1.1                          A bill for an act 
  1.2             relating to human services; provider payment; amending 
  1.3             Minnesota Statutes 1996, sections 256B.0595, by adding 
  1.4             a subdivision; 256B.0911, subdivision 4; 256B.431, 
  1.5             subdivision 2b, and by adding a subdivision; and 
  1.6             256B.69, by adding a subdivision; Minnesota Statutes 
  1.7             1997 Supplement, sections 144A.4605, subdivision 2; 
  1.8             256B.0911, subdivision 7; 256B.433, subdivision 3a; 
  1.9             and 256B.434, subdivision 10; repealing Minnesota 
  1.10            Statutes 1996, sections 144.0721, subdivision 3a; 
  1.11            Minnesota Statutes 1997 Supplement, sections 144.0721, 
  1.12            subdivision 3; and 256B.0913, subdivision 15; Laws 
  1.13            1997, chapter 203, article 4, section 65. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:  
  1.15     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.16  144A.4605, subdivision 2, is amended to read: 
  1.17     Subd. 2.  [ASSISTED LIVING HOME CARE LICENSE ESTABLISHED.] 
  1.18  Effective January 1, 1998, a home care provider license category 
  1.19  entitled assisted living home care provider is hereby 
  1.20  established for immediate implementation as required by this 
  1.21  section.  A home care provider may obtain an assisted living 
  1.22  license if the program meets the following requirements: 
  1.23     (a) nursing services, delegated nursing services, other 
  1.24  services performed by unlicensed personnel, or central storage 
  1.25  of medications under the assisted living license are provided 
  1.26  solely for residents of one or more housing with services 
  1.27  establishments registered under chapter 144D; 
  1.28     (b) unlicensed personnel perform home health aide and home 
  1.29  care aide tasks identified in Minnesota Rules, parts 4668.0100, 
  2.1   subparts 1 and 2, and 4668.0110, subpart 1.  Qualifications to 
  2.2   perform these tasks shall be established in accordance with 
  2.3   subdivision 3; 
  2.4      (c) periodic supervision of unlicensed personnel is 
  2.5   provided as required by rule; 
  2.6      (d) notwithstanding Minnesota Rules, part 4668.0160, 
  2.7   subpart 6, item D, client records shall include: 
  2.8      (1) a weekly summary of the client's status and home care 
  2.9   services provided; 
  2.10     (2) documentation each time medications are administered to 
  2.11  a client; and 
  2.12     (3) documentation on the day of occurrence of any 
  2.13  significant change in the client's status or any significant 
  2.14  incident, such as a fall or refusal to take medications. 
  2.15     All entries must be signed by the staff providing the s 
  2.16  services and entered into the record no later than two weeks 
  2.17  after the end of the service day, except as specified in clauses 
  2.18  (2) and (3); 
  2.19     (e) medication and treatment orders, if any, are included 
  2.20  in the client record and are renewed at least every 12 months, 
  2.21  or more frequently when indicated by a clinical assessment; 
  2.22     (f) the central storage of medications in a housing with 
  2.23  services establishment registered under chapter 144D is managed 
  2.24  under a system that is established by a registered nurse and 
  2.25  addresses the control of medications, handling of medications, 
  2.26  medication containers, medication records, and disposition of 
  2.27  medications; and 
  2.28     (g) in other respects meets the requirements established by 
  2.29  rules adopted under sections 144A.45 to 144A.48. 
  2.30     Sec. 2.  Minnesota Statutes 1996, section 256B.0595, is 
  2.31  amended by adding a subdivision to read:  
  2.32     Subd. 2c.  [PROHIBITION AGAINST RECOUPING FUNDS FROM 
  2.33  PROVIDER.] (a) The commissioner may not collect or recoup from 
  2.34  the provider of services any retroactive adjustments of a 
  2.35  recipient resource or other medical assistance funds paid on 
  2.36  behalf of a person retroactively deemed ineligible unless the 
  3.1   provider knew that the recipient was ineligible for medical 
  3.2   assistance and despite that knowledge provided services to the 
  3.3   ineligible recipient. 
  3.4      (b) This section applies to any unresolved appeals, 
  3.5   actions, or disputes brought by a provider challenging the 
  3.6   commissioner's retroactive collection or recoupment of medical 
  3.7   assistance payments from the provider due to a retroactive 
  3.8   determination of a person's ineligibility for services rendered 
  3.9   before the effective date of this subdivision.  The commissioner 
  3.10  shall review all pending appeals, actions, or disputes and 
  3.11  reinstate payment to any provider of service if required under 
  3.12  this subdivision. 
  3.13     Sec. 3.  Minnesota Statutes 1996, section 256B.0911, 
  3.14  subdivision 4, is amended to read: 
  3.15     Subd. 4.  [RESPONSIBILITIES OF THE COUNTY AND THE SCREENING 
  3.16  TEAM.] (a) The county shall: 
  3.17     (1) provide information and education to the general public 
  3.18  regarding availability of the preadmission screening program; 
  3.19     (2) accept referrals from individuals, families, human 
  3.20  service and health professionals, and hospital and nursing 
  3.21  facility personnel; 
  3.22     (3) assess the health, psychological, and social needs of 
  3.23  referred individuals and identify services needed to maintain 
  3.24  these persons in the least restrictive environments; 
  3.25     (4) determine if the individual screened needs nursing 
  3.26  facility level of care; 
  3.27     (5) assess specialized service needs based upon an 
  3.28  evaluation by: 
  3.29     (i) a qualified independent mental health professional for 
  3.30  persons with a primary or secondary diagnosis of a serious 
  3.31  mental illness; and 
  3.32     (ii) a qualified mental retardation professional for 
  3.33  persons with a primary or secondary diagnosis of mental 
  3.34  retardation or related conditions.  For purposes of this clause, 
  3.35  a qualified mental retardation professional must meet the 
  3.36  standards for a qualified mental retardation professional in 
  4.1   Code of Federal Regulations, title 42, section 483.430; 
  4.2      (6) make recommendations for individuals screened regarding 
  4.3   cost-effective community services which are available to the 
  4.4   individual; 
  4.5      (7) make recommendations for individuals screened regarding 
  4.6   nursing home placement when there are no cost-effective 
  4.7   community services available; 
  4.8      (8) develop an individual's community care plan and provide 
  4.9   follow-up services as needed; and 
  4.10     (9) prepare and submit reports that may be required by the 
  4.11  commissioner of human services. 
  4.12     (b) The screener shall document that the most 
  4.13  cost-effective alternatives available were offered to the 
  4.14  individual or the individual's legal representative.  For 
  4.15  purposes of this section, "cost-effective alternatives" means 
  4.16  community services and living arrangements that cost the same or 
  4.17  less than nursing facility care. 
  4.18     (c) Screeners shall adhere to the level of care criteria 
  4.19  for admission to a certified nursing facility established under 
  4.20  section 144.0721.  
  4.21     (d) (c) For persons who are eligible for medical assistance 
  4.22  or who would be eligible within 180 days of admission to a 
  4.23  nursing facility and who are admitted to a nursing facility, the 
  4.24  nursing facility must include a screener or the case manager in 
  4.25  the discharge planning process for those individuals who the 
  4.26  team has determined have discharge potential.  The screener or 
  4.27  the case manager must ensure a smooth transition and follow-up 
  4.28  for the individual's return to the community. 
  4.29     Screeners shall cooperate with other public and private 
  4.30  agencies in the community, in order to offer a variety of 
  4.31  cost-effective services to the disabled and elderly.  The 
  4.32  screeners shall encourage the use of volunteers from families, 
  4.33  religious organizations, social clubs, and similar civic and 
  4.34  service organizations to provide services. 
  4.35     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
  4.36  256B.0911, subdivision 7, is amended to read: 
  5.1      Subd. 7.  [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] 
  5.2   (a) Medical assistance reimbursement for nursing facilities 
  5.3   shall be authorized for a medical assistance recipient only if a 
  5.4   preadmission screening has been conducted prior to admission or 
  5.5   the local county agency has authorized an exemption.  Medical 
  5.6   assistance reimbursement for nursing facilities shall not be 
  5.7   provided for any recipient who the local screener has determined 
  5.8   does not meet the level of care criteria for nursing facility 
  5.9   placement or, if indicated, has not had a level II PASARR 
  5.10  evaluation completed unless an admission for a recipient with 
  5.11  mental illness is approved by the local mental health authority 
  5.12  or an admission for a recipient with mental retardation or 
  5.13  related condition is approved by the state mental retardation 
  5.14  authority.  The county preadmission screening team may deny 
  5.15  certified nursing facility admission using the level of care 
  5.16  criteria established under section 144.0721 and deny medical 
  5.17  assistance reimbursement for certified nursing facility care.  
  5.18  Persons receiving care in a certified nursing facility or 
  5.19  certified boarding care home who are reassessed by the 
  5.20  commissioner of health according to section 144.0722 and 
  5.21  determined to no longer meet the level of care criteria for a 
  5.22  certified nursing facility or certified boarding care home may 
  5.23  no longer remain a resident in the certified nursing facility or 
  5.24  certified boarding care home and must be relocated to the 
  5.25  community if the persons were admitted on or after July 1, 1998. 
  5.26     (b) Persons receiving services under section 256B.0913, 
  5.27  subdivisions 1 to 14, or 256B.0915 who are reassessed and found 
  5.28  to not meet the level of care criteria for admission to a 
  5.29  certified nursing facility or certified boarding care home may 
  5.30  no longer receive these services if persons were admitted to the 
  5.31  program on or after July 1, 1998.  The commissioner shall make a 
  5.32  request to the health care financing administration for a waiver 
  5.33  allowing screening team approval of Medicaid payments for 
  5.34  certified nursing facility care.  An individual has a choice and 
  5.35  makes the final decision between nursing facility placement and 
  5.36  community placement after the screening team's recommendation, 
  6.1   except as provided in paragraphs (b) and (c).  If a medical 
  6.2   assistance recipient is determined to qualify for placement as a 
  6.3   resident in a nursing facility by preadmission screening 
  6.4   conducted under this section, the commissioner shall not 
  6.5   retroactively deny payment or recoup medical assistance funds 
  6.6   for services rendered by a provider in the event the 
  6.7   commissioner reverses, modifies, or disagrees with the county 
  6.8   screening team determination that an individual qualifies for 
  6.9   placement in a nursing facility or otherwise modifies the level 
  6.10  of care determination.  Any prohibition of payment for medical 
  6.11  assistance services based on subsequent determination of 
  6.12  inappropriate placement shall be prospective only and payments 
  6.13  to the provider shall continue until the resident is discharged. 
  6.14  Payments to the provider will continue during the time the 
  6.15  resident receives all required discharge notifications and 
  6.16  exhausts any appeal rights. 
  6.17     (c) The local county mental health authority or the state 
  6.18  mental retardation authority under Public Law Numbers 100-203 
  6.19  and 101-508 may prohibit admission to a nursing facility, if the 
  6.20  individual does not meet the nursing facility level of care 
  6.21  criteria or needs specialized services as defined in Public Law 
  6.22  Numbers 100-203 and 101-508.  For purposes of this section, 
  6.23  "specialized services" for a person with mental retardation or a 
  6.24  related condition means "active treatment" as that term is 
  6.25  defined in Code of Federal Regulations, title 42, section 
  6.26  483.440(a)(1). 
  6.27     (d) Upon the receipt by the commissioner of approval by the 
  6.28  Secretary of Health and Human Services of the waiver requested 
  6.29  under paragraph (a), the local screener shall deny medical 
  6.30  assistance reimbursement for nursing facility care for an 
  6.31  individual whose long-term care needs can be met in a 
  6.32  community-based setting and whose cost of community-based home 
  6.33  care services is less than 75 percent of the average payment for 
  6.34  nursing facility care for that individual's case mix 
  6.35  classification, and who is either: 
  6.36     (i) a current medical assistance recipient being screened 
  7.1   for admission to a nursing facility; or 
  7.2      (ii) an individual who would be eligible for medical 
  7.3   assistance within 180 days of entering a nursing facility and 
  7.4   who meets a nursing facility level of care. 
  7.5      (e) Appeals from the screening team's recommendation or the 
  7.6   county agency's final decision shall be made according to 
  7.7   section 256.045, subdivision 3.  
  7.8      (f) For an individual who is admitted by a nursing facility 
  7.9   based on the individual or responsible party's representation 
  7.10  that the individual qualifies for medical assistance and is in 
  7.11  immediate need of admission, who applies for medical assistance 
  7.12  but is subsequently denied, and who fails to pay the nursing 
  7.13  facility after receiving notice of the denial, any denial of 
  7.14  payment by medical assistance to the nursing facility shall be 
  7.15  prospective only.  Medical assistance shall pay for services 
  7.16  rendered from date of the applicant's admission through denial, 
  7.17  unless the provider knew that the applicant was ineligible for 
  7.18  medical assistance and despite that knowledge provided services 
  7.19  to the ineligible applicant.  Applicants and responsible parties 
  7.20  shall be liable to medical assistance for any payments made 
  7.21  under this section. 
  7.22     Sec. 5.  Minnesota Statutes 1996, section 256B.431, 
  7.23  subdivision 2b, is amended to read: 
  7.24     Subd. 2b.  [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For 
  7.25  rate years beginning on or after July 1, 1985, the commissioner 
  7.26  shall establish procedures for determining per diem 
  7.27  reimbursement for operating costs.  
  7.28     (b) The commissioner shall contract with an econometric 
  7.29  firm with recognized expertise in and access to national 
  7.30  economic change indices that can be applied to the appropriate 
  7.31  cost categories when determining the operating cost payment rate.
  7.32     (c) The commissioner shall analyze and evaluate each 
  7.33  nursing facility's cost report of allowable operating costs 
  7.34  incurred by the nursing facility during the reporting year 
  7.35  immediately preceding the rate year for which the payment rate 
  7.36  becomes effective.  
  8.1      (d) The commissioner shall establish limits on actual 
  8.2   allowable historical operating cost per diems based on cost 
  8.3   reports of allowable operating costs for the reporting year that 
  8.4   begins October 1, 1983, taking into consideration relevant 
  8.5   factors including resident needs, geographic location, size of 
  8.6   the nursing facility, and the costs that must be incurred for 
  8.7   the care of residents in an efficiently and economically 
  8.8   operated nursing facility.  In developing the geographic groups 
  8.9   for purposes of reimbursement under this section, the 
  8.10  commissioner shall ensure that nursing facilities in any county 
  8.11  contiguous to the Minneapolis-St. Paul seven-county metropolitan 
  8.12  area are included in the same geographic group.  The limits 
  8.13  established by the commissioner shall not be less, in the 
  8.14  aggregate, than the 60th percentile of total actual allowable 
  8.15  historical operating cost per diems for each group of nursing 
  8.16  facilities established under subdivision 1 based on cost reports 
  8.17  of allowable operating costs in the previous reporting year.  
  8.18  For rate years beginning on or after July 1, 1989, facilities 
  8.19  located in geographic group I as described in Minnesota Rules, 
  8.20  part 9549.0052, on January 1, 1989, may choose to have the 
  8.21  commissioner apply either the care related limits or the other 
  8.22  operating cost limits calculated for facilities located in 
  8.23  geographic group II, or both, if either of the limits calculated 
  8.24  for the group II facilities is higher.  The efficiency incentive 
  8.25  for geographic group I nursing facilities must be calculated 
  8.26  based on geographic group I limits.  The phase-in must be 
  8.27  established utilizing the chosen limits.  For purposes of these 
  8.28  exceptions to the geographic grouping requirements, the 
  8.29  definitions in Minnesota Rules, parts 9549.0050 to 9549.0059 
  8.30  (Emergency), and 9549.0010 to 9549.0080, apply.  The limits 
  8.31  established under this paragraph remain in effect until the 
  8.32  commissioner establishes a new base period.  Until the new base 
  8.33  period is established, the commissioner shall adjust the limits 
  8.34  annually using the appropriate economic change indices 
  8.35  established in paragraph (e).  In determining allowable 
  8.36  historical operating cost per diems for purposes of setting 
  9.1   limits and nursing facility payment rates, the commissioner 
  9.2   shall divide the allowable historical operating costs by the 
  9.3   actual number of resident days, except that where a nursing 
  9.4   facility is occupied at less than 90 percent of licensed 
  9.5   capacity days, the commissioner may establish procedures to 
  9.6   adjust the computation of the per diem to an imputed occupancy 
  9.7   level at or below 90 percent.  The commissioner shall establish 
  9.8   efficiency incentives as appropriate.  The commissioner may 
  9.9   establish efficiency incentives for different operating cost 
  9.10  categories.  The commissioner shall consider establishing 
  9.11  efficiency incentives in care related cost categories.  The 
  9.12  commissioner may combine one or more operating cost categories 
  9.13  and may use different methods for calculating payment rates for 
  9.14  each operating cost category or combination of operating cost 
  9.15  categories.  For the rate year beginning on July 1, 1985, the 
  9.16  commissioner shall: 
  9.17     (1) allow nursing facilities that have an average length of 
  9.18  stay of 180 days or less in their skilled nursing level of care, 
  9.19  125 percent of the care related limit and 105 percent of the 
  9.20  other operating cost limit established by rule; and 
  9.21     (2) exempt nursing facilities licensed on July 1, 1983, by 
  9.22  the commissioner to provide residential services for the 
  9.23  physically handicapped under Minnesota Rules, parts 9570.2000 to 
  9.24  9570.3600, from the care related limits and allow 105 percent of 
  9.25  the other operating cost limit established by rule. 
  9.26     For the purpose of calculating the other operating cost 
  9.27  efficiency incentive for nursing facilities referred to in 
  9.28  clause (1)  or (2), the commissioner shall use the other 
  9.29  operating cost limit established by rule before application of 
  9.30  the 105 percent. 
  9.31     (e) The commissioner shall establish a composite index or 
  9.32  indices by determining the appropriate economic change 
  9.33  indicators to be applied to specific operating cost categories 
  9.34  or combination of operating cost categories.  
  9.35     (f) Each nursing facility shall receive an operating cost 
  9.36  payment rate equal to the sum of the nursing facility's 
 10.1   operating cost payment rates for each operating cost category.  
 10.2   The operating cost payment rate for an operating cost category 
 10.3   shall be the lesser of the nursing facility's historical 
 10.4   operating cost in the category increased by the appropriate 
 10.5   index established in paragraph (e) for the operating cost 
 10.6   category plus an efficiency incentive established pursuant to 
 10.7   paragraph (d) or the limit for the operating cost category 
 10.8   increased by the same index.  If a nursing facility's actual 
 10.9   historic operating costs are greater than the prospective 
 10.10  payment rate for that rate year, there shall be no retroactive 
 10.11  cost settle-up.  In establishing payment rates for one or more 
 10.12  operating cost categories, the commissioner may establish 
 10.13  separate rates for different classes of residents based on their 
 10.14  relative care needs.  
 10.15     (g) The commissioner shall include the reported actual real 
 10.16  estate tax liability or payments in lieu of real estate tax of 
 10.17  each nursing facility as an operating cost of that nursing 
 10.18  facility.  Allowable costs under this subdivision for payments 
 10.19  made by a nonprofit nursing facility that are in lieu of real 
 10.20  estate taxes shall not exceed the amount which the nursing 
 10.21  facility would have paid to a city or township and county for 
 10.22  fire, police, sanitation services, and road maintenance costs 
 10.23  had real estate taxes been levied on that property for those 
 10.24  purposes.  For rate years beginning on or after July 1, 1987, 
 10.25  the reported actual real estate tax liability or payments in 
 10.26  lieu of real estate tax of nursing facilities shall be adjusted 
 10.27  to include an amount equal to one-half of the dollar change in 
 10.28  real estate taxes from the prior year.  The commissioner shall 
 10.29  include a reported actual special assessment, and reported 
 10.30  actual license fees required by the Minnesota department of 
 10.31  health, for each nursing facility as an operating cost of that 
 10.32  nursing facility.  For rate years beginning on or after July 1, 
 10.33  1989, the commissioner shall include a nursing facility's 
 10.34  reported public employee retirement act contribution for the 
 10.35  reporting year as apportioned to the care-related operating cost 
 10.36  categories and other operating cost categories multiplied by the 
 11.1   appropriate composite index or indices established pursuant to 
 11.2   paragraph (e) as costs under this paragraph.  Total adjusted 
 11.3   real estate tax liability, payments in lieu of real estate tax, 
 11.4   actual special assessments paid, the indexed public employee 
 11.5   retirement act contribution, and license fees paid as required 
 11.6   by the Minnesota department of health, for each nursing facility 
 11.7   (1) shall be divided by actual resident days in order to compute 
 11.8   the operating cost payment rate for this operating cost 
 11.9   category, (2) shall not be used to compute the care-related 
 11.10  operating cost limits or other operating cost limits established 
 11.11  by the commissioner, and (3) shall not be increased by the 
 11.12  composite index or indices established pursuant to paragraph 
 11.13  (e), unless otherwise indicated in this paragraph. 
 11.14     (h) For rate years beginning on or after July 1, 1987, the 
 11.15  commissioner shall adjust the rates of a nursing facility that 
 11.16  meets the criteria for the special dietary needs of its 
 11.17  residents and the requirements in section 31.651.  The 
 11.18  adjustment for raw food cost shall be the difference between the 
 11.19  nursing facility's allowable historical raw food cost per diem 
 11.20  and 115 percent of the median historical allowable raw food cost 
 11.21  per diem of the corresponding geographic group. 
 11.22     The rate adjustment shall be reduced by the applicable 
 11.23  phase-in percentage as provided under subdivision 2h. 
 11.24     (i) For the cost report year ending September 30, 1996, and 
 11.25  for all subsequent reporting years, certified nursing facilities 
 11.26  must identify, differentiate, and record resident day statistics 
 11.27  for residents in case mix classification A who, on or after July 
 11.28  1, 1996, meet the modified level of care criteria in section 
 11.29  144.0721.  The resident day statistics shall be separated into 
 11.30  case mix classification A-1 for any resident day meeting the 
 11.31  high-function class A level of care criteria and case mix 
 11.32  classification A-2 for other case mix class A resident days. 
 11.33     Sec. 6.  Minnesota Statutes 1996, section 256B.431, is 
 11.34  amended by adding a subdivision to read: 
 11.35     Subd. 27.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
 11.36  BEGINNING JULY 1, 1998.] The nursing facility reimbursement 
 12.1   changes in paragraphs (a) and (b) shall apply in the sequence 
 12.2   specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and 
 12.3   this section, beginning July 1, 1998. 
 12.4      (a) For rate years beginning on or after July 1, 1998, the 
 12.5   operating cost limits established in subdivisions 2, 2b, 2i, 3c, 
 12.6   and 22, paragraph (d), and any previously effective 
 12.7   corresponding limits in law or rule shall not apply, except that 
 12.8   these cost limits shall still be calculated for purposes of 
 12.9   determining efficiency incentive per diems.  For rate years 
 12.10  beginning on or after July 1, 1998, the total operating cost 
 12.11  payment rates for a nursing facility shall be the greater of the 
 12.12  total operating cost payment rates determined under this section 
 12.13  or the total operating cost payment rates in effect on June 30, 
 12.14  1998, subject to rate adjustments due to field audit or rate 
 12.15  appeal resolution.  
 12.16     (b) For rate years beginning on or after July 1, 1998, the 
 12.17  operating cost per diem referred to in subdivision 26, paragraph 
 12.18  (a), clauses (1) and (2), is the sum of the care related and 
 12.19  other operating per diems for a given case mix class.  Any 
 12.20  reductions to the combined operating per diem shall be divided 
 12.21  proportionately between the care related and other operating per 
 12.22  diems. 
 12.23     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
 12.24  256B.433, subdivision 3a, is amended to read: 
 12.25     Subd. 3a.  [EXEMPTION FROM REQUIREMENT FOR SEPARATE THERAPY 
 12.26  BILLING.] The provisions of subdivision 3 do not apply to 
 12.27  nursing facilities that are reimbursed according to the 
 12.28  provisions of section sections 256B.431 and 256B.434 and are 
 12.29  located in a county participating in the prepaid medical 
 12.30  assistance program. 
 12.31     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 12.32  256B.434, subdivision 10, is amended to read: 
 12.33     Subd. 10.  [EXEMPTIONS.] (a) To the extent permitted by 
 12.34  federal law, (1) a facility that has entered into a contract 
 12.35  under this section is not required to file a cost report, as 
 12.36  defined in Minnesota Rules, part 9549.0020, subpart 13, for any 
 13.1   year after the base year that is the basis for the calculation 
 13.2   of the contract payment rate for the first rate year of the 
 13.3   alternative payment demonstration project contract; and (2) a 
 13.4   facility under contract is not subject to audits of historical 
 13.5   costs or revenues, or paybacks or retroactive adjustments based 
 13.6   on these costs or revenues, except audits, paybacks, or 
 13.7   adjustments relating to the cost report that is the basis for 
 13.8   calculation of the first rate year under the contract. 
 13.9      (b) A facility that is under contract with the commissioner 
 13.10  under this section is not subject to the moratorium on licensure 
 13.11  or certification of new nursing home beds in section 144A.071, 
 13.12  unless the project results in a net increase in bed capacity or 
 13.13  involves relocation of beds from one site to another.  Contract 
 13.14  payment rates must not be adjusted to reflect any additional 
 13.15  costs that a nursing facility incurs as a result of a 
 13.16  construction project undertaken under this paragraph.  In 
 13.17  addition, as a condition of entering into a contract under this 
 13.18  section, a nursing facility must agree that any future medical 
 13.19  assistance payments for nursing facility services will not 
 13.20  reflect any additional costs attributable to the sale of a 
 13.21  nursing facility under this section and to construction 
 13.22  undertaken under this paragraph that otherwise would not be 
 13.23  authorized under the moratorium in section 144A.073.  Nothing in 
 13.24  this section prevents a nursing facility participating in the 
 13.25  alternative payment demonstration project under this section 
 13.26  from seeking approval of an exception to the moratorium through 
 13.27  the process established in section 144A.073, and if approved the 
 13.28  facility's rates shall be adjusted to reflect the cost of the 
 13.29  project.  Nothing in this section prevents a nursing facility 
 13.30  participating in the alternative payment demonstration project 
 13.31  from seeking legislative approval of an exception to the 
 13.32  moratorium under section 144A.071, and, if enacted, the 
 13.33  facility's rates shall be adjusted to reflect the cost of the 
 13.34  project. 
 13.35     (c) Notwithstanding section 256B.48, subdivision 6, 
 13.36  paragraphs (c), (d), and (e), and pursuant to any terms and 
 14.1   conditions contained in the facility's contract, a nursing 
 14.2   facility that is under contract with the commissioner under this 
 14.3   section is in compliance with section 256B.48, subdivision 6, 
 14.4   paragraph (b), if the facility is Medicare certified. 
 14.5      (d) Notwithstanding paragraph (a), if by April 1, 1996, the 
 14.6   health care financing administration has not approved a required 
 14.7   waiver, or the health care financing administration otherwise 
 14.8   requires cost reports to be filed prior to the waiver's 
 14.9   approval, the commissioner shall require a cost report for the 
 14.10  rate year. 
 14.11     (e) A facility that is under contract with the commissioner 
 14.12  under this section shall be allowed to change therapy 
 14.13  arrangements from an unrelated vendor to a related vendor during 
 14.14  the term of the contract.  The commissioner may develop 
 14.15  reasonable requirements designed to prevent an increase in 
 14.16  therapy utilization for residents enrolled in the medical 
 14.17  assistance program. 
 14.18     Sec. 9.  Minnesota Statutes 1996, section 256B.69, is 
 14.19  amended by adding a subdivision to read: 
 14.20     Subd. 25.  [CONTINUATION OF PAYMENTS THROUGH DISCHARGE.] In 
 14.21  the event a medical assistance recipient or beneficiary becomes 
 14.22  ineligible for or is denied nursing facility services, any 
 14.23  denial of medical assistance payment to a provider under this 
 14.24  section shall be prospective only and payments to the provider 
 14.25  shall continue until the resident is discharged.  Payments to 
 14.26  the provider will continue during the time the resident receives 
 14.27  all required discharge notifications and exhausts any rights to 
 14.28  appeal. 
 14.29     Sec. 10.  [ALTERNATIVE CARE AND MEDICAL ASSISTANCE 
 14.30  REIMBURSEMENT.] 
 14.31     Notwithstanding the provisions of Minnesota Statutes, 
 14.32  sections 256B.0913, 256B.0915, or state plan requirements to the 
 14.33  contrary, alternative care or Medicaid payment must be made 
 14.34  available for services delivered under Minnesota Statutes, 
 14.35  section 144.4605 beginning January 1, 1998. 
 14.36     Sec. 11.  [STUDY OF COSTS AND IMPACT OF REGULATION OF 
 15.1   ASSISTED LIVING HOME CARE PROVIDER LICENSEES.] 
 15.2      By December 15, 1998, the commissioner of health and human 
 15.3   services in consultation with owners and operators of registered 
 15.4   housing establishments under Minnesota Statutes, chapter 144D, 
 15.5   consumers of registered housing and services and representatives 
 15.6   of elderly housing associations, shall report to the health and 
 15.7   human services policy and fiscal committees of the house and 
 15.8   senate on the costs incurred under rules, as proposed by the 
 15.9   commissioner of health, to implement Laws 1997, chapter 113, 
 15.10  section 6, and shall: 
 15.11     (1) provide an analysis of the implications of added 
 15.12  regulatory costs to the affordability, accessibility, and 
 15.13  quality of elderly housing; and 
 15.14     (2) provide recommendations for alternatives to added home 
 15.15  care regulation for registered with services settings. 
 15.16     Sec. 12.  [REPEALER.] 
 15.17     Minnesota Statutes 1996, section 144.0721, subdivision 3a; 
 15.18  Minnesota Statutes 1997 Supplement, sections 144.0721, 
 15.19  subdivision 3; and 256B.0913, subdivision 15; and Laws 1997, 
 15.20  chapter 203, article 4, section 65, are repealed.