1.1                          A bill for an act 
  1.2             relating to human services; increasing reimbursement 
  1.3             rates for low-rate nursing facilities; providing 
  1.4             reimbursement for nursing facility medical liability 
  1.5             insurance costs; amending Minnesota Statutes 2002, 
  1.6             section 256B.431, by adding subdivisions. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 256B.431, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 40.  [REDUCTION IN RATE DISPARITIES.] (a) For the 
  1.11  rate year beginning July 1, 2004, the commissioner shall adjust 
  1.12  the operating payment rate for low-rate nursing facilities 
  1.13  reimbursed under this section whose rates are not determined 
  1.14  under Minnesota Rules, part 9549.0057, and low-rate nursing 
  1.15  facilities reimbursed under section 256B.434, as provided under 
  1.16  this subdivision.  A nursing facility is eligible for a rate 
  1.17  adjustment under this subdivision only if 50 percent or more of 
  1.18  the facility's beds are licensed by the commissioner of health 
  1.19  as nursing home beds. 
  1.20     (b) For the rate year beginning July 1, 2004, if a nursing 
  1.21  facility's case-mix portion of their operating payment rate for 
  1.22  RUGs levels with a weight of 1.00 is less than $60.36 per day, 
  1.23  the commissioner shall make available to the facility the lesser 
  1.24  of $60.36 per day or an increase of ten percent over the 
  1.25  case-mix portion of their rate in effect on June 30, 2004, for 
  1.26  the RUGs categories with a weight equal to 1.00.  For the other 
  2.1   RUGs levels, the increase at the 1.00 RUG level shall be 
  2.2   multiplied by the weights for other RUGs levels, to obtain 
  2.3   adjusted operating payment rates for the case-mix portion of 
  2.4   those RUGs levels.  If a facility's other operating portion of 
  2.5   their operating rate is less than $47.94 per day, the 
  2.6   commissioner shall make available to the facility the lesser of 
  2.7   $47.94 per day or an increase of ten percent over the other 
  2.8   operating portion of the operating rate in effect on June 30, 
  2.9   2004. 
  2.10     Sec. 2.  Minnesota Statutes 2002, section 256B.431, is 
  2.11  amended by adding a subdivision to read: 
  2.12     Subd. 41.  [MEDICAL LIABILITY COSTS.] (a) After the 
  2.13  computations in subdivision 40, the commissioner shall make 
  2.14  available to eligible nursing facilities reimbursed under this 
  2.15  section whose rates are not determined under Minnesota Rules, 
  2.16  part 9549.0057, and to eligible nursing facilities reimbursed 
  2.17  under section 256B.434, an adjustment to the nursing facility's 
  2.18  operating cost per diems for the rate year beginning July 1, 
  2.19  2004, to assist facilities in paying increased medical liability 
  2.20  insurance premiums greater than .... percent.  The per diem 
  2.21  adjustment shall be computed by the commissioner using the 
  2.22  information described in paragraph (b) and the method described 
  2.23  in paragraph (c).  This adjustment is onetime and must not be 
  2.24  included in a facility's base when calculating operating cost 
  2.25  per diems for rate years beginning on or after July 1, 2005.  
  2.26     (b) A facility is eligible for an adjustment if the 
  2.27  facility experienced a rate of increase in premiums for medical 
  2.28  liability insurance of five percent or more between calendar 
  2.29  years 2002 and 2003, and provides to the commissioner, in the 
  2.30  form and manner specified by the commissioner, information on 
  2.31  the amount of premiums paid for medical liability insurance for 
  2.32  calendar years 2002 and 2003.  The information must be delivered 
  2.33  to the commissioner by October 1, 2004, or postmarked by 
  2.34  September 30, 2004.  Facilities that do not meet this deadline 
  2.35  are ineligible for the rate adjustment. 
  2.36     (c) The commissioner shall review the information timely 
  3.1   submitted under paragraph (b) to determine each facility's 
  3.2   allowable excess increase in costs determined under paragraph 
  3.3   (a) to be used for the rate adjustment.  Subject to the 
  3.4   limitation in paragraph (d), the commissioner shall compute the 
  3.5   rate adjustments by dividing the allowable increased costs by 
  3.6   actual resident days from the most recent reporting year. 
  3.7      (d) If the rate increases are projected to increase the 
  3.8   state share of medical assistance costs by $5,600,000 or less, 
  3.9   the rate adjustments shall be implemented.  If the rate 
  3.10  increases are projected to increase the state share of medical 
  3.11  assistance costs by more than $5,600,000, the commissioner shall 
  3.12  proportionally decrease each facility's rate adjustment to 
  3.13  levels that project to spending no more than $5,600,000.