
 11.20  assistance medical care, and MinnesotaCare resources devoted to 
 11.21  mental health services for children and their families in the 
 11.22  target population including inpatient, outpatient, medication 
 11.23  management, services under the rehabilitation option, and 
 11.24  related physician services from in the total health capitation 
 11.25  from of prepaid plans, including plans established under 
 11.26  contract with the commissioner to provide medical assistance 
 11.27  services under section 256B.69;, for the target population as 
 11.28  identified in section 245.492, subdivision 21, and develop 
 11.29  guidelines for managing these mental health benefits that will 
 11.30  require all contractors to: 
 11.31     (i) provide mental health services eligible for medical 
 11.32  assistance reimbursement; 
 11.33     (ii) meet performance standards established by the 
 11.34  commissioner of human services including providing services 
 11.35  consistent with the requirements and standards set out in 
 11.36  sections 245.487 to 245.4888 and 245.491 to 245.496; 
 12.1      (iii) provide the commissioner of human services with data 
 12.2   consistent with that collected under sections 245.487 to 
 12.3   245.4888; and 
 12.4      (iv) in service delivery areas where there is a local 
 12.5   children's mental health collaborative for the target population 
 12.6   defined by local children's mental health collaborative: 
 12.7      (A) participate in the local children's mental health 
 12.8   collaborative; 
 12.9      (B) commit resources to the integrated fund that are 
 12.10  actuarially equivalent to resources received for the target 
 12.11  population being served by local children's mental health 
 12.12  collaboratives; and 
 12.13     (C) meet the requirements and the performance standards 
 12.14  developed for local children's mental health collaboratives; 
 12.15     (2) ensure that any prepaid health plan that is operating 
 12.16  within the jurisdiction of a local children's mental health 
 12.17  collaborative and that is able to meet all the requirements 
 12.18  under section 245.494, subdivision 3, paragraph (1), items (i) 
 12.19  to (iv), shall have 60 days from the date of receipt of written 
 12.20  notice of the establishment of the collaborative to decide 
 12.21  whether it will participate in the local children's mental 
 12.22  health collaborative; the prepaid health plan shall notify the 
 12.23  collaborative and the commissioner of its decision to 
 12.24  participate; 
 12.25     (3) (2) assist each children's mental health collaborative 
 12.26  to determine an actuarially feasible operational target 
 12.27  population; 
 12.28     (3) ensure that a prepaid health plan that contracts with 
 12.29  the commissioner to provide medical assistance or MinnesotaCare 
 12.30  services shall pass through the identified resources to a 
 12.31  collaborative or collaboratives upon the collaboratives meeting 
 12.32  the requirements of section 245.4933 to serve the 
 12.33  collaborative's operational target population.  The commissioner 
 12.34  shall, through an independent actuarial analysis, specify 
 12.35  differential rates the prepaid health plan must pay the 
 12.36  collaborative based upon severity, functioning, and other risk 
 13.1   factors, taking into consideration the fee-for-service 
 13.2   experience of children excluded from prepaid medical assistance 
 13.3   participation; 
 13.4      (4) ensure that a children's mental health collaborative 
 13.5   that enters into an agreement with a prepaid health plan under 
 13.6   contract with the commissioner shall accept medical assistance 
 13.7   recipients in the operational target population on a first-come, 
 13.8   first-served basis up to the collaborative's operating capacity 
 13.9   or as determined in the agreement between the collaborative and 
 13.10  the commissioner; 
 13.11     (5) ensure that a children's mental health collaborative 
 13.12  that receives resources passed through a prepaid health plan 
 13.13  under contract with the commissioner shall be subject to the 
 13.14  quality assurance standards, reporting of utilization 
 13.15  information, standards set out in sections 245.487 to 245.4888, 
 13.16  and other requirements established in Minnesota Rules, part 
 13.17  9500.1460; 
 13.18     (6) ensure that any prepaid health plan that contracts with 
 13.19  the commissioner, including a plan that contracts under section 
 13.20  256B.69, must enter into an agreement with any collaborative 
 13.21  operating in the same service delivery area that: 
 13.22     (i) meets the requirements of section 245.4933; 
 13.23     (ii) is willing to accept the rate determined by the 
 13.24  commissioner to provide medical assistance services; and 
 13.25     (iii) requests to contract with the prepaid health plan; 
 13.26     (7) ensure that no agreement between a health plan and a 
 13.27  collaborative shall terminate the legal responsibility of the 
 13.28  health plan to assure that all activities under the contract are 
 13.29  carried out.  The agreement may require the collaborative to 
 13.30  indemnify the health plan for activities that are not carried 
 13.31  out; 
 13.32     (8) ensure that where a collaborative enters into an 
 13.33  agreement with the commissioner to provide medical assistance 
 13.34  and MinnesotaCare services a separate capitation rate will be 
 13.35  determined through an independent actuarial analysis which is 
 13.36  based upon the factors set forth in clause (3) to be paid to a 
 14.1   collaborative for children in the operational target population 
 14.2   who are eligible for medical assistance but not included in the 
 14.3   prepaid health plan contract with the commissioner; 
 14.4      (9) ensure that in counties where no prepaid health plan 
 14.5   contract to provide medical assistance or MinnesotaCare services 
 14.6   exists, a children's mental health collaborative that meets the 
 14.7   requirements of section 245.4933 shall: 
 14.8      (i) be paid a capitated rate, actuarially determined, that 
 14.9   is based upon the collaborative's operational target population; 
 14.10     (ii) accept medical assistance or MinnesotaCare recipients 
 14.11  in the operational target population on a first-come, 
 14.12  first-served basis up to the collaborative's operating capacity 
 14.13  or as determined in the contract between the collaborative and 
 14.14  the commissioner; and 
 14.15     (iii) comply with quality assurance standards, reporting of 
 14.16  utilization information, standards set out in sections 245.487 
 14.17  to 245.4888, and other requirements established in Minnesota 
 14.18  Rules, part 9500.1460; 
 14.19     (10) subject to federal approval, in the development of 
 14.20  rates for local children's mental health collaboratives, the 
 14.21  commissioner shall consider, and may adjust, trend and 
 14.22  utilization factors, to reflect changes in mental health service 
 14.23  utilization and access; 
 14.24     (11) consider changes in mental health service utilization, 
 14.25  access, and price, and determine the actuarial value of the 
 14.26  services in the maintenance of rates for local children's mental 
 14.27  health collaborative provided services, subject to federal 
 14.28  approval; 
 14.29     (12) provide written notice to any prepaid health plan 
 14.30  operating within the service delivery area of a children's 
 14.31  mental health collaborative of the collaborative's existence 
 14.32  within 30 days of the commissioner's receipt of notice of the 
 14.33  collaborative's formation; 
 14.34     (13) ensure that in a geographic area where both a prepaid 
 14.35  health plan including those established under either section 
 14.36  256.9363 or 256B.69 and a local children's mental health 
 15.1   collaborative exist, medical assistance and MinnesotaCare 
 15.2   recipients in the operational target population who are enrolled 
 15.3   in prepaid health plans will have the choice to receive mental 
 15.4   health services through either the prepaid health plan or the 
 15.5   collaborative that has a contract with the prepaid health plan, 
 15.6   according to the terms of the contract; 
 15.7      (14) develop a mechanism for integrating medical assistance 
 15.8   resources for mental health service with resources for general 
 15.9   assistance medical care, MinnesotaCare, and any other state and 
 15.10  local resources available for services for children in the 
 15.11  operational target population and develop a procedure for making 
 15.12  these resources available for use by a local children's mental 
 15.13  health collaborative; 
 15.14     (4) (15) gather data needed to manage mental health care 
 15.15  including evaluation data and data necessary to establish a 
 15.16  separate capitation rate for children's mental health services 
 15.17  if that option is selected; 
 15.18     (5) (16) by January 1, 1994, develop a model contract for 
 15.19  providers of mental health managed care that meets the 
 15.20  requirements set out in sections 245.491 to 245.496 and 256B.69, 
 15.21  and utilize this contract for all subsequent awards, and before 
 15.22  January 1, 1995, the commissioner of human services shall not 
 15.23  enter into or extend any contract for any prepaid plan that 
 15.24  would impede the implementation of sections 245.491 to 245.496; 
 15.25     (6) (17) develop revenue enhancement or rebate mechanisms 
 15.26  and procedures to certify expenditures made through local 
 15.27  children's mental health collaboratives for services including 
 15.28  administration and outreach that may be eligible for federal 
 15.29  financial participation under medical assistance, including 
 15.30  expenses for administration, and other federal programs; 
 15.31     (7) (18) ensure that new contracts and extensions or 
 15.32  modifications to existing contracts under section 256B.69 do not 
 15.33  impede implementation of sections 245.491 to 245.496; 
 15.34     (8) (19) provide technical assistance to help local 
 15.35  children's mental health collaboratives certify local 
 15.36  expenditures for federal financial participation, using due 
 16.1   diligence in order to meet implementation timelines for sections 
 16.2   245.491 to 245.496 and recommend necessary legislation to 
 16.3   enhance federal revenue, provide clinical and management 
 16.4   flexibility, and otherwise meet the goals of local children's 
 16.5   mental health collaboratives and request necessary state plan 
 16.6   amendments to maximize the availability of medical assistance 
 16.7   for activities undertaken by the local children's mental health 
 16.8   collaborative; 
 16.9      (9) (20) take all steps necessary to secure medical 
 16.10  assistance reimbursement under the rehabilitation option for 
 16.11  family community support services and therapeutic support of 
 16.12  foster care, and for residential treatment and wraparound 
 16.13  services when these services are provided through a local 
 16.14  children's mental health collaborative individualized 
 16.15  rehabilitation services; 
 16.16     (10) (21) provide a mechanism to identify separately the 
 16.17  reimbursement to a county for child welfare targeted case 
 16.18  management provided to children served by the local 
 16.19  collaborative for purposes of subsequent transfer by the county 
 16.20  to the integrated fund; and 
 16.21     (11)  where interested and qualified contractors are 
 16.22  available, finalize contracts within 180 days of receipt of 
 16.23  written notification of the establishment of a local children's 
 16.24  mental health collaborative. 
 16.25     (22) ensure that family members who are enrolled in a 
 16.26  prepaid health plan and whose children are receiving mental 
 16.27  health services through a local children's mental health 
 16.28  collaborative file complaints about mental health services 
 16.29  needed by the family members, the commissioner shall comply with 
 16.30  section 256B.031, subdivision 6.  A collaborative may assist a 
 16.31  family to make a complaint; and 
 16.32     (23) facilitate a smooth transition for children receiving 
 16.33  prepaid medical assistance or MinnesotaCare services through a 
 16.34  children's mental health collaborative who become enrolled in a 
 16.35  prepaid health plan. 
 16.36     Sec. 13.  Minnesota Statutes 1994, section 245.495, is 
 17.1   amended to read: 
 17.2      245.495 [ADDITIONAL FEDERAL REVENUES.] 
 17.3      (a) Each local children's mental health collaborative shall 
 17.4   report expenditures eligible for federal reimbursement in a 
 17.5   manner prescribed by the commissioner of human services under 
 17.6   section 256.01, subdivision 2, clause (17).  The commissioner of 
 17.7   human services shall pay all funds earned by each local 
 17.8   children's mental health collaborative to the collaborative.  
 17.9   Each local children's mental health collaborative must use these 
 17.10  funds to expand the initial operational target population or to 
 17.11  develop or provide mental health services through the local 
 17.12  integrated service system to children in the target population.  
 17.13  Funds may not be used to supplant funding for services to 
 17.14  children in the target population. 
 17.15     For purposes of this section, "mental health services" are 
 17.16  community-based, nonresidential services, which may include 
 17.17  respite care, that are identified in the child's multiagency 
 17.18  plan of care. 
 17.19     (b) The commissioner may set aside a portion of the federal 
 17.20  funds earned under this section to repay the special revenue 
 17.21  maximization account under section 256.01, subdivision 2, clause 
 17.22  (15).  The set-aside must not exceed five percent of the federal 
 17.23  reimbursement earned by collaboratives and repayment is limited 
 17.24  to: 
 17.25     (1) the costs of developing and implementing sections 
 17.26  245.491 to 245.496, including the costs of technical assistance 
 17.27  from the departments of human services, education, health, and 
 17.28  corrections to implement the children's mental health integrated 
 17.29  fund; 
 17.30     (2) programming the information systems; and 
 17.31     (3) any lost federal revenue for the central office claim 
 17.32  directly caused by the implementation of these sections. 
 17.33     (c) Any unexpended funds from the set-aside described in 
 17.34  paragraph (b) shall be distributed to counties according to 
 17.35  section 245.496, subdivision 2. 
 17.36     Sec. 14.  Minnesota Statutes 1994, section 245.496, 
 18.1   subdivision 3, is amended to read: 
 18.2      Subd. 3.  [SUBMISSION AND APPROVAL OF LOCAL COLLABORATIVE 
 18.3   PROPOSALS FOR INTEGRATED SYSTEMS.] By December 31, 1994, a local 
 18.4   children's mental health collaborative that received start-up 
 18.5   funds must submit to the state coordinating council its proposal 
 18.6   for creating and funding an integrated service system for 
 18.7   children in the target population.  A local children's mental 
 18.8   health collaborative which forms without receiving start-up 
 18.9   funds must submit its proposal for creating and funding an 
 18.10  integrated service system within one year of notifying the 
 18.11  commissioner of human services of its existence.  Within 60 days 
 18.12  of receiving the local collaborative proposal the state 
 18.13  coordinating council must review the proposal and notify the 
 18.14  local children's mental health collaborative as to whether or 
 18.15  not the proposal has been approved.  If the proposal is not 
 18.16  approved, the state coordinating council must indicate changes 
 18.17  needed to receive approval. 
 18.18     Sec. 15.  Minnesota Statutes 1994, section 245.496, is 
 18.19  amended by adding a subdivision to read: 
 18.20     Subd. 4.  [APPROVAL OF A COLLABORATIVE'S INTEGRATED SERVICE 
 18.21  SYSTEM.] A collaborative may not become a medical assistance 
 18.22  provider unless the state coordinating council approves a 
 18.23  collaborative's proposed integrated service system design.  The 
 18.24  state coordinating council shall approve the integrated service 
 18.25  system proposal only when the following elements are present: 
 18.26     (1) interagency agreements signed by the head of each 
 18.27  member agency who has the authority to obligate the agency and 
 18.28  which set forth the specific financial commitments of each 
 18.29  member agency; 
 18.30     (2) an adequate management structure for fiscal and 
 18.31  clinical responsibility including appropriate allocation of risk 
 18.32  and liability; 
 18.33     (3) a process of utilization review; and 
 18.34     (4) compliance with sections 245.491 to 245.496. 
 18.35     Sec. 16.  Minnesota Statutes 1994, section 256.015, 
 18.36  subdivision 1, is amended to read: 
 19.1      Subdivision 1.  [STATE AGENCY HAS LIEN.] When the state 
 19.2   agency provides, pays for, or becomes liable for medical care or 
 19.3   furnishes subsistence or other payments to a person, the agency 
 19.4   has a lien for the cost of the care and payments on all causes 
 19.5   of action that accrue to the person to whom the care or payments 
 19.6   were furnished, or to the person's legal representatives, as a 
 19.7   result of the occurrence that necessitated the medical care, 
 19.8   subsistence, or other payments.  For purposes of this section, 
 19.9   "state agency" includes authorized agents of the state agency. 
 19.10     Sec. 17.  Minnesota Statutes 1994, section 256.015, 
 19.11  subdivision 2, is amended to read: 
 19.12     Subd. 2.  [PERFECTION; ENFORCEMENT.] The state agency may 
 19.13  perfect and enforce its lien under sections 514.69, 514.70, and 
 19.14  514.71, and must file the verified lien statement with the 
 19.15  appropriate court administrator in the county of financial 
 19.16  responsibility.  The verified lien statement must contain the 
 19.17  following:  the name and address of the person to whom medical 
 19.18  care, subsistence, or other payment was furnished; the date of 
 19.19  injury; the name and address of vendors furnishing medical care; 
 19.20  the dates of the service or payment; the amount claimed to be 
 19.21  due for the care or payment; and to the best of the state 
 19.22  agency's knowledge, the names and addresses of all persons, 
 19.23  firms, or corporations claimed to be liable for damages arising 
 19.24  from the injuries.  
 19.25     This section does not affect the priority of any attorney's 
 19.26  lien.  The state agency is not subject to any limitations period 
 19.27  referred to in section 514.69 or 514.71 and has one year from 
 19.28  the date notice is first received by it under subdivision 4, 
 19.29  paragraph (c), even if the notice is untimely, or one year from 
 19.30  the date medical bills are first paid by the state agency, 
 19.31  whichever is later, to file its verified lien statement.  The 
 19.32  state agency may commence an action to enforce the lien within 
 19.33  one year of (1) the date the notice required by subdivision 4, 
 19.34  paragraph (c), is received, or (2) the date the person's cause 
 19.35  of action is concluded by judgment, award, settlement, or 
 19.36  otherwise, whichever is later. 
 20.1      Sec. 18.  Minnesota Statutes 1994, section 256.9353, 
 20.2   subdivision 8, is amended to read: 
 20.3      Subd. 8.  [LIEN.] When the state agency provides, pays for, 
 20.4   or becomes liable for covered health services, the agency shall 
 20.5   have a lien for the cost of the covered health services upon any 
 20.6   and all causes of action accruing to the enrollee, or to the 
 20.7   enrollee's legal representatives, as a result of the occurrence 
 20.8   that necessitated the payment for the covered health services.  
 20.9   All liens under this section shall be subject to the provisions 
 20.10  of section 256.015.  For purposes of this subdivision, "state 
 20.11  agency" includes authorized agents of the state agency. 
 20.12     Sec. 19.  Minnesota Statutes 1994, section 256.9365, is 
 20.13  amended to read: 
 20.14     256.9365 [PURCHASE OF CONTINUATION COVERAGE FOR AIDS 
 20.15  PATIENTS.] 
 20.16     Subdivision 1.  [PROGRAM ESTABLISHED.] The commissioner of 
 20.17  human services shall establish a program to pay private health 
 20.18  plan premiums for persons who have contracted human 
 20.19  immunodeficiency virus (HIV) to enable them to continue coverage 
 20.20  under a group or individual health plan.  If a person is 
 20.21  determined to be eligible under subdivision 2, the commissioner 
 20.22  shall:  (1) pay the eligible person's group plan premium for the 
 20.23  period of continuation coverage provided in the Consolidated 
 20.24  Omnibus Budget Reconciliation Act of 1985; or (2) pay the 
 20.25  eligible person's individual plan premium for 24 months pay the 
 20.26  portion of the group plan premium for which the individual is 
 20.27  responsible, if the individual is responsible for at least 50 
 20.28  percent of the cost of the premium, or pay the individual plan 
 20.29  premium.  The commissioner shall not pay for that portion of a 
 20.30  premium that is attributable to other family members or 
 20.31  dependents.  
 20.32     Subd. 2.  [ELIGIBILITY REQUIREMENTS.] To be eligible for 
 20.33  the program, an applicant must satisfy the following 
 20.34  requirements: 
 20.35     (1) the applicant must provide a physician's statement 
 20.36  verifying that the applicant is infected with HIV and is, or 
 21.1   within three months is likely to become, too ill to work in the 
 21.2   applicant's current employment because of HIV-related disease; 
 21.3      (2) the applicant's monthly gross family income must not 
 21.4   exceed 300 percent of the federal poverty guidelines, after 
 21.5   deducting medical expenses and insurance premiums; 
 21.6      (3) the applicant must not own assets with a combined value 
 21.7   of more than $25,000; and 
 21.8      (4) if applying for payment of group plan premiums, the 
 21.9   applicant must be covered by an employer's or former employer's 
 21.10  group insurance plan and be eligible to purchase continuation 
 21.11  coverage; and 
 21.12     (5) if applying for payment of individual plan premiums, 
 21.13  the applicant must be covered by an individual health plan whose 
 21.14  coverage and premium costs satisfy additional requirements 
 21.15  established by the commissioner in rule. 
 21.16     Subd. 3.  [RULES COST-EFFECTIVE COVERAGE.] The commissioner 
 21.17  shall establish rules as necessary to implement the program.  
 21.18  Special Requirements for the payment of individual plan premiums 
 21.19  under subdivision 2, clause (5), must be designed to ensure that 
 21.20  the state cost of paying an individual plan premium over a 
 21.21  two-year period does not exceed the estimated state cost that 
 21.22  would otherwise be incurred in the medical assistance or general 
 21.23  assistance medical care program.  The commissioner shall 
 21.24  purchase the most cost-effective coverage available for eligible 
 21.25  individuals.  
 21.26     Sec. 20.  Minnesota Statutes 1994, section 256.969, 
 21.27  subdivision 1, is amended to read: 
 21.28     Subdivision 1.  [HOSPITAL COST INDEX.] (a) The hospital 
 21.29  cost index shall be obtained from an independent source and 
 21.30  shall represent a weighted average of historical, as limited to 
 21.31  statutory maximums, and projected cost change estimates 
 21.32  determined for expense categories to include wages and salaries, 
 21.33  employee benefits, medical and professional fees, raw food, 
 21.34  utilities, insurance including malpractice insurance, and other 
 21.35  applicable expenses as determined by the commissioner.  The 
 21.36  index shall reflect Minnesota cost category weights.  Individual 
 22.1   indices shall be specific to Minnesota if the commissioner 
 22.2   determines that sufficient accuracy of the hospital cost index 
 22.3   is achieved.  The hospital cost index may be used to adjust the 
 22.4   base year operating payment rate through the rate year on an 
 22.5   annually compounded basis.  Notwithstanding section 256.9695, 
 22.6   subdivision 3, paragraph (c), The hospital cost index shall not 
 22.7   be effective under the general assistance medical care program 
 22.8   and shall be limited to five percent under the medical 
 22.9   assistance program for admissions occurring during the biennium 
 22.10  ending June 30, 1995 1997. 
 22.11     (b) For fiscal years beginning on or after July 1, 1993, 
 22.12  the commissioner of human services shall not provide automatic 
 22.13  annual inflation adjustments for hospital payment rates under 
 22.14  medical assistance, nor under general assistance medical care.  
 22.15  The commissioner of finance shall include as a budget change 
 22.16  request in each biennial detailed expenditure budget submitted 
 22.17  to the legislature under section 16A.11 annual adjustments in 
 22.18  hospital payment rates under medical assistance and general 
 22.19  assistance medical care, based upon the hospital cost index. 
 22.20     Sec. 21.  Minnesota Statutes 1994, section 256.969, 
 22.21  subdivision 10, is amended to read: 
 22.22     Subd. 10.  [SEPARATE BILLING BY CERTIFIED REGISTERED NURSE 
 22.23  ANESTHETISTS.] Hospitals may exclude certified registered nurse 
 22.24  anesthetist costs from the operating payment rate as allowed by 
 22.25  section 256B.0625, subdivision 11.  To be eligible, a hospital 
 22.26  must notify the commissioner in writing by October 1 of the year 
 22.27  preceding the rate year of the request to exclude certified 
 22.28  registered nurse anesthetist costs.  The hospital must agree 
 22.29  that all hospital claims for the cost and charges of certified 
 22.30  registered nurse anesthetist services will not be included as 
 22.31  part of the rates for inpatient services provided during the 
 22.32  rate year.  In this case, the operating payment rate shall be 
 22.33  adjusted to exclude the cost of certified registered nurse 
 22.34  anesthetist services.  Payments made through separate claims for 
 22.35  certified registered nurse anesthetist services shall not be 
 22.36  paid directly through the hospital provider number or indirectly 
 23.1   by the certified registered nurse anesthetist to the hospital or 
 23.2   related organizations. 
 23.3      For admissions occurring on or after July 1, 1991, and 
 23.4   until the expiration date of section 256.9695, subdivision 3, 
 23.5   services of certified registered nurse anesthetists provided on 
 23.6   an inpatient basis may be paid as allowed by section 256B.0625, 
 23.7   subdivision 11, when the hospital's base year did not include 
 23.8   the cost of these services.  To be eligible, a hospital must 
 23.9   notify the commissioner in writing by July 1, 1991, of the 
 23.10  request and must comply with all other requirements of this 
 23.11  subdivision. 
 23.12     Sec. 22.  Minnesota Statutes 1994, section 256.969, 
 23.13  subdivision 16, is amended to read: 
 23.14     Subd. 16.  [INDIAN HEALTH SERVICE FACILITIES.] Indian 
 23.15  health service facilities are exempt from the rate establishment 
 23.16  methods required by this section and shall be reimbursed at 
 23.17  charges as limited to the amount allowed under federal law.  
 23.18  This exemption is not effective for payments under general 
 23.19  assistance medical care. 
 23.20     Sec. 23.  Minnesota Statutes 1994, section 256.969, 
 23.21  subdivision 24, is amended to read: 
 23.22     Subd. 24.  [HOSPITAL PEER GROUPS.] (a) For admissions 
 23.23  occurring on or after the later of July 1, 1994 1995, or the 
 23.24  implementation date of the upgrade to the Medicaid management 
 23.25  information system, operating payment rates of each hospital 
 23.26  shall be limited to the payment rates within its peer group so 
 23.27  that the statewide payment level is reduced by ten percent under 
 23.28  the medical assistance program and by 15 percent under the 
 23.29  general assistance medical care program.  For subsequent rate 
 23.30  years, the limits shall be adjusted by the hospital cost index.  
 23.31  The commissioner shall contract for the development of criteria 
 23.32  for and the establishment of the peer groups.  Peer groups must 
 23.33  be established based on variables that affect medical assistance 
 23.34  cost such as scope and intensity of services, acuity of 
 23.35  patients, location, and capacity.  Rates shall be standardized 
 23.36  by the case mix index and adjusted, if applicable, for the 
 24.1   variable outlier percentage.  The peer groups may exclude and 
 24.2   have separate limits or be standardized for operating cost 
 24.3   differences that are not common to all hospitals in order to 
 24.4   establish a minimum number of groups. under paragraphs (b) and 
 24.5   (c).  Rates established for neonatal transfer rates that are 
 24.6   paid according to subdivision 13 are not subject to peer group 
 24.7   limitations. 
 24.8      (b) Peer groups are established based on the status of the 
 24.9   hospital or the rehabilitation distinct part of the hospital on 
 24.10  the October 1 prior to a rebased rate year using the criteria of 
 24.11  clauses (1) to (7), except that the criteria of clauses (3) and 
 24.12  (4) must be combined under general assistance medical care: 
 24.13     (1) nonmetropolitan statistical area hospitals; 
 24.14     (2) metropolitan statistical area major teaching 
 24.15  hospitals.  A major teaching hospital is one that meets the 
 24.16  certification requirements of the council of teaching hospitals 
 24.17  including the operation of a minimum of four approved active 
 24.18  residency programs with at least two in medicine, surgery, 
 24.19  obstetrics, pediatrics, family practice, or psychiatry; 
 24.20     (3) metropolitan statistical area minor teaching hospitals 
 24.21  as designated by the Medicare program; 
 24.22     (4) metropolitan statistical area nonteaching hospitals; 
 24.23     (5) children's hospitals with neonatal intensive care 
 24.24  units.  A children's hospital is a hospital in which the 
 24.25  admissions are predominantly individuals under 18 years of age; 
 24.26     (6) rehabilitation hospitals and rehabilitation distinct 
 24.27  parts of hospitals as designated by the Medicare program and 
 24.28  children's hospitals without neonatal intensive care units; and 
 24.29     (7) long-term hospitals as designated by the Medicare 
 24.30  program. 
 24.31     (c) The limitation on rates is established for each 
 24.32  eligibility and rehabilitation category of rates within a peer 
 24.33  group by the method in clauses (1) to (6): 
 24.34     (1) combine the adjusted base year operating rate per 
 24.35  admission and outlier rate per day into a rate per admission for 
 24.36  each hospital after recalculating each hospital's case mix index 
 25.1   based on the Medicare diagnostic related groups using the 
 25.2   grouper in effect for the rate year; 
 25.3      (2) determine the metropolitan statistical area, 
 25.4   nonmetropolitan statistical area, and statewide average rates 
 25.5   from clause (1); 
 25.6      (3) after excluding rates based on averages in clause (2), 
 25.7   establish the limit at the interpolated median for each medical 
 25.8   assistance and general assistance medical care category, and at 
 25.9   139 percent of the interpolated median for the rehabilitation 
 25.10  category; 
 25.11     (4)(i) for medical assistance, if clause (1) is greater 
 25.12  than clause (3), add 80 percent of the difference between clause 
 25.13  (1) and clause (3) to clause (3) and divide the result by clause 
 25.14  (1).  Multiply this result by each hospital's adjusted base year 
 25.15  operating rate per admission and outlier rate per day; 
 25.16     (ii) for general assistance medical care, if the result of 
 25.17  clause (1) is greater than the result of clause (3), add 64 
 25.18  percent of the difference between clause (1) and clause (3) to 
 25.19  clause (3) and divide the result by clause (1).  Multiply this 
 25.20  result by each hospital's adjusted base year operating rate per 
 25.21  admission and outlier rate per day; and 
 25.22     (iii) for rates established for the rehabilitation 
 25.23  category, regardless of program eligibility, if the result of 
 25.24  clause (1) is greater than the result of clause (3), divide 
 25.25  clause (3) by clause (1) and multiply the result by each 
 25.26  hospital's adjusted base year operating rate per admission and 
 25.27  outlier rate per day; 
 25.28     (5) for any hospital with an admission or outlier rate that 
 25.29  is based on an average rate of other hospitals: 
 25.30     (i) for medical assistance, if the result of clause (2) is 
 25.31  greater than the result of clause (3), add 80 percent of the 
 25.32  difference between clause (2) and clause (3) to clause (3) and 
 25.33  divide the result by clause (2).  Multiply this result by each 
 25.34  hospital's applicable average adjusted base year operating rate 
 25.35  per admission or outlier rate per day; 
 25.36     (ii) for general assistance medical care, if the result of 
 26.1   clause (2) is greater than the result of clause (3), add 64 
 26.2   percent of the difference between clause (2) and clause (3) to 
 26.3   clause (3) and divide the result by clause (2).  Multiply this 
 26.4   result by each hospital's applicable average adjusted base year 
 26.5   operating rate per admission or outlier rate per day; 
 26.6      (iii) for rates established for the rehabilitation 
 26.7   category, regardless of program eligibility, if the result of 
 26.8   clause (2) is greater than the result of clause (3), divide 
 26.9   clause (3) by clause (2) and multiply the result by each 
 26.10  hospital's adjusted base year operating rate per admission and 
 26.11  outlier rate per day; and 
 26.12     (6) for rate years in which the rates are not rebased to 
 26.13  more recent data, the limits are adjusted by the hospital cost 
 26.14  index. 
 26.15     Sec. 24.  Minnesota Statutes 1994, section 256B.042, 
 26.16  subdivision 2, is amended to read: 
 26.17     Subd. 2.  [LIEN ENFORCEMENT.] The state agency may perfect 
 26.18  and enforce its lien by following the procedures set forth in 
 26.19  sections 514.69, 514.70 and 514.71, and its verified lien 
 26.20  statement shall be filed with the appropriate court 
 26.21  administrator in the county of financial responsibility.  The 
 26.22  verified lien statement shall contain the following:  the name 
 26.23  and address of the person to whom medical care was furnished, 
 26.24  the date of injury, the name and address of the vendor or 
 26.25  vendors furnishing medical care, the dates of the service, the 
 26.26  amount claimed to be due for the care, and, to the best of the 
 26.27  state agency's knowledge, the names and addresses of all 
 26.28  persons, firms, or corporations claimed to be liable for damages 
 26.29  arising from the injuries.  This section shall not affect the 
 26.30  priority of any attorney's lien.  The state agency is not 
 26.31  subject to any limitations period referred to in section 514.69 
 26.32  or 514.71 and has one year from the date notice is first 
 26.33  received by it under subdivision 4, paragraph (c), even if the 
 26.34  notice is untimely, or one year from the date medical bills are 
 26.35  first paid by the state agency, whichever is later, to file its 
 26.36  verified lien statement.  The state agency may commence an 
 27.1   action to enforce the lien within one year of (1) the date the 
 27.2   notice required by subdivision 4, paragraph (c), is received or 
 27.3   (2) the date the recipient's cause of action is concluded by 
 27.4   judgment, award, settlement, or otherwise, whichever is 
 27.5   later.  For purposes of this section, "state agency" includes 
 27.6   authorized agents of the state agency. 
 27.7      Sec. 25.  Minnesota Statutes 1994, section 256B.056, is 
 27.8   amended by adding a subdivision to read: 
 27.9      Subd. 3b.  [TREATMENT OF TRUSTS.] (a) A "medical assistance 
 27.10  qualifying trust" is a revocable or irrevocable trust, or 
 27.11  similar legal device, established on or before August 10, 1993, 
 27.12  by a person or the person's spouse under the terms of which the 
 27.13  person receives or could receive payments from the trust 
 27.14  principal or income and the trustee has discretion in making 
 27.15  payments to the person from the trust principal or income.  
 27.16  Notwithstanding that definition, a medical assistance qualifying 
 27.17  trust does not include:  (1) a trust set up by will; (2) a trust 
 27.18  set up before April 7, 1986, solely to benefit a person with 
 27.19  mental retardation living in an intermediate care facility for 
 27.20  persons with mental retardation; or (3) a trust set up by a 
 27.21  person with payments made by the Social Security Administration 
 27.22  pursuant to the United States Supreme Court decision in Sullivan 
 27.23  v. Zebley, 110 S. Ct. 885 (1990).  The maximum amount of 
 27.24  payments that a trustee of a medical assistance qualifying trust 
 27.25  may make to a person under the terms of the trust is considered 
 27.26  to be available assets to the person, without regard to whether 
 27.27  the trustee actually makes the maximum payments to the person 
 27.28  and without regard to the purpose for which the medical 
 27.29  assistance qualifying trust was established. 
 27.30     (b) Trusts established after August 10, 1993, are treated 
 27.31  according to section 13611(b) of the Omnibus Budget 
 27.32  Reconciliation Act of 1993 (OBRA), Public Law Number 103-66. 
 27.33     Sec. 26.  Minnesota Statutes 1994, section 256B.056, 
 27.34  subdivision 4, is amended to read: 
 27.35     Subd. 4.  [INCOME.] To be eligible for medical assistance, 
 27.36  a person must not have, or anticipate receiving, semiannual 
 28.1   income in excess of 120 percent of the income standards by 
 28.2   family size used in the aid to families with dependent children 
 28.3   program, except that families and children may have an income up 
 28.4   to 133-1/3 percent of the AFDC income standard.  In computing 
 28.5   income to determine eligibility of persons who are not residents 
 28.6   of long-term care facilities, the commissioner shall disregard 
 28.7   increases in income as required by Public Law Numbers 94-566, 
 28.8   section 503; 99-272; and 99-509.  Veterans aid and attendance 
 28.9   benefits are considered income to the recipient. 
 28.10     Sec. 27.  Minnesota Statutes 1994, section 256B.0575, is 
 28.11  amended to read: 
 28.12     256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
 28.13  PERSONS.] 
 28.14     When an institutionalized person is determined eligible for 
 28.15  medical assistance, the income that exceeds the deductions in 
 28.16  paragraphs (a) and (b) must be applied to the cost of 
 28.17  institutional care.  
 28.18     (a) The following amounts must be deducted from the 
 28.19  institutionalized person's income in the following order: 
 28.20     (1) the personal needs allowance under section 256B.35 or, 
 28.21  for a veteran who does not have a spouse or child, or a 
 28.22  surviving spouse of a veteran having no child, the amount of an 
 28.23  improved pension received from the veteran's administration not 
 28.24  exceeding $90 per month; 
 28.25     (2) the personal allowance for disabled individuals under 
 28.26  section 256B.36; 
 28.27     (3) if the institutionalized person has a legally appointed 
 28.28  guardian or conservator, five percent of the recipient's gross 
 28.29  monthly income up to $100 as reimbursement for guardianship or 
 28.30  conservatorship services; 
 28.31     (4) a monthly income allowance determined under section 
 28.32  256B.058, subdivision 2, but only to the extent income of the 
 28.33  institutionalized spouse is made available to the community 
 28.34  spouse; 
 28.35     (5) a monthly allowance for children under age 18 which, 
 28.36  together with the net income of the children, would provide 
 29.1   income equal to the medical assistance standard for families and 
 29.2   children according to section 256B.056, subdivision 4, for a 
 29.3   family size that includes only the minor children.  This 
 29.4   deduction applies only if the children do not live with the 
 29.5   community spouse and only if the children resided with the 
 29.6   institutionalized person immediately prior to admission; 
 29.7      (6) a monthly family allowance for other family members, 
 29.8   equal to one-third of the difference between 122 percent of the 
 29.9   federal poverty guidelines and the monthly income for that 
 29.10  family member; 
 29.11     (7) reparations payments made by the Federal Republic of 
 29.12  Germany and reparations payments made by the Netherlands for 
 29.13  victims of Nazi persecution between 1940 and 1945; and 
 29.14     (8) amounts for reasonable expenses incurred for necessary 
 29.15  medical or remedial care for the institutionalized spouse that 
 29.16  are not medical assistance covered expenses and that are not 
 29.17  subject to payment by a third party.  
 29.18     For purposes of clause (6), "other family member" means a 
 29.19  person who resides with the community spouse and who is a minor 
 29.20  or dependent child, dependent parent, or dependent sibling of 
 29.21  either spouse.  "Dependent" means a person who could be claimed 
 29.22  as a dependent for federal income tax purposes under the 
 29.23  Internal Revenue Code. 
 29.24     (b) Income shall be allocated to an institutionalized 
 29.25  person for a period of up to three calendar months, in an amount 
 29.26  equal to the medical assistance standard for a family size of 
 29.27  one if:  
 29.28     (1) a physician certifies that the person is expected to 
 29.29  reside in the long-term care facility for three calendar months 
 29.30  or less; 
 29.31     (2) if the person has expenses of maintaining a residence 
 29.32  in the community; and 
 29.33     (3) if one of the following circumstances apply:  
 29.34     (i) the person was not living together with a spouse or a 
 29.35  family member as defined in paragraph (a) when the person 
 29.36  entered a long-term care facility; or 
 30.1      (ii) the person and the person's spouse become 
 30.2   institutionalized on the same date, in which case the allocation 
 30.3   shall be applied to the income of one of the spouses.  
 30.4   For purposes of this paragraph, a person is determined to be 
 30.5   residing in a licensed nursing home, regional treatment center, 
 30.6   or medical institution if the person is expected to remain for a 
 30.7   period of one full calendar month or more. 
 30.8      Sec. 28.  Minnesota Statutes 1994, section 256B.059, 
 30.9   subdivision 1, is amended to read: 
 30.10     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 30.11  section, the terms defined in this subdivision have the meanings 
 30.12  given them. 
 30.13     (b) "Community spouse" means the spouse of an 
 30.14  institutionalized person spouse. 
 30.15     (c) "Spousal share" means one-half of the total value of 
 30.16  all assets, to the extent that either the institutionalized 
 30.17  spouse or the community spouse had an ownership interest at the 
 30.18  time of institutionalization. 
 30.19     (d) "Assets otherwise available to the community spouse" 
 30.20  means assets individually or jointly owned by the community 
 30.21  spouse, other than assets excluded by subdivision 5, paragraph 
 30.22  (c). 
 30.23     (e) "Community spouse asset allowance" is the value of 
 30.24  assets that can be transferred under subdivision 3. 
 30.25     (f) "Institutionalized spouse" means a person who is: 
 30.26     (1) in a hospital, nursing facility, or intermediate care 
 30.27  facility for persons with mental retardation, or receiving home 
 30.28  and community-based services under section 256B.0915, and is 
 30.29  expected to remain in the facility or institution or receive the 
 30.30  home and community-based services for at least 30 consecutive 
 30.31  days; and 
 30.32     (2) married to a person who is not in a hospital, nursing 
 30.33  facility, or intermediate care facility for persons with mental 
 30.34  retardation, and is not receiving home and community-based 
 30.35  services under section 256B.0915. 
 30.36     Sec. 29.  Minnesota Statutes 1994, section 256B.059, 
 31.1   subdivision 3, is amended to read: 
 31.2      Subd. 3.  [COMMUNITY SPOUSE ASSET ALLOWANCE.] An 
 31.3   institutionalized spouse may transfer assets to the community 
 31.4   spouse solely for the benefit of the community spouse.  Except 
 31.5   for increased amounts allowable under subdivision 4, the maximum 
 31.6   amount of assets allowed to be transferred is the amount which, 
 31.7   when added to the assets otherwise available to the community 
 31.8   spouse, is as follows:  
 31.9      (1) prior to July 1, 1994, the greater of: 
 31.10     (i) $14,148; 
 31.11     (ii) the lesser of the spousal share or $70,740; or 
 31.12     (iii) the amount required by court order to be paid to the 
 31.13  community spouse; and 
 31.14     (2) for persons who begin whose date of initial 
 31.15  determination of eligibility for medical assistance following 
 31.16  their first continuous period of institutionalization occurs on 
 31.17  or after July 1, 1994, the greater of: 
 31.18     (i) $20,000; 
 31.19     (ii) the lesser of the spousal share or $70,740; or 
 31.20     (iii) the amount required by court order to be paid to the 
 31.21  community spouse. 
 31.22     If the assets available to the community spouse are already 
 31.23  at the limit permissible under this section, or the higher limit 
 31.24  attributable to increases under subdivision 4, no assets may be 
 31.25  transferred from the institutionalized spouse to the community 
 31.26  spouse.  The transfer must be made as soon as practicable after 
 31.27  the date the institutionalized spouse is determined eligible for 
 31.28  medical assistance, or within the amount of time needed for any 
 31.29  court order required for the transfer.  On January 1, 1994, and 
 31.30  every January 1 thereafter, the limits in this subdivision shall 
 31.31  be adjusted by the same percentage change in the consumer price 
 31.32  index for all urban consumers (all items; United States city 
 31.33  average) between the two previous Septembers.  These adjustments 
 31.34  shall also be applied to the limits in subdivision 5. 
 31.35     Sec. 30.  Minnesota Statutes 1994, section 256B.059, 
 31.36  subdivision 5, is amended to read: 
 32.1      Subd. 5.  [ASSET AVAILABILITY.] (a) At the time of 
 32.2   application initial determination of eligibility for medical 
 32.3   assistance benefits following the first continuous period of 
 32.4   institutionalization, assets considered available to the 
 32.5   institutionalized spouse shall be the total value of all assets 
 32.6   in which either spouse has an ownership interest, reduced by the 
 32.7   following: 
 32.8      (1) prior to July 1, 1994, the greater of:  
 32.9      (i) $14,148; 
 32.10     (ii) the lesser of the spousal share or $70,740; or 
 32.11     (iii) the amount required by court order to be paid to the 
 32.12  community spouse; 
 32.13     (2) for persons who begin whose date of initial 
 32.14  determination of eligibility for medical assistance following 
 32.15  their first continuous period of institutionalization occurs on 
 32.16  or after July 1, 1994, the greater of:  
 32.17     (i) $20,000; 
 32.18     (ii) the lesser of the spousal share or $70,740; or 
 32.19     (iii) the amount required by court order to be paid to the 
 32.20  community spouse.  If the community spouse asset allowance has 
 32.21  been increased under subdivision 4, then the assets considered 
 32.22  available to the institutionalized spouse under this subdivision 
 32.23  shall be further reduced by the value of additional amounts 
 32.24  allowed under subdivision 4. 
 32.25     (b) An institutionalized spouse may be found eligible for 
 32.26  medical assistance even though assets in excess of the allowable 
 32.27  amount are found to be available under paragraph (a) if the 
 32.28  assets are owned jointly or individually by the community 
 32.29  spouse, and the institutionalized spouse cannot use those assets 
 32.30  to pay for the cost of care without the consent of the community 
 32.31  spouse, and if:  (i) the institutionalized spouse assigns to the 
 32.32  commissioner the right to support from the community spouse 
 32.33  under section 256B.14, subdivision 3; (ii) the institutionalized 
 32.34  spouse lacks the ability to execute an assignment due to a 
 32.35  physical or mental impairment; or (iii) the denial of 
 32.36  eligibility would cause an imminent threat to the 
 33.1   institutionalized spouse's health and well-being. 
 33.2      (c) After the month in which the institutionalized spouse 
 33.3   is determined eligible for medical assistance, during the 
 33.4   continuous period of institutionalization, no assets of the 
 33.5   community spouse are considered available to the 
 33.6   institutionalized spouse, unless the institutionalized spouse 
 33.7   has been found eligible under clause paragraph (b). 
 33.8      (d) Assets determined to be available to the 
 33.9   institutionalized spouse under this section must be used for the 
 33.10  health care or personal needs of the institutionalized spouse. 
 33.11     (e) For purposes of this section, assets do not include 
 33.12  assets excluded under section 256B.056, without regard to the 
 33.13  limitations on total value in that section the supplemental 
 33.14  security income program. 
 33.15     Sec. 31.  Minnesota Statutes 1994, section 256B.0595, 
 33.16  subdivision 1, is amended to read: 
 33.17     Subdivision 1.  [PROHIBITED TRANSFERS.] (a) For transfers 
 33.18  of assets made on or before August 10, 1993, if a person or the 
 33.19  person's spouse has given away, sold, or disposed of, for less 
 33.20  than fair market value, any asset or interest therein, except 
 33.21  assets other than the homestead that are excluded under section 
 33.22  256B.056, subdivision 3 the supplemental security program, 
 33.23  within 30 months before or any time after the date of 
 33.24  institutionalization if the person has been determined eligible 
 33.25  for medical assistance, or within 30 months before or any time 
 33.26  after the date of the first approved application for medical 
 33.27  assistance if the person has not yet been determined eligible 
 33.28  for medical assistance, the person is ineligible for long-term 
 33.29  care services for the period of time determined under 
 33.30  subdivision 2.  
 33.31     (b) Effective for transfers made on or after July 1, 1993, 
 33.32  or upon federal approval, whichever is later August 10, 1993, (1)
 33.33  a person, a person's spouse, or a person's authorized 
 33.34  representative any person, court, or administrative body with 
 33.35  legal authority to act in place of, on behalf of, at the 
 33.36  direction of, or upon the request of the person or person's 
 34.1   spouse, (2) may not give away, sell, or dispose of, for less 
 34.2   than fair market value, any asset or interest therein, except 
 34.3   assets other than the homestead that are excluded under the 
 34.4   supplemental security income program, for the purpose of 
 34.5   establishing or maintaining medical assistance eligibility.  For 
 34.6   purposes of determining eligibility for medical assistance 
 34.7   long-term care services, any transfer of an asset such assets 
 34.8   within 60 36 months preceding application before or any time 
 34.9   after an institutionalized person applies for medical assistance 
 34.10  or during the period of medical assistance eligibility, 
 34.11  including assets excluded under section 256B.056, subdivision 3, 
 34.12  or 36 months before or any time after a medical assistance 
 34.13  recipient becomes institutionalized, for less than fair market 
 34.14  value may be considered.  Any such transfer for less than fair 
 34.15  market value made within 60 months preceding application for 
 34.16  medical assistance or during the period of medical assistance 
 34.17  eligibility is presumed to have been made for the purpose of 
 34.18  establishing or maintaining medical assistance eligibility and 
 34.19  the person is ineligible for medical assistance long-term care 
 34.20  services for the period of time determined under subdivision 2, 
 34.21  unless the person furnishes convincing evidence to establish 
 34.22  that the transaction was exclusively for another purpose, or 
 34.23  unless the transfer is permitted under subdivisions subdivision 
 34.24  3 or 4.  Notwithstanding the provisions of this paragraph, in 
 34.25  the case of payments from a trust or portions of a trust that 
 34.26  are considered transfers of assets under federal law, any 
 34.27  transfers made within 60 months before or any time after an 
 34.28  institutionalized person applies for medical assistance and 
 34.29  within 60 months before or any time after a medical assistance 
 34.30  recipient becomes institutionalized, may be considered. 
 34.31     (c) This section applies to transfers, for less than fair 
 34.32  market value, of income or assets, including assets that are 
 34.33  considered income in the month received, such as inheritances, 
 34.34  court settlements, and retroactive benefit payments or income to 
 34.35  which the person or the person's spouse is entitled but does not 
 34.36  receive due to action by the person, the person's spouse, or any 
 35.1   person, court, or administrative body with legal authority to 
 35.2   act in place of, on behalf of, at the direction of, or upon the 
 35.3   request of the person or the person's spouse.  
 35.4      (d) This section applies to payments for care or personal 
 35.5   services provided by a relative, unless the compensation was 
 35.6   stipulated in a notarized, written agreement which was in 
 35.7   existence when the service was performed, the care or services 
 35.8   directly benefited the person, and the payments made represented 
 35.9   reasonable compensation for the care or services provided.  A 
 35.10  notarized written agreement is not required if payment for the 
 35.11  services was made within 60 days after the service was provided. 
 35.12     (e) This section applies to the portion of any asset or 
 35.13  interest that a person or, a person's spouse transfers, or any 
 35.14  person, court, or administrative body with legal authority to 
 35.15  act in place of, on behalf of, at the direction of, or upon the 
 35.16  request of the person or the person's spouse, to an 
 35.17  irrevocable any trust, annuity, or other instrument, that 
 35.18  exceeds the value of the benefit likely to be returned to the 
 35.19  person or spouse while alive, based on estimated life expectancy 
 35.20  using the life expectancy tables employed by the supplemental 
 35.21  security income program to determine the value of an agreement 
 35.22  for services for life.  The commissioner may adopt rules 
 35.23  reducing life expectancies based on the need for long-term care. 
 35.24     (f) For purposes of this section, long-term care services 
 35.25  include services in a nursing facility, services that are 
 35.26  eligible for payment according to section 256B.0625, subdivision 
 35.27  2, because they are provided in a swing bed, intermediate care 
 35.28  facility for persons with mental retardation, and home and 
 35.29  community-based services provided pursuant to section 256B.491 
 35.30  sections 256B.0915, 256B.092, and 256B.49.  For purposes of this 
 35.31  subdivision and subdivisions 2, 3, and 4, "institutionalized 
 35.32  person" includes a person who is an inpatient in a nursing 
 35.33  facility, or in a swing bed, or intermediate care facility for 
 35.34  persons with mental retardation or who is receiving home and 
 35.35  community-based services under section 256B.491 sections 
 35.36  256B.0915, 256B.092, and 256B.49. 
 36.1      Sec. 32.  Minnesota Statutes 1994, section 256B.0595, 
 36.2   subdivision 2, is amended to read: 
 36.3      Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
 36.4   uncompensated transfer occurring on or before August 10, 1993, 
 36.5   the number of months of ineligibility for long-term care 
 36.6   services shall be the lesser of 30 months, or the uncompensated 
 36.7   transfer amount divided by the average medical assistance rate 
 36.8   for nursing facility services in the state in effect on the date 
 36.9   of application.  The amount used to calculate the average 
 36.10  medical assistance payment rate shall be adjusted each July 1 to 
 36.11  reflect payment rates for the previous calendar year.  The 
 36.12  period of ineligibility begins with the month in which the 
 36.13  assets were transferred.  If the transfer was not reported to 
 36.14  the local agency at the time of application, and the applicant 
 36.15  received long-term care services during what would have been the 
 36.16  period of ineligibility if the transfer had been reported, a 
 36.17  cause of action exists against the transferee for the cost of 
 36.18  long-term care services provided during the period of 
 36.19  ineligibility, or for the uncompensated amount of the transfer, 
 36.20  whichever is less.  The action may be brought by the state or 
 36.21  the local agency responsible for providing medical assistance 
 36.22  under chapter 256G.  The uncompensated transfer amount is the 
 36.23  fair market value of the asset at the time it was given away, 
 36.24  sold, or disposed of, less the amount of compensation received.  
 36.25     (b) For uncompensated transfers made on or after July 1, 
 36.26  August 10, 1993, or upon federal approval, whichever is later, 
 36.27  the number of months of ineligibility, including partial months, 
 36.28  for medical assistance long-term care services shall be the 
 36.29  total uncompensated value of the resources transferred divided 
 36.30  by the average medical assistance rate for nursing facility 
 36.31  services in the state in effect on the date of application.  If 
 36.32  a calculation of a penalty period results in a partial month, 
 36.33  payments for medical assistance services will be reduced in an 
 36.34  amount equal to the fraction, except that in calculating the 
 36.35  value of uncompensated transfers, uncompensated transfers not to 
 36.36  exceed $1,000 in total value per month shall be disregarded for 
 37.1   each month prior to the month of application for medical 
 37.2   assistance.  The amount used to calculate the average medical 
 37.3   assistance payment rate shall be adjusted each July 1 to reflect 
 37.4   payment rates for the previous calendar year.  The period of 
 37.5   ineligibility begins with the month in which the assets were 
 37.6   transferred except that if one or more uncompensated transfers 
 37.7   are made during a period of ineligibility, the total assets 
 37.8   transferred during the ineligibility period shall be combined 
 37.9   and a penalty period calculated to begin in the month the first 
 37.10  uncompensated transfer was made.  The penalty in this paragraph 
 37.11  shall not apply to uncompensated transfers of assets not to 
 37.12  exceed a total of $1,000 per month during a medical assistance 
 37.13  eligibility certification period.  If the transfer was not 
 37.14  reported to the local agency at the time of application, and the 
 37.15  applicant received medical assistance services during what would 
 37.16  have been the period of ineligibility if the transfer had been 
 37.17  reported, a cause of action exists against the transferee for 
 37.18  the cost of medical assistance services provided during the 
 37.19  period of ineligibility, or for the uncompensated amount of the 
 37.20  transfer, whichever is less.  The action may be brought by the 
 37.21  state or the local agency responsible for providing medical 
 37.22  assistance under chapter 256G.  The uncompensated transfer 
 37.23  amount is the fair market value of the asset at the time it was 
 37.24  given away, sold, or disposed of, less the amount of 
 37.25  compensation received.  
 37.26     (c) If the total value of all uncompensated transfers made 
 37.27  in a month exceeds $1,000, the disregards allowed under 
 37.28  paragraph (b) do not apply.  If a calculation of a penalty 
 37.29  period results in a partial month, payments for long-term care 
 37.30  services shall be reduced in an amount equal to the fraction, 
 37.31  except that in calculating the value of uncompensated transfers, 
 37.32  if the total value of all uncompensated transfers made in a 
 37.33  month does not exceed $1,000, then such transfers shall be 
 37.34  disregarded for each month prior to the month of application for 
 37.35  or during receipt of medical assistance. 
 37.36     Sec. 33.  Minnesota Statutes 1994, section 256B.0595, 
 38.1   subdivision 3, is amended to read: 
 38.2      Subd. 3.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 38.3   (a) An institutionalized person is not ineligible for long-term 
 38.4   care services due to a transfer of assets for less than fair 
 38.5   market value if the asset transferred was a homestead and: 
 38.6      (1) title to the homestead was transferred to the 
 38.7   individual's 
 38.8      (i) spouse; 
 38.9      (ii) child who is under age 21; 
 38.10     (iii) blind or permanently and totally disabled child as 
 38.11  defined in the supplemental security income program; 
 38.12     (iv) sibling who has equity interest in the home and who 
 38.13  was residing in the home for a period of at least one year 
 38.14  immediately before the date of the individual's admission to the 
 38.15  facility; or 
 38.16     (v) son or daughter who was residing in the individual's 
 38.17  home for a period of at least two years immediately before the 
 38.18  date of the individual's admission to the facility, and who 
 38.19  provided care to the individual that permitted the individual to 
 38.20  reside at home rather than in an institution or facility; 
 38.21     (2) a satisfactory showing is made that the individual 
 38.22  intended to dispose of the homestead at fair market value or for 
 38.23  other valuable consideration; or 
 38.24     (3) the local agency grants a waiver of the excess 
 38.25  resources created by the uncompensated transfer because denial 
 38.26  of eligibility would cause undue hardship for the individual, 
 38.27  based on imminent threat to the individual's health and 
 38.28  well-being.  
 38.29     (b) When a waiver is granted under paragraph (a), clause 
 38.30  (3), a cause of action exists against the person to whom the 
 38.31  homestead was transferred for that portion of long-term care 
 38.32  services granted within: 
 38.33     (1) 30 months of the a transfer made on or before August 
 38.34  10, 1993; 
 38.35     (2) 60 months if the homestead was transferred after August 
 38.36  10, 1993, to a trust or portion of a trust that is considered a 
 39.1   transfer of assets under federal law; or 
 39.2      (3) 36 months if transferred in any other manner after 
 39.3   August 10, 1993, 
 39.4   or the amount of the uncompensated transfer, whichever is less, 
 39.5   together with the costs incurred due to the action.  The action 
 39.6   may be brought by the state or the local agency responsible for 
 39.7   providing medical assistance under chapter 256G.  
 39.8      (c) Effective for transfers made on or after July 1, 1993, 
 39.9   or upon federal approval, whichever is later, an 
 39.10  institutionalized person is not ineligible for medical 
 39.11  assistance services due to a transfer of assets for less than 
 39.12  fair market value if the asset transferred was a homestead and: 
 39.13     (1) title to the homestead was transferred to the 
 39.14  individual's 
 39.15     (i) spouse; 
 39.16     (ii) child who is under age 21; 
 39.17     (iii) blind or permanently and totally disabled child as 
 39.18  defined in the supplemental security income program; 
 39.19     (iv) sibling who has equity interest in the home and who 
 39.20  was residing in the home for a period of at least one year 
 39.21  immediately before the date of the individual's admission to the 
 39.22  facility; or 
 39.23     (v) son or daughter who was residing in the individual's 
 39.24  home for a period of at least two years immediately before the 
 39.25  date of the individual's admission to the facility, and who 
 39.26  provided care to the individual that permitted the individual to 
 39.27  reside at home rather than in an institution or facility; 
 39.28     (2) a satisfactory showing is made that the individual 
 39.29  intended to dispose of the homestead at fair market value or for 
 39.30  other valuable consideration; or 
 39.31     (3) the local agency grants a waiver of the excess 
 39.32  resources created by the uncompensated transfer because denial 
 39.33  of eligibility would cause undue hardship for the individual, 
 39.34  based on imminent threat to the individual's health and 
 39.35  well-being.  
 39.36     (d) When a waiver is granted under paragraph (c), clause 
 40.1   (3), a cause of action exists against the person to whom the 
 40.2   homestead was transferred for that portion of medical assistance 
 40.3   services granted during the period of ineligibility under 
 40.4   subdivision 2, or the amount of the uncompensated transfer, 
 40.5   whichever is less, together with the costs incurred due to the 
 40.6   action.  The action may be brought by the state or the local 
 40.7   agency responsible for providing medical assistance under 
 40.8   chapter 256G.  
 40.9      Sec. 34.  Minnesota Statutes 1994, section 256B.0595, 
 40.10  subdivision 4, is amended to read: 
 40.11     Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] (a) 
 40.12  An institutionalized person who has made, or whose spouse has 
 40.13  made a transfer prohibited by subdivision 1, is not ineligible 
 40.14  for long-term care services if one of the following conditions 
 40.15  applies: 
 40.16     (1) the assets were transferred to the community 
 40.17  individual's spouse, as defined in section 256B.059 or to 
 40.18  another for the sole benefit of the spouse; or 
 40.19     (2) the institutionalized spouse, prior to being 
 40.20  institutionalized, transferred assets to a spouse, provided that 
 40.21  the spouse to whom the assets were transferred does not then 
 40.22  transfer those assets to another person for less than fair 
 40.23  market value.  (At the time when one spouse is 
 40.24  institutionalized, assets must be allocated between the spouses 
 40.25  as provided under section 256B.059); or 
 40.26     (3) the assets were transferred to the individual's child 
 40.27  who is blind or permanently and totally disabled as determined 
 40.28  in the supplemental security income program; or 
 40.29     (4) a satisfactory showing is made that the individual 
 40.30  intended to dispose of the assets either at fair market value or 
 40.31  for other valuable consideration; or 
 40.32     (5) the local agency determines that denial of eligibility 
 40.33  for long-term care services would work an undue hardship and 
 40.34  grants a waiver of excess assets.  When a waiver is granted, a 
 40.35  cause of action exists against the person to whom the assets 
 40.36  were transferred for that portion of long-term care services 
 41.1   granted within 30 months of the transfer, or the amount of the 
 41.2   uncompensated transfer, whichever is less, together with the 
 41.3   costs incurred due to the action.  The action may be brought by 
 41.4   the state or the local agency responsible for providing medical 
 41.5   assistance under this chapter.; or 
 41.6      (6) for transfers occurring after August 10, 1993, the 
 41.7   assets were transferred by the person or person's spouse:  (i) 
 41.8   into a trust established solely for the benefit of a son or 
 41.9   daughter of any age who is blind or disabled as defined by the 
 41.10  Supplemental Security Income program; or (ii) into a trust 
 41.11  established solely for the benefit of an individual who is under 
 41.12  65 years of age who is disabled as defined by the Supplemental 
 41.13  Security Income program. 
 41.14     (b) Effective for transfers made on or after July 1, 1993, 
 41.15  or upon federal approval, whichever is later, an 
 41.16  institutionalized person who has made, or whose spouse has made 
 41.17  a transfer prohibited by subdivision 1, is not ineligible for 
 41.18  medical assistance services if one of the following conditions 
 41.19  applies: 
 41.20     (1) the assets were transferred to the community spouse, as 
 41.21  defined in section 256B.059; or 
 41.22     (2) the institutionalized spouse, prior to being 
 41.23  institutionalized, transferred assets to a spouse, provided that 
 41.24  the spouse to whom the assets were transferred does not then 
 41.25  transfer those assets to another person for less than fair 
 41.26  market value.  (At the time when one spouse is 
 41.27  institutionalized, assets must be allocated between the spouses 
 41.28  as provided under section 256B.059); or 
 41.29     (3) the assets were transferred to the individual's child 
 41.30  who is blind or permanently and totally disabled as determined 
 41.31  in the supplemental security income program; or 
 41.32     (4) a satisfactory showing is made that the individual 
 41.33  intended to dispose of the assets either at fair market value or 
 41.34  for other valuable consideration; or 
 41.35     (5) the local agency determines that denial of eligibility 
 41.36  for medical assistance services would work an undue hardship and 
 42.1   grants a waiver of excess assets.  When a waiver is granted, a 
 42.2   cause of action exists against the person to whom the assets 
 42.3   were transferred for that portion of medical assistance services 
 42.4   granted during the period of ineligibility determined under 
 42.5   subdivision 2 or the amount of the uncompensated transfer, 
 42.6   whichever is less, together with the costs incurred due to the 
 42.7   action.  The action may be brought by the state or the local 
 42.8   agency responsible for providing medical assistance under this 
 42.9   chapter. 
 42.10     Sec. 35.  Minnesota Statutes 1994, section 256B.06, 
 42.11  subdivision 4, is amended to read: 
 42.12     Subd. 4.  [CITIZENSHIP REQUIREMENTS.] Eligibility for 
 42.13  medical assistance is limited to citizens of the United States 
 42.14  and aliens lawfully admitted for permanent residence or 
 42.15  otherwise permanently residing in the United States under the 
 42.16  color of law.  Aliens who are seeking legalization under the 
 42.17  Immigration Reform and Control Act of 1986, Public Law Number 
 42.18  99-603, who are under age 18, over age 65, blind, disabled, or 
 42.19  Cuban or Haitian, and who meet the eligibility requirements of 
 42.20  medical assistance under subdivision 1 and sections 256B.055 to 
 42.21  256B.062 are eligible to receive medical assistance.  Pregnant 
 42.22  women who are aliens seeking legalization under the Immigration 
 42.23  Reform and Control Act of 1986, Public Law Number 99-603, and 
 42.24  who meet the eligibility requirements of medical assistance 
 42.25  under subdivision 1 are eligible for payment of care and 
 42.26  services through the period of pregnancy and six weeks 
 42.27  postpartum.  Payment shall also be made for care and services 
 42.28  that are furnished to an alien, regardless of immigration 
 42.29  status, who otherwise meets the eligibility requirements of this 
 42.30  section if such care and services are necessary for the 
 42.31  treatment of an emergency medical condition, except for organ 
 42.32  transplants and related care and services.  For purposes of this 
 42.33  subdivision, the term "emergency medical condition" means a 
 42.34  medical condition, including labor and delivery, that if not 
 42.35  immediately treated could cause a person physical or mental 
 42.36  disability, continuation of severe pain, or death. 
 43.1      Sec. 36.  Minnesota Statutes 1994, section 256B.0625, 
 43.2   subdivision 5, is amended to read: 
 43.3      Subd. 5.  [COMMUNITY MENTAL HEALTH CENTER SERVICES.] 
 43.4   Medical assistance covers community mental health center 
 43.5   services, as defined in rules adopted by the commissioner 
 43.6   pursuant to section 256B.04, subdivision 2, and provided by a 
 43.7   community mental health center as defined in section 245.62, 
 43.8   subdivision 2 that meets the requirements in paragraphs (a) to 
 43.9   (j). 
 43.10     (a) The provider is licensed under Minnesota Rules, parts 
 43.11  9520.0750 to 9520.0870.  
 43.12     (b) The provider provides mental health services under the 
 43.13  clinical supervision of a mental health professional who is 
 43.14  licensed for independent practice at the doctoral level or by a 
 43.15  board-certified psychiatrist or a psychiatrist who is eligible 
 43.16  for board certification.  Clinical supervision has the meaning 
 43.17  given in Minnesota Rules, part 9505.0323, subpart 1, item F.  
 43.18     (c) The provider must be a private nonprofit corporation or 
 43.19  a governmental agency and have a community board of directors as 
 43.20  specified by section 245.66.  
 43.21     (d) The provider must have a sliding fee scale that meets 
 43.22  the requirements in Minnesota Rules, part 9550.0060 and agree to 
 43.23  serve within the limits of its capacity, all individuals 
 43.24  residing in its service delivery area.  
 43.25     (e) At a minimum, the provider must provide the following 
 43.26  outpatient mental health services:  diagnostic assessment; 
 43.27  explanation of findings; family, group, and individual 
 43.28  psychotherapy, including crisis intervention psychotherapy 
 43.29  services, multiple family group psychotherapy, psychological 
 43.30  testing, and medication management.  In addition, the provider 
 43.31  must provide or be capable of providing upon request of the 
 43.32  local mental health authority day treatment services and 
 43.33  professional home-based mental health services.  The provider 
 43.34  must have the capacity to provide such services to specialized 
 43.35  populations such as the elderly, families with children, persons 
 43.36  who are seriously and persistently mentally ill, and children 
 44.1   who are seriously emotionally disturbed.  
 44.2      (f) The provider must be capable of providing the services 
 44.3   specified in paragraph (e) to individuals who are diagnosed with 
 44.4   both mental illness or emotional disturbance, and chemical 
 44.5   dependency, and to individuals dually diagnosed with a mental 
 44.6   illness or emotional disturbance and mental retardation or a 
 44.7   related condition.  
 44.8      (g) The provider must provide 24-hour emergency care 
 44.9   services or demonstrate the capacity to assist recipients in 
 44.10  need of such services to access such services on a 24-hour basis.
 44.11     (h) The provider must have a contract with the local mental 
 44.12  health authority to provide one or more of the services 
 44.13  specified in paragraph (e).  
 44.14     (i) The provider must agree, upon request of the local 
 44.15  mental health authority, to enter into a contract with the 
 44.16  county to provide mental health services not reimbursable under 
 44.17  the medical assistance program.  
 44.18     (j) The provider may not be enrolled with the medical 
 44.19  assistance program as both a hospital and a community mental 
 44.20  health center.  The community mental health center's 
 44.21  administrative, organizational, and financial structure must be 
 44.22  separate and distinct from that of the hospital. 
 44.23     Sec. 37.  Minnesota Statutes 1994, section 256B.0625, 
 44.24  subdivision 8, is amended to read: 
 44.25     Subd. 8.  [PHYSICAL THERAPY.] Medical assistance covers 
 44.26  physical therapy and related services.  Services provided by a 
 44.27  physical therapy assistant shall be reimbursed at the same rate 
 44.28  as services performed by a physical therapist when the services 
 44.29  of the physical therapy assistant are provided under the 
 44.30  direction of a physical therapist who is on the premises.  
 44.31  Services provided by a physical therapy assistant that are 
 44.32  provided under the direction of a physical therapist who is not 
 44.33  on the premises shall be reimbursed at 65 percent of the 
 44.34  physical therapist rate. 
 44.35     Sec. 38.  Minnesota Statutes 1994, section 256B.0625, 
 44.36  subdivision 8a, is amended to read: 
 45.1      Subd. 8a.  [OCCUPATIONAL THERAPY.] Medical assistance 
 45.2   covers occupational therapy and related services.  Services 
 45.3   provided by an occupational therapy assistant shall be 
 45.4   reimbursed at the same rate as services performed by an 
 45.5   occupational therapist when the services of the occupational 
 45.6   therapy assistant are provided under the direction of the 
 45.7   occupational therapist who is on the premises.  Services 
 45.8   provided by an occupational therapy assistant that are provided 
 45.9   under the direction of an occupational therapist who is not on 
 45.10  the premises shall be reimbursed at 65 percent of the 
 45.11  occupational therapist rate. 
 45.12     Sec. 39.  Minnesota Statutes 1994, section 256B.0625, 
 45.13  subdivision 13, is amended to read: 
 45.14     Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs if 
 45.15  prescribed by a licensed practitioner and dispensed by a 
 45.16  licensed pharmacist, or by a physician enrolled in the medical 
 45.17  assistance program as a dispensing physician.  The commissioner, 
 45.18  after receiving recommendations from professional medical 
 45.19  associations and professional pharmacist associations, shall 
 45.20  designate a formulary committee to advise the commissioner on 
 45.21  the names of drugs for which payment is made, recommend a system 
 45.22  for reimbursing providers on a set fee or charge basis rather 
 45.23  than the present system, and develop methods encouraging use of 
 45.24  generic drugs when they are less expensive and equally effective 
 45.25  as trademark drugs.  The formulary committee shall consist of 
 45.26  nine members, four of whom shall be physicians who are not 
 45.27  employed by the department of human services, and a majority of 
 45.28  whose practice is for persons paying privately or through health 
 45.29  insurance, three of whom shall be pharmacists who are not 
 45.30  employed by the department of human services, and a majority of 
 45.31  whose practice is for persons paying privately or through health 
 45.32  insurance, a consumer representative, and a nursing home 
 45.33  representative.  Committee members shall serve three-year terms 
 45.34  and shall serve without compensation.  Members may be 
 45.35  reappointed once.  
 45.36     (b) The commissioner shall establish a drug formulary.  Its 
 46.1   establishment and publication shall not be subject to the 
 46.2   requirements of the administrative procedure act, but the 
 46.3   formulary committee shall review and comment on the formulary 
 46.4   contents.  The formulary committee shall review and recommend 
 46.5   drugs which require prior authorization.  The formulary 
 46.6   committee may recommend drugs for prior authorization directly 
 46.7   to the commissioner, as long as opportunity for public input is 
 46.8   provided.  Prior authorization may be requested by the 
 46.9   commissioner based on medical and clinical criteria before 
 46.10  certain drugs are eligible for payment.  Before a drug may be 
 46.11  considered for prior authorization at the request of the 
 46.12  commissioner:  
 46.13     (1) the drug formulary committee must develop criteria to 
 46.14  be used for identifying drugs; the development of these criteria 
 46.15  is not subject to the requirements of chapter 14, but the 
 46.16  formulary committee shall provide opportunity for public input 
 46.17  in developing criteria; 
 46.18     (2) the drug formulary committee must hold a public forum 
 46.19  and receive public comment for an additional 15 days; and 
 46.20     (3) the commissioner must provide information to the 
 46.21  formulary committee on the impact that placing the drug on prior 
 46.22  authorization will have on the quality of patient care and 
 46.23  information regarding whether the drug is subject to clinical 
 46.24  abuse or misuse.  Prior authorization may be required by the 
 46.25  commissioner before certain formulary drugs are eligible for 
 46.26  payment.  The formulary shall not include:  
 46.27     (i) drugs or products for which there is no federal 
 46.28  funding; 
 46.29     (ii) over-the-counter drugs, except for antacids, 
 46.30  acetaminophen, family planning products, aspirin, insulin, 
 46.31  products for the treatment of lice, vitamins for adults with 
 46.32  documented vitamin deficiencies, and vitamins for children under 
 46.33  the age of seven and pregnant or nursing women; 
 46.34     (iii) any other over-the-counter drug identified by the 
 46.35  commissioner, in consultation with the drug formulary committee, 
 46.36  as necessary, appropriate, and cost-effective for the treatment 
 47.1   of certain specified chronic diseases, conditions or disorders, 
 47.2   and this determination shall not be subject to the requirements 
 47.3   of chapter 14; 
 47.4      (iv) anorectics; and 
 47.5      (v) drugs for which medical value has not been established. 
 47.6      The commissioner shall publish conditions for prohibiting 
 47.7   payment for specific drugs after considering the formulary 
 47.8   committee's recommendations.  
 47.9      (c) The basis for determining the amount of payment shall 
 47.10  be the lower of:  (1) the actual acquisition costs of the drugs 
 47.11  plus a fixed dispensing fee established by the commissioner,; (2)
 47.12  the maximum allowable cost set by the federal government or by 
 47.13  the commissioner plus the fixed dispensing fee; or the usual and 
 47.14  customary price charged to the public (3) the lowest price the 
 47.15  provider has agreed to accept from any payor, including prices 
 47.16  charged to the public, and prices agreed upon through contract 
 47.17  with any third-party payor or health plan.  The pharmacy 
 47.18  dispensing fee shall be $2.35.  Actual acquisition cost includes 
 47.19  quantity and other special discounts except time and cash 
 47.20  discounts.  The actual acquisition cost of a drug shall be 
 47.21  estimated by the commissioner, at average wholesale price minus 
 47.22  7.6 percent effective January 1, 1994.  The maximum allowable 
 47.23  cost of a multisource drug may be set by the commissioner and it 
 47.24  shall be comparable to, but no higher than, the maximum amount 
 47.25  paid by other third-party payors in this state who have maximum 
 47.26  allowable cost programs.  Establishment of the amount of payment 
 47.27  for drugs shall not be subject to the requirements of the 
 47.28  administrative procedure act.  An additional dispensing fee of 
 47.29  $.30 may be added to the dispensing fee paid to pharmacists for 
 47.30  legend drug prescriptions dispensed to residents of long-term 
 47.31  care facilities when a unit dose blister card system, approved 
 47.32  by the department, is used.  Under this type of dispensing 
 47.33  system, the pharmacist must dispense a 30-day supply of drug.  
 47.34  The National Drug Code (NDC) from the drug container used to 
 47.35  fill the blister card must be identified on the claim to the 
 47.36  department.  The unit dose blister card containing the drug must 
 48.1   meet the packaging standards set forth in Minnesota Rules, part 
 48.2   6800.2700, that govern the return of unused drugs to the 
 48.3   pharmacy for reuse.  The pharmacy provider will be required to 
 48.4   credit the department for the actual acquisition cost of all 
 48.5   unused drugs that are eligible for reuse.  Over-the-counter 
 48.6   medications must be dispensed in the manufacturer's unopened 
 48.7   package.  The commissioner may permit the drug clozapine to be 
 48.8   dispensed in a quantity that is less than a 30-day supply.  
 48.9   Whenever a generically equivalent product is available, payment 
 48.10  shall be on the basis of the actual acquisition cost of the 
 48.11  generic drug, unless the prescriber specifically indicates 
 48.12  "dispense as written - brand necessary" on the prescription as 
 48.13  required by section 151.21, subdivision 2.  Implementation of 
 48.14  any change in the fixed dispensing fee that has not been subject 
 48.15  to the administrative procedure act is limited to not more than 
 48.16  180 days, unless, during that time, the commissioner initiates 
 48.17  rulemaking through the administrative procedure act. 
 48.18     (d) Until the date the on-line, real-time Medicaid 
 48.19  Management Information System (MMIS) upgrade is successfully 
 48.20  implemented, as determined by the commissioner of 
 48.21  administration, a pharmacy provider may require individuals who 
 48.22  seek to become eligible for medical assistance under a one-month 
 48.23  spenddown, as provided in section 256B.056, subdivision 5, to 
 48.24  pay for services to the extent of the spenddown amount at the 
 48.25  time the services are provided.  A pharmacy provider choosing 
 48.26  this option shall file a medical assistance claim for the 
 48.27  pharmacy services provided.  If medical assistance reimbursement 
 48.28  is received for this claim, the pharmacy provider shall return 
 48.29  to the individual the total amount paid by the individual for 
 48.30  the pharmacy services reimbursed by the medical assistance 
 48.31  program.  If the claim is not eligible for medical assistance 
 48.32  reimbursement because of the provider's failure to comply with 
 48.33  the provisions of the medical assistance program, the pharmacy 
 48.34  provider shall refund to the individual the total amount paid by 
 48.35  the individual.  Pharmacy providers may choose this option only 
 48.36  if they apply similar credit restrictions to private pay or 
 49.1   privately insured individuals.  A pharmacy provider choosing 
 49.2   this option must inform individuals who seek to become eligible 
 49.3   for medical assistance under a one-month spenddown of (1) their 
 49.4   right to appeal the denial of services on the grounds that they 
 49.5   have satisfied the spenddown requirement, and (2) their 
 49.6   potential eligibility for the MinnesotaCare program or the 
 49.7   children's health plan. 
 49.8      Sec. 40.  Minnesota Statutes 1994, section 256B.0625, 
 49.9   subdivision 13a, is amended to read: 
 49.10     Subd. 13a.  [DRUG UTILIZATION REVIEW BOARD.] A 
 49.11  12-member nine-member drug utilization review board is 
 49.12  established.  The board is comprised of six at least three but 
 49.13  no more than four licensed physicians actively engaged in the 
 49.14  practice of medicine in Minnesota; five at least three licensed 
 49.15  pharmacists actively engaged in the practice of pharmacy in 
 49.16  Minnesota; and one consumer representative; the remainder to be 
 49.17  made up of health care professionals who are licensed in their 
 49.18  field and have recognized knowledge in the clinically 
 49.19  appropriate prescribing, dispensing, and monitoring of covered 
 49.20  outpatient drugs.  The board shall be staffed by an employee of 
 49.21  the department who shall serve as an ex officio nonvoting member 
 49.22  of the board.  The members of the board shall be appointed by 
 49.23  the commissioner and shall serve three-year terms.  
 49.24  The physician members shall be selected from lists submitted by 
 49.25  professional medical associations.  The pharmacist members shall 
 49.26  be selected from lists submitted by professional pharmacist 
 49.27  associations.  The commissioner shall appoint the initial 
 49.28  members of the board for terms expiring as follows:  four three 
 49.29  members for terms expiring June 30, 1995 1996; four three 
 49.30  members for terms expiring June 30, 1994 1997; and four three 
 49.31  members for terms expiring June 30, 1993 1998.  Members may be 
 49.32  reappointed once.  The board shall annually elect a chair from 
 49.33  among the members. 
 49.34     The commissioner shall, with the advice of the board: 
 49.35     (1) implement a medical assistance retrospective and 
 49.36  prospective drug utilization review program as required by 
 50.1   United States Code, title 42, section 1396r-8(g)(3); 
 50.2      (2) develop and implement the predetermined criteria and 
 50.3   practice parameters for appropriate prescribing to be used in 
 50.4   retrospective and prospective drug utilization review; 
 50.5      (3) develop, select, implement, and assess interventions 
 50.6   for physicians, pharmacists, and patients that are educational 
 50.7   and not punitive in nature; 
 50.8      (4) establish a grievance and appeals process for 
 50.9   physicians and pharmacists under this section; 
 50.10     (5) publish and disseminate educational information to 
 50.11  physicians and pharmacists regarding the board and the review 
 50.12  program; 
 50.13     (6) adopt and implement procedures designed to ensure the 
 50.14  confidentiality of any information collected, stored, retrieved, 
 50.15  assessed, or analyzed by the board, staff to the board, or 
 50.16  contractors to the review program that identifies individual 
 50.17  physicians, pharmacists, or recipients; 
 50.18     (7) establish and implement an ongoing process to (i) 
 50.19  receive public comment regarding drug utilization review 
 50.20  criteria and standards, and (ii) consider the comments along 
 50.21  with other scientific and clinical information in order to 
 50.22  revise criteria and standards on a timely basis; and 
 50.23     (8) adopt any rules necessary to carry out this section. 
 50.24     The board may establish advisory committees.  The 
 50.25  commissioner may contract with appropriate organizations to 
 50.26  assist the board in carrying out the board's duties.  The 
 50.27  commissioner may enter into contracts for services to develop 
 50.28  and implement a retrospective and prospective review program. 
 50.29     The board shall report to the commissioner annually on 
 50.30  December 1 the date the Drug Utilization Review Annual Report is 
 50.31  due to the Health Care Financing Administration.  This report is 
 50.32  to cover the preceding federal fiscal year.  The commissioner 
 50.33  shall make the report available to the public upon request.  The 
 50.34  report must include information on the activities of the board 
 50.35  and the program; the effectiveness of implemented interventions; 
 50.36  administrative costs; and any fiscal impact resulting from the 
 51.1   program.  An honorarium of $50 per meeting shall be paid to each 
 51.2   board member in attendance.  
 51.3      Sec. 41.  Minnesota Statutes 1994, section 256B.0625, 
 51.4   subdivision 18, is amended to read: 
 51.5      Subd. 18.  [BUS OR TAXICAB TRANSPORTATION.] To the extent 
 51.6   authorized by rule of the state agency, medical assistance 
 51.7   covers costs of bus or taxicab the most appropriate and 
 51.8   cost-effective form of transportation incurred by any ambulatory 
 51.9   eligible person for obtaining nonemergency medical care. 
 51.10     Sec. 42.  Minnesota Statutes 1994, section 256B.0625, 
 51.11  subdivision 37, is amended to read: 
 51.12     Subd. 37.  [WRAPAROUND INDIVIDUALIZED REHABILITATION 
 51.13  SERVICES.] Medical assistance covers wraparound individualized 
 51.14  rehabilitation services as defined in section 245.492, 
 51.15  subdivision 20, that are provided through a local children's 
 51.16  mental health collaborative, as that entity is defined in 
 51.17  section 245.492, subdivision 11 23, that are provided by a 
 51.18  collaborative, county, or an entity under contract with a county 
 51.19  through an integrated service system, as described in section 
 51.20  245.4931, that is approved by the state coordinating council, 
 51.21  subject to federal approval. 
 51.22     Sec. 43.  Minnesota Statutes 1994, section 256B.0625, is 
 51.23  amended by adding a subdivision to read: 
 51.24     Subd. 38.  [PAYMENTS FOR MENTAL HEALTH SERVICES.] Payments 
 51.25  for mental health services covered under the medical assistance 
 51.26  program that are provided by masters-prepared mental health 
 51.27  professionals shall be 80 percent of the rate paid to 
 51.28  doctoral-prepared professionals.  Payments for mental health 
 51.29  services covered under the medical assistance program that are 
 51.30  provided by masters-prepared mental health professionals 
 51.31  employed by community mental health centers shall be 100 percent 
 51.32  of the rate paid to doctoral-prepared professionals. 
 51.33     Sec. 44.  Minnesota Statutes 1994, section 256B.0911, 
 51.34  subdivision 2, is amended to read: 
 51.35     Subd. 2.  [PERSONS REQUIRED TO BE SCREENED; EXEMPTIONS.] 
 51.36  All applicants to Medicaid certified nursing facilities must be 
 52.1   screened prior to admission, regardless of income, assets, or 
 52.2   funding sources, except the following: 
 52.3      (1) patients who, having entered acute care facilities from 
 52.4   certified nursing facilities, are returning to a certified 
 52.5   nursing facility; 
 52.6      (2) residents transferred from other certified nursing 
 52.7   facilities; 
 52.8      (3) individuals who have a contractual right to have their 
 52.9   nursing facility care paid for indefinitely by the veteran's 
 52.10  administration; or 
 52.11     (4) individuals who are enrolled in the Ebenezer/Group 
 52.12  Health social health maintenance organization project, or 
 52.13  enrolled in a demonstration project under section 256B.69, 
 52.14  subdivision 18, at the time of application to a nursing home. 
 52.15     Regardless of the exemptions in clauses (2) to (4), persons 
 52.16  who have a diagnosis or possible diagnosis of mental illness, 
 52.17  mental retardation, or a related condition must be screened 
 52.18  before admission unless the admission prior to screening is 
 52.19  authorized by the local mental health authority or the local 
 52.20  developmental disabilities case manager, or unless authorized by 
 52.21  the county agency according to Public Law Number 101-508. 
 52.22     Before admission to a Medicaid certified nursing home or 
 52.23  boarding care home, all persons must be screened and approved 
 52.24  for admission through an assessment process.  The nursing 
 52.25  facility is authorized to conduct case mix assessments which are 
 52.26  not conducted by the county public health nurse under Minnesota 
 52.27  Rules, part 9549.0059.  The designated county agency is 
 52.28  responsible for distributing the quality assurance and review 
 52.29  form for all new applicants to nursing homes. 
 52.30     Other persons who are not applicants to nursing facilities 
 52.31  must be screened if a request is made for a screening. 
 52.32     Sec. 45.  Minnesota Statutes 1994, section 256B.0915, 
 52.33  subdivision 2, is amended to read: 
 52.34     Subd. 2.  [SPOUSAL IMPOVERISHMENT POLICIES.] The 
 52.35  commissioner shall seek to amend the federal waiver and the 
 52.36  medical assistance state plan to allow spousal impoverishment 
 53.1   criteria as authorized in Code of Federal Regulations, title 42, 
 53.2   section 435.726(1924) under United States Code, title 42, 
 53.3   section 1396r-5, and as implemented in sections 256B.0575, 
 53.4   256B.058, and 256B.059 to be applied to persons who are screened 
 53.5   and determined to need a nursing facility level of care, except 
 53.6   that the amendment shall seek to add to the personal needs 
 53.7   allowance permitted in section 256B.0575, an amount equivalent 
 53.8   to the group residential housing rate as set by section 256I.03, 
 53.9   subdivision 5. 
 53.10     Sec. 46.  Minnesota Statutes 1994, section 256B.15, 
 53.11  subdivision 1a, is amended to read: 
 53.12     Subd. 1a.  [ESTATES SUBJECT TO CLAIMS.] If a person 
 53.13  receives any medical assistance hereunder, on the person's 
 53.14  death, if single, or on the death of the survivor of a married 
 53.15  couple, either or both of whom received medical assistance, the 
 53.16  total amount paid for medical assistance rendered for the person 
 53.17  and spouse shall be filed as a claim against the estate of the 
 53.18  person or the estate of the surviving spouse in the court having 
 53.19  jurisdiction to probate the estate.  
 53.20     A claim shall be filed if medical assistance was rendered 
 53.21  for either or both persons under one of the following 
 53.22  circumstances: 
 53.23     (a) the person was over 65 55 years of age, and received 
 53.24  services under this chapter, excluding alternative care; 
 53.25     (b) the person resided in a medical institution for six 
 53.26  months or longer, received services under this chapter excluding 
 53.27  alternative care, and, at the time of institutionalization or 
 53.28  application for medical assistance, whichever is later, the 
 53.29  person could not have reasonably been expected to be discharged 
 53.30  and returned home, as certified in writing by the person's 
 53.31  treating physician.  For purposes of this section only, a 
 53.32  "medical institution" means a skilled nursing facility, 
 53.33  intermediate care facility, intermediate care facility for 
 53.34  persons with mental retardation, nursing facility, or inpatient 
 53.35  hospital; or 
 53.36     (c) the person received general assistance medical care 
 54.1   services under chapter 256D.  
 54.2      The claim shall be considered an expense of the last 
 54.3   illness of the decedent for the purpose of section 524.3-805.  
 54.4   Any statute of limitations that purports to limit any county 
 54.5   agency or the state agency, or both, to recover for medical 
 54.6   assistance granted hereunder shall not apply to any claim made 
 54.7   hereunder for reimbursement for any medical assistance granted 
 54.8   hereunder.  Notice of the claim shall be given to all heirs and 
 54.9   devisees of the decedent whose identity can be ascertained with 
 54.10  reasonable diligence.  The notice must include procedures and 
 54.11  instructions for making an application for a hardship waiver 
 54.12  under subdivision 5; time frames for submitting an application 
 54.13  and determination; and information regarding appeal rights and 
 54.14  procedures.  Counties are entitled to one-half of the nonfederal 
 54.15  share of medical assistance collections from estates that are 
 54.16  directly attributable to county effort.  
 54.17     Sec. 47.  Minnesota Statutes 1994, section 256B.15, 
 54.18  subdivision 2, is amended to read: 
 54.19     Subd. 2.  [LIMITATIONS ON CLAIMS.] The claim shall include 
 54.20  only the total amount of medical assistance rendered after 
 54.21  age 65 55 or during a period of institutionalization described 
 54.22  in subdivision 1a, clause (b), and the total amount of general 
 54.23  assistance medical care rendered, and shall not include 
 54.24  interest.  Claims that have been allowed but not paid shall bear 
 54.25  interest according to section 524.3-806, paragraph (d).  A claim 
 54.26  against the estate of a surviving spouse who did not receive 
 54.27  medical assistance, for medical assistance rendered for the 
 54.28  predeceased spouse, is limited to the value of the assets of the 
 54.29  estate that were marital property or jointly owned property at 
 54.30  any time during the marriage. 
 54.31     Sec. 48.  Minnesota Statutes 1994, section 256B.15, is 
 54.32  amended by adding a subdivision to read: 
 54.33     Subd. 5.  [UNDUE HARDSHIP.] Any person entitled to notice 
 54.34  in subdivision 1a has a right to apply for waiver of the claim 
 54.35  based upon undue hardship.  Any claim pursuant to this section 
 54.36  may be fully or partially waived because of undue hardship.  
 55.1   Undue hardship does not include action taken by the decedent 
 55.2   which divested or diverted assets from the estate recovery 
 55.3   during the period of time prescribed by federal law.  Any waiver 
 55.4   of a claim must benefit the person claiming undue hardship. 
 55.5      Sec. 49.  Minnesota Statutes 1994, section 256B.49, 
 55.6   subdivision 1, is amended to read: 
 55.7      Subdivision 1.  [STUDY; WAIVER APPLICATION.] The 
 55.8   commissioner shall authorize a study to assess the need for home 
 55.9   and community-based waivers for chronically ill children who 
 55.10  have been and will continue to be hospitalized without a waiver, 
 55.11  and for disabled individuals under the age of 65 who are likely 
 55.12  to reside in an acute care or nursing home facility in the 
 55.13  absence of a waiver.  If a need for these waivers can be 
 55.14  demonstrated, the commissioner shall apply for federal waivers 
 55.15  necessary to secure, to the extent allowed by law, federal 
 55.16  participation under United States Code, title 42, sections 
 55.17  1396-1396p, as amended through December 31, 1982, for the 
 55.18  provision of home and community-based services to chronically 
 55.19  ill children who, in the absence of such a waiver, would remain 
 55.20  in an acute care setting, and to disabled individuals under the 
 55.21  age of 65 who, in the absence of a waiver, would reside in an 
 55.22  acute care or nursing home setting.  If the need is 
 55.23  demonstrated, the commissioner shall request a waiver under 
 55.24  United States Code, title 42, sections 1396-1396p, to allow 
 55.25  medicaid eligibility for blind or disabled children with 
 55.26  ineligible parents where income deemed from the parents would 
 55.27  cause the applicant to be ineligible for supplemental security 
 55.28  income if the family shared a household and to furnish necessary 
 55.29  services in the home or community to disabled individuals under 
 55.30  the age of 65 who would be eligible for medicaid if 
 55.31  institutionalized in an acute care or nursing home setting. 
 55.32  These waivers are requested to furnish necessary services in the 
 55.33  home and community setting to children or disabled adults under 
 55.34  age 65 who are medicaid eligible when institutionalized in an 
 55.35  acute care or nursing home setting.  The commissioner shall 
 55.36  assure that the cost of home and community-based care will not 
 56.1   be more than the cost of care if the eligible child or disabled 
 56.2   adult under age 65 were to remain institutionalized.  The 
 56.3   commissioner shall seek to amend the federal waivers obtained 
 56.4   under this section to apply criteria to protect against spousal 
 56.5   impoverishment as authorized under United States Code, title 42, 
 56.6   section 1396r-5, and as implemented in sections 256B.0575, 
 56.7   256B.058, and 256B.059, except that the amendment shall seek to 
 56.8   add to the personal needs allowance permitted in section 
 56.9   256B.0575, an amount equivalent to the group residential housing 
 56.10  rate as set by section 256I.03, subdivision 5. 
 56.11     Sec. 50.  Minnesota Statutes 1994, section 256B.69, 
 56.12  subdivision 4, is amended to read: 
 56.13     Subd. 4.  [LIMITATION OF CHOICE.] The commissioner shall 
 56.14  develop criteria to determine when limitation of choice may be 
 56.15  implemented in the experimental counties.  The criteria shall 
 56.16  ensure that all eligible individuals in the county have 
 56.17  continuing access to the full range of medical assistance 
 56.18  services as specified in subdivision 6.  The commissioner shall 
 56.19  exempt the following persons from participation in the project, 
 56.20  in addition to those who do not meet the criteria for limitation 
 56.21  of choice:  (1) persons eligible for medical assistance 
 56.22  according to section 256B.055, subdivision 1, and children under 
 56.23  age 21 who are in foster placement; (2) persons eligible for 
 56.24  medical assistance due to blindness or disability as determined 
 56.25  by the social security administration or the state medical 
 56.26  review team, unless they are 65 years of age or older; (3) 
 56.27  recipients who currently have private coverage through a health 
 56.28  maintenance organization; and (4) recipients who are eligible 
 56.29  for medical assistance by spending down excess income for 
 56.30  medical expenses other than the nursing facility per diem 
 56.31  expense.  The commissioner may allow persons with a one-month 
 56.32  spenddown who are otherwise eligible to enroll to voluntarily 
 56.33  enroll or remain enrolled, if they elect to prepay their monthly 
 56.34  spenddown to the state.  Before limitation of choice is 
 56.35  implemented, eligible individuals shall be notified and after 
 56.36  notification, shall be allowed to choose only among 
 57.1   demonstration providers.  After initially choosing a provider, 
 57.2   the recipient is allowed to change that choice only at specified 
 57.3   times as allowed by the commissioner.  If a demonstration 
 57.4   provider ends participation in the project for any reason, a 
 57.5   recipient enrolled with that provider must select a new provider 
 57.6   but may change providers without cause once more within the 
 57.7   first 60 days after enrollment with the second provider. 
 57.8      Sec. 51.  Minnesota Statutes 1994, section 256B.69, is 
 57.9   amended by adding a subdivision to read: 
 57.10     Subd. 18.  [ALTERNATIVE INTEGRATED LONG-TERM CARE SERVICES; 
 57.11  ELDERLY AND DISABLED PERSONS.] The commissioner may implement 
 57.12  demonstration projects to create alternative integrated delivery 
 57.13  systems for acute and long-term care services to elderly and 
 57.14  disabled persons that provide increased coordination, improve 
 57.15  access to quality services, and mitigate future cost increases.  
 57.16  The commissioner may seek federal authority to combine Medicare 
 57.17  and Medicaid capitation payments for the purpose of such 
 57.18  demonstrations.  Medicare funds and services shall be 
 57.19  administered according to the terms and conditions of the 
 57.20  federal waiver and demonstration provisions.  For the purpose of 
 57.21  administering medical assistance funds, demonstrations under 
 57.22  this subdivision are subject to subdivisions 1 to 17.  The 
 57.23  provisions of Minnesota Rules, parts 9500.1450 to 9500.1464, 
 57.24  apply to these demonstrations, with the exceptions of parts 
 57.25  9500.1452, subpart 2, item B; and 9500.1457, subpart 1, items B 
 57.26  and C, which do not apply to elderly persons enrolling in 
 57.27  demonstrations under this section.  An initial open enrollment 
 57.28  period may be provided.  Persons who disenroll from 
 57.29  demonstrations under this subdivision remain subject to 
 57.30  Minnesota Rules, parts 9500.1450 to 9500.1464.  When a person is 
 57.31  enrolled in a health plan under these demonstrations and the 
 57.32  health plan's participation is subsequently terminated for any 
 57.33  reason, the person shall be provided an opportunity to select a 
 57.34  new health plan and shall have the right to change health plans 
 57.35  within the first 60 days of enrollment in the second health 
 57.36  plan.  Persons required to participate in health plans under 
 58.1   this section who fail to make a choice of health plan shall not 
 58.2   be randomly assigned to health plans under these demonstrations. 
 58.3   Notwithstanding section 256.9363, subdivision 5, and Minnesota 
 58.4   Rules, part 9505.5220, subpart 1, item A, if adopted, for the 
 58.5   purpose of demonstrations under this subdivision, the 
 58.6   commissioner may contract with managed care organizations to 
 58.7   serve only elderly persons eligible for medical assistance, 
 58.8   elderly and disabled persons, or disabled persons only. 
 58.9      Before implementation of a demonstration project for 
 58.10  disabled persons, the commissioner must provide information to 
 58.11  appropriate committees of the house and senate and must involve 
 58.12  representatives of affected disability groups in the design of 
 58.13  the demonstration projects. 
 58.14     Sec. 52.  [256B.691] [RISK-BASED TRANSPORTATION PAYMENTS.] 
 58.15     Any contract with a prepaid health plan under the medical 
 58.16  assistance, general assistance medical care, or MinnesotaCare 
 58.17  program that requires the health plan to cover transportation 
 58.18  services for obtaining medical care for eligible individuals who 
 58.19  are ambulatory must provide for payment for those services on a 
 58.20  risk basis. 
 58.21     Sec. 53.  Minnesota Statutes 1994, section 256D.03, 
 58.22  subdivision 3, is amended to read: 
 58.23     Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 58.24  (a) General assistance medical care may be paid for any person 
 58.25  who is not eligible for medical assistance under chapter 256B, 
 58.26  including eligibility for medical assistance based on a 
 58.27  spenddown of excess income according to section 256B.056, 
 58.28  subdivision 5, and: 
 58.29     (1) who is receiving assistance under section 256D.05 or 
 58.30  256D.051, or who is having a payment made on the person's behalf 
 58.31  under sections 256I.01 to 256I.06; or 
 58.32     (2)(i) who is a resident of Minnesota; and whose equity in 
 58.33  assets is not in excess of $1,000 per assistance unit.  No asset 
 58.34  test shall be applied to children and their parents living in 
 58.35  the same household.  Exempt assets, the reduction of excess 
 58.36  assets, and the waiver of excess assets must conform to the 
 59.1   medical assistance program in chapter 256B, with the following 
 59.2   exception:  the maximum amount of undistributed funds in a trust 
 59.3   that could be distributed to or on behalf of the beneficiary by 
 59.4   the trustee, assuming the full exercise of the trustee's 
 59.5   discretion under the terms of the trust, must be applied toward 
 59.6   the asset maximum; and 
 59.7      (ii) who has countable income not in excess of the 
 59.8   assistance standards established in section 256B.056, 
 59.9   subdivision 4, or whose excess income is spent down pursuant to 
 59.10  section 256B.056, subdivision 5, using a six-month budget 
 59.11  period, except that a one-month budget period must be used for 
 59.12  recipients residing in a long-term care facility.  The method 
 59.13  for calculating earned income disregards and deductions for a 
 59.14  person who resides with a dependent child under age 21 shall be 
 59.15  as specified in section 256.74, subdivision 1.  However, if a 
 59.16  disregard of $30 and one-third of the remainder described in 
 59.17  section 256.74, subdivision 1, clause (4), has been applied to 
 59.18  the wage earner's income, the disregard shall not be applied 
 59.19  again until the wage earner's income has not been considered in 
 59.20  an eligibility determination for general assistance, general 
 59.21  assistance medical care, medical assistance, or aid to families 
 59.22  with dependent children for 12 consecutive months.  The earned 
 59.23  income and work expense deductions for a person who does not 
 59.24  reside with a dependent child under age 21 shall be the same as 
 59.25  the method used to determine eligibility for a person under 
 59.26  section 256D.06, subdivision 1, except the disregard of the 
 59.27  first $50 of earned income is not allowed; or 
 59.28     (3) who would be eligible for medical assistance except 
 59.29  that the person resides in a facility that is determined by the 
 59.30  commissioner or the federal health care financing administration 
 59.31  to be an institution for mental diseases. 
 59.32     (b) Eligibility is available for the month of application, 
 59.33  and for three months prior to application if the person was 
 59.34  eligible in those prior months.  A redetermination of 
 59.35  eligibility must occur every 12 months. 
 59.36     (c) General assistance medical care is not available for a 
 60.1   person in a correctional facility unless the person is detained 
 60.2   by law for less than one year in a county correctional or 
 60.3   detention facility as a person accused or convicted of a crime, 
 60.4   or admitted as an inpatient to a hospital on a criminal hold 
 60.5   order, and the person is a recipient of general assistance 
 60.6   medical care at the time the person is detained by law or 
 60.7   admitted on a criminal hold order and as long as the person 
 60.8   continues to meet other eligibility requirements of this 
 60.9   subdivision.  
 60.10     (d) General assistance medical care is not available for 
 60.11  applicants or recipients who do not cooperate with the county 
 60.12  agency to meet the requirements of medical assistance. 
 60.13     (e) In determining the amount of assets of an individual, 
 60.14  there shall be included any asset or interest in an asset, 
 60.15  including an asset excluded under paragraph (a), that was given 
 60.16  away, sold, or disposed of for less than fair market value 
 60.17  within the 30 60 months preceding application for general 
 60.18  assistance medical care or during the period of eligibility.  
 60.19  Any transfer described in this paragraph shall be presumed to 
 60.20  have been for the purpose of establishing eligibility for 
 60.21  general assistance medical care, unless the individual furnishes 
 60.22  convincing evidence to establish that the transaction was 
 60.23  exclusively for another purpose.  For purposes of this 
 60.24  paragraph, the value of the asset or interest shall be the fair 
 60.25  market value at the time it was given away, sold, or disposed 
 60.26  of, less the amount of compensation received.  For any 
 60.27  uncompensated transfer, the number of months of ineligibility, 
 60.28  including partial months, shall be calculated by dividing the 
 60.29  uncompensated transfer amount by the average monthly per person 
 60.30  payment made by the medical assistance program to skilled 
 60.31  nursing facilities for the previous calendar year.  The 
 60.32  individual shall remain ineligible until this fixed period has 
 60.33  expired.  The period of ineligibility may exceed 30 months, and 
 60.34  a reapplication for benefits after 30 months from the date of 
 60.35  the transfer shall not result in eligibility unless and until 
 60.36  the period of ineligibility has expired.  The period of 
 61.1   ineligibility begins in the month the transfer was reported to 
 61.2   the county agency, or if the transfer was not reported, the 
 61.3   month in which the county agency discovered the transfer, 
 61.4   whichever comes first.  For applicants, the period of 
 61.5   ineligibility begins on the date of the first approved 
 61.6   application. 
 61.7      (f)(1) Beginning October 1, 1993, an undocumented alien or 
 61.8   a nonimmigrant is ineligible for general assistance medical care 
 61.9   other than emergency services.  For purposes of this 
 61.10  subdivision, a nonimmigrant is an individual in one or more of 
 61.11  the classes listed in United States Code, title 8, section 
 61.12  1101(a)(15), and an undocumented alien is an individual who 
 61.13  resides in the United States without the approval or 
 61.14  acquiescence of the Immigration and Naturalization Service. 
 61.15     (2) This subdivision does not apply to a child under age 
 61.16  18, to a Cuban or Haitian entrant as defined in Public Law 
 61.17  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 61.18  is aged, blind, or disabled as defined in United States Code, 
 61.19  title 42, section 1382c(a)(1). 
 61.20     (3) For purposes of paragraph (f), "emergency services" has 
 61.21  the meaning given in Code of Federal Regulations, title 42, 
 61.22  section 440.255(b)(1). 
 61.23     Sec. 54.  Minnesota Statutes 1994, section 256D.03, 
 61.24  subdivision 3b, is amended to read: 
 61.25     Subd. 3b.  [COOPERATION.] General assistance or general 
 61.26  assistance medical care applicants and recipients must cooperate 
 61.27  with the state and local agency to identify potentially liable 
 61.28  third-party payors and assist the state in obtaining third-party 
 61.29  payments.  Cooperation includes identifying any third party who 
 61.30  may be liable for care and services provided under this chapter 
 61.31  to the applicant, recipient, or any other family member for whom 
 61.32  application is made and providing relevant information to assist 
 61.33  the state in pursuing a potentially liable third party.  General 
 61.34  assistance medical care applicants and recipients must cooperate 
 61.35  by providing information about any group health plan in which 
 61.36  they may be eligible to enroll.  They must cooperate with the 
 62.1   state and local agency in determining if the plan is 
 62.2   cost-effective.  If the plan is determined cost-effective and 
 62.3   the premium will be paid by the state or local agency or is 
 62.4   available at no cost to the person, they must enroll or remain 
 62.5   enrolled in the group health plan.  Cost-effective insurance 
 62.6   premiums approved for payment by the state agency and paid by 
 62.7   the local agency are eligible for reimbursement according to 
 62.8   subdivision 6.  
 62.9      Sec. 55.  Minnesota Statutes 1994, section 256D.03, 
 62.10  subdivision 4, is amended to read: 
 62.11     Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
 62.12  For a person who is eligible under subdivision 3, paragraph (a), 
 62.13  clause (3), general assistance medical care covers: 
 62.14     (1) inpatient hospital services; 
 62.15     (2) outpatient hospital services; 
 62.16     (3) services provided by Medicare certified rehabilitation 
 62.17  agencies; 
 62.18     (4) prescription drugs and other products recommended 
 62.19  through the process established in section 256B.0625, 
 62.20  subdivision 13; 
 62.21     (5) equipment necessary to administer insulin and 
 62.22  diagnostic supplies and equipment for diabetics to monitor blood 
 62.23  sugar level; 
 62.24     (6) eyeglasses and eye examinations provided by a physician 
 62.25  or optometrist; 
 62.26     (7) hearing aids; 
 62.27     (8) prosthetic devices; 
 62.28     (9) laboratory and X-ray services; 
 62.29     (10) physician's services; 
 62.30     (11) medical transportation; 
 62.31     (12) chiropractic services as covered under the medical 
 62.32  assistance program; 
 62.33     (13) podiatric services; 
 62.34     (14) dental services; 
 62.35     (15) outpatient services provided by a mental health center 
 62.36  or clinic that is under contract with the county board and is 
 63.1   established under section 245.62; 
 63.2      (16) day treatment services for mental illness provided 
 63.3   under contract with the county board; 
 63.4      (17) prescribed medications for persons who have been 
 63.5   diagnosed as mentally ill as necessary to prevent more 
 63.6   restrictive institutionalization; 
 63.7      (18) case management services for a person with serious and 
 63.8   persistent mental illness who would be eligible for medical 
 63.9   assistance except that the person resides in an institution for 
 63.10  mental diseases; 
 63.11     (19) psychological services, medical supplies and 
 63.12  equipment, and Medicare premiums, coinsurance and deductible 
 63.13  payments; 
 63.14     (20) medical equipment not specifically listed in this 
 63.15  paragraph when the use of the equipment will prevent the need 
 63.16  for costlier services that are reimbursable under this 
 63.17  subdivision; and 
 63.18     (21) services performed by a certified pediatric nurse 
 63.19  practitioner, a certified family nurse practitioner, a certified 
 63.20  adult nurse practitioner, a certified obstetric/gynecological 
 63.21  nurse practitioner, or a certified geriatric nurse practitioner 
 63.22  in independent practice, if the services are otherwise covered 
 63.23  under this chapter as a physician service, and if the service is 
 63.24  within the scope of practice of the nurse practitioner's license 
 63.25  as a registered nurse, as defined in section 148.171.; and 
 63.26     (22) services of a certified public health nurse or a 
 63.27  registered nurse practicing in a public health nursing clinic 
 63.28  that is a department of, or that operates under the direct 
 63.29  authority of, a unit of government, if the service is within the 
 63.30  scope of practice of the public health nurse's license as a 
 63.31  registered nurse, as defined in section 148.171. 
 63.32     (b) For a recipient who is eligible under subdivision 3, 
 63.33  paragraph (a), clause (1) or (2), general assistance medical 
 63.34  care covers the services listed in paragraph (a) with the 
 63.35  exception of special transportation services, and nonpreventive 
 63.36  dental services unless required as a result of an emergency.  
 64.1   For purposes of this paragraph, "emergency" means a person 
 64.2   requires a level of care that warrants hospital emergency 
 64.3   department care.  This level of care may be provided in a 
 64.4   dentist's office. 
 64.5      (c) In order to contain costs, the commissioner of human 
 64.6   services shall select vendors of medical care who can provide 
 64.7   the most economical care consistent with high medical standards 
 64.8   and shall where possible contract with organizations on a 
 64.9   prepaid capitation basis to provide these services.  The 
 64.10  commissioner shall consider proposals by counties and vendors 
 64.11  for prepaid health plans, competitive bidding programs, block 
 64.12  grants, or other vendor payment mechanisms designed to provide 
 64.13  services in an economical manner or to control utilization, with 
 64.14  safeguards to ensure that necessary services are provided.  
 64.15  Before implementing prepaid programs in counties with a county 
 64.16  operated or affiliated public teaching hospital or a hospital or 
 64.17  clinic operated by the University of Minnesota, the commissioner 
 64.18  shall consider the risks the prepaid program creates for the 
 64.19  hospital and allow the county or hospital the opportunity to 
 64.20  participate in the program in a manner that reflects the risk of 
 64.21  adverse selection and the nature of the patients served by the 
 64.22  hospital, provided the terms of participation in the program are 
 64.23  competitive with the terms of other participants considering the 
 64.24  nature of the population served.  Payment for services provided 
 64.25  pursuant to this subdivision shall be as provided to medical 
 64.26  assistance vendors of these services under sections 256B.02, 
 64.27  subdivision 8, and 256B.0625.  For payments made during fiscal 
 64.28  year 1990 and later years, the commissioner shall consult with 
 64.29  an independent actuary in establishing prepayment rates, but 
 64.30  shall retain final control over the rate methodology. 
 64.31     (d) The commissioner of human services may reduce payments 
 64.32  provided under sections 256D.01 to 256D.21 and 261.23 in order 
 64.33  to remain within the amount appropriated for general assistance 
 64.34  medical care, within the following restrictions. 
 64.35     For the period July 1, 1985 to December 31, 1985, 
 64.36  reductions below the cost per service unit allowable under 
 65.1   section 256.966, are permitted only as follows:  payments for 
 65.2   inpatient and outpatient hospital care provided in response to a 
 65.3   primary diagnosis of chemical dependency or mental illness may 
 65.4   be reduced no more than 30 percent; payments for all other 
 65.5   inpatient hospital care may be reduced no more than 20 percent.  
 65.6   Reductions below the payments allowable under general assistance 
 65.7   medical care for the remaining general assistance medical care 
 65.8   services allowable under this subdivision may be reduced no more 
 65.9   than ten percent. 
 65.10     For the period January 1, 1986 to December 31, 1986, 
 65.11  reductions below the cost per service unit allowable under 
 65.12  section 256.966 are permitted only as follows:  payments for 
 65.13  inpatient and outpatient hospital care provided in response to a 
 65.14  primary diagnosis of chemical dependency or mental illness may 
 65.15  be reduced no more than 20 percent; payments for all other 
 65.16  inpatient hospital care may be reduced no more than 15 percent.  
 65.17  Reductions below the payments allowable under general assistance 
 65.18  medical care for the remaining general assistance medical care 
 65.19  services allowable under this subdivision may be reduced no more 
 65.20  than five percent. 
 65.21     For the period January 1, 1987 to June 30, 1987, reductions 
 65.22  below the cost per service unit allowable under section 256.966 
 65.23  are permitted only as follows:  payments for inpatient and 
 65.24  outpatient hospital care provided in response to a primary 
 65.25  diagnosis of chemical dependency or mental illness may be 
 65.26  reduced no more than 15 percent; payments for all other 
 65.27  inpatient hospital care may be reduced no more than ten 
 65.28  percent.  Reductions below the payments allowable under medical 
 65.29  assistance for the remaining general assistance medical care 
 65.30  services allowable under this subdivision may be reduced no more 
 65.31  than five percent.  
 65.32     For the period July 1, 1987 to June 30, 1988, reductions 
 65.33  below the cost per service unit allowable under section 256.966 
 65.34  are permitted only as follows:  payments for inpatient and 
 65.35  outpatient hospital care provided in response to a primary 
 65.36  diagnosis of chemical dependency or mental illness may be 
 66.1   reduced no more than 15 percent; payments for all other 
 66.2   inpatient hospital care may be reduced no more than five percent.
 66.3   Reductions below the payments allowable under medical assistance 
 66.4   for the remaining general assistance medical care services 
 66.5   allowable under this subdivision may be reduced no more than 
 66.6   five percent. 
 66.7      For the period July 1, 1988 to June 30, 1989, reductions 
 66.8   below the cost per service unit allowable under section 256.966 
 66.9   are permitted only as follows:  payments for inpatient and 
 66.10  outpatient hospital care provided in response to a primary 
 66.11  diagnosis of chemical dependency or mental illness may be 
 66.12  reduced no more than 15 percent; payments for all other 
 66.13  inpatient hospital care may not be reduced.  Reductions below 
 66.14  the payments allowable under medical assistance for the 
 66.15  remaining general assistance medical care services allowable 
 66.16  under this subdivision may be reduced no more than five percent. 
 66.17     There shall be no copayment required of any recipient of 
 66.18  benefits for any services provided under this subdivision.  A 
 66.19  hospital receiving a reduced payment as a result of this section 
 66.20  may apply the unpaid balance toward satisfaction of the 
 66.21  hospital's bad debts. 
 66.22     (e) Any county may, from its own resources, provide medical 
 66.23  payments for which state payments are not made. 
 66.24     (f) Chemical dependency services that are reimbursed under 
 66.25  chapter 254B must not be reimbursed under general assistance 
 66.26  medical care. 
 66.27     (g) The maximum payment for new vendors enrolled in the 
 66.28  general assistance medical care program after the base year 
 66.29  shall be determined from the average usual and customary charge 
 66.30  of the same vendor type enrolled in the base year. 
 66.31     (h) The conditions of payment for services under this 
 66.32  subdivision are the same as the conditions specified in rules 
 66.33  adopted under chapter 256B governing the medical assistance 
 66.34  program, unless otherwise provided by statute or rule. 
 66.35     Sec. 56.  Minnesota Statutes 1994, section 256D.425, is 
 66.36  amended by adding a subdivision to read: 
 67.1      Subd. 4.  [COOPERATION.] To be eligible for the Minnesota 
 67.2   supplemental aid program, applicants and recipients must 
 67.3   cooperate with the state and local agency to identify 
 67.4   potentially liable third-party payors and assist the state in 
 67.5   obtaining third-party payments.  Cooperation includes 
 67.6   identifying any third party who may be liable for benefits 
 67.7   provided under this chapter to the applicant, recipient, or any 
 67.8   other family member for whom application is made, and providing 
 67.9   relevant information to assist the state in pursuing a 
 67.10  potentially liable third party. 
 67.11     Sec. 57.  [EFFECTIVE DATE.] 
 67.12     Subdivision 1.  The amendments to section 256B.15, 
 67.13  subdivisions 1a and 2, relating only to the age of a medical 
 67.14  assistance recipient for purposes of estate claims, are 
 67.15  effective for persons who are between the ages of 55 and 64 on 
 67.16  or after July 1, 1995, for the total amount of medical 
 67.17  assistance rendered on or after July 1, 1995. 
 67.18     Subd. 2.  Section 25 (256B.056, subdivision 3b) is 
 67.19  effective retroactive to October 1, 1993. 
 67.20     Subd. 3.  Sections 30 to 33 (256B.0595, subdivisions 1, 2, 
 67.21  3, and 4) are effective retroactive to October 1, 1993, except 
 67.22  that the portion of section 31 amending 256B.0595, subdivision 
 67.23  2(c), is effective retroactive to transfers of income or assets 
 67.24  made on or after September 1994. 
 67.25     Sec. 58.  [REPEALER.] 
 67.26     Minnesota Statutes 1994, section 256B.055, subdivision 12, 
 67.27  is repealed effective January 1, 1996.