1.1                          A bill for an act 
  1.2             relating to health; modifying provisions relating to 
  1.3             nursing home moratorium exceptions; amending Minnesota 
  1.4             Statutes 1994, sections 144A.071, subdivisions 2, 4a, 
  1.5             and by adding a subdivision; and 144A.073, 
  1.6             subdivisions 1, 2, 3, 4, 8, and by adding a 
  1.7             subdivision; repealing Minnesota Statutes 1994, 
  1.8             section 144A.073, subdivision 3a. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 144A.071, 
  1.11  subdivision 2, is amended to read: 
  1.12     Subd. 2.  [MORATORIUM.] The commissioner of health, in 
  1.13  coordination with the commissioner of human services, shall deny 
  1.14  each request for new licensed or certified nursing home or 
  1.15  certified boarding care beds except as provided in subdivision 3 
  1.16  or 4a, or section 144A.073.  "Certified bed" means a nursing 
  1.17  home bed or a boarding care bed certified by the commissioner of 
  1.18  health for the purposes of the medical assistance program, under 
  1.19  United States Code, title 42, sections 1396 et seq.  
  1.20     The commissioner of human services, in coordination with 
  1.21  the commissioner of health, shall deny any request to issue a 
  1.22  license under section 252.28 and chapter 245A to a nursing home 
  1.23  or boarding care home, if that license would result in an 
  1.24  increase in the medical assistance reimbursement amount.  
  1.25     In addition, the commissioner of health must not approve 
  1.26  any construction project whose cost exceeds $500,000, or 25 
  1.27  percent of the facility's appraised value, whichever is less, 
  2.1   unless: 
  2.2      (a) any construction costs exceeding the lesser of $500,000 
  2.3   or 25 percent of the facility's appraised value are not added to 
  2.4   the facility's appraised value and are not included in the 
  2.5   facility's payment rate for reimbursement under the medical 
  2.6   assistance program; or 
  2.7      (b) the project: 
  2.8      (1) has been approved through the process described in 
  2.9   section 144A.073; 
  2.10     (2) meets an exception in subdivision 3 or 4a; 
  2.11     (3) is necessary to correct violations of state or federal 
  2.12  law issued by the commissioner of health; 
  2.13     (4) is necessary to repair or replace a portion of the 
  2.14  facility that was ~~destroyed~~ damaged by fire, lightning, or other 
  2.15  hazards provided that the provisions of subdivision 4a, clause 
  2.16  (a), are met; 
  2.17     (5) as of May 1, 1992, the facility has submitted to the 
  2.18  commissioner of health written documentation evidencing that the 
  2.19  facility meets the "commenced construction" definition as 
  2.20  specified in subdivision 1a, clause (d), or that substantial 
  2.21  steps have been taken prior to April 1, 1992, relating to the 
  2.22  construction project.  "Substantial steps" require that the 
  2.23  facility has made arrangements with outside parties relating to 
  2.24  the construction project and include the hiring of an architect 
  2.25  or construction firm, submission of preliminary plans to the 
  2.26  department of health or documentation from a financial 
  2.27  institution that financing arrangements for the construction 
  2.28  project have been made; or 
  2.29     (6) is being proposed by a licensed nursing facility that 
  2.30  is not certified to participate in the medical assistance 
  2.31  program and will not result in new licensed or certified beds. 
  2.32     Prior to the final plan approval of any construction 
  2.33  project, the commissioner of health shall be provided with an 
  2.34  itemized cost estimate for the project construction costs.  If a 
  2.35  construction project is anticipated to be completed in phases, 
  2.36  the total estimated cost of all phases of the project shall be 
  3.1   submitted to the commissioner and shall be considered as one 
  3.2   construction project.  Once the construction project is 
  3.3   completed and prior to the final clearance by the commissioner, 
  3.4   the total project construction costs for the construction 
  3.5   project shall be submitted to the commissioner.  If the final 
  3.6   project construction cost exceeds the dollar threshold in this 
  3.7   subdivision, the commissioner of human services shall not 
  3.8   recognize any of the project construction costs or the related 
  3.9   financing costs in excess of this threshold in establishing the 
  3.10  facility's property-related payment rate. 
  3.11     The dollar thresholds for construction projects are as 
  3.12  follows:  for construction projects other than those authorized 
  3.13  in clauses (1) to (6), the dollar threshold is $500,000 or 25 
  3.14  percent of appraised value, whichever is less.  For projects 
  3.15  authorized after July 1, 1993, under clause (1), the dollar 
  3.16  threshold is the cost estimate submitted with a proposal for an 
  3.17  exception under section 144A.073, plus inflation as calculated 
  3.18  according to section 256B.431, subdivision 3f, paragraph (a).  
  3.19  For projects authorized under clauses (2) to (4), the dollar 
  3.20  threshold is the itemized estimate project construction costs 
  3.21  submitted to the commissioner of health at the time of final 
  3.22  plan approval, plus inflation as calculated according to section 
  3.23  256B.431, subdivision 3f, paragraph (a). 
  3.24     The commissioner of health shall adopt emergency or 
  3.25  permanent rules to implement this section or to amend the 
  3.26  emergency rules for granting exceptions to the moratorium on 
  3.27  nursing homes under section 144A.073.  The authority to adopt 
  3.28  emergency rules continues to December 30, 1992. 
  3.29     Sec. 2.  Minnesota Statutes 1994, section 144A.071, 
  3.30  subdivision 4a, is amended to read: 
  3.31     Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
  3.32  best interest of the state to ensure that nursing homes and 
  3.33  boarding care homes continue to meet the physical plant 
  3.34  licensing and certification requirements by permitting certain 
  3.35  construction projects.  Facilities should be maintained in 
  3.36  condition to satisfy the physical and emotional needs of 
  4.1   residents while allowing the state to maintain control over 
  4.2   nursing home expenditure growth. 
  4.3      The commissioner of health in coordination with the 
  4.4   commissioner of human services, may approve the renovation, 
  4.5   replacement, upgrading, or relocation of a nursing home or 
  4.6   boarding care home, under the following conditions: 
  4.7      (a) to license or certify beds in a new facility 
  4.8   constructed to replace a facility or to make repairs in an 
  4.9   existing facility that was destroyed or damaged after June 30, 
  4.10  1987, by fire, lightning, or other hazard provided:  
  4.11     (i) destruction was not caused by the intentional act of or 
  4.12  at the direction of a controlling person of the facility; 
  4.13     (ii) at the time the facility was destroyed or damaged the 
  4.14  controlling persons of the facility maintained insurance 
  4.15  coverage for the type of hazard that occurred in an amount that 
  4.16  a reasonable person would conclude was adequate; 
  4.17     (iii) the net proceeds from an insurance settlement for the 
  4.18  damages caused by the hazard are applied to the cost of the new 
  4.19  facility or repairs; 
  4.20     (iv) the new facility is constructed on the same site as 
  4.21  the destroyed facility or on another site subject to the 
  4.22  restrictions in section 144A.073, subdivision 5; 
  4.23     (v) the number of licensed and certified beds in the new 
  4.24  facility does not exceed the number of licensed and certified 
  4.25  beds in the destroyed facility; and 
  4.26     (vi) the commissioner determines that the replacement beds 
  4.27  are needed to prevent an inadequate supply of beds as defined in 
  4.28  subdivision 3, paragraph (a). 
  4.29  Project construction costs incurred for repairs authorized under 
  4.30  this clause shall not be considered in the dollar threshold 
  4.31  amount defined in subdivision 2; 
  4.32     (b) to license or certify beds that are moved from one 
  4.33  location to another within a nursing home facility, provided the 
  4.34  total costs of remodeling performed in conjunction with the 
  4.35  relocation of beds does not exceed 25 percent of the appraised 
  4.36  value of the facility or $500,000, whichever is less; 
  5.1      (c) to license or certify beds in a project recommended for 
  5.2   approval under section 144A.073; 
  5.3      (d) to license or certify beds that are moved from an 
  5.4   existing state nursing home to a different state facility, 
  5.5   provided there is no net increase in the number of state nursing 
  5.6   home beds; 
  5.7      (e) to certify and license as nursing home beds boarding 
  5.8   care beds in a certified boarding care facility if the beds meet 
  5.9   the standards for nursing home licensure, or in a facility that 
  5.10  was granted an exception to the moratorium under section 
  5.11  144A.073, and if the cost of any remodeling of the facility does 
  5.12  not exceed 25 percent of the appraised value of the facility or 
  5.13  $500,000, whichever is less.  If boarding care beds are licensed 
  5.14  as nursing home beds, the number of boarding care beds in the 
  5.15  facility must not increase beyond the number remaining at the 
  5.16  time of the upgrade in licensure.  The provisions contained in 
  5.17  section 144A.073 regarding the upgrading of the facilities do 
  5.18  not apply to facilities that satisfy these requirements; 
  5.19     (f) to license and certify up to 40 beds transferred from 
  5.20  an existing facility owned and operated by the Amherst H. Wilder 
  5.21  Foundation in the city of St. Paul to a new unit at the same 
  5.22  location as the existing facility that will serve persons with 
  5.23  Alzheimer's disease and other related disorders.  The transfer 
  5.24  of beds may occur gradually or in stages, provided the total 
  5.25  number of beds transferred does not exceed 40.  At the time of 
  5.26  licensure and certification of a bed or beds in the new unit, 
  5.27  the commissioner of health shall delicense and decertify the 
  5.28  same number of beds in the existing facility.  As a condition of 
  5.29  receiving a license or certification under this clause, the 
  5.30  facility must make a written commitment to the commissioner of 
  5.31  human services that it will not seek to receive an increase in 
  5.32  its property-related payment rate as a result of the transfers 
  5.33  allowed under this paragraph; 
  5.34     (g) to license and certify nursing home beds to replace 
  5.35  currently licensed and certified boarding care beds which may be 
  5.36  located either in a remodeled or renovated boarding care or 
  6.1   nursing home facility or in a remodeled, renovated, newly 
  6.2   constructed, or replacement nursing home facility within the 
  6.3   identifiable complex of health care facilities in which the 
  6.4   currently licensed boarding care beds are presently located, 
  6.5   provided that the number of boarding care beds in the facility 
  6.6   or complex are decreased by the number to be licensed as nursing 
  6.7   home beds and further provided that, if the total costs of new 
  6.8   construction, replacement, remodeling, or renovation exceed ten 
  6.9   percent of the appraised value of the facility or $200,000, 
  6.10  whichever is less, the facility makes a written commitment to 
  6.11  the commissioner of human services that it will not seek to 
  6.12  receive an increase in its property-related payment rate by 
  6.13  reason of the new construction, replacement, remodeling, or 
  6.14  renovation.  The provisions contained in section 144A.073 
  6.15  regarding the upgrading of facilities do not apply to facilities 
  6.16  that satisfy these requirements; 
  6.17     (h) to license as a nursing home and certify as a nursing 
  6.18  facility a facility that is licensed as a boarding care facility 
  6.19  but not certified under the medical assistance program, but only 
  6.20  if the commissioner of human services certifies to the 
  6.21  commissioner of health that licensing the facility as a nursing 
  6.22  home and certifying the facility as a nursing facility will 
  6.23  result in a net annual savings to the state general fund of 
  6.24  $200,000 or more; 
  6.25     (i) to certify, after September 30, 1992, and prior to July 
  6.26  1, 1993, existing nursing home beds in a facility that was 
  6.27  licensed and in operation prior to January 1, 1992; 
  6.28     (j) to license and certify new nursing home beds to replace 
  6.29  beds in a facility condemned as part of an economic 
  6.30  redevelopment plan in a city of the first class, provided the 
  6.31  new facility is located within one mile of the site of the old 
  6.32  facility.  Operating and property costs for the new facility 
  6.33  must be determined and allowed under existing reimbursement 
  6.34  rules; 
  6.35     (k) to license and certify up to 20 new nursing home beds 
  6.36  in a community-operated hospital and attached convalescent and 
  7.1   nursing care facility with 40 beds on April 21, 1991, that 
  7.2   suspended operation of the hospital in April 1986.  The 
  7.3   commissioner of human services shall provide the facility with 
  7.4   the same per diem property-related payment rate for each 
  7.5   additional licensed and certified bed as it will receive for its 
  7.6   existing 40 beds; 
  7.7      (l) to license or certify beds in renovation, replacement, 
  7.8   or upgrading projects as defined in section 144A.073, 
  7.9   subdivision 1, so long as the cumulative total costs of the 
  7.10  facility's remodeling projects do not exceed 25 percent of the 
  7.11  appraised value of the facility or $500,000, whichever is less; 
  7.12     (m) to license and certify beds that are moved from one 
  7.13  location to another for the purposes of converting up to five 
  7.14  four-bed wards to single or double occupancy rooms in a nursing 
  7.15  home that, as of January 1, 1993, was county-owned and had a 
  7.16  licensed capacity of 115 beds; 
  7.17     (n) to allow a facility that on April 16, 1993, was a 
  7.18  106-bed licensed and certified nursing facility located in 
  7.19  Minneapolis to layaway all of its licensed and certified nursing 
  7.20  home beds.  These beds may be relicensed and recertified in a 
  7.21  newly-constructed teaching nursing home facility affiliated with 
  7.22  a teaching hospital upon approval by the legislature.  The 
  7.23  proposal must be developed in consultation with the interagency 
  7.24  committee on long-term care planning.  The beds on layaway 
  7.25  status shall have the same status as voluntarily delicensed and 
  7.26  decertified beds, except that beds on layaway status remain 
  7.27  subject to the surcharge in section 256.9657.  This layaway 
  7.28  provision expires July 1, 1995; 
  7.29     (o) to allow a project which will be completed in 
  7.30  conjunction with an approved moratorium exception project for a 
  7.31  nursing home in southern Cass county and which is directly 
  7.32  related to that portion of the facility that must be repaired, 
  7.33  renovated, or replaced, to correct an emergency plumbing problem 
  7.34  for which a state correction order has been issued and which 
  7.35  must be corrected by August 31, 1993; 
  7.36     (p) to allow a facility that on April 16, 1993, was a 
  8.1   368-bed licensed and certified nursing facility located in 
  8.2   Minneapolis to layaway, upon 30 days prior written notice to the 
  8.3   commissioner, up to 30 of the facility's licensed and certified 
  8.4   beds by converting three-bed wards to single or double 
  8.5   occupancy.  Beds on layaway status shall have the same status as 
  8.6   voluntarily delicensed and decertified beds except that beds on 
  8.7   layaway status remain subject to the surcharge in section 
  8.8   256.9657, remain subject to the license application and renewal 
  8.9   fees under section 144A.07 and shall be subject to a $100 per 
  8.10  bed reactivation fee.  In addition, at any time within three 
  8.11  years of the effective date of the layaway, the beds on layaway 
  8.12  status may be: 
  8.13     (1) relicensed and recertified upon relocation and 
  8.14  reactivation of some or all of the beds to an existing licensed 
  8.15  and certified facility or facilities located in Pine River, 
  8.16  Brainerd, or International Falls; provided that the total 
  8.17  project construction costs related to the relocation of beds 
  8.18  from layaway status for any facility receiving relocated beds 
  8.19  may not exceed the dollar threshold provided in subdivision 2 
  8.20  unless the construction project has been approved through the 
  8.21  moratorium exception process under section 144A.073; 
  8.22     (2) relicensed and recertified, upon reactivation of some 
  8.23  or all of the beds within the facility which placed the beds in 
  8.24  layaway status, if the commissioner has determined a need for 
  8.25  the reactivation of the beds on layaway status. 
  8.26     The property-related payment rate of a facility placing 
  8.27  beds on layaway status must be adjusted by the incremental 
  8.28  change in its rental per diem after recalculating the rental per 
  8.29  diem as provided in section 256B.431, subdivision 3a, paragraph 
  8.30  (d).  The property-related payment rate for a facility 
  8.31  relicensing and recertifying beds from layaway status must be 
  8.32  adjusted by the incremental change in its rental per diem after 
  8.33  recalculating its rental per diem using the number of beds after 
  8.34  the relicensing to establish the facility's capacity day 
  8.35  divisor, which shall be effective the first day of the month 
  8.36  following the month in which the relicensing and recertification 
  9.1   became effective.  Any beds remaining on layaway status more 
  9.2   than three years after the date the layaway status became 
  9.3   effective must be removed from layaway status and immediately 
  9.4   delicensed and decertified; 
  9.5      (q) to license and certify beds in a renovation and 
  9.6   remodeling project to convert 13 three-bed wards into 13 two-bed 
  9.7   rooms and 13 single-bed rooms, expand space, and add 
  9.8   improvements in a nursing home that, as of January 1, 1994, met 
  9.9   the following conditions:  the nursing home was located in 
  9.10  Ramsey county; was not owned by a hospital corporation; had a 
  9.11  licensed capacity of 64 beds; and had been ranked among the top 
  9.12  15 applicants by the 1993 moratorium exceptions advisory review 
  9.13  panel.  The total project construction cost estimate for this 
  9.14  project must not exceed the cost estimate submitted in 
  9.15  connection with the 1993 moratorium exception process; or 
  9.16     (r) to license and certify beds in a renovation and 
  9.17  remodeling project to convert 12 four-bed wards into 24 two-bed 
  9.18  rooms, expand space, and add improvements in a nursing home 
  9.19  that, as of January 1, 1994, met the following conditions:  the 
  9.20  nursing home was located in Ramsey county; had a licensed 
  9.21  capacity of 154 beds; and had been ranked among the top 15 
  9.22  applicants by the 1993 moratorium exceptions advisory review 
  9.23  panel.  The total project construction cost estimate for this 
  9.24  project must not exceed the cost estimate submitted in 
  9.25  connection with the 1993 moratorium exception process. 
  9.26     Sec. 3.  Minnesota Statutes 1994, section 144A.071, is 
  9.27  amended by adding a subdivision to read: 
  9.28     Subd. 5a.  [COST ESTIMATE OF A MORATORIUM EXCEPTION 
  9.29  PROJECT.] For the purposes of this section and section 144A.073, 
  9.30  the cost estimate of a moratorium exception project shall 
  9.31  include the effects of the proposed project on the costs of the 
  9.32  state subsidy for community-based services, nursing services, 
  9.33  and housing in institutional and noninstitutional settings.  The 
  9.34  commissioner of health, in cooperation with the commissioner of 
  9.35  human services, shall define the method for estimating these 
  9.36  costs in the permanent rule implementing section 144A.073.  The 
 10.1   commissioner of human services shall prepare an estimate of the 
 10.2   total state annual long-term costs of each moratorium exception 
 10.3   proposal. 
 10.4      Sec. 4.  Minnesota Statutes 1994, section 144A.073, 
 10.5   subdivision 1, is amended to read: 
 10.6      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 10.7   section, the following terms have the meanings given them: 
 10.8      (a) "Conversion" means the relocation of a nursing home bed 
 10.9   from a nursing home to an attached hospital. 
 10.10     (b) "Relocation" means the movement of licensed nursing 
 10.11  home beds or certified boarding care beds as permitted under 
 10.12  subdivision 4, clause (3), and subdivision 5. 
 10.13     (c) "Renovation" means extensive remodeling of, or 
 10.14  construction of an addition to, a facility on an existing site 
 10.15  with a total cost exceeding ten percent of the appraised value 
 10.16  of the facility or $200,000, whichever is less. 
 10.17     ~~(c)~~ (d) "Replacement" means the demolition ~~or~~, delicensure, 
 10.18  reconstruction, or construction of an addition to all or part of 
 10.19  an existing facility. 
 10.20     ~~(d)~~ (e) "Upgrading" means a change in the level of 
 10.21  licensure of a bed from a boarding care bed to a nursing home 
 10.22  bed in a certified boarding care facility. 
 10.23     Sec. 5.  Minnesota Statutes 1994, section 144A.073, 
 10.24  subdivision 2, is amended to read: 
 10.25     Subd. 2.  [REQUEST FOR PROPOSALS.] At the ~~intervals~~ 
 10.26  ~~specified in rules~~ authorization by the legislature of 
 10.27  additional medical assistance expenditures for exceptions to the 
 10.28  moratorium on nursing homes, the interagency committee shall 
 10.29  publish in the State Register a request for proposals for 
 10.30  nursing home projects to be licensed or certified under section 
 10.31  144A.071, subdivision 4a, clause (c).  The public notice of this 
 10.32  funding and the request for proposals must specify how the 
 10.33  approval criteria will be prioritized by the advisory review 
 10.34  panel, the interagency long-term care planning committee, and 
 10.35  the commissioner.  The notice must describe the information that 
 10.36  must accompany a request and state that proposals must be 
 11.1   submitted to the interagency committee within 90 days of the 
 11.2   date of publication.  The notice must include the amount of the 
 11.3   legislative appropriation available for the additional costs to 
 11.4   the medical assistance program of projects approved under this 
 11.5   section.  If no money is appropriated for a year, ~~the notice for~~ 
 11.6   ~~that year must state that proposals will not be requested~~ 
 11.7   ~~because no appropriations were made~~ the interagency committee 
 11.8   shall publish a notice to that effect, and no proposals shall be 
 11.9   requested.  If money is appropriated, the interagency committee 
 11.10  shall initiate the application and review process described in 
 11.11  this section at least twice each biennium and up to four times 
 11.12  each biennium, according to dates established by rule.  
 11.13  Authorized funds shall be allocated proportionally to the number 
 11.14  of processes.  Funds not encumbered by an earlier process within 
 11.15  a biennium shall carry forward to subsequent iterations of the 
 11.16  process.  Authorization for expenditures does not carry forward 
 11.17  into the following biennium.  To be considered for approval, a 
 11.18  proposal must include the following information: 
 11.19     (1) whether the request is for renovation, replacement, 
 11.20  upgrading, ~~or~~ conversion, or relocation; 
 11.21     (2) a description of the problem the project is designed to 
 11.22  address; 
 11.23     (3) a description of the proposed project; 
 11.24     (4) an analysis of projected costs of the nursing facility 
 11.25  proposal, including initial construction and remodeling costs~~,~~; 
 11.26  site preparation costs~~,~~; financing costs, including the current 
 11.27  estimated long-term financing costs of the proposal, which 
 11.28  consists of the amount and sources of money, reserves if 
 11.29  required under the proposed funding mechanism, annual payments 
 11.30  scheduled, interest rates, length of term, closing costs and 
 11.31  fees, insurance costs, and any completed marketing study or 
 11.32  underwriting review; and estimated operating costs during the 
 11.33  first two years after completion of the project; 
 11.34     (5) for proposals involving replacement of all or part of a 
 11.35  facility, the proposed location of the replacement facility and 
 11.36  an estimate of the cost of addressing the problem through 
 12.1   renovation; 
 12.2      (6) for proposals involving renovation, an estimate of the 
 12.3   cost of addressing the problem through replacement; 
 12.4      (7) the proposed timetable for commencing construction and 
 12.5   completing the project; ~~and~~ 
 12.6      (8) a statement of any licensure or certification issues, 
 12.7   such as certification survey deficiencies; 
 12.8      (9) the proposed alternative disposition of current 
 12.9   residents if beds are to be closed so that the department of 
 12.10  human services can estimate the total costs of a proposal; and 
 12.11     (10) other information required by permanent rule of the 
 12.12  commissioner of health in accordance with subdivisions 4 and 8. 
 12.13     Sec. 6.  Minnesota Statutes 1994, section 144A.073, 
 12.14  subdivision 3, is amended to read: 
 12.15     Subd. 3.  [REVIEW AND APPROVAL OF PROPOSALS.] Within the 
 12.16  limits of money specifically appropriated to the medical 
 12.17  assistance program for this purpose, the interagency long-term 
 12.18  care planning committee may recommend that the commissioner of 
 12.19  health grant exceptions to the nursing home licensure or 
 12.20  certification moratorium for proposals that satisfy the 
 12.21  requirements of this section.  The interagency committee shall 
 12.22  appoint an advisory review panel composed of representatives of 
 12.23  consumers and providers to review proposals and provide comments 
 12.24  and recommendations to the committee.  The commissioners of 
 12.25  human services and health shall provide staff and technical 
 12.26  assistance to the committee for the review and analysis of 
 12.27  proposals.  The interagency committee shall hold a public 
 12.28  hearing before submitting recommendations to the commissioner of 
 12.29  health on project requests.  The committee shall submit 
 12.30  recommendations within 150 days of the date of the publication 
 12.31  of the notice~~, based on a comparison and ranking of proposals~~ 
 12.32  ~~using the criteria in subdivision 4~~.  The commissioner of health 
 12.33  shall approve or disapprove a project within 30 days after 
 12.34  receiving the committee's recommendations.  The advisory review 
 12.35  panel, the committee, and the commissioner of health shall base 
 12.36  their recommendations, approvals, or disapprovals on a 
 13.1   comparison and ranking of proposals using only the criteria in 
 13.2   subdivision 4 and in emergency and permanent rules adopted by 
 13.3   the commissioner.  The cost to the medical assistance program of 
 13.4   the proposals approved must be within the limits of the 
 13.5   appropriations specifically made for this purpose.  Approval of 
 13.6   a proposal expires 18 months after approval by the commissioner 
 13.7   of health unless the facility has commenced construction as 
 13.8   defined in section 144A.071, subdivision 1a, paragraph (d).  The 
 13.9   committee's report to the legislature, as required under section 
 13.10  144A.31, must include the projects approved, the criteria used 
 13.11  to recommend proposals for approval, and the estimated costs of 
 13.12  the projects, including the costs of initial construction and 
 13.13  remodeling, and the estimated operating costs during the first 
 13.14  two years after the project is completed. 
 13.15     Sec. 7.  Minnesota Statutes 1994, section 144A.073, is 
 13.16  amended by adding a subdivision to read: 
 13.17     Subd. 3c.  [COST NEUTRAL RELOCATION 
 13.18  PROJECTS.] Notwithstanding subdivision 3, the interagency 
 13.19  committee may at any time accept proposals or amendments to 
 13.20  proposals previously approved under this section for relocations 
 13.21  that are cost neutral with respect to state costs as defined in 
 13.22  section 144A.071, subdivision 5a.  The committee shall review 
 13.23  these applications and make recommendations to the commissioner 
 13.24  within 90 days.  The committee must evaluate proposals according 
 13.25  to subdivision 4, clauses (1), (2), and (3), and other criteria 
 13.26  established in rule.  The commissioner shall approve or 
 13.27  disapprove a project within 30 days of receiving the committee's 
 13.28  recommendation.  Proposals and amendments approved under this 
 13.29  subdivision are not subject to the six-mile limit in subdivision 
 13.30  5, paragraph (e), and an amendment under this section to a 
 13.31  proposal originally approved before April 1, 1995, involving the 
 13.32  replacement of 102 licensed and certified beds may include the 
 13.33  relocation of 50 percent of the beds to each of two other 
 13.34  locations.  A project previously approved under this section 
 13.35  that applies for and is granted an amendment under this 
 13.36  subdivision prior to July 1, 1995, shall have an additional six 
 14.1   months to commence construction beyond the limit established in 
 14.2   subdivision 3b. 
 14.3      Sec. 8.  Minnesota Statutes 1994, section 144A.073, 
 14.4   subdivision 4, is amended to read: 
 14.5      Subd. 4.  [CRITERIA FOR REVIEW.] ~~(a)~~ The following criteria 
 14.6   ~~must~~ shall be used in a consistent manner to compare ~~and~~, 
 14.7   evaluate, and rank all proposals submitted.  Except for the 
 14.8   criteria specified in clause (3), the application of criteria 
 14.9   listed under this subdivision shall not reflect any distinction 
 14.10  based on the geographic location of the proposed project: 
 14.11     (1) ~~the extent to which the average occupancy rate of the~~ 
 14.12  ~~facility supports the need for the proposed project;~~ 
 14.13     ~~(2) the extent to which the average occupancy rate of all~~ 
 14.14  ~~facilities in the county in which the applicant is located,~~ 
 14.15  ~~together with all contiguous Minnesota counties, supports the~~ 
 14.16  ~~need for the proposed project;~~ 
 14.17     ~~(3)~~ the extent to which the proposal furthers state 
 14.18  long-term care goals, including the goals stated in section 
 14.19  144A.31, and including the goal of enhancing the availability 
 14.20  and use of alternative care services and the goal of reducing 
 14.21  the number of long-term care resident rooms with more than two 
 14.22  beds; 
 14.23     ~~(4) the cost-effectiveness of the proposal, including~~ (2) 
 14.24  the proposal's long-term effects on ~~the~~ state costs ~~of the~~ 
 14.25  ~~medical assistance program, as determined by the commissioner of~~ 
 14.26  ~~human services; and~~ including the cost estimate of the project 
 14.27  according to section 144A.071, subdivision 5a; 
 14.28     ~~(5) other factors developed in rule by the commissioner of~~ 
 14.29  ~~health that evaluate and assess how the proposed project will~~ 
 14.30  ~~further promote or protect the health, safety, comfort,~~ 
 14.31  ~~treatment, or well-being of the facility's residents.~~ 
 14.32     ~~(b) In addition to the criteria in paragraph (a), the~~ 
 14.33  ~~following criteria must be used to evaluate, compare, and rank~~ 
 14.34  ~~proposals involving renovation or replacement:~~ 
 14.35     (3) the extent to which the proposal promotes equitable 
 14.36  access to long-term care services in nursing homes through 
 15.1   redistribution of the nursing home bed supply, as measured by 
 15.2   the number of beds relative to the population 85 or older, 
 15.3   projected to the year 2000 by the state demographer, and 
 15.4   according to items (i) through (iv): 
 15.5      (i) reduce beds in counties where the supply is relatively 
 15.6   high, and increase beds in counties where the supply is 
 15.7   relatively low; 
 15.8      (ii) adjust the bed supply so as to create the greatest 
 15.9   benefits in improving the distribution of beds; 
 15.10     (iii) adjust the existing bed supply (A) in counties in the 
 15.11  seven-county metropolitan area so that the bed supply in the 
 15.12  counties, together with all contiguous Minnesota counties, moves 
 15.13  toward the statewide mean and (B) in other counties so that the 
 15.14  supply in the 50-mile radius surrounding the project under 
 15.15  review moves toward the statewide mean; and 
 15.16     (iv) adjust the existing bed supply so that the 
 15.17  distribution of beds as projected for the year 2020 would be 
 15.18  consistent with projected need; 
 15.19     ~~(1)~~ (4) the extent to which the project improves conditions 
 15.20  that affect the health or safety of residents, such as narrow 
 15.21  corridors, narrow door frames, unenclosed fire exits, and wood 
 15.22  frame construction, and similar provisions contained in fire and 
 15.23  life safety codes and licensure and certification rules; 
 15.24     ~~(2)~~ (5) the extent to which the project improves conditions 
 15.25  that affect the comfort or quality of life of residents in a 
 15.26  facility or the ability of the facility to provide efficient 
 15.27  care, such as a relatively high number of residents in a room; 
 15.28  inadequate lighting or ventilation; poor access to bathing or 
 15.29  toilet facilities; a lack of available ancillary space for 
 15.30  dining rooms, day rooms, or rooms used for other activities; 
 15.31  problems relating to heating, cooling, or energy efficiency; 
 15.32  inefficient location of nursing stations; narrow corridors; or 
 15.33  other provisions contained in the licensure and certification 
 15.34  rules; 
 15.35     (6) the extent to which the applicant demonstrates the 
 15.36  delivery of quality care to residents as evidenced by the two 
 16.1   most recent state agency certification surveys and the 
 16.2   applicants' response to those surveys; 
 16.3      (7) the extent to which the project removes the need for 
 16.4   waivers or variances previously granted by either the licensing 
 16.5   agency, certifying agency, fire marshal, or local government 
 16.6   entity; and 
 16.7      (8) other factors that may be developed in permanent rule 
 16.8   by the commissioner of health that evaluate and assess how the 
 16.9   proposed project will further promote or protect the health, 
 16.10  safety, comfort, treatment, or well-being of the facility's 
 16.11  residents. 
 16.12     Sec. 9.  Minnesota Statutes 1994, section 144A.073, 
 16.13  subdivision 8, is amended to read: 
 16.14     Subd. 8.  [RULEMAKING.] The commissioner of health shall 
 16.15  adopt ~~emergency or~~ permanent rules to implement this 
 16.16  section.  The permanent rules must be in accordance with and 
 16.17  implement only the criteria listed in this section.  The 
 16.18  authority to adopt ~~emergency~~ permanent rules continues until 
 16.19  ~~December 30, 1988~~ July 1, 1996.  
 16.20     Sec. 10.  [REPEALER.] 
 16.21     Minnesota Statutes 1994, section 144A.073, subdivision 3a, 
 16.22  is repealed. 
 16.23     Sec. 11.  [EFFECTIVE DATE.] 
 16.24     Sections 3, 4, 7, and 8 are effective the day following 
 16.25  final enactment.