1.1                          A bill for an act 
  1.2             relating to human services; changing elderly and 
  1.3             disabled health care; establishing a nursing facility 
  1.4             conversion demonstration project; changing provisions 
  1.5             for regional treatment centers; creating a 
  1.6             demonstration project for the disabled; amending 
  1.7             Minnesota Statutes 1996, sections 62E.14, by adding a 
  1.8             subdivision; 144.0721, subdivision 3; 245.652, 
  1.9             subdivisions 1, 2, and 4; 246.0135; 246.02, 
  1.10            subdivision 2; 252.025, subdivisions 1, 4, and by 
  1.11            adding a subdivision; 252.32, subdivisions 1a, 3, 3a, 
  1.12            3c, and 5; 254.04; 254B.02, subdivision 3; 254B.03, 
  1.13            subdivision 1; 256.476, subdivisions 2, 3, 4, and 5; 
  1.14            256B.0625, subdivision 15; 256B.0911, subdivision 7; 
  1.15            256B.0913, subdivisions 5 and 15; 256B.0915, 
  1.16            subdivision 3, and by adding a subdivision; 256B.421, 
  1.17            subdivision 1; 256B.431, subdivision 25, and by adding 
  1.18            a subdivision; 256B.434, subdivisions 3 and 4; 
  1.19            256B.49, subdivision 1; 256B.69, subdivision 4, and by 
  1.20            adding subdivisions; 256D.03, subdivision 3b; 256I.04, 
  1.21            subdivision 2a; 256I.05, subdivision 1a; 469.155, 
  1.22            subdivision 4; and Laws 1995, chapter 207, article 8, 
  1.23            section 41, subdivision 2; proposing coding for new 
  1.24            law in Minnesota Statutes, chapter 256B; repealing 
  1.25            Minnesota Statutes 1996, sections 252.32, subdivision 
  1.26            4; 256B.501, subdivision 5c; and 469.154, subdivision 
  1.27            6. 
  1.28  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.29                             ARTICLE 1 
  1.30                CONTINUING CARE FOR ELDERLY PERSONS 
  1.31     Section 1.  Minnesota Statutes 1996, section 144.0721, 
  1.32  subdivision 3, is amended to read: 
  1.33     Subd. 3.  [LEVEL OF CARE CRITERIA; MODIFICATIONS.] The 
  1.34  commissioner shall seek appropriate federal waivers to implement 
  1.35  this subdivision.  Notwithstanding any laws or rules to the 
  1.36  contrary, effective July 1, ~~1996~~ 1997, Minnesota's level of care 
  2.1   criteria for admission of any person to a nursing facility 
  2.2   licensed under chapter 144A, or a boarding care home licensed 
  2.3   under sections 144.50 to 144.56, are modified as follows: 
  2.4      (1) the resident reimbursement classifications and 
  2.5   terminology established by rule under sections 256B.41 to 
  2.6   256B.48 are the basis for applying the level of care criteria 
  2.7   changes; 
  2.8      (2) an applicant to a certified nursing facility or 
  2.9   certified boarding care home who is dependent in zero, one, or 
  2.10  two case mix activities of daily living, is classified as a case 
  2.11  mix A, and is independent in orientation and self-preservation, 
  2.12  is reclassified as a high function class A person and is not 
  2.13  eligible for admission to Minnesota certified nursing facilities 
  2.14  or certified boarding care homes; 
  2.15     (3) applicants in clause (2) who are dependent in one or 
  2.16  two case mix activities of daily living, who are eligible for 
  2.17  assistance as determined under sections 256B.055 and 256B.056 or 
  2.18  meet eligibility criteria for section 256B.0913 are eligible for 
  2.19  a service allowance under section 256B.0913, subdivision 15, and 
  2.20  are not eligible for services under sections 256B.0913, 
  2.21  subdivisions 1 to 14, and 256B.0915.  ~~Applicants in clause (2)~~ 
  2.22  ~~shall have the option of receiving personal care assistant and~~ 
  2.23  ~~home health aide services under section 256B.0625, if otherwise~~ 
  2.24  ~~eligible, or of receiving the service allowance option, but not~~ 
  2.25  ~~both.~~  Applicants in clause (2) shall have the option of 
  2.26  residing in community settings under sections 256I.01 to 
  2.27  256I.06, if otherwise eligible, or receiving the services 
  2.28  allowance option under section 256B.0913, subdivision 15, but 
  2.29  not both; 
  2.30     (4) residents of a certified nursing facility or certified 
  2.31  boarding care home who were admitted before July 1, ~~1996~~ 1997, 
  2.32  or individuals receiving services under section 256B.0913, 
  2.33  subdivisions 1 to 14, or 256B.0915, before July 1, ~~1996~~ 1997, 
  2.34  are not subject to the new level of care criteria unless the 
  2.35  resident is discharged home or to another service setting other 
  2.36  than a certified nursing facility or certified boarding care 
  3.1   home and applies for admission to a certified nursing facility 
  3.2   or certified boarding care home after June 30, ~~1996~~ 1997; 
  3.3      (5) the local screening teams under section 256B.0911 ~~shall~~ 
  3.4   ~~make preliminary determinations concerning~~ may determine the 
  3.5   existence of extraordinary circumstances which render 
  3.6   nonadmission to a certified nursing or certified boarding care 
  3.7   home a serious threat to the health and safety of applicants in 
  3.8   clause (2) and may authorize ~~an~~ admission ~~for a short-term stay~~ 
  3.9   ~~at~~ to a certified nursing facility or certified boarding care 
  3.10  home in accordance with a treatment and discharge plan ~~for up to~~ 
  3.11  ~~30 days per year~~; and 
  3.12     (6) an individual deemed ineligible for admission to 
  3.13  Minnesota certified nursing facilities is entitled to an appeal 
  3.14  under section 256.045, subdivision 3. 
  3.15     If the commissioner determines upon appeal that an 
  3.16  applicant in clause (2) presents extraordinary circumstances 
  3.17  including but not limited to the absence or inaccessibility of 
  3.18  suitable alternatives, contravening family circumstances, ~~and~~ or 
  3.19  protective service issues, the applicant may be eligible for 
  3.20  admission to Minnesota certified nursing facilities or certified 
  3.21  boarding care homes. 
  3.22     Sec. 2.  Minnesota Statutes 1996, section 256.476, 
  3.23  subdivision 2, is amended to read: 
  3.24     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
  3.25  following terms have the meanings given them: 
  3.26     (a) "County board" means the county board of commissioners 
  3.27  for the county of financial responsibility as defined in section 
  3.28  256G.02, subdivision 4, or its designated representative.  When 
  3.29  a human services board has been established under sections 
  3.30  402.01 to 402.10, it shall be considered the county board for 
  3.31  the purposes of this section. 
  3.32     (b) "Family" means the person's birth parents, adoptive 
  3.33  parents or stepparents, siblings or stepsiblings, children or 
  3.34  stepchildren, grandparents, grandchildren, niece, nephew, aunt, 
  3.35  uncle, or spouse.  For the purposes of this section, a family 
  3.36  member is at least 18 years of age. 
  4.1      (c) "Functional limitations" means the long-term inability 
  4.2   to perform an activity or task in one or more areas of major 
  4.3   life activity, including self-care, understanding and use of 
  4.4   language, learning, mobility, self-direction, and capacity for 
  4.5   independent living.  For the purpose of this section, the 
  4.6   inability to perform an activity or task results from a mental, 
  4.7   emotional, psychological, sensory, or physical disability, 
  4.8   condition, or illness. 
  4.9      (d) "Informed choice" means a voluntary decision made by 
  4.10  the person or the person's legal representative, after becoming 
  4.11  familiarized with the alternatives to: 
  4.12     (1) select a preferred alternative from a number of 
  4.13  feasible alternatives; 
  4.14     (2) select an alternative which may be developed in the 
  4.15  future; and 
  4.16     (3) refuse any or all alternatives. 
  4.17     (e) "Local agency" means the local agency authorized by the 
  4.18  county board to carry out the provisions of this section. 
  4.19     (f) "Person" or "persons" means a person or persons meeting 
  4.20  the eligibility criteria in subdivision 3. 
  4.21     (g) ~~"Responsible individual"~~ "Authorized representative" 
  4.22  means an individual designated by the person or their legal 
  4.23  representative to act on their behalf.  This individual may be a 
  4.24  family member, guardian, representative payee, or other 
  4.25  individual designated by the person or their legal 
  4.26  representative, if any, to assist in purchasing and arranging 
  4.27  for supports.  For the purposes of this section, ~~a responsible~~ 
  4.28  ~~individual~~ an authorized representative is at least 18 years of 
  4.29  age. 
  4.30     (h) "Screening" means the screening of a person's service 
  4.31  needs under sections 256B.0911 and 256B.092. 
  4.32     (i) "Supports" means services, care, aids, home 
  4.33  modifications, or assistance purchased by the person or the 
  4.34  person's family.  Examples of supports include respite care, 
  4.35  assistance with daily living, and adaptive aids.  For the 
  4.36  purpose of this section, notwithstanding the provisions of 
  5.1   section 144A.43, supports purchased under the consumer support 
  5.2   program are not considered home care services. 
  5.3      (j) "Program of origination" means the program the 
  5.4   individual transferred from when approved for the consumer 
  5.5   support grant program. 
  5.6      Sec. 3.  Minnesota Statutes 1996, section 256.476, 
  5.7   subdivision 3, is amended to read: 
  5.8      Subd. 3.  [ELIGIBILITY TO APPLY FOR GRANTS.] (a) A person 
  5.9   is eligible to apply for a consumer support grant if the person 
  5.10  meets all of the following criteria: 
  5.11     (1) the person is eligible for and has been approved to 
  5.12  receive services under medical assistance as determined under 
  5.13  sections 256B.055 and 256B.056 or the person is eligible for and 
  5.14  has been approved to receive services under alternative care 
  5.15  services as determined under section 256B.0913 or the person has 
  5.16  been approved to receive a grant under the developmental 
  5.17  disability family support program under section 252.32; 
  5.18     (2) the person is able to direct and purchase the person's 
  5.19  own care and supports, or the person has a family member, legal 
  5.20  representative, or other ~~responsible individual~~ authorized 
  5.21  representative who can purchase and arrange supports on the 
  5.22  person's behalf; 
  5.23     (3) the person has functional limitations, requires ongoing 
  5.24  supports to live in the community, and is at risk of or would 
  5.25  continue institutionalization without such supports; and 
  5.26     (4) the person will live in a home.  For the purpose of 
  5.27  this section, "home" means the person's own home or home of a 
  5.28  person's family member.  These homes are natural home settings 
  5.29  and are not licensed by the department of health or human 
  5.30  services. 
  5.31     (b) Persons may not concurrently receive a consumer support 
  5.32  grant if they are: 
  5.33     (1) receiving home and community-based services under 
  5.34  United States Code, title 42, section 1396h(c); personal care 
  5.35  attendant and home health aide services under section 256B.0625; 
  5.36  a developmental disability family support grant; or alternative 
  6.1   care services under section 256B.0913; or 
  6.2      (2) residing in an institutional or congregate care setting.
  6.3      (c) A person or person's family receiving a consumer 
  6.4   support grant shall not be charged a fee or premium by a local 
  6.5   agency for participating in the program.  A person or person's 
  6.6   family is not eligible for a consumer support grant if their 
  6.7   income is at a level where they are required to pay a parental 
  6.8   fee under sections 252.27, 256B.055, subdivision 12, and 256B.14 
  6.9   and rules adopted under those sections for medical assistance 
  6.10  services to a disabled child living with at least one parent.  
  6.11     (d) The commissioner may limit the participation of nursing 
  6.12  facility residents, residents of intermediate care facilities 
  6.13  for persons with mental retardation, and the recipients of 
  6.14  services from federal waiver programs in the consumer support 
  6.15  grant program if the participation of these individuals will 
  6.16  result in an increase in the cost to the state. 
  6.17     (e) The commissioner shall establish a budgeted 
  6.18  appropriation each fiscal year for the consumer support grant 
  6.19  program.  The number of individuals participating in the program 
  6.20  will be adjusted so the total amount allocated to counties does 
  6.21  not exceed the amount of the budgeted appropriation.  The 
  6.22  budgeted appropriation will be adjusted annually to accommodate 
  6.23  changes in demand for the consumer support grants. 
  6.24     Sec. 4.  Minnesota Statutes 1996, section 256.476, 
  6.25  subdivision 4, is amended to read: 
  6.26     Subd. 4.  [SUPPORT GRANTS; CRITERIA AND LIMITATIONS.] (a) A 
  6.27  county board may choose to participate in the consumer support 
  6.28  grant program.  If a county board chooses to participate in the 
  6.29  program, the local agency shall establish written procedures and 
  6.30  criteria to determine the amount and use of support grants.  
  6.31  These procedures must include, at least, the availability of 
  6.32  respite care, assistance with daily living, and adaptive aids.  
  6.33  The local agency may establish monthly or annual maximum amounts 
  6.34  for grants and procedures where exceptional resources may be 
  6.35  required to meet the health and safety needs of the person on a 
  6.36  time-limited basis, however, the total amount awarded to each 
  7.1   individual may not exceed the limits established in subdivision 
  7.2   5, paragraph (f). 
  7.3      (b) Support grants to a person or a person's family ~~may~~ 
  7.4   will be provided through a monthly subsidy ~~or lump sum~~ payment 
  7.5   ~~basis~~ and be in the form of cash, voucher, or direct county 
  7.6   payment to vendor.  Support grant amounts must be determined by 
  7.7   the local agency.  Each service and item purchased with a 
  7.8   support grant must meet all of the following criteria:  
  7.9      (1) it must be over and above the normal cost of caring for 
  7.10  the person if the person did not have functional limitations; 
  7.11     (2) it must be directly attributable to the person's 
  7.12  functional limitations; 
  7.13     (3) it must enable the person or the person's family to 
  7.14  delay or prevent out-of-home placement of the person; and 
  7.15     (4) it must be consistent with the needs identified in the 
  7.16  service plan, when applicable. 
  7.17     (c) Items and services purchased with support grants must 
  7.18  be those for which there are no other public or private funds 
  7.19  available to the person or the person's family.  Fees assessed 
  7.20  to the person or the person's family for health and human 
  7.21  services are not reimbursable through the grant. 
  7.22     (d) In approving or denying applications, the local agency 
  7.23  shall consider the following factors:  
  7.24     (1) the extent and areas of the person's functional 
  7.25  limitations; 
  7.26     (2) the degree of need in the home environment for 
  7.27  additional support; and 
  7.28     (3) the potential effectiveness of the grant to maintain 
  7.29  and support the person in the family environment or the person's 
  7.30  own home. 
  7.31     (e) At the time of application to the program or screening 
  7.32  for other services, the person or the person's family shall be 
  7.33  provided sufficient information to ensure an informed choice of 
  7.34  alternatives by the person, the person's legal representative, 
  7.35  if any, or the person's family.  The application shall be made 
  7.36  to the local agency and shall specify the needs of the person 
  8.1   and family, the form and amount of grant requested, the items 
  8.2   and services to be reimbursed, and evidence of eligibility for 
  8.3   medical assistance or alternative care program. 
  8.4      (f) Upon approval of an application by the local agency and 
  8.5   agreement on a support plan for the person or person's family, 
  8.6   the local agency shall make grants to the person or the person's 
  8.7   family.  The grant shall be in an amount for the direct costs of 
  8.8   the services or supports outlined in the service agreement.  
  8.9      (g) Reimbursable costs shall not include costs for 
  8.10  resources already available, such as special education classes, 
  8.11  day training and habilitation, case management, other services 
  8.12  to which the person is entitled, medical costs covered by 
  8.13  insurance or other health programs, or other resources usually 
  8.14  available at no cost to the person or the person's family. 
  8.15     (h) The state of Minnesota, the county boards participating 
  8.16  in the consumer support grant program, or the agencies acting on 
  8.17  behalf of the county boards in the implementation and 
  8.18  administration of the consumer support grant program shall not 
  8.19  be liable for damages, injuries, or liabilities sustained 
  8.20  through the purchase of support by the individual, the 
  8.21  individual's family, or the authorized representative under this 
  8.22  section with funds received through the consumer support grant 
  8.23  program.  Liabilities include but are not limited to:  workers' 
  8.24  compensation liability, the Federal Insurance Contributions Act 
  8.25  (FICA), or the Federal Unemployment Tax Act (FUTA). 
  8.26     Sec. 5.  Minnesota Statutes 1996, section 256.476, 
  8.27  subdivision 5, is amended to read: 
  8.28     Subd. 5.  [REIMBURSEMENT, ALLOCATIONS, AND REPORTING.] (a) 
  8.29  For the purpose of transferring persons to the consumer support 
  8.30  grant program from specific programs or services, such as the 
  8.31  developmental disability family support program and alternative 
  8.32  care program, personal care attendant, home health aide, or 
  8.33  nursing facility services, the amount of funds transferred by 
  8.34  the commissioner between the developmental disability family 
  8.35  support program account, the alternative care account, the 
  8.36  medical assistance account, or the consumer support grant 
  9.1   account shall be based on each county's participation in 
  9.2   transferring persons to the consumer support grant program from 
  9.3   those programs and services. 
  9.4      (b) At the beginning of each fiscal year, county 
  9.5   allocations for consumer support grants shall be based on: 
  9.6      (1) the number of persons to whom the county board expects 
  9.7   to provide consumer supports grants; 
  9.8      (2) their eligibility for current program and services; 
  9.9      (3) the amount of nonfederal dollars expended on those 
  9.10  individuals for those programs and services; or 
  9.11     (4) in situations where an individual is unable to obtain 
  9.12  the support needed from the program of origination due to the 
  9.13  unavailability of service providers at the time or the location 
  9.14  where the supports are needed, the allocation will be based on 
  9.15  the county's best estimate of the nonfederal dollars that would 
  9.16  have been expended if the services had been available; and 
  9.17     ~~(4)~~ (5) projected dates when persons will start receiving 
  9.18  grants.  County allocations shall be adjusted periodically by 
  9.19  the commissioner based on the actual transfer of persons or 
  9.20  service openings, and the nonfederal dollars associated with 
  9.21  those persons or service openings, to the consumer support grant 
  9.22  program. 
  9.23     (c) The amount of funds transferred by the commissioner 
  9.24  from the alternative care account and the medical assistance 
  9.25  account for an individual may be changed if it is determined by 
  9.26  the county or its agent that the individual's need for support 
  9.27  has changed. 
  9.28     (d) The authority to utilize funds transferred to the 
  9.29  consumer support grant account for the purposes of implementing 
  9.30  and administering the consumer support grant program will not be 
  9.31  limited or constrained by the spending authority provided to the 
  9.32  program of origination. 
  9.33     (e) The commissioner shall use up to five percent of each 
  9.34  county's allocation, as adjusted, for payments to that county 
  9.35  for administrative expenses, to be paid as a proportionate 
  9.36  addition to reported direct service expenditures. 
 10.1      ~~(d)~~ (f) Except as provided below, the county allocation for 
 10.2   each individual or individual's family cannot exceed 80 percent 
 10.3   of the total nonfederal dollars expended on the individual by 
 10.4   the program of origination except for the developmental 
 10.5   disabilities family support grant program which can be approved 
 10.6   up to 100 percent of the nonfederal dollars and in situations as 
 10.7   described in paragraph (b), clause (4).  In situations where 
 10.8   exceptional need exists or the individual's need for support 
 10.9   increases, up to 100 percent of the nonfederal dollars expended 
 10.10  may be allocated to the county.  Allocations that exceed 80 
 10.11  percent of the nonfederal dollars expended on the individual by 
 10.12  the program of origination must be approved by the 
 10.13  commissioner.  The remainder of the amount expended on the 
 10.14  individual by the program of origination will be used in the 
 10.15  following proportions:  half will be made available to the 
 10.16  consumer support grant program and participating counties for 
 10.17  consumer training, resource development, and other costs, and 
 10.18  half will be returned to the state general fund. 
 10.19     (g) The commissioner may recover, suspend, or withhold 
 10.20  payments if the county board, local agency, or grantee does not 
 10.21  comply with the requirements of this section. 
 10.22     Sec. 6.  Minnesota Statutes 1996, section 256B.0911, 
 10.23  subdivision 7, is amended to read: 
 10.24     Subd. 7.  [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] 
 10.25  (a) Medical assistance reimbursement for nursing facilities 
 10.26  shall be authorized for a medical assistance recipient only if a 
 10.27  preadmission screening has been conducted prior to admission or 
 10.28  the local county agency has authorized an exemption.  Medical 
 10.29  assistance reimbursement for nursing facilities shall not be 
 10.30  provided for any recipient who the local screener has determined 
 10.31  does not meet the level of care criteria for nursing facility 
 10.32  placement or, if indicated, has not had a level II PASARR 
 10.33  evaluation completed unless an admission for a recipient with 
 10.34  mental illness is approved by the local mental health authority 
 10.35  or an admission for a recipient with mental retardation or 
 10.36  related condition is approved by the state mental retardation 
 11.1   authority.  The county preadmission screening team may deny 
 11.2   certified nursing facility admission using the level of care 
 11.3   criteria established under section 144.0721 and deny medical 
 11.4   assistance reimbursement for certified nursing facility care.  
 11.5   Persons receiving care in a certified nursing facility or 
 11.6   certified boarding care home who are reassessed by the 
 11.7   commissioner of health pursuant to section 144.0722 and 
 11.8   determined to no longer meet the level of care criteria for a 
 11.9   certified nursing facility or certified boarding care home may 
 11.10  no longer remain a resident in the certified nursing facility or 
 11.11  certified boarding care home and must be relocated to the 
 11.12  community if the persons were admitted on or after July 1, ~~1996~~ 
 11.13  1997.  
 11.14     (b) Residents who are reassessed and determined to no 
 11.15  longer meet the level of care criteria for a certified nursing 
 11.16  facility or certified boarding care home may ask for a 
 11.17  reconsideration of their case mix assessment under section 
 11.18  144.0722.  If the case mix reconsideration is not timely 
 11.19  requested, or if the case mix classification is upheld by the 
 11.20  commissioner of health, the commissioner of human services shall 
 11.21  issue a notice of discharge to the resident.  A resident subject 
 11.22  to discharge under this subdivision is entitled to an appeal of 
 11.23  the discharge under section 256.045, subdivision 3.  The sole 
 11.24  issue in such an appeal is whether the resident can demonstrate 
 11.25  extraordinary circumstances which would render discharge a 
 11.26  serious threat to the health and safety of the resident.  
 11.27  Extraordinary circumstances shall include but are not limited to:
 11.28     (1) the absence or inaccessibility of suitable community 
 11.29  alternatives; 
 11.30     (2) contravening family circumstances; or 
 11.31     (3) protective service issues.  
 11.32     (c) Persons receiving services under section 256B.0913, 
 11.33  subdivisions 1 to 14, or 256B.0915 who are reassessed and found 
 11.34  to not meet the level of care criteria for admission to a 
 11.35  certified nursing facility or certified boarding care home may 
 11.36  no longer receive these services if persons were admitted to the 
 12.1   program on or after July 1, ~~1996~~ 1997.  Reassessed individuals 
 12.2   ineligible for services under section 256B.0913, subdivisions 1 
 12.3   to 14, or 256B.0915, are entitled to an appeal under section 
 12.4   256.045, subdivision 3.  The commissioner shall make a request 
 12.5   to the health care financing administration for a waiver 
 12.6   allowing screening team approval of Medicaid payments for 
 12.7   certified nursing facility care.  An individual has a choice and 
 12.8   makes the final decision between nursing facility placement and 
 12.9   community placement after the screening team's recommendation, 
 12.10  except as provided in paragraphs (b) and (c).  
 12.11     ~~(b)~~ (d) The local county mental health authority or the 
 12.12  state mental retardation authority under Public Law Numbers 
 12.13  100-203 and 101-508 may prohibit admission to a nursing 
 12.14  facility, if the individual does not meet the nursing facility 
 12.15  level of care criteria or needs specialized services as defined 
 12.16  in Public Law Numbers 100-203 and 101-508.  For purposes of this 
 12.17  section, "specialized services" for a person with mental 
 12.18  retardation or a related condition means "active treatment" as 
 12.19  that term is defined in Code of Federal Regulations, title 42, 
 12.20  section 483.440(a)(1). 
 12.21     ~~(c)~~ (e) Upon the receipt by the commissioner of approval by 
 12.22  the Secretary of Health and Human Services of the waiver 
 12.23  requested under paragraph (a), the local screener shall deny 
 12.24  medical assistance reimbursement for nursing facility care for 
 12.25  an individual whose long-term care needs can be met in a 
 12.26  community-based setting and whose cost of community-based home 
 12.27  care services is less than 75 percent of the average payment for 
 12.28  nursing facility care for that individual's case mix 
 12.29  classification, and who is either: 
 12.30     (i) a current medical assistance recipient being screened 
 12.31  for admission to a nursing facility; or 
 12.32     (ii) an individual who would be eligible for medical 
 12.33  assistance within 180 days of entering a nursing facility and 
 12.34  who meets a nursing facility level of care. 
 12.35     ~~(d)~~ (f) Appeals from the screening team's recommendation or 
 12.36  the county agency's final decision shall be made according to 
 13.1   section 256.045, subdivision 3. 
 13.2      Sec. 7.  Minnesota Statutes 1996, section 256B.0913, 
 13.3   subdivision 5, is amended to read: 
 13.4      Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a) 
 13.5   Alternative care funding may be used for payment of costs of: 
 13.6      (1) adult foster care; 
 13.7      (2) adult day care; 
 13.8      (3) home health aide; 
 13.9      (4) homemaker services; 
 13.10     (5) personal care; 
 13.11     (6) case management; 
 13.12     (7) respite care; 
 13.13     (8) assisted living; 
 13.14     (9) residential care services; 
 13.15     (10) care-related supplies and equipment; 
 13.16     (11) meals delivered to the home; 
 13.17     (12) transportation; 
 13.18     (13) skilled nursing; 
 13.19     (14) chore services; 
 13.20     (15) companion services; 
 13.21     (16) nutrition services; 
 13.22     (17) training for direct informal caregivers; and 
 13.23     (18) telemedicine devices to monitor recipients in their 
 13.24  own homes as an alternative to hospital care, nursing home care, 
 13.25  or home visits. 
 13.26     (b) The county agency must ensure that the funds are used 
 13.27  only to supplement and not supplant services available through 
 13.28  other public assistance or services programs. 
 13.29     (c) Unless specified in statute, the service standards for 
 13.30  alternative care services shall be the same as the service 
 13.31  standards defined in the elderly waiver.  Persons or agencies 
 13.32  must be employed by or under a contract with the county agency 
 13.33  or the public health nursing agency of the local board of health 
 13.34  in order to receive funding under the alternative care program. 
 13.35     (d) The adult foster care rate shall be considered a 
 13.36  difficulty of care payment and shall not include room and 
 14.1   board.  The adult foster care daily rate shall be negotiated 
 14.2   between the county agency and the foster care provider.  The 
 14.3   rate established under this section shall not exceed 75 percent 
 14.4   of the state average monthly nursing home payment for the case 
 14.5   mix classification to which the individual receiving foster care 
 14.6   is assigned, and it must allow for other alternative care 
 14.7   services to be authorized by the case manager. 
 14.8      (e) Personal care services may be provided by a personal 
 14.9   care provider organization.  A county agency may contract with a 
 14.10  relative of the client to provide personal care services, but 
 14.11  must ensure nursing supervision.  Covered personal care services 
 14.12  defined in section 256B.0627, subdivision 4, must meet 
 14.13  applicable standards in Minnesota Rules, part 9505.0335. 
 14.14     (f) A county may use alternative care funds to purchase 
 14.15  medical supplies and equipment without prior approval from the 
 14.16  commissioner when:  (1) there is no other funding source; (2) 
 14.17  the supplies and equipment are specified in the individual's 
 14.18  care plan as medically necessary to enable the individual to 
 14.19  remain in the community according to the criteria in Minnesota 
 14.20  Rules, part 9505.0210, item A; and (3) the supplies and 
 14.21  equipment represent an effective and appropriate use of 
 14.22  alternative care funds.  A county may use alternative care funds 
 14.23  to purchase supplies and equipment from a non-Medicaid certified 
 14.24  vendor if the cost for the items is less than that of a Medicaid 
 14.25  vendor.  A county is not required to contract with a provider of 
 14.26  supplies and equipment if the monthly cost of the supplies and 
 14.27  equipment is less than $250.  
 14.28     (g) For purposes of this section, residential care services 
 14.29  are services which are provided to individuals living in 
 14.30  residential care homes.  Residential care homes are currently 
 14.31  licensed as board and lodging establishments and are registered 
 14.32  with the department of health as providing special services or 
 14.33  registered under section 144D.  Residential care services are 
 14.34  defined as "supportive services" and "health-related services."  
 14.35  "Supportive services" means the provision of up to 24-hour 
 14.36  supervision and oversight.  Supportive services includes:  
 15.1      (1) transportation, when provided by the residential care 
 15.2   center only; 
 15.3      (2) socialization, when socialization is part of the plan 
 15.4   of care, has specific goals and outcomes established, and is not 
 15.5   diversional or recreational in nature; 
 15.6      (3) assisting clients in setting up meetings and 
 15.7   appointments; 
 15.8      (4) assisting clients in setting up medical and social 
 15.9   services; 
 15.10     (5) providing assistance with personal laundry, such as 
 15.11  carrying the client's laundry to the laundry room.  Assistance 
 15.12  with personal laundry does not include any laundry, such as bed 
 15.13  linen, that is included in the room and board rate.  
 15.14  Health-related services are limited to minimal assistance with 
 15.15  dressing, grooming, and bathing and providing reminders to 
 15.16  residents to take medications that are self-administered or 
 15.17  providing storage for medications, if requested.  Individuals 
 15.18  receiving residential care services cannot receive both personal 
 15.19  care services and residential care services.  
 15.20     (h) For the purposes of this section, "assisted living" 
 15.21  refers to supportive services provided by a single vendor to 
 15.22  clients who reside in the same apartment building of three or 
 15.23  more units.  Assisted living services are defined as up to 
 15.24  24-hour supervision, and oversight, supportive services as 
 15.25  defined in clause (1), individualized home care aide tasks as 
 15.26  defined in clause (2), and individualized home management tasks 
 15.27  as defined in clause (3) provided to residents of a residential 
 15.28  center living in their units or apartments with a full kitchen 
 15.29  and bathroom.  A full kitchen includes a stove, oven, 
 15.30  refrigerator, food preparation counter space, and a kitchen 
 15.31  utensil storage compartment.  Assisted living services must be 
 15.32  provided by the management of the residential center or by 
 15.33  providers under contract with the management or with the county. 
 15.34     (1) Supportive services include:  
 15.35     (i) socialization, when socialization is part of the plan 
 15.36  of care, has specific goals and outcomes established, and is not 
 16.1   diversional or recreational in nature; 
 16.2      (ii) assisting clients in setting up meetings and 
 16.3   appointments; and 
 16.4      (iii) providing transportation, when provided by the 
 16.5   residential center only.  
 16.6      Individuals receiving assisted living services will not 
 16.7   receive both assisted living services and homemaking or personal 
 16.8   care services.  Individualized means services are chosen and 
 16.9   designed specifically for each resident's needs, rather than 
 16.10  provided or offered to all residents regardless of their 
 16.11  illnesses, disabilities, or physical conditions.  
 16.12     (2) Home care aide tasks means:  
 16.13     (i) preparing modified diets, such as diabetic or low 
 16.14  sodium diets; 
 16.15     (ii) reminding residents to take regularly scheduled 
 16.16  medications or to perform exercises; 
 16.17     (iii) household chores in the presence of technically 
 16.18  sophisticated medical equipment or episodes of acute illness or 
 16.19  infectious disease; 
 16.20     (iv) household chores when the resident's care requires the 
 16.21  prevention of exposure to infectious disease or containment of 
 16.22  infectious disease; and 
 16.23     (v) assisting with dressing, oral hygiene, hair care, 
 16.24  grooming, and bathing, if the resident is ambulatory, and if the 
 16.25  resident has no serious acute illness or infectious disease.  
 16.26  Oral hygiene means care of teeth, gums, and oral prosthetic 
 16.27  devices.  
 16.28     (3) Home management tasks means:  
 16.29     (i) housekeeping; 
 16.30     (ii) laundry; 
 16.31     (iii) preparation of regular snacks and meals; and 
 16.32     (iv) shopping.  
 16.33     Assisted living services as defined in this section shall 
 16.34  not be authorized in boarding and lodging establishments 
 16.35  licensed according to sections 157.011 and 157.15 to 157.22. 
 16.36     (i) For the purposes of this section, reimbursement for 
 17.1   assisted living services and residential care services shall be 
 17.2   a monthly rate negotiated and authorized by the county agency.  
 17.3   The rate shall not exceed the nonfederal share of the greater of 
 17.4   either the statewide or any of the geographic groups' weighted 
 17.5   average monthly medical assistance nursing facility payment rate 
 17.6   of the case mix resident class to which the 180-day eligible 
 17.7   client would be assigned under Minnesota Rules, parts 9549.0050 
 17.8   to 9549.0059 unless the residential care home is registered 
 17.9   under chapter 144D and services are delivered as specified in 
 17.10  Minnesota Rules, parts 4668.0002 to 4668.0399 and include 
 17.11  24-hour on-site supervision.  For alternative care assisted 
 17.12  living projects established under Laws 1988, chapter 689, 
 17.13  article 2, section 256, monthly rates may not exceed 65 percent 
 17.14  of the greater of either statewide or any of the geographic 
 17.15  groups' weighted average monthly medical assistance nursing 
 17.16  facility payment rate of the case mix resident class to which 
 17.17  the 180-day eligible client would be assigned under Minnesota 
 17.18  Rules, parts 9549.0050 to 9549.0059.  The rate may not cover 
 17.19  rent and direct food costs. 
 17.20     (j) For purposes of this section, companion services are 
 17.21  defined as nonmedical care, supervision and oversight, provided 
 17.22  to a functionally impaired adult.  Companions may assist the 
 17.23  individual with such tasks as meal preparation, laundry and 
 17.24  shopping, but do not perform these activities as discrete 
 17.25  services.  The provision of companion services does not entail 
 17.26  hands-on medical care.  Providers may also perform light 
 17.27  housekeeping tasks which are incidental to the care and 
 17.28  supervision of the recipient.  This service must be approved by 
 17.29  the case manager as part of the care plan.  Companion services 
 17.30  must be provided by individuals or nonprofit organizations who 
 17.31  are under contract with the local agency to provide the 
 17.32  service.  Any person related to the waiver recipient by blood, 
 17.33  marriage or adoption cannot be reimbursed under this service.  
 17.34  Persons providing companion services will be monitored by the 
 17.35  case manager. 
 17.36     (k) For purposes of this section, training for direct 
 18.1   informal caregivers is defined as a classroom or home course of 
 18.2   instruction which may include:  transfer and lifting skills, 
 18.3   nutrition, personal and physical cares, home safety in a home 
 18.4   environment, stress reduction and management, behavioral 
 18.5   management, long-term care decision making, care coordination 
 18.6   and family dynamics.  The training is provided to an informal 
 18.7   unpaid caregiver of a 180-day eligible client which enables the 
 18.8   caregiver to deliver care in a home setting with high levels of 
 18.9   quality.  The training must be approved by the case manager as 
 18.10  part of the individual care plan.  Individuals, agencies, and 
 18.11  educational facilities which provide caregiver training and 
 18.12  education will be monitored by the case manager. 
 18.13     Sec. 8.  Minnesota Statutes 1996, section 256B.0913, 
 18.14  subdivision 15, is amended to read: 
 18.15     Subd. 15.  [SERVICE ALLOWANCE FUND AVAILABILITY.] (a) 
 18.16  Effective July 1, ~~1996~~ 1997, the commissioner may use 
 18.17  alternative care funds for services to high function class A 
 18.18  persons as defined in section 144.0721, subdivision 3, clause 
 18.19  (2).  The county alternative care grant allocation will be 
 18.20  supplemented with a special allocation amount ~~based on the~~ 
 18.21  ~~projected number of eligible high function class A's and~~ 
 18.22  ~~computed on the basis of $240 per month per projected eligible~~ 
 18.23  ~~person.  Individual monthly expenditures under the service~~ 
 18.24  ~~allowance option are permitted to be either greater or less than~~ 
 18.25  ~~the amount of $240 per month based on individual need.  County~~ 
 18.26  ~~allocations shall be adjusted periodically based on the actual~~ 
 18.27  ~~provision of services to high function class A persons~~.  The 
 18.28  allocation will be distributed by a population based formula and 
 18.29  shall not exceed the proportion of projected savings made 
 18.30  available under section 144.0721, subdivision 3. 
 18.31     (b) Counties shall have the option of providing services, 
 18.32  cash service allowances, vouchers, or a combination of these 
 18.33  options to high function class A persons defined in section 
 18.34  144.0721, subdivision 3, clause (2).  High function class A 
 18.35  persons may choose services from among the categories of 
 18.36  services listed under subdivision 5, except for case management 
 19.1   services. 
 19.2      (c) If the special allocation under this section to a 
 19.3   county is not sufficient to serve all persons who qualify 
 19.4   for ~~alternative care services~~ the service allowance, the county 
 19.5   is not required to provide any ~~alternative care~~ services to a 
 19.6   high function class A person but shall establish a waiting list 
 19.7   to provide services as special allocation funding becomes 
 19.8   available. 
 19.9      Sec. 9.  Minnesota Statutes 1996, section 256B.0915, 
 19.10  subdivision 3, is amended to read: 
 19.11     Subd. 3.  [LIMITS OF CASES, RATES, REIMBURSEMENT, AND 
 19.12  FORECASTING.] (a) The number of medical assistance waiver 
 19.13  recipients that a county may serve must be allocated according 
 19.14  to the number of medical assistance waiver cases open on July 1 
 19.15  of each fiscal year.  Additional recipients may be served with 
 19.16  the approval of the commissioner. 
 19.17     (b) The monthly limit for the cost of waivered services to 
 19.18  an individual waiver client shall be the statewide average 
 19.19  payment rate of the case mix resident class to which the waiver 
 19.20  client would be assigned under the medical assistance case mix 
 19.21  reimbursement system.  If medical supplies and equipment or 
 19.22  adaptations are or will be purchased for an elderly waiver 
 19.23  services recipient, the costs may be prorated on a monthly basis 
 19.24  throughout the year in which they are purchased.  If the monthly 
 19.25  cost of a recipient's other waivered services exceeds the 
 19.26  monthly limit established in this paragraph, the annual cost of 
 19.27  the waivered services shall be determined.  In this event, the 
 19.28  annual cost of waivered services shall not exceed 12 times the 
 19.29  monthly limit calculated in this paragraph.  The statewide 
 19.30  average payment rate is calculated by determining the statewide 
 19.31  average monthly nursing home rate, effective July 1 of the 
 19.32  fiscal year in which the cost is incurred, less the statewide 
 19.33  average monthly income of nursing home residents who are age 65 
 19.34  or older, and who are medical assistance recipients in the month 
 19.35  of March of the previous state fiscal year.  The annual cost 
 19.36  divided by 12 of elderly or disabled waivered services for a 
 20.1   person who is a nursing facility resident at the time of 
 20.2   requesting a determination of eligibility for elderly or 
 20.3   disabled waivered services shall not exceed the monthly payment 
 20.4   for the resident class assigned under Minnesota Rules, parts 
 20.5   9549.0050 to 9549.0059, for that resident in the nursing 
 20.6   facility where the resident currently resides.  The following 
 20.7   costs must be included in determining the total monthly costs 
 20.8   for the waiver client: 
 20.9      (1) cost of all waivered services, including extended 
 20.10  medical supplies and equipment; and 
 20.11     (2) cost of skilled nursing, home health aide, and personal 
 20.12  care services reimbursable by medical assistance.  
 20.13     (c) Medical assistance funding for skilled nursing 
 20.14  services, private duty nursing, home health aide, and personal 
 20.15  care services for waiver recipients must be approved by the case 
 20.16  manager and included in the individual care plan. 
 20.17     (d) For both the elderly waiver and the nursing facility 
 20.18  disabled waiver, a county may purchase extended supplies and 
 20.19  equipment without prior approval from the commissioner when 
 20.20  there is no other funding source and the supplies and equipment 
 20.21  are specified in the individual's care plan as medically 
 20.22  necessary to enable the individual to remain in the community 
 20.23  according to the criteria in Minnesota Rules, part 9505.0210, 
 20.24  items A and B.  A county is not required to contract with a 
 20.25  provider of supplies and equipment if the monthly cost of the 
 20.26  supplies and equipment is less than $250.  
 20.27     (e) For the fiscal year beginning on July 1, 1993, and for 
 20.28  subsequent fiscal years, the commissioner of human services 
 20.29  shall not provide automatic annual inflation adjustments for 
 20.30  home and community-based waivered services.  The commissioner of 
 20.31  finance shall include as a budget change request in each 
 20.32  biennial detailed expenditure budget submitted to the 
 20.33  legislature under section 16A.11, annual adjustments in 
 20.34  reimbursement rates for home and community-based waivered 
 20.35  services, based on the forecasted percentage change in the Home 
 20.36  Health Agency Market Basket of Operating Costs, for the fiscal 
 21.1   year beginning July 1, compared to the previous fiscal year, 
 21.2   unless otherwise adjusted by statute.  The Home Health Agency 
 21.3   Market Basket of Operating Costs is published by Data Resources, 
 21.4   Inc.  The forecast to be used is the one published for the 
 21.5   calendar quarter beginning January 1, six months prior to the 
 21.6   beginning of the fiscal year for which rates are set.  The adult 
 21.7   foster care rate shall be considered a difficulty of care 
 21.8   payment and shall not include room and board. 
 21.9      (f) The adult foster care daily rate for the elderly and 
 21.10  disabled waivers shall be negotiated between the county agency 
 21.11  and the foster care provider.  The rate established under this 
 21.12  section shall not exceed the state average monthly nursing home 
 21.13  payment for the case mix classification to which the individual 
 21.14  receiving foster care is assigned; the rate must allow for other 
 21.15  waiver and medical assistance home care services to be 
 21.16  authorized by the case manager. 
 21.17     (g) The assisted living and residential care service rates 
 21.18  for elderly and community alternatives for disabled individuals 
 21.19  (CADI) waivers shall be made to the vendor as a monthly rate 
 21.20  negotiated with the county agency.  The rate shall not exceed 
 21.21  the nonfederal share of the greater of either the statewide or 
 21.22  any of the geographic groups' weighted average monthly medical 
 21.23  assistance nursing facility payment rate of the case mix 
 21.24  resident class to which the elderly or disabled client would be 
 21.25  assigned under Minnesota Rules, parts 9549.0050 to 
 21.26  9549.0059 unless the residential care home is registered under 
 21.27  chapter 144D and services are delivered as specified in 
 21.28  Minnesota Rules, parts 4668.0002 to 4668.0399, and include 
 21.29  24-hour on-site supervision.  For alternative care assisted 
 21.30  living projects established under Laws 1988, chapter 689, 
 21.31  article 2, section 256, monthly rates may not exceed 65 percent 
 21.32  of the greater of either the statewide or any of the geographic 
 21.33  groups' weighted average monthly medical assistance nursing 
 21.34  facility payment rate for the case mix resident class to which 
 21.35  the elderly or disabled client would be assigned under Minnesota 
 21.36  Rules, parts 9549.0050 to 9549.0059.  The rate may not cover 
 22.1   direct rent or food costs. 
 22.2      (h) The county shall negotiate individual rates with 
 22.3   vendors and may be reimbursed for actual costs up to the greater 
 22.4   of the county's current approved rate or 60 percent of the 
 22.5   maximum rate in fiscal year 1994 and 65 percent of the maximum 
 22.6   rate in fiscal year 1995 for each service within each program. 
 22.7      (i) On July 1, 1993, the commissioner shall increase the 
 22.8   maximum rate for home-delivered meals to $4.50 per meal. 
 22.9      (j) Reimbursement for the medical assistance recipients 
 22.10  under the approved waiver shall be made from the medical 
 22.11  assistance account through the invoice processing procedures of 
 22.12  the department's Medicaid Management Information System (MMIS), 
 22.13  only with the approval of the client's case manager.  The budget 
 22.14  for the state share of the Medicaid expenditures shall be 
 22.15  forecasted with the medical assistance budget, and shall be 
 22.16  consistent with the approved waiver.  
 22.17     (k) Beginning July 1, 1991, the state shall reimburse 
 22.18  counties according to the payment schedule in section 256.025 
 22.19  for the county share of costs incurred under this subdivision on 
 22.20  or after January 1, 1991, for individuals who are receiving 
 22.21  medical assistance. 
 22.22     Sec. 10.  Minnesota Statutes 1996, section 256B.0915, is 
 22.23  amended by adding a subdivision to read: 
 22.24     Subd. 7.  [PREPAID ELDERLY WAIVER SERVICES.] An individual 
 22.25  for whom a prepaid health plan is liable for nursing home 
 22.26  services or elderly waiver services according to section 
 22.27  256B.69, subdivision 6a, is not eligible to receive 
 22.28  county-administered elderly waiver services under this section. 
 22.29     Sec. 11.  Minnesota Statutes 1996, section 256B.421, 
 22.30  subdivision 1, is amended to read: 
 22.31     Subdivision 1.  [SCOPE.] For the purposes of this section 
 22.32  and sections 256B.41, 256B.411, 256B.431, 256B.432, 
 22.33  256B.433, 256B.434, 256B.435, 256B.47, 256B.48, 256B.50, and 
 22.34  256B.502, the following terms and phrases shall have the meaning 
 22.35  given to them. 
 22.36     Sec. 12.  Minnesota Statutes 1996, section 256B.431, is 
 23.1   amended by adding a subdivision to read: 
 23.2      Subd. 2s.  [PAYMENTS IN EXCESS OF MEDICAL ASSISTANCE RATE.] 
 23.3   (a) For rate years beginning on or after July 1, 1997, a nursing 
 23.4   facility that receives a per diem payment in excess of the 
 23.5   medical assistance payment rate which is related to routine 
 23.6   nursing facility care, and is from a third party through a 
 23.7   contractual managed care arrangement, must offset to the nursing 
 23.8   category on the provider's cost report either:  
 23.9      (i) 90 percent of the per diem payment in excess of the 
 23.10  medical assistance payment rate; or 
 23.11     (ii) the directly identified costs associated with the per 
 23.12  diem payment in excess of the medical assistance rate.  
 23.13     (b) The cost of nonroutine nursing facility care shall be 
 23.14  determined using the medical assistance allowed charge for each 
 23.15  unit of nonroutine service provided to the nursing facility 
 23.16  resident while the resident is covered under the managed care 
 23.17  contract. 
 23.18     Sec. 13.  Minnesota Statutes 1996, section 256B.431, 
 23.19  subdivision 25, is amended to read: 
 23.20     Subd. 25.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
 23.21  BEGINNING JULY 1, 1995.] The nursing facility reimbursement 
 23.22  changes in paragraphs (a) to (h) shall apply in the sequence 
 23.23  specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 
 23.24  this section, beginning July 1, 1995. 
 23.25     (a) The eight-cent adjustment to care-related rates in 
 23.26  subdivision 22, paragraph (e), shall no longer apply. 
 23.27     (b) For rate years beginning on or after July 1, 1995, the 
 23.28  commissioner shall limit a nursing facility's allowable 
 23.29  operating per diem for each case mix category for each rate year 
 23.30  as in clauses (1) to (3). 
 23.31     (1) For the rate year beginning July 1, 1995, the 
 23.32  commissioner shall group nursing facilities into two groups, 
 23.33  freestanding and nonfreestanding, within each geographic group, 
 23.34  using their operating cost per diem for the case mix A 
 23.35  classification.  A nonfreestanding nursing facility is a nursing 
 23.36  facility whose other operating cost per diem is subject to the 
 24.1   hospital attached, short length of stay, or the rule 80 limits.  
 24.2   All other nursing facilities shall be considered freestanding 
 24.3   nursing facilities.  The commissioner shall then array all 
 24.4   nursing facilities in each grouping by their allowable case mix 
 24.5   A operating cost per diem.  In calculating a nursing facility's 
 24.6   operating cost per diem for this purpose, the commissioner shall 
 24.7   exclude the raw food cost per diem related to providing special 
 24.8   diets that are based on religious beliefs, as determined in 
 24.9   subdivision 2b, paragraph (h).  For those nursing facilities in 
 24.10  each grouping whose case mix A operating cost per diem: 
 24.11     (i) is at or below the median minus 1.0 standard deviation 
 24.12  of the array, the commissioner shall limit the nursing 
 24.13  facility's allowable operating cost per diem for each case mix 
 24.14  category to the lesser of the prior reporting year's allowable 
 24.15  operating cost per diems plus the inflation factor as 
 24.16  established in paragraph (f), clause (2), increased by six 
 24.17  percentage points, or the current reporting year's corresponding 
 24.18  allowable operating cost per diem; 
 24.19     (ii) is between minus .5 standard deviation and minus 1.0 
 24.20  standard deviation below the median of the array, the 
 24.21  commissioner shall limit the nursing facility's allowable 
 24.22  operating cost per diem for each case mix category to the lesser 
 24.23  of the prior reporting year's allowable operating cost per diems 
 24.24  plus the inflation factor as established in paragraph (f), 
 24.25  clause (2), increased by four percentage points, or the current 
 24.26  reporting year's corresponding allowable operating cost per 
 24.27  diem; or 
 24.28     (iii) is equal to or above minus .5 standard deviation 
 24.29  below the median of the array, the commissioner shall limit the 
 24.30  nursing facility's allowable operating cost per diem for each 
 24.31  case mix category to the lesser of the prior reporting year's 
 24.32  allowable operating cost per diems plus the inflation factor as 
 24.33  established in paragraph (f), clause (2), increased by three 
 24.34  percentage points, or the current reporting year's corresponding 
 24.35  allowable operating cost per diem. 
 24.36     (2) For the rate year beginning on July 1, 1996, the 
 25.1   commissioner shall limit the nursing facility's allowable 
 25.2   operating cost per diem for each case mix category to the lesser 
 25.3   of the prior reporting year's allowable operating cost per diems 
 25.4   plus the inflation factor as established in paragraph (f), 
 25.5   clause (2), increased by one percentage point or the current 
 25.6   reporting year's corresponding allowable operating cost per 
 25.7   diems; and 
 25.8      (3) For rate years beginning on or after July 1, 1997, the 
 25.9   commissioner shall limit the nursing facility's allowable 
 25.10  operating cost per diem for each case mix category to the lesser 
 25.11  of the reporting year prior to the current reporting year's 
 25.12  allowable operating cost per diems plus the inflation factor as 
 25.13  established in paragraph (f), clause (2), or the current 
 25.14  reporting year's corresponding allowable operating cost per 
 25.15  diems. 
 25.16     (c) For rate years beginning on July 1, 1995, the 
 25.17  commissioner shall limit the allowable operating cost per diems 
 25.18  for high cost nursing facilities.  After application of the 
 25.19  limits in paragraph (b) to each nursing facility's operating 
 25.20  cost per diems, the commissioner shall group nursing facilities 
 25.21  into two groups, freestanding or nonfreestanding, within each 
 25.22  geographic group.  A nonfreestanding nursing facility is a 
 25.23  nursing facility whose other operating cost per diems are 
 25.24  subject to hospital attached, short length of stay, or rule 80 
 25.25  limits.  All other nursing facilities shall be considered 
 25.26  freestanding nursing facilities.  The commissioner shall then 
 25.27  array all nursing facilities within each grouping by their 
 25.28  allowable case mix A operating cost per diems.  In calculating a 
 25.29  nursing facility's operating cost per diem for this purpose, the 
 25.30  commissioner shall exclude the raw food cost per diem related to 
 25.31  providing special diets that are based on religious beliefs, as 
 25.32  determined in subdivision 2b, paragraph (h).  For those nursing 
 25.33  facilities in each grouping whose case mix A operating cost per 
 25.34  diem exceeds 1.0 standard deviation above the median, the 
 25.35  commissioner shall reduce their allowable operating cost per 
 25.36  diems by two percent.  For those nursing facilities in each 
 26.1   grouping whose case mix A operating cost per diem exceeds 0.5 
 26.2   standard deviation above the median but is less than or equal to 
 26.3   1.0 standard deviation above the median, the commissioner shall 
 26.4   reduce their allowable operating cost per diems by one percent. 
 26.5      (d) For rate years beginning on or after July 1, 1996, the 
 26.6   commissioner shall limit the allowable operating cost per diems 
 26.7   for high cost nursing facilities.  After application of the 
 26.8   limits in paragraph (b) to each nursing facility's operating 
 26.9   cost per diems, the commissioner shall group nursing facilities 
 26.10  into two groups, freestanding or nonfreestanding, within each 
 26.11  geographic group.  A nonfreestanding nursing facility is a 
 26.12  nursing facility whose other operating cost per diems are 
 26.13  subject to hospital attached, short length of stay, or rule 80 
 26.14  limits.  All other nursing facilities shall be considered 
 26.15  freestanding nursing facilities.  The commissioner shall then 
 26.16  array all nursing facilities within each grouping by their 
 26.17  allowable case mix A operating cost per diems.  In calculating a 
 26.18  nursing facility's operating cost per diem for this purpose, the 
 26.19  commissioner shall exclude the raw food cost per diem related to 
 26.20  providing special diets that are based on religious beliefs, as 
 26.21  determined in subdivision 2b, paragraph (h).  In those nursing 
 26.22  facilities in each grouping whose case mix A operating cost per 
 26.23  diem exceeds 1.0 standard deviation above the median, the 
 26.24  commissioner shall reduce their allowable operating cost per 
 26.25  diems by three percent.  For those nursing facilities in each 
 26.26  grouping whose case mix A operating cost per diem exceeds 0.5 
 26.27  standard deviation above the median but is less than or equal to 
 26.28  1.0 standard deviation above the median, the commissioner shall 
 26.29  reduce their allowable operating cost per diems by two percent.  
 26.30  For the rate year beginning on or after July 1, 1997, the 
 26.31  commissioner shall modify the high cost facility limits 
 26.32  methodology described in this paragraph as follows:  For those 
 26.33  nursing facilities in each grouping whose case mix A operating 
 26.34  cost per diem exceeds 1.0 standard deviation above the median, 
 26.35  the commissioner shall reduce their allowable operating cost per 
 26.36  diems by four percent.  For those nursing facilities in each 
 27.1   grouping whose case mix A operating cost per diem exceeds 0.3 
 27.2   standard deviation above the median, but is less than or equal 
 27.3   to the 1.0 standard deviation above the median, the commissioner 
 27.4   shall reduce their allowable operating cost per diems by three 
 27.5   percent.  However, in no case shall a nursing facility's 
 27.6   operating cost per diems be reduced below its grouping's limit 
 27.7   established at 0.3 standard deviations above the median. 
 27.8      (e) For rate years beginning on or after July 1, 1995, the 
 27.9   commissioner shall determine a nursing facility's efficiency 
 27.10  incentive by first computing the allowable difference, which is 
 27.11  the lesser of $4.50 or the amount by which the facility's other 
 27.12  operating cost limit exceeds its nonadjusted other operating 
 27.13  cost per diem for that rate year.  For rate years beginning on 
 27.14  or after July 1, 1997, in determining the amount of the 
 27.15  efficiency incentive for hospital attached nursing facilities, 
 27.16  the commissioner must use the other operating cost limit 
 27.17  applicable to the freestanding nursing facilities in their same 
 27.18  geographic group.  The commissioner shall compute the efficiency 
 27.19  incentive by: 
 27.20     (1) subtracting the allowable difference from $4.50 and 
 27.21  dividing the result by $4.50; 
 27.22     (2) multiplying 0.20 by the ratio resulting from clause 
 27.23  (1), and then; 
 27.24     (3) adding 0.50 to the result from clause (2); and 
 27.25     (4) multiplying the result from clause (3) times the 
 27.26  allowable difference. 
 27.27     The nursing facility's efficiency incentive payment shall 
 27.28  be the lesser of $2.25 or the product obtained in clause (4). 
 27.29     (f) For rate years beginning on or after July 1, 1995, the 
 27.30  forecasted price index for a nursing facility's allowable 
 27.31  operating cost per diems shall be determined under clauses (1) 
 27.32  to (3) using the change in the Consumer Price Index-All Items 
 27.33  (United States city average) (CPI-U) or the change in the 
 27.34  Nursing Home Market Basket, both as forecasted by Data Resources 
 27.35  Inc., whichever is applicable.  The commissioner shall use the 
 27.36  indices as forecasted in the fourth quarter of the calendar year 
 28.1   preceding the rate year, subject to subdivision 2l, paragraph 
 28.2   (c).  If, as a result of federal legislative or administrative 
 28.3   action, the methodology used to calculate the Consumer Price 
 28.4   Index-All Items (United States city average) (CPI-U) changes, 
 28.5   the commissioner shall develop a conversion factor or other 
 28.6   methodology to convert the CPI-U index factor that results from 
 28.7   the new methodology to an index factor that approximates, as 
 28.8   closely as possible, the index factor that would have resulted 
 28.9   from application of the original CPI-U methodology prior to any 
 28.10  changes in methodology.  The commissioner shall use the 
 28.11  conversion factor or other methodology to calculate an adjusted 
 28.12  inflation index.  The adjusted inflation index must be used to 
 28.13  calculate payment rates under this section instead of the CPI-U 
 28.14  index specified in paragraph (d).  If the commissioner is 
 28.15  required to develop an adjusted inflation index, the 
 28.16  commissioner shall report to the legislature as part of the next 
 28.17  budget submission the fiscal impact of applying this index. 
 28.18     (1) The CPI-U forecasted index for allowable operating cost 
 28.19  per diems shall be based on the 21-month period from the 
 28.20  midpoint of the nursing facility's reporting year to the 
 28.21  midpoint of the rate year following the reporting year. 
 28.22     (2) The Nursing Home Market Basket forecasted index for 
 28.23  allowable operating costs and per diem limits shall be based on 
 28.24  the 12-month period between the midpoints of the two reporting 
 28.25  years preceding the rate year. 
 28.26     (3) For rate years beginning on or after July 1, 1996, the 
 28.27  forecasted index for operating cost limits referred to in 
 28.28  subdivision 21, paragraph (b), shall be based on the CPI-U for 
 28.29  the 12-month period between the midpoints of the two reporting 
 28.30  years preceding the rate year. 
 28.31     (g) After applying these provisions for the respective rate 
 28.32  years, the commissioner shall index these allowable operating 
 28.33  costs per diems by the inflation factor provided for in 
 28.34  paragraph (f), clause (1), and add the nursing facility's 
 28.35  efficiency incentive as computed in paragraph (e). 
 28.36     (h) A nursing facility licensed for 302 beds on September 
 29.1   30, 1993, that was approved under the moratorium exception 
 29.2   process in section 144A.073 for a partial replacement, and 
 29.3   completed the replacement project in December 1994, is exempt 
 29.4   from paragraphs (b) to (d) for rate years beginning on or after 
 29.5   July 1, 1995. 
 29.6      (i) Notwithstanding Laws 1996, chapter 451, article 3, 
 29.7   section 11, paragraph (h), for the rate years beginning on July 
 29.8   1, 1996, July 1, 1997, and July 1, 1998, a nursing facility 
 29.9   licensed for 40 beds effective May 1, 1992, with a subsequent 
 29.10  increase of 20 Medicare/Medicaid certified beds, effective 
 29.11  January 26, 1993, in accordance with an increase in licensure is 
 29.12  exempt from paragraphs (b) to (d). 
 29.13     Sec. 14.  Minnesota Statutes 1996, section 256B.434, 
 29.14  subdivision 3, is amended to read: 
 29.15     Subd. 3.  [DURATION AND TERMINATION OF CONTRACTS.] (a) 
 29.16  Subject to available resources, the commissioner may begin to 
 29.17  execute contracts with nursing facilities November 1, 1995. 
 29.18     (b) All contracts entered into under this section are for a 
 29.19  term of ~~four years~~ one year.  Either party may terminate a 
 29.20  contract ~~effective July 1 of any year by providing written~~ 
 29.21  ~~notice to the other party no later than April 1 of that year~~ at 
 29.22  any time without cause by providing 30 calendar days advance 
 29.23  written notice to the other party.  The decision to terminate a 
 29.24  contract is not appealable.  If neither party provides written 
 29.25  notice of termination ~~by April 1, the contract is automatically~~ 
 29.26  ~~renewed for the next rate year~~ the contract shall be 
 29.27  renegotiated for additional one-year terms, for up to a total of 
 29.28  four consecutive one-year terms.  The provisions of the contract 
 29.29  shall be renegotiated annually by the parties prior to the 
 29.30  expiration date of the contract.  The parties may voluntarily 
 29.31  renegotiate the terms of the contract at any time by mutual 
 29.32  agreement. 
 29.33     (c) If a nursing facility fails to comply with the terms of 
 29.34  a contract, the commissioner shall provide reasonable notice 
 29.35  regarding the breach of contract and a reasonable opportunity 
 29.36  for the facility to come into compliance.  If the facility fails 
 30.1   to come into compliance or to remain in compliance, the 
 30.2   commissioner may terminate the contract.  If a contract is 
 30.3   terminated, the contract payment remains in effect for the 
 30.4   remainder of the rate year in which the contract was terminated, 
 30.5   but in all other respects the provisions of this section do not 
 30.6   apply to that facility effective the date the contract is 
 30.7   terminated.  The contract shall contain a provision governing 
 30.8   the transition back to the cost-based reimbursement system 
 30.9   established under section 256B.431, subdivision 25, and 
 30.10  Minnesota Rules, parts 9549.0010 to 9549.0080.  A contract 
 30.11  entered into under this section may be amended by mutual 
 30.12  agreement of the parties. 
 30.13     Sec. 15.  Minnesota Statutes 1996, section 256B.434, 
 30.14  subdivision 4, is amended to read: 
 30.15     Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
 30.16  nursing facilities which have their payment rates determined 
 30.17  under this section rather than section 256B.431, subdivision 25, 
 30.18  the commissioner shall establish a rate under this subdivision.  
 30.19  The nursing facility must enter into a written contract with the 
 30.20  commissioner. 
 30.21     (b) A nursing facility's case mix payment rate for the 
 30.22  first rate year of a facility's contract under this section is 
 30.23  the payment rate the facility would have received under section 
 30.24  256B.431, subdivision 25. 
 30.25     (c) A nursing facility's case mix payment rates for the 
 30.26  second and subsequent years of a facility's contract under this 
 30.27  section are the previous rate year's contract payment rates plus 
 30.28  an inflation adjustment.  The index for the inflation adjustment 
 30.29  must be based on the change in the Consumer Price Index-All 
 30.30  Items (United States City average) (CPI-U) forecasted by Data 
 30.31  Resources, Inc., as forecasted in the fourth quarter of the 
 30.32  calendar year preceding the rate year.  The inflation adjustment 
 30.33  must be based on the 12-month period from the midpoint of the 
 30.34  previous rate year to the midpoint of the rate year for which 
 30.35  the rate is being determined.  For the rate year beginning July 
 30.36  1, 1998, the nursing facility's prior rate year's payment rate 
 31.1   determined under this paragraph shall be reduced by two 
 31.2   percentage points before applying the foregoing inflation 
 31.3   adjustment. 
 31.4      (d) The commissioner may develop additional incentive-based 
 31.5   payments of up to five percent above the standard contract rate 
 31.6   for achieving outcomes specified in each contract.  The 
 31.7   incentive system may be implemented for contract rate years 
 31.8   beginning on or after July 1, 1996.  The specified outcomes must 
 31.9   be measurable and must be based on criteria to be developed by 
 31.10  the commissioner.  The commissioner may establish, for each 
 31.11  contract, various levels of achievement within an outcome.  
 31.12  After the outcomes have been specified the commissioner shall 
 31.13  assign various levels of payment associated with achieving the 
 31.14  outcome.  Any incentive-based payment cancels if there is a 
 31.15  termination of the contract.  In establishing the specified 
 31.16  outcomes and related criteria the commissioner shall consider 
 31.17  the following state policy objectives: 
 31.18     (1) improved cost effectiveness and quality of life as 
 31.19  measured by improved clinical outcomes; 
 31.20     (2) successful diversion or discharge to community 
 31.21  alternatives; 
 31.22     (3) decreased acute care costs; 
 31.23     (4) improved consumer satisfaction; 
 31.24     (5) the achievement of quality; or 
 31.25     (6) any additional outcomes the commissioner finds 
 31.26  desirable. 
 31.27     Sec. 16.  [256B.435] [NURSING FACILITY CONVERSION 
 31.28  DEMONSTRATION PROJECT.] 
 31.29     Subdivision 1.  [DEMONSTRATION PROJECT.] The commissioner 
 31.30  shall design and implement a process to start July 1, 1998, 
 31.31  which will decrease the number of Minnesota nursing facilities 
 31.32  participating in the medical assistance program by June 30, 
 31.33  2002.  That process must include voluntary nursing facility 
 31.34  closures and, as necessary, selective medical assistance 
 31.35  decertification of nursing facilities to achieve the goal of 
 31.36  approximately 20 fewer nursing facilities.  The total number of 
 32.1   licensed nursing home and boarding care home beds participating 
 32.2   in the medical assistance program upon completion of the project 
 32.3   must decrease by at least 2000 beds.  Nursing facilities subject 
 32.4   to this project include those with payment rates determined 
 32.5   under sections 256B.431, 256B.434, and 256B.48, subdivision 1a. 
 32.6      Subd. 2.  [VOLUNTARY NURSING FACILITY CLOSURES.] (a) For 
 32.7   the rate years beginning on or after July 1, 1998, a nursing 
 32.8   facility may elect to cease operations as a nursing home or 
 32.9   boarding care facility, and apply for technical assistance and 
 32.10  incentive payments under this subdivision.  The commissioner 
 32.11  shall issue a request for proposal (RFP) by October 1, 1997, 
 32.12  outlining the process and criteria for nursing facilities 
 32.13  interested in applying to voluntarily close.  A nursing facility 
 32.14  seeking to transfer some of its nursing facility beds to another 
 32.15  location may be eligible for the incentives under this 
 32.16  subdivision provided that:  
 32.17     (1) the number of beds closed is at least 70 percent of its 
 32.18  capacity; 
 32.19     (2) the estimated cost to medical assistance of the 
 32.20  transferred beds, as determined by the commissioner, is at least 
 32.21  budget neutral; and 
 32.22     (3) other total closure proposals are given higher priority.
 32.23     (b) The commissioner shall make available technical support 
 32.24  to facilitate a nursing facility seeking voluntary closure under 
 32.25  this section.  Department technical support shall include 
 32.26  assistance in:  general transition planning; coordination of 
 32.27  discharge planning and resident relocation efforts in 
 32.28  coordination with the affected county and nursing facility; 
 32.29  identification of alternative community resources and placements 
 32.30  for displaced facility residents; assessing potential alternate 
 32.31  uses of the facility's capital assets; and identifying possible 
 32.32  financing for facility renovations consistent with identified 
 32.33  alternative uses. 
 32.34     (c) The commissioner and the nursing facility may negotiate 
 32.35  a closure incentive payment of up to $1,000 per bed for a 
 32.36  nursing facility which agrees to delicense all or substantially 
 33.1   all of its licensed nursing home and boarding care home beds.  
 33.2   The nursing facility's proposal must include a plan for 
 33.3   cost-effective alternative placement of its residents.  The 
 33.4   provider's proposal must also indicate the intended purpose of 
 33.5   the incentive payment.  If the intended use of the incentive 
 33.6   payment is for facility renovations that will result in another 
 33.7   public use or for the promotion of another community 
 33.8   alternative, the commissioner must give higher priority to those 
 33.9   proposals.  Once established, the commissioner's determination 
 33.10  and incentive payment are not appealable.  The commissioner must 
 33.11  not exceed the biennial appropriation for this purpose.  Nothing 
 33.12  shall preclude a nursing facility from electing to voluntarily 
 33.13  close without benefit of the incentive payments and technical 
 33.14  support and assistance set forth in this subdivision. 
 33.15     Subd. 3.  [SELECTIVE DECERTIFICATION OF NURSING 
 33.16  FACILITIES.] (a) Beginning July 1, 1999, the commissioner shall 
 33.17  implement a process to reduce the number of nursing facility 
 33.18  beds through selective decertification in order to achieve the 
 33.19  goal of approximately 20 fewer nursing facilities participating 
 33.20  in the medical assistance program by June 30, 2002.  The 
 33.21  mechanism to be utilized to implement the selective 
 33.22  decertification process will be by nonrenewal of provider 
 33.23  agreements.  Notwithstanding section 256B.04, subdivisions 4 and 
 33.24  12, and Minnesota Rules, part 9505.0195, the commissioner may 
 33.25  terminate provider agreements.  The commissioner, with 
 33.26  cooperation from the commissioner of health, shall develop any 
 33.27  necessary federal waiver requests to permit a selective medical 
 33.28  assistance decertification process.  The commissioners should 
 33.29  submit any needed federal waiver requests by February 1, 1998. 
 33.30     (b) In developing the waiver and decertification process, 
 33.31  the commissioner shall develop criteria that will be used to 
 33.32  define which nursing facilities to decertify.  The commissioner 
 33.33  shall consider using the following factors in developing 
 33.34  criteria:  
 33.35     (1) availability and capacity of cost-effective community 
 33.36  alternatives; 
 34.1      (2) future demographics and bed supply for county; 
 34.2      (3) high proportion of case mix A residents; 
 34.3      (4) low case mix score; 
 34.4      (5) high case mix A operating cost per diem; 
 34.5      (6) type of licensure; 
 34.6      (7) percent of total and medical assistance occupancy; 
 34.7      (8) a measure of care quality; and 
 34.8      (9) any other factor deemed relevant by the commissioner.  
 34.9      (c) In determining the nursing facility decertification 
 34.10  criteria to be used, the commissioner shall establish an 
 34.11  advisory committee.  The advisory committee's composition shall 
 34.12  include consumers or their representatives, counties, 
 34.13  legislators, and providers or their representatives, as well as 
 34.14  representatives of the departments of health and human services. 
 34.15     (d) The commissioner shall recommend to the 1999 
 34.16  legislature adoption of a process and criteria for determining 
 34.17  the schedule by which nursing facilities will be decertified 
 34.18  beginning in fiscal year 2000 under this subdivision. 
 34.19     Subd. 4.  [RULEMAKING EXEMPTION.] The commissioner is 
 34.20  exempt from all rulemaking requirements in chapter 14 for the 
 34.21  demonstration project under this section. 
 34.22     Subd. 5.  [LEGISLATIVE REPORTS.] The commissioner shall 
 34.23  report annually to the legislature every February, from 1999 to 
 34.24  2003, on the status and progress of the demonstration project 
 34.25  and shall make recommendations as needed to improve the 
 34.26  project's effectiveness. 
 34.27     Sec. 17.  Minnesota Statutes 1996, section 256B.69, 
 34.28  subdivision 4, is amended to read: 
 34.29     Subd. 4.  [LIMITATION OF CHOICE.] The commissioner shall 
 34.30  develop criteria to determine when limitation of choice may be 
 34.31  implemented in the experimental counties.  The criteria shall 
 34.32  ensure that all eligible individuals in the county have 
 34.33  continuing access to the full range of medical assistance 
 34.34  services as specified in subdivision 6.  The commissioner shall 
 34.35  exempt the following persons from participation in the project, 
 34.36  in addition to those who do not meet the criteria for limitation 
 35.1   of choice:  (1) persons eligible for medical assistance 
 35.2   according to section 256B.055, subdivision 1; (2) persons 
 35.3   eligible for medical assistance due to blindness or disability 
 35.4   as determined by the social security administration or the state 
 35.5   medical review team, unless:  (i) they are 65 years of age or 
 35.6   older, or (ii) they reside in Itasca county or they reside in a 
 35.7   county in which the commissioner conducts a pilot project under 
 35.8   a waiver granted pursuant to section 1115 of the Social Security 
 35.9   Act; (3) recipients who currently have private coverage through 
 35.10  a health maintenance organization; (4) recipients who are 
 35.11  eligible for medical assistance by spending down excess income 
 35.12  for medical expenses other than the nursing facility per diem 
 35.13  expense; (5) recipients who receive benefits under the Refugee 
 35.14  Assistance Program, established under United States Code, title 
 35.15  8, section 1522(e); (6) children who are both determined to be 
 35.16  severely emotionally disturbed and receiving case management 
 35.17  services according to section 256B.0625, subdivision 20; and (7) 
 35.18  adults under age 65 who are both determined to be seriously and 
 35.19  persistently mentally ill and received case management services 
 35.20  according to section 256B.0625, subdivision 20.  Children under 
 35.21  age 21 who are in foster placement may enroll in the project on 
 35.22  an elective basis.  Individuals excluded under clauses (6) and 
 35.23  (7) may choose to enroll on an elective basis.  The commissioner 
 35.24  may allow persons with a one-month spenddown who are otherwise 
 35.25  eligible to enroll to voluntarily enroll or remain enrolled, if 
 35.26  they elect to prepay their monthly spenddown to the state.  
 35.27  Effective July 1, 1999, the commissioner may require individuals 
 35.28  who are eligible for medical assistance on a spenddown basis to 
 35.29  enroll in the prepaid medical assistance program and may require 
 35.30  that the spenddown amount be paid to the state, county, or 
 35.31  health plan as a condition of eligibility for medical 
 35.32  assistance.  The commissioner shall request any necessary 
 35.33  federal authority to require the enrollment of individuals with 
 35.34  spenddowns into the prepaid medical assistance demonstration 
 35.35  project.  Beginning on or after July 1, 1997, the commissioner 
 35.36  may require those individuals to enroll in the prepaid medical 
 36.1   assistance program who otherwise would have been excluded under 
 36.2   clauses (1) and (3) and under Minnesota Rules, part 9500.1452, 
 36.3   subpart 2, items H, K, and L.  Before limitation of choice is 
 36.4   implemented, eligible individuals shall be notified and after 
 36.5   notification, shall be allowed to choose only among 
 36.6   demonstration providers.  The commissioner may assign an 
 36.7   individual with private coverage through a health maintenance 
 36.8   organization, to the same health maintenance organization for 
 36.9   medical assistance coverage, if the health maintenance 
 36.10  organization is under contract for medical assistance in the 
 36.11  individual's county of residence.  After initially choosing a 
 36.12  provider, the recipient is allowed to change that choice only at 
 36.13  specified times as allowed by the commissioner.  If a 
 36.14  demonstration provider ends participation in the project for any 
 36.15  reason, a recipient enrolled with that provider must select a 
 36.16  new provider but may change providers without cause once more 
 36.17  within the first 60 days after enrollment with the second 
 36.18  provider. 
 36.19     Sec. 18.  Minnesota Statutes 1996, section 256B.69, is 
 36.20  amended by adding a subdivision to read: 
 36.21     Subd. 6a.  [NURSING HOME SERVICES.] (a) Notwithstanding 
 36.22  Minnesota Rules, part 9500.1457, subpart 1, item B, nursing 
 36.23  facility services as defined in section 256B.0625, subdivision 
 36.24  2, which are provided in a nursing facility certified by the 
 36.25  Minnesota department of health for services provided and 
 36.26  eligible for payment under Medicaid, shall be covered under the 
 36.27  prepaid medical assistance program for individuals who are not 
 36.28  residing in a nursing facility at the time of enrollment in the 
 36.29  prepaid medical assistance program.  Liability for coverage of 
 36.30  nursing facility services by a participating health plan is 
 36.31  limited to 365 days for any person enrolled under the prepaid 
 36.32  medical assistance program. 
 36.33     (b) For individuals enrolled in the Minnesota senior health 
 36.34  options project authorized under subdivision 23, nursing 
 36.35  facility services shall be covered according to the terms and 
 36.36  conditions of the federal waiver governing that demonstration 
 37.1   project. 
 37.2      Sec. 19.  Minnesota Statutes 1996, section 256B.69, is 
 37.3   amended by adding a subdivision to read: 
 37.4      Subd. 6b.  [ELDERLY WAIVER SERVICES.] Notwithstanding 
 37.5   Minnesota Rules, part 9500.1457, subpart 1, item C, elderly 
 37.6   waiver services shall be covered under the prepaid medical 
 37.7   assistance program for all individuals who are eligible 
 37.8   according to section 256B.0915.  For individuals enrolled in the 
 37.9   Minnesota senior health options project authorized under 
 37.10  subdivision 23, elderly waiver services shall be covered 
 37.11  according to the terms and conditions of the federal waiver 
 37.12  governing that demonstration project. 
 37.13     Sec. 20.  Minnesota Statutes 1996, section 256I.04, 
 37.14  subdivision 2a, is amended to read: 
 37.15     Subd. 2a.  [LICENSE REQUIRED.] A county agency may not 
 37.16  enter into an agreement with an establishment to provide group 
 37.17  residential housing unless:  
 37.18     (1) the establishment is licensed by the department of 
 37.19  health as a hotel and restaurant; a board and lodging 
 37.20  establishment; a residential care home; a boarding care home 
 37.21  before March 1, 1985; or a supervised living facility, and the 
 37.22  service provider for residents of the facility is licensed under 
 37.23  chapter 245A.  However, an establishment licensed by the 
 37.24  department of health to provide lodging need not also be 
 37.25  licensed to provide board if meals are being supplied to 
 37.26  residents under a contract with a food vendor who is licensed by 
 37.27  the department of health; or 
 37.28     (2) the residence is licensed by the commissioner of human 
 37.29  services under Minnesota Rules, parts 9555.5050 to 9555.6265, or 
 37.30  certified by a county human services agency prior to July 1, 
 37.31  1992, using the standards under Minnesota Rules, parts 9555.5050 
 37.32  to 9555.6265; or 
 37.33     (3) services are delivered as specified in Minnesota Rules, 
 37.34  parts 4668.0002 to 4668.0799, and the residence is registered 
 37.35  under chapter 144D, and provides three meals per day. 
 37.36     The requirements under clauses (1) ~~and~~, (2), and (3) do not 
 38.1   apply to establishments exempt from state licensure because they 
 38.2   are located on Indian reservations and subject to tribal health 
 38.3   and safety requirements. 
 38.4      Sec. 21.  Minnesota Statutes 1996, section 256I.05, 
 38.5   subdivision 1a, is amended to read: 
 38.6      Subd. 1a.  [SUPPLEMENTARY RATES.] In addition to the room 
 38.7   and board rate specified in subdivision 1, the county agency may 
 38.8   negotiate a payment not to exceed $426.37 for other services 
 38.9   necessary to provide room and board provided by the group 
 38.10  residence if the residence is licensed by or registered by the 
 38.11  department of health, or licensed by the department of human 
 38.12  services to provide services in addition to room and board, and 
 38.13  if the provider of services is not also concurrently receiving 
 38.14  funding for services for a recipient under a home and 
 38.15  community-based waiver under title XIX of the Social Security 
 38.16  Act; or funding from the medical assistance program under 
 38.17  section 256B.0627, subdivision 4, for personal care services for 
 38.18  residents in the setting; or residing in a setting which 
 38.19  receives funding under Minnesota Rules, parts 9535.2000 to 
 38.20  9535.3000.  If funding is available for other necessary services 
 38.21  through a home and community-based waiver, or personal care 
 38.22  services under section 256B.0627, subdivision 4, then the GRH 
 38.23  rate is limited to the rate set in subdivision 1.  The 
 38.24  registration and licensure requirement does not apply to 
 38.25  establishments which are exempt from state licensure because 
 38.26  they are located on Indian reservations and for which the tribe 
 38.27  has prescribed health and safety requirements.  Service payments 
 38.28  under this section may be prohibited under rules to prevent the 
 38.29  supplanting of federal funds with state funds.  The commissioner 
 38.30  shall pursue the feasibility of obtaining the approval of the 
 38.31  Secretary of Health and Human Services to provide home and 
 38.32  community-based waiver services under title XIX of the Social 
 38.33  Security Act for residents who are not eligible for an existing 
 38.34  home and community-based waiver due to a primary diagnosis of 
 38.35  mental illness or chemical dependency and shall apply for a 
 38.36  waiver if it is determined to be cost-effective.  The 
 39.1   commissioner is authorized to make cost-neutral transfers from 
 39.2   the GRH fund for beds under this section to other funding 
 39.3   programs administered by the department, county human service 
 39.4   agencies, or managed care provider organizations if those beds 
 39.5   are permanently removed from the GRH census and the transfer is 
 39.6   under a plan approved by the commissioner.  The commissioner 
 39.7   shall report the amount of any transfers under this provision 
 39.8   annually to the legislature. 
 39.9      Sec. 22.  Minnesota Statutes 1996, section 469.155, 
 39.10  subdivision 4, is amended to read: 
 39.11     Subd. 4.  [REFINANCING HEALTH FACILITIES.] It may issue 
 39.12  revenue bonds to pay, purchase, or discharge all or any part of 
 39.13  the outstanding indebtedness of a contracting party engaged 
 39.14  primarily in the operation of one or more nonprofit hospitals or 
 39.15  nursing homes previously incurred in the acquisition or 
 39.16  betterment of its existing hospital or nursing home facilities 
 39.17  to the extent deemed necessary by the governing body of the 
 39.18  municipality or redevelopment agency; this may include any 
 39.19  unpaid interest on the indebtedness accrued or to accrue to the 
 39.20  date on which the indebtedness is finally paid, and any premium 
 39.21  the governing body of the municipality or redevelopment agency 
 39.22  determines to be necessary to be paid to pay, purchase, or 
 39.23  defease the outstanding indebtedness.  If revenue bonds are 
 39.24  issued for this purpose, the refinancing and the existing 
 39.25  properties of the contracting party shall be deemed to 
 39.26  constitute a project under section 469.153, subdivision 2, 
 39.27  clause (d).  ~~Revenue bonds may not be issued pursuant to this~~ 
 39.28  ~~subdivision unless the application for approval of the project~~ 
 39.29  ~~pursuant to section 469.154 shows that a reduction in debt~~ 
 39.30  ~~service charges is estimated to result and will be reflected in~~ 
 39.31  ~~charges to patients and third-party payors.  Proceeds of revenue~~ 
 39.32  ~~bonds issued pursuant to this subdivision may not be used for~~ 
 39.33  ~~any purpose inconsistent with the provisions of chapter 256B.~~  
 39.34  ~~Nothing in this subdivision prohibits the use of revenue bond~~ 
 39.35  ~~proceeds to pay outstanding indebtedness of a contracting party~~ 
 39.36  ~~to the extent permitted by law on March 28, 1978.~~  
 40.1      Sec. 23.  [REPEALER.] 
 40.2      Minnesota Statutes 1996, section 469.154, subdivision 6, is 
 40.3   repealed. 
 40.4      Sec. 24.  [EFFECTIVE DATE.] 
 40.5      Sections 2 to 5 are effective the day following final 
 40.6   enactment.  
 40.7      Section 18 is effective for persons enrolled in the prepaid 
 40.8   medical assistance program who are admitted to a nursing 
 40.9   facility on or after July 1, 1999, or upon federal approval, 
 40.10  whichever is later.  Section 19 is effective for all individuals 
 40.11  enrolled in the prepaid medical assistance program on or after 
 40.12  July 1, 1999, or upon federal approval, whichever is later. 
 40.13                             ARTICLE 2 
 40.14                CONTINUING CARE FOR DISABLED PERSONS 
 40.15     Section 1.  Minnesota Statutes 1996, section 62E.14, is 
 40.16  amended by adding a subdivision to read: 
 40.17     Subd. 4e.  [WAIVER OF PREEXISTING CONDITIONS; PERSONS 
 40.18  COVERED BY PUBLICLY FUNDED HEALTH PROGRAMS.] A person may enroll 
 40.19  in the comprehensive plan with a waiver of the preexisting 
 40.20  condition limitation in subdivision 3, provided that:  
 40.21     (1) the person was formerly enrolled in the medical 
 40.22  assistance, general assistance medical care, or MinnesotaCare 
 40.23  program; 
 40.24     (2) the person is a Minnesota resident; and 
 40.25     (3) the person applies within 90 days of termination from 
 40.26  medical assistance, general assistance medical care, or 
 40.27  MinnesotaCare program. 
 40.28     Sec. 2.  Minnesota Statutes 1996, section 245.652, 
 40.29  subdivision 1, is amended to read: 
 40.30     Subdivision 1.  [PURPOSE.] The regional treatment centers 
 40.31  shall provide services designed to end a person's reliance on 
 40.32  chemical use or a person's chemical abuse and increase effective 
 40.33  and chemical-free functioning.  Clinically effective programs 
 40.34  must be provided in accordance with section 246.64.  Services 
 40.35  may be offered on the regional center campus or at sites 
 40.36  elsewhere in the ~~catchment~~ area served by the regional treatment 
 41.1   center. 
 41.2      Sec. 3.  Minnesota Statutes 1996, section 245.652, 
 41.3   subdivision 2, is amended to read: 
 41.4      Subd. 2.  [SERVICES OFFERED.] Services provided ~~must~~ may 
 41.5   include, but are not limited to, the following: 
 41.6      (1) primary and extended residential care, including 
 41.7   residential treatment programs of varied duration intended to 
 41.8   deal with a person's chemical dependency or chemical abuse 
 41.9   problems; 
 41.10     (2) follow-up care to persons discharged from regional 
 41.11  treatment center programs or other chemical dependency programs; 
 41.12     (3) outpatient treatment programs; and 
 41.13     (4) other treatment services, as appropriate and as 
 41.14  provided under contract or shared service agreements. 
 41.15     Sec. 4.  Minnesota Statutes 1996, section 245.652, 
 41.16  subdivision 4, is amended to read: 
 41.17     Subd. 4.  [SYSTEM LOCATIONS.] ~~Programs shall be located in~~ 
 41.18  ~~Anoka, Brainerd, Fergus Falls, St. Peter, and Willmar and may be~~ 
 41.19  ~~offered at other selected sites.~~  Programs are currently located 
 41.20  in Walker, Anoka, Brainerd, Fergus Falls, St. Peter, Willmar, 
 41.21  and in the Moose Lake area, Cloquet, and Cambridge.  Locations 
 41.22  of state-operated chemical dependency programs shall be 
 41.23  determined by needs of Minnesota counties and consumers.  The 
 41.24  commissioner of human services shall have the authority to 
 41.25  consolidate or close any state-operated chemical dependency 
 41.26  programs that are not able to generate sufficient revenues to 
 41.27  cover their expenses, after reasonable attempts to generate 
 41.28  additional revenues have failed.  Before the closure or 
 41.29  consolidation of any state-operated chemical dependency program, 
 41.30  the commissioner shall notify the chairs of the senate health 
 41.31  and family security finance division and the house of 
 41.32  representatives health and human services finance division. 
 41.33     Sec. 5.  Minnesota Statutes 1996, section 246.0135, is 
 41.34  amended to read: 
 41.35     246.0135 [OPERATION OF REGIONAL TREATMENT CENTERS.] 
 41.36     (a) The commissioner of human services is prohibited from 
 42.1   closing any regional treatment center or state-operated nursing 
 42.2   home ~~or~~ and, except for chemical dependency programs as provided 
 42.3   in section 245.652, any program at any of the regional treatment 
 42.4   centers or state-operated nursing homes, without specific 
 42.5   legislative authorization.  For persons with mental retardation 
 42.6   or related conditions who move from one regional treatment 
 42.7   center to another regional treatment center, the provisions of 
 42.8   section 256B.092, subdivision 10, must be followed for both the 
 42.9   discharge from one regional treatment center and admission to 
 42.10  another regional treatment center, except that the move is not 
 42.11  subject to the consensus requirement of section 256B.092, 
 42.12  subdivision 10, paragraph (b). 
 42.13     (b) Prior to closing or downsizing a regional treatment 
 42.14  center, the commissioner of human services shall be responsible 
 42.15  for assuring that community-based alternatives developed in 
 42.16  response are adequate to meet the program needs identified by 
 42.17  each county within the catchment area and do not require 
 42.18  additional local county property tax expenditures. 
 42.19     (c) The nonfederal share of the cost of alternative 
 42.20  treatment or care developed as the result of the closure of a 
 42.21  regional treatment center, including costs associated with 
 42.22  fulfillment of responsibilities under chapter 253B shall be paid 
 42.23  from state funds appropriated for purposes specified in section 
 42.24  246.013. 
 42.25     (d) Counties in the catchment area of a regional treatment 
 42.26  center which has been closed or downsized may not at any time be 
 42.27  required to pay a greater cost of care for alternative care and 
 42.28  treatment than the county share set by the commissioner for the 
 42.29  cost of care provided by regional treatment centers. 
 42.30     (e) The commissioner may not divert state funds used for 
 42.31  providing for care or treatment of persons residing in a 
 42.32  regional treatment center for purposes unrelated to the care and 
 42.33  treatment of such persons. 
 42.34     Sec. 6.  Minnesota Statutes 1996, section 246.02, 
 42.35  subdivision 2, is amended to read: 
 42.36     Subd. 2.  The commissioner of human services shall act with 
 43.1   the advice of the medical policy directional committee on mental 
 43.2   health in the appointment and removal of the chief executive 
 43.3   officers of the following institutions:  Anoka-Metro Regional 
 43.4   Treatment Center, Ah-Gwah-Ching Center, Fergus Falls Regional 
 43.5   Treatment Center, St. Peter Regional Treatment Center and 
 43.6   Minnesota Security Hospital, Willmar Regional Treatment Center, 
 43.7   ~~Faribault Regional Center,~~ Cambridge Regional Human Services 
 43.8   Center, Brainerd Regional Human Services Center, ~~and until June~~ 
 43.9   ~~30, 1995, Moose Lake Regional Treatment Center, and after June~~ 
 43.10  ~~30, 1995,~~ Minnesota Sexual Psychopathic Personality Treatment 
 43.11  Center and until June 30, 1998, Faribault Regional Center. 
 43.12     Sec. 7.  Minnesota Statutes 1996, section 252.025, 
 43.13  subdivision 1, is amended to read: 
 43.14     Subdivision 1.  [REGIONAL TREATMENT CENTERS.] State 
 43.15  hospitals for persons with mental retardation shall be 
 43.16  established and maintained at Faribault until June 30, 1998, 
 43.17  Cambridge and Brainerd, and notwithstanding any provision to the 
 43.18  contrary they shall be respectively known as the Faribault 
 43.19  regional center, the Cambridge regional human services center, 
 43.20  and the Brainerd regional human services center.  Each of the 
 43.21  foregoing state hospitals shall also be known by the name of 
 43.22  regional center at the discretion of the commissioner of human 
 43.23  services.  The terms "human services" or "treatment" may be 
 43.24  included in the designation. 
 43.25     Sec. 8.  Minnesota Statutes 1996, section 252.025, 
 43.26  subdivision 4, is amended to read: 
 43.27     Subd. 4.  [STATE-PROVIDED SERVICES.] (a) It is the policy 
 43.28  of the state to capitalize and recapitalize the regional 
 43.29  treatment centers as necessary to prevent depreciation and 
 43.30  obsolescence of physical facilities and to ensure they retain 
 43.31  the physical capability to provide residential programs.  
 43.32  Consistent with that policy and with section 252.50, and within 
 43.33  the limits of appropriations made available for this purpose, 
 43.34  the commissioner may establish, by June 30, 1991, the following 
 43.35  state-operated, community-based programs for the least 
 43.36  vulnerable regional treatment center residents:  at Brainerd 
 44.1   regional services center, two residential programs and two day 
 44.2   programs; at Cambridge regional treatment center, four 
 44.3   residential programs and two day programs; at Faribault regional 
 44.4   treatment center, ten residential programs and six day programs; 
 44.5   at Fergus Falls regional treatment center, two residential 
 44.6   programs and one day program; at Moose Lake regional treatment 
 44.7   center, four residential programs and two day programs; and at 
 44.8   Willmar regional treatment center, two residential programs and 
 44.9   one day program. 
 44.10     (b) By January 15, 1991, the commissioner shall report to 
 44.11  the legislature a plan to provide continued regional treatment 
 44.12  center capacity and state-operated, community-based residential 
 44.13  and day programs for persons with developmental disabilities at 
 44.14  Brainerd, Cambridge, ~~Faribault,~~ Fergus Falls, St. Peter, and 
 44.15  Willmar, as follows: 
 44.16     (1) by July 1, 1998, continued regional treatment center 
 44.17  capacity to serve 350 persons with developmental disabilities as 
 44.18  follows:  at Brainerd, 80 persons; at Cambridge, 12 persons; ~~at~~ 
 44.19  ~~Faribault, 110 persons;~~ at Fergus Falls, 60 persons; at St. 
 44.20  Peter, 35 persons; at Willmar, 25 persons; and up to 16 crisis 
 44.21  beds in the Twin Cities metropolitan area; and 
 44.22     (2) by July 1, 1999, continued regional treatment center 
 44.23  capacity to serve 254 persons with developmental disabilities as 
 44.24  follows:  at Brainerd, 57 persons; at Cambridge, 12 persons; ~~at~~ 
 44.25  ~~Faribault, 80 persons;~~ at Fergus Falls, 35 persons; at St. 
 44.26  Peter, 30 persons; at Willmar, 12 persons, and up to 16 crisis 
 44.27  beds in the Twin Cities metropolitan area.  In addition, the 
 44.28  plan shall provide for the capacity to provide residential 
 44.29  services to 570 persons with developmental disabilities in 95 
 44.30  state-operated, community-based residential programs. 
 44.31     The commissioner is subject to a mandamus action under 
 44.32  chapter 586 for any failure to comply with the provisions of 
 44.33  this subdivision. 
 44.34     Sec. 9.  Minnesota Statutes 1996, section 252.025, is 
 44.35  amended by adding a subdivision to read: 
 44.36     Subd. 7.  [MINNESOTA EXTENDED TREATMENT OPTIONS.] The 
 45.1   commissioner shall develop by July 1, 1997, the Minnesota 
 45.2   extended treatment options at the Cambridge campus to serve 
 45.3   citizens of Minnesota who have developmental disabilities and 
 45.4   exhibit severe behaviors which present a risk to public safety.  
 45.5   This program will provide secure residential services on the 
 45.6   campus and an array of community support services statewide. 
 45.7      Sec. 10.  Minnesota Statutes 1996, section 252.32, 
 45.8   subdivision 1a, is amended to read: 
 45.9      Subd. 1a.  [SUPPORT GRANTS.] (a) Provision of support 
 45.10  grants must be limited to families who require support and whose 
 45.11  dependents are under the age of 22 and who have mental 
 45.12  retardation or who have a related condition and who have been 
 45.13  determined by a screening team established under section 
 45.14  256B.092 to be at risk of institutionalization.  Families who 
 45.15  are receiving home and community-based waivered services for 
 45.16  persons with mental retardation or related conditions are not 
 45.17  eligible for support grants.  Effective October 1, 1997, 
 45.18  families who are receiving other home and community-based 
 45.19  waivered services are not eligible for support grants.  Families 
 45.20  whose annual adjusted gross income is $60,000 or more are not 
 45.21  eligible for support grants except in cases where extreme 
 45.22  hardship is demonstrated.  Beginning in state fiscal year 1994, 
 45.23  the commissioner shall adjust the income ceiling annually to 
 45.24  reflect the projected change in the average value in the United 
 45.25  States Department of Labor Bureau of Labor Statistics consumer 
 45.26  price index (all urban) for that year. 
 45.27     (b) Support grants may be made available as monthly subsidy 
 45.28  grants and lump sum grants. 
 45.29     (c) Support grants may be issued in the form of cash, 
 45.30  voucher, and direct county payment to a vendor.  
 45.31     (d) Applications for the support grant shall be made by the 
 45.32  legal guardian to the county social service agency ~~to the~~ 
 45.33  ~~department of human services~~.  The application shall specify the 
 45.34  needs of the families, the form of the grant requested by the 
 45.35  families, and that the families have agreed to use the support 
 45.36  grant for items and services within the designated reimbursable 
 46.1   expense categories and recommendations of the county.  
 46.2      (e) Families who were receiving subsidies on the date of 
 46.3   implementation of the $60,000 income limit in paragraph (a) 
 46.4   continue to be eligible for a family support grant until 
 46.5   December 31, 1991, if all other eligibility criteria are met.  
 46.6   After December 31, 1991, these families are eligible for a grant 
 46.7   in the amount of one-half the grant they would otherwise 
 46.8   receive, for as long as they remain eligible under other 
 46.9   eligibility criteria. 
 46.10     Sec. 11.  Minnesota Statutes 1996, section 252.32, 
 46.11  subdivision 3, is amended to read: 
 46.12     Subd. 3.  [AMOUNT OF SUPPORT GRANT; USE.] Support grant 
 46.13  amounts shall be determined by the ~~commissioner of human~~ 
 46.14  ~~services~~ county social service agency.  Each service and item 
 46.15  purchased with a support grant must: 
 46.16     (1) be over and above the normal costs of caring for the 
 46.17  dependent if the dependent did not have a disability; 
 46.18     (2) be directly attributable to the dependent's disabling 
 46.19  condition; and 
 46.20     (3) enable the family to delay or prevent the out-of-home 
 46.21  placement of the dependent. 
 46.22     The design and delivery of services and items purchased 
 46.23  under this section must suit the dependent's chronological age 
 46.24  and be provided in the least restrictive environment possible, 
 46.25  consistent with the needs identified in the individual service 
 46.26  plan. 
 46.27     Items and services purchased with support grants must be 
 46.28  those for which there are no other public or private funds 
 46.29  available to the family.  Fees assessed to parents for health or 
 46.30  human services that are funded by federal, state, or county 
 46.31  dollars are not reimbursable through this program. 
 46.32     The maximum monthly amount shall be $250 per eligible 
 46.33  dependent, or $3,000 per eligible dependent per state fiscal 
 46.34  year, within the limits of available funds.  ~~During fiscal year~~ 
 46.35  ~~1992 and 1993, the maximum monthly grant awarded to families who~~ 
 46.36  ~~are eligible for medical assistance shall be $200, except in~~ 
 47.1   ~~cases where extreme hardship is demonstrated.~~  The ~~commissioner~~ 
 47.2   county social service agency may consider the dependent's 
 47.3   supplemental security income in determining the amount of the 
 47.4   support grant.  ~~A variance~~ The county social service agency may 
 47.5   ~~be granted by the commissioner to~~ exceed $3,000 per state fiscal 
 47.6   year per eligible dependent for emergency circumstances in cases 
 47.7   where exceptional resources of the family are required to meet 
 47.8   the health, welfare-safety needs of the child.  The ~~commissioner~~ 
 47.9   county social service agency may set aside up to five percent of 
 47.10  ~~the appropriation~~ their allocation to fund emergency situations. 
 47.11     Effective July 1, 1997, county social service agencies 
 47.12  shall continue to provide funds to families receiving state 
 47.13  grants on June 30, 1997, if eligibility criteria continue to be 
 47.14  met.  Any adjustments to their monthly grant amount must be 
 47.15  based on the needs of the family and funding availability. 
 47.16     Sec. 12.  Minnesota Statutes 1996, section 252.32, 
 47.17  subdivision 3a, is amended to read: 
 47.18     Subd. 3a.  [REPORTS AND ~~REIMBURSEMENT~~ ALLOCATIONS.] (a) The 
 47.19  commissioner shall specify requirements for quarterly fiscal and 
 47.20  annual program reports according to section 256.01, subdivision 
 47.21  2, paragraph (17).  Program reports shall include data which 
 47.22  will enable the commissioner to evaluate program effectiveness 
 47.23  and to audit compliance.  The commissioner shall reimburse 
 47.24  county costs on a quarterly basis. 
 47.25     (b) Beginning January 1, 1998, the commissioner shall 
 47.26  allocate state funds made available under this section to county 
 47.27  social service agencies on a calendar year basis.  The 
 47.28  commissioner shall allocate to each county first in amounts 
 47.29  equal to each county's guaranteed floor as described in clause 
 47.30  (1), and second, any remaining funds, after the allocation of 
 47.31  funds to the newly participating counties as provided for in 
 47.32  clause (3), shall be allocated in proportion to each county's 
 47.33  total number of families receiving a grant on July 1 of the most 
 47.34  recent calendar year.  
 47.35     (1) Each county's guaranteed floor shall be calculated as 
 47.36  follows:  
 48.1      (i) 95 percent of the county's allocation received in the 
 48.2   preceding calendar year.  For the calendar year 1998 allocation, 
 48.3   the preceding calendar year shall be considered to be double the 
 48.4   six-month allocation as provided in clause (2); 
 48.5      (ii) when the amount of funds available for allocation is 
 48.6   less than the amount available in the preceding year, each 
 48.7   county's previous year allocation shall be reduced in proportion 
 48.8   to the reduction in statewide funding, for the purpose of 
 48.9   establishing the guaranteed floor.  
 48.10     (2) For the period July 1, 1997, to December 31, 1997, the 
 48.11  commissioner shall allocate to each county an amount equal to 
 48.12  the actual, state approved, grants issued to the families for 
 48.13  the month of January 1997, multiplied by six.  This six-month 
 48.14  allocation shall be combined with the calendar year 1998 
 48.15  allocation and be administered as an 18-month allocation.  
 48.16     (3) At the commissioner's discretion, funds may be 
 48.17  allocated to any nonparticipating county that requests an 
 48.18  allocation under this section.  Allocations to newly 
 48.19  participating counties are dependent upon the availability of 
 48.20  funds, as determined by the actual expenditure amount of the 
 48.21  participating counties for the most recently completed calendar 
 48.22  year.  
 48.23     (4) The commissioner shall regularly review the use of 
 48.24  family support fund allocations by county.  The commissioner may 
 48.25  reallocate unexpended or unencumbered money at any time to those 
 48.26  counties that have a demonstrated need for additional funding.  
 48.27     (c) County allocations under this section will be adjusted 
 48.28  for transfers that occur pursuant to section 256.476. 
 48.29     Sec. 13.  Minnesota Statutes 1996, section 252.32, 
 48.30  subdivision 3c, is amended to read: 
 48.31     Subd. 3c.  [COUNTY BOARD RESPONSIBILITIES.] County boards 
 48.32  receiving funds under this section shall:  
 48.33     (1) determine the needs of families for services in 
 48.34  accordance with section 256B.092 or 256E.08 and any rules 
 48.35  adopted under those sections; 
 48.36     (2) determine the eligibility of all persons proposed for 
 49.1   program participation; 
 49.2      (3) ~~recommend for approval~~ approve all items and services 
 49.3   to be reimbursed and inform families of the ~~commissioner's~~ 
 49.4   county's approval decision; 
 49.5      (4) issue support grants directly to, or on behalf of, 
 49.6   eligible families; 
 49.7      (5) inform recipients of their right to appeal under 
 49.8   subdivision 3e; 
 49.9      (6) submit quarterly financial reports under subdivision 
 49.10  3b; and 
 49.11     (7) coordinate services with other programs offered by the 
 49.12  county. 
 49.13     Sec. 14.  Minnesota Statutes 1996, section 252.32, 
 49.14  subdivision 5, is amended to read: 
 49.15     Subd. 5.  [COMPLIANCE.] If a county board or grantee does 
 49.16  not comply with this section ~~and the rules adopted by the~~ 
 49.17  ~~commissioner of human services~~, the commissioner may recover, 
 49.18  suspend, or withhold payments. 
 49.19     Sec. 15.  Minnesota Statutes 1996, section 254.04, is 
 49.20  amended to read: 
 49.21     254.04 [TREATMENT OF CHEMICALLY DEPENDENT PERSONS.] 
 49.22     The commissioner of human services is hereby authorized to 
 49.23  continue the treatment of chemically dependent persons at 
 49.24  Ah-Gwah-Ching and Moose Lake area programs as well as at the 
 49.25  regional treatment centers located at Anoka, Brainerd, Fergus 
 49.26  Falls, ~~Moose Lake,~~ St. Peter, and Willmar as specified in 
 49.27  section 245.652.  ~~During the year ending June 30, 1994, the~~ 
 49.28  ~~commissioner shall relocate, in the catchment area served by the~~ 
 49.29  ~~Moose Lake regional treatment center, two state-operated~~ 
 49.30  ~~off-campus programs designed to serve patients who are relocated~~ 
 49.31  ~~from the Moose Lake regional treatment center.  One program~~ 
 49.32  ~~shall be a 35-bed program for women who are chemically~~ 
 49.33  ~~dependent; the other shall be a 25-bed program for men who are~~ 
 49.34  ~~chemically dependent.  The facility space housing the Liberalis~~ 
 49.35  ~~chemical dependency program (building C-35) and the men's~~ 
 49.36  ~~chemical dependency program (4th floor main) may not be vacated~~ 
 50.1   ~~until suitable off-campus space for the women's chemical~~ 
 50.2   ~~dependency program of 35 beds and the men's chemical dependency~~ 
 50.3   ~~program of 25 beds is located and clients and staff are~~ 
 50.4   ~~relocated.~~ 
 50.5      Sec. 16.  Minnesota Statutes 1996, section 254B.02, 
 50.6   subdivision 3, is amended to read: 
 50.7      Subd. 3.  [RESERVE ACCOUNT.] The commissioner shall 
 50.8   allocate money from the reserve account to counties that, during 
 50.9   the current fiscal year, have met or exceeded the base level of 
 50.10  expenditures for eligible chemical dependency services from 
 50.11  local money.  The commissioner shall establish the base level 
 50.12  for fiscal year 1988 as the amount of local money used for 
 50.13  eligible services in calendar year 1986.  In later years, the 
 50.14  base level must be increased in the same proportion as state 
 50.15  appropriations to implement Laws 1986, chapter 394, sections 8 
 50.16  to 20, are increased.  The base level must be decreased if the 
 50.17  fund balance from which allocations are made under section 
 50.18  254B.02, subdivision 1, is decreased in later years.  The local 
 50.19  match rate for the reserve account is the same rate as applied 
 50.20  to the initial allocation.  Reserve account payments must not be 
 50.21  included when calculating the county adjustments made according 
 50.22  to subdivision 2.  For counties providing medical assistance or 
 50.23  general assistance medical care through managed care plans on 
 50.24  January 1, 1996, the base year is fiscal year 1995.  For 
 50.25  counties beginning provision of managed care after January 1, 
 50.26  1996, the base year is the most recent fiscal year before 
 50.27  enrollment in managed care begins.  For counties providing 
 50.28  managed care, the base level will be increased or decreased in 
 50.29  proportion to changes in the fund balance from which allocations 
 50.30  are made under subdivision 2, but will be additionally increased 
 50.31  or decreased in proportion to the change in county adjusted 
 50.32  population made in subdivision 1, paragraphs (b) and (c). 
 50.33     Sec. 17.  Minnesota Statutes 1996, section 254B.03, 
 50.34  subdivision 1, is amended to read: 
 50.35     Subdivision 1.  [LOCAL AGENCY DUTIES.] (a) Every local 
 50.36  agency shall provide chemical dependency services to persons 
 51.1   residing within its jurisdiction who meet criteria established 
 51.2   by the commissioner for placement in a chemical dependency 
 51.3   residential or nonresidential treatment service.  Chemical 
 51.4   dependency money must be administered by the local agencies 
 51.5   according to law and rules adopted by the commissioner under 
 51.6   sections 14.001 to 14.69. 
 51.7      (b) In order to contain costs, the county board shall, with 
 51.8   the approval of the commissioner of human services, select 
 51.9   eligible vendors of chemical dependency services who can provide 
 51.10  economical and appropriate treatment.  Unless the local agency 
 51.11  is a social services department directly administered by a 
 51.12  county or human services board, the local agency shall not be an 
 51.13  eligible vendor under section 254B.05.  The commissioner may 
 51.14  approve proposals from county boards to provide services in an 
 51.15  economical manner or to control utilization, with safeguards to 
 51.16  ensure that necessary services are provided.  If a county 
 51.17  implements a demonstration or experimental medical services 
 51.18  funding plan, the commissioner shall transfer the money as 
 51.19  appropriate.  If a county selects a vendor located in another 
 51.20  state, the county shall ensure that the vendor is in compliance 
 51.21  with the rules governing licensure of programs located in the 
 51.22  state. 
 51.23     (c) For the biennium ending June 30, 1999, the rate for 
 51.24  vendors may not increase more than three percent above the rate 
 51.25  approved on January 1, 1997.  Residential vendors may not 
 51.26  receive a rate increase in the biennium ending June 30, 1999, if 
 51.27  the rate charged on January 1, 1997, exceeds the statewide 
 51.28  median rate for that level of care.  Rates for residential 
 51.29  levels of care for vendors who are enrolled after January 1, 
 51.30  1997, may not exceed the median rate for each level of care 
 51.31  provided. 
 51.32     ~~(c)~~ (d) A culturally specific vendor that provides 
 51.33  assessments under a variance under Minnesota Rules, part 
 51.34  9530.6610, shall be allowed to provide assessment services to 
 51.35  persons not covered by the variance. 
 51.36     Sec. 18.  Minnesota Statutes 1996, section 256B.0625, 
 52.1   subdivision 15, is amended to read: 
 52.2      Subd. 15.  [HEALTH PLAN PREMIUMS AND COPAYMENTS.] Medical 
 52.3   assistance covers health care prepayment plan premiums, 
 52.4   insurance premiums, and copayments if determined to be 
 52.5   cost-effective by the commissioner.  Effective for all premium 
 52.6   payments due on or after August 1, 1997, medical assistance does 
 52.7   not cover premiums for health insurance policies offered by the 
 52.8   Minnesota comprehensive health association under chapter 62E.  
 52.9   For purposes of obtaining Medicare part A and part B, and 
 52.10  copayments, expenditures may be made even if federal funding is 
 52.11  not available. 
 52.12     Sec. 19.  Minnesota Statutes 1996, section 256B.49, 
 52.13  subdivision 1, is amended to read: 
 52.14     Subdivision 1.  [STUDY; WAIVER APPLICATION.] The 
 52.15  commissioner shall authorize a study to assess the need for home 
 52.16  and community-based waivers for chronically ill children who 
 52.17  have been and will continue to be hospitalized without a waiver, 
 52.18  and for disabled individuals under the age of 65 who are likely 
 52.19  to reside in an acute care or nursing home facility in the 
 52.20  absence of a waiver.  If a need for these waivers can be 
 52.21  demonstrated, the commissioner shall apply for federal waivers 
 52.22  necessary to secure, to the extent allowed by law, federal 
 52.23  participation under United States Code, title 42, sections 
 52.24  1396-1396p, as amended through December 31, 1982, for the 
 52.25  provision of home and community-based services to chronically 
 52.26  ill children who, in the absence of such a waiver, would remain 
 52.27  in an acute care setting, and to disabled individuals under the 
 52.28  age of 65 who, in the absence of a waiver, would reside in an 
 52.29  acute care or nursing home setting.  If the need is 
 52.30  demonstrated, the commissioner shall request a waiver under 
 52.31  United States Code, title 42, sections 1396-1396p, to allow 
 52.32  medicaid eligibility for blind or disabled children with 
 52.33  ineligible parents where income deemed from the parents would 
 52.34  cause the applicant to be ineligible for supplemental security 
 52.35  income if the family shared a household and to furnish necessary 
 52.36  services in the home or community to disabled individuals under 
 53.1   the age of 65 who would be eligible for medicaid if 
 53.2   institutionalized in an acute care or nursing home setting. 
 53.3   These waivers are requested to furnish necessary services in the 
 53.4   home and community setting to children or disabled adults under 
 53.5   age 65 who are medicaid eligible when institutionalized in an 
 53.6   acute care or nursing home setting.  The commissioner shall 
 53.7   assure that the cost of home and community-based care will not 
 53.8   be more than the cost of care if the eligible child or disabled 
 53.9   adult under age 65 were to remain institutionalized.  The 
 53.10  average monthly limit for the cost of home and community-based 
 53.11  services to a community alternative care waiver client shall not 
 53.12  exceed the statewide average medical assistance adjusted base 
 53.13  year operating cost for nursing and accommodation services under 
 53.14  sections 256.9685 to 256.969 for the diagnostic category to 
 53.15  which the waiver client would be assigned except the admission 
 53.16  and outlier rates shall be converted to an overall per diem.  
 53.17  The average monthly limit for the cost of services to a 
 53.18  traumatic brain injury neurobehavioral hospital waiver client 
 53.19  shall not exceed the statewide average medical assistance 
 53.20  adjusted base-year operating cost for nursing and accommodation 
 53.21  services of neurobehavioral rehabilitation programs in Medicare 
 53.22  designated long-term hospitals under sections 256.9685 to 
 53.23  256.969.  The following costs must be included in determining 
 53.24  the total average monthly costs for a waiver client:  
 53.25     (1) cost of all waivered services; and 
 53.26     (2) cost of skilled nursing, private duty nursing, home 
 53.27  health aide, and personal care services reimbursable by medical 
 53.28  assistance.  
 53.29     The commissioner of human services shall seek federal 
 53.30  waivers as necessary to implement the average monthly limit.  
 53.31  The commissioner shall seek to amend the federal waivers 
 53.32  obtained under this section to apply criteria to protect against 
 53.33  spousal impoverishment as authorized under United States Code, 
 53.34  title 42, section 1396r-5, and as implemented in sections 
 53.35  256B.0575, 256B.058, and 256B.059, except that the amendment 
 53.36  shall seek to add to the personal needs allowance permitted in 
 54.1   section 256B.0575, an amount equivalent to the group residential 
 54.2   housing rate as set by section 256I.03, subdivision 5. 
 54.3      Sec. 20.  Minnesota Statutes 1996, section 256D.03, 
 54.4   subdivision 3b, is amended to read: 
 54.5      Subd. 3b.  [COOPERATION.] General assistance or general 
 54.6   assistance medical care applicants and recipients must cooperate 
 54.7   with the state and local agency to identify potentially liable 
 54.8   third-party payors and assist the state in obtaining third-party 
 54.9   payments.  Cooperation includes identifying any third party who 
 54.10  may be liable for care and services provided under this chapter 
 54.11  to the applicant, recipient, or any other family member for whom 
 54.12  application is made and providing relevant information to assist 
 54.13  the state in pursuing a potentially liable third party.  General 
 54.14  assistance medical care applicants and recipients must cooperate 
 54.15  by providing information about any group health plan in which 
 54.16  they may be eligible to enroll.  They must cooperate with the 
 54.17  state and local agency in determining if the plan is 
 54.18  cost-effective.  If the plan is determined cost-effective and 
 54.19  the premium will be paid by the state or local agency or is 
 54.20  available at no cost to the person, they must enroll or remain 
 54.21  enrolled in the group health plan.  Effective for all premium 
 54.22  payments due on or after August 1, 1997, general assistance 
 54.23  medical care does not pay for premiums for health insurance 
 54.24  offered by the Minnesota comprehensive health association under 
 54.25  chapter 62E.  Cost-effective insurance premiums approved for 
 54.26  payment by the state agency and paid by the local agency are 
 54.27  eligible for reimbursement according to subdivision 6.  
 54.28     Sec. 21.  Laws 1995, chapter 207, article 8, section 41, 
 54.29  subdivision 2, is amended to read: 
 54.30     Subd. 2.  [PROGRAM DESIGN AND IMPLEMENTATION.] (a) The 
 54.31  pilot projects shall be established to design, plan, and improve 
 54.32  the mental health service delivery system for adults with 
 54.33  serious and persistent mental illness that would: 
 54.34     (1) provide an expanded array of services from which 
 54.35  clients can choose services appropriate to their needs; 
 54.36     (2) be based on purchasing strategies that improve access 
 55.1   and coordinate services without cost shifting; 
 55.2      (3) incorporate existing state facilities and resources 
 55.3   into the community mental health infrastructure through creative 
 55.4   partnerships with local vendors; and 
 55.5      (4) utilize existing categorical funding streams and 
 55.6   reimbursement sources in combined and creative ways, except 
 55.7   appropriations to regional treatment centers and all funds that 
 55.8   are attributable to the operation of state-operated services are 
 55.9   excluded unless appropriated specifically by the legislature for 
 55.10  a purpose consistent with this section. 
 55.11     (b) All projects funded by January 1, 1997, must complete 
 55.12  ~~their~~ the planning phase and be operational by June 30, 1997; 
 55.13  all projects funded by January 1, 1998, must be operational by 
 55.14  June 30, 1998. 
 55.15     Sec. 22.  [BRAINERD REGIONAL HUMAN SERVICES CENTER 
 55.16  GOVERNANCE DEMONSTRATION PROJECT.] 
 55.17     (a) The commissioner of human services is authorized to 
 55.18  establish a planning group comprised of representatives of the 
 55.19  Brainerd Regional Human Services Center and the 12 counties 
 55.20  within the catchment area of the Brainerd Regional Human 
 55.21  Services Center, to evaluate the feasibility of, and propose a 
 55.22  model for regional governance of the regional treatment center.  
 55.23  Establishment of a governance model that will enable further 
 55.24  integration of funding and service systems to ensure that 
 55.25  persons with mental illness or developmental disabilities in the 
 55.26  region are served according to law in a cost-efficient and 
 55.27  cost-effective manner will be the focal point of this planning 
 55.28  effort. 
 55.29     (b) The counties of Aitkin, Beltrami, Benton, Cass, 
 55.30  Clearwater, Crow Wing, Hubbard, Lake of the Woods, Morrison, 
 55.31  Stearns, Todd, and Wadena and the Brainerd Regional Human 
 55.32  Services Center will be represented on the planning group.  The 
 55.33  chief executive officer of the Brainerd Regional Human Services 
 55.34  Center will convene the initial meeting of the planning group no 
 55.35  later than July 1, 1997.  The planning group will select from 
 55.36  among its members a chairperson, identify other stakeholder 
 56.1   involvement in the planning process, and establish a project 
 56.2   work plan and meeting schedule.  If the planning group 
 56.3   determines that it is feasible to proceed with regional 
 56.4   governance of the Brainerd Regional Human Services Center, it 
 56.5   shall formulate and make recommendations on the governance 
 56.6   structure and its operating principles to the commissioner of 
 56.7   human services no later than May 15, 1998, for review and 
 56.8   approval by the commissioner prior to implementation of the 
 56.9   governance structure on July 1, 1998. 
 56.10     (c) The design of the governance model must lead to a 
 56.11  mental health and developmental disabilities service system that 
 56.12  is regionally based and community-focused and includes the 
 56.13  long-term psychiatric hospital services of the regional 
 56.14  treatment center as a component part of this locally defined 
 56.15  system.  The governing body will have decision-making authority 
 56.16  over the budget of the Brainerd Regional Human Services Center 
 56.17  and any related funds which county members agree to bring under 
 56.18  the auspices of the governance structure for purposes of this 
 56.19  demonstration project.  The Brainerd Regional Human Services 
 56.20  Center portion of the regional treatment center biennial 
 56.21  appropriation for mental health and developmental disabilities 
 56.22  programs would be placed under the management of the regional 
 56.23  governance body in accordance with the demonstration project's 
 56.24  agreed upon implementation schedule.  Project planning should 
 56.25  reflect the commitment to partnership between the state and 
 56.26  counties in considering those aspects of the service delivery in 
 56.27  the region that might be brought to a broader governance 
 56.28  structure in order to maximize benefits to clients for dollars 
 56.29  expended in the system.  Design of the project to enhance 
 56.30  regional flexibility and support the community-based system 
 56.31  infrastructure will improve the regional capacity to meet the 
 56.32  needs of persons with mental illness and developmental 
 56.33  disabilities and assure the availability of safety net services 
 56.34  within the regional service system. 
 56.35     (d) Implementation of the regional governance project will 
 56.36  not proceed without the affirmative recommendation of the 
 57.1   project planning group.  The planning group may discontinue the 
 57.2   project at any point that it collectively determines development 
 57.3   of a regional governance model to be unworkable by providing the 
 57.4   commissioner of human services 30 days' written notice and an 
 57.5   explanation of the reasons that prevented the project from going 
 57.6   forward. 
 57.7      Sec. 23.  [REPEALER.] 
 57.8      Minnesota Statutes 1996, sections 252.32, subdivision 4; 
 57.9   and 256B.501, subdivision 5c, are repealed. 
 57.10                             ARTICLE 3 
 57.11                       DEMONSTRATION PROJECT 
 57.12                   FOR PERSONS WITH DISABILITIES 
 57.13     Section 1.  [256B.77] [ALTERNATIVE MANAGED CARE FOR PERSONS 
 57.14  WITH DISABILITIES.] 
 57.15     Subdivision 1.  [DEMONSTRATION PROJECT FOR PERSONS WITH 
 57.16  DISABILITIES.] The commissioner of human services shall, in 
 57.17  cooperation with local agencies, develop and implement a 
 57.18  demonstration project to create alternative managed care 
 57.19  organizations in which medical assistance benefit set services 
 57.20  for persons with disabilities are provided in an integrated 
 57.21  manner and funded on a capitated basis.  This demonstration 
 57.22  project must be proposed and designed by local planning groups 
 57.23  that include county and provider agencies, consumers, family 
 57.24  members, advocates, and advocacy agencies and may include health 
 57.25  plans.  Consumers, families, and consumer representatives must 
 57.26  be involved in the planning, implementation, and evaluation 
 57.27  processes for the demonstration project.  
 57.28     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
 57.29  the following terms have the meanings given. 
 57.30     (a) "Acute care" means the medical assistance benefit set, 
 57.31  not including continuing care services, as specified in the 
 57.32  contract. 
 57.33     (b) "Advocate" means an individual who has been authorized 
 57.34  by the enrollee or the enrollee's legal representative to help 
 57.35  the enrollee understand information presented and to speak on 
 57.36  the enrollee's behalf.  The advocate does not have the legal 
 58.1   authority to make decisions that the guardian or conservator may 
 58.2   have.  The advocate represents only the enrollee. 
 58.3      (c) "Alternative services" means services developed and 
 58.4   provided through the managed care organization which are not 
 58.5   part of the medical assistance benefit set. 
 58.6      (d) "Commissioner" means the commissioner of the department 
 58.7   of human services. 
 58.8      (e) "Continuing care" means the medical assistance benefit 
 58.9   set, not including acute care services, as specified in the 
 58.10  contract. 
 58.11     (f) "Contract" means the legal agreement between the 
 58.12  commissioner and the managed care organization. 
 58.13     (g) "Demonstration site" means the geographic area in which 
 58.14  eligible individuals may be included in the demonstration 
 58.15  project. 
 58.16     (h) "Department" means the department of human services. 
 58.17     (i) "Eligible individuals" means those persons residing in 
 58.18  demonstration sites who are eligible for medical assistance and 
 58.19  are disabled based on a disability determination under section 
 58.20  256B.055, subdivisions 7 and 12; or who are eligible for medical 
 58.21  assistance and have been diagnosed as having a serious and 
 58.22  persistent mental illness as defined in section 245.462, 
 58.23  subdivision 20; or having severe emotional disturbance, as 
 58.24  defined in section 245.4871, subdivision 6.  Other individuals 
 58.25  may be included at the option of the managed care organization 
 58.26  based on agreement with the commissioner. 
 58.27     (j) "Enrollee" means an eligible individual who is enrolled 
 58.28  in a managed care organization in the demonstration project. 
 58.29     (k) "Informed choice" means a voluntary decision made by 
 58.30  the enrollee or the enrollee's legal representative, after 
 58.31  becoming familiarized with the alternatives, and having been 
 58.32  provided sufficient relevant written and oral information at an 
 58.33  appropriate comprehension level and in a manner consistent with 
 58.34  the enrollee's or the enrollee's legal representative's primary 
 58.35  mode of communication. 
 58.36     (l) "Informed consent" means the written agreement, or an 
 59.1   agreement as documented in the record, by a competent person, or 
 59.2   a person's legal representative who: 
 59.3      (1) has the capacity to make reasoned decisions based on 
 59.4   relevant information; 
 59.5      (2) is making decisions voluntarily and without coercion; 
 59.6   and 
 59.7      (3) has knowledge to make an informed choice. 
 59.8      (m) "Legal representative" means an individual who is 
 59.9   legally authorized to provide informed consent or make informed 
 59.10  choices on the person's behalf.  A legal representative may be 
 59.11  one of the following individuals: 
 59.12     (1) the parent of a minor under the age of 18 who has not 
 59.13  been emancipated; 
 59.14     (2) a court-appointed guardian or conservator of a person 
 59.15  who is 18 years of age or older in areas where legally 
 59.16  authorized to make decisions; 
 59.17     (3) a guardian ad litem or special guardian or conservator, 
 59.18  in areas where legally authorized to make decisions; 
 59.19     (4) legal counsel if so specified by the person; or 
 59.20     (5) any other legally authorized individual. 
 59.21  The managed care organization is prohibited from acting as legal 
 59.22  representative for any enrollee. 
 59.23     (n) "Life domain areas" include, but are not limited to:  
 59.24  home, family, education, employment, social environment, 
 59.25  psychological and emotional health, self-care, independence, 
 59.26  physical health, need for legal representation, financial needs, 
 59.27  safety, and cultural identification and spiritual needs. 
 59.28     (o) "Local agency" means the county human services agency 
 59.29  responsible for administering eligibility for medical assistance.
 59.30     (p) "Managed care organization" means an agency, 
 59.31  organization, county government, prepaid health plan, provider 
 59.32  network, or a group of these entities under contract with the 
 59.33  commissioner to participate in the demonstration project.  A 
 59.34  managed care organization must meet the standards of a health 
 59.35  maintenance organization under chapter 62D, a community 
 59.36  integrated service network under section 62N.02, subdivision 4a, 
 60.1   or other legal entity under chapter 62Q. 
 60.2      (q) "Medical assistance benefit set" means the set of 
 60.3   benefits covered under sections 256B.0625, 256B.0912, 256B.0915, 
 60.4   256B.092, and 256B.49.  Authorization and provision of covered 
 60.5   benefits will be done in accordance with the definition of 
 60.6   medical necessity in Minnesota Rules, part 9505.0175, subpart 
 60.7   25.  The medical assistance benefit set will include the 
 60.8   postcommitment, community-based psychiatric hospitalization 
 60.9   covered by Medicaid contracts in those areas of the state 
 60.10  covered by these existing contracts. 
 60.11     (r) "Outcome" means the behavior, action, or status of the 
 60.12  enrollee that can be observed, measured, and reliably and 
 60.13  validly determined. 
 60.14     (s) "Personal support plan" means a document agreed to and 
 60.15  signed by the enrollee or the enrollee's legal representative, 
 60.16  if any, which describes:  
 60.17     (1) the amount, type, setting, and frequency of formal and 
 60.18  informal supports and services; 
 60.19     (2) the use of regulated treatment; 
 60.20     (3) the transition of a child to the adult service system; 
 60.21  and 
 60.22     (4) the outcomes expected from the provision of these 
 60.23  supports and services.  
 60.24     The personal support plan must be based on choices, 
 60.25  preferences, and assessed needs and strengths of the enrollee.  
 60.26  This document is developed by the person, or the person's legal 
 60.27  representative, the service coordinator, and other individuals 
 60.28  requested by the person.  Service coordinators must address any 
 60.29  conflict of interest in the personal support plan when they are 
 60.30  a provider of other services to the enrollee in order to ensure 
 60.31  that responsibilities outlined in subdivision 12, paragraph (a), 
 60.32  are fulfilled. 
 60.33     (t) "Regulated treatment" means any behavior altering 
 60.34  medication of any classification or any aversive or deprivation 
 60.35  procedure as defined in rules and statutes applicable to 
 60.36  eligible individuals. 
 61.1      (u) "Service coordinator" refers to the individual 
 61.2   authorized by the managed care organization to coordinate or 
 61.3   provide supports and services identified in the personal support 
 61.4   plan.  Eligible service coordinators are individuals age 18 and 
 61.5   older who meet the qualifications and fulfill the 
 61.6   responsibilities described in subdivision 12, paragraph (a).  
 61.7   Providers of residential services licensed under chapter 245A to 
 61.8   provide residential services, other than short-term 
 61.9   detoxification or mental health crisis service or adult or child 
 61.10  foster care, or who are providing residential services 
 61.11  compensated under group residential housing, may not act as 
 61.12  service coordinator for enrollees for whom they provide 
 61.13  residential services.  Each managed care organization may 
 61.14  develop further criteria for eligible vendors of service 
 61.15  coordination during the demonstration period. 
 61.16     Subd. 3.  [FEDERAL WAIVERS.] The commissioner shall request 
 61.17  any authority from the United States Department of Health and 
 61.18  Human Services that is necessary to implement the demonstration 
 61.19  project under the medical assistance program, and to combine 
 61.20  Medicare and Medicaid funding for service delivery to dual 
 61.21  eligibles.  Implementation of these programs may begin without 
 61.22  authority to include Medicare funding.  The commissioner may 
 61.23  begin enrollment of eligible individuals in managed care 
 61.24  organizations upon federal approval, but no earlier than January 
 61.25  1, 1998. 
 61.26     Subd. 4.  [DEMONSTRATION SITES.] (a) The commissioner shall 
 61.27  designate up to five demonstration sites, with the approval of 
 61.28  the local agency.  Demonstration sites may include one county or 
 61.29  a multicounty group. 
 61.30     (b) In each demonstration site, upon federal approval, the 
 61.31  commissioner shall give the local agency the option to become 
 61.32  the managed care organization for that county before issuing a 
 61.33  request for proposals.  If, within the time frame specified by 
 61.34  the commissioner, the local agency chooses not to become the 
 61.35  managed care organization or a joint purchaser with the state, 
 61.36  or federal approval is not granted, the commissioner may issue a 
 62.1   request for proposals to solicit contractors. 
 62.2      (c) In demonstration sites in which the managed care 
 62.3   organization is not the local agency, the commissioner shall 
 62.4   require a contract between the local agency and the managed care 
 62.5   organization that delineates each entity's role in providing and 
 62.6   coordinating services for individuals. 
 62.7      Subd. 5.  [CONTRACTS.] The commissioner may contract with 
 62.8   any managed care organization that demonstrates the ability to 
 62.9   manage services for enrollees covered under this section 
 62.10  according to the terms and conditions of the contract with the 
 62.11  commissioner.  The commissioner must ensure that the managed 
 62.12  care organization has in place an adequate system for the 
 62.13  resolution of complaints; involvement of enrollees and their 
 62.14  families; the collection and reporting of data; quality of 
 62.15  services monitoring and improvement; enrollee education and 
 62.16  assistance; and the management of services in coordination with 
 62.17  local agencies, health plans, and providers of related services 
 62.18  that are not covered under this chapter. 
 62.19     Subd. 6.  [ELIGIBILITY AND ENROLLMENT.] The local agency, 
 62.20  in conjunction with the commissioner, shall develop a process 
 62.21  for individual enrollment into the demonstration project.  
 62.22  Enrollment into managed care organizations shall be conducted 
 62.23  according to the terms of the federal waiver.  Enrollment of 
 62.24  eligible persons under the demonstration project may be phased 
 62.25  in, with approval of the commissioner.  The commissioner shall 
 62.26  ensure that eligibility for the enrollee is completed by 
 62.27  individuals with no service coordination responsibilities for 
 62.28  that enrollee as defined in subdivision 12.  
 62.29     Subd. 7.  [EMERGENCY SITUATIONS.] The managed care 
 62.30  organization must provide access to emergency care and crisis 
 62.31  services.  The managed care organization shall cover necessary 
 62.32  services as a result of a medical emergency, even if the 
 62.33  services were rendered outside of the managed care organization 
 62.34  network.  The managed care organization shall provide for a 
 62.35  needs assessment when requested by the enrollee or the 
 62.36  enrollee's legal representative in response to a crisis 
 63.1   situation, other than a medical emergency, and authorize covered 
 63.2   services determined to be needed as a result of the crisis 
 63.3   situation.  
 63.4      Subd. 8.  [CONSUMER CHOICE AND SAFEGUARDS.] (a) The 
 63.5   commissioner may require all eligible persons to obtain services 
 63.6   covered under this chapter through managed care organizations. 
 63.7   The commissioner will encourage demonstration sites to provide 
 63.8   enrollees a choice of managed care organizations.  Enrollees 
 63.9   shall be given choices among a range of available providers with 
 63.10  expertise in serving persons with their category of disability.  
 63.11  The commissioner shall ensure that all enrollees have continued 
 63.12  access to medically necessary covered services. 
 63.13     (b) The commissioner must ensure that a set of enrollee 
 63.14  safeguards in the categories of access, choice, comprehensive 
 63.15  benefits, legal representation, quardianship, representative 
 63.16  payee, quality, rights and appeals, and data collection and 
 63.17  confidentiality are in place prior to enrollment of eligible 
 63.18  individuals. 
 63.19     (c) Within 12 months following initial enrollment into the 
 63.20  project, enrollees will be given options to:  change managed 
 63.21  care organizations, if multiple managed care organizations are 
 63.22  offered for acute or continuing care within a demonstration 
 63.23  site; or change primary care provider, if a single managed care 
 63.24  organization is offered within a demonstration site.  Enrollees 
 63.25  shall also be offered an annual open enrollment period, during 
 63.26  which they are permitted to change their managed care 
 63.27  organization or primary care provider.  Enrollees shall also be 
 63.28  offered an annual open enrollment period during which they are 
 63.29  permitted to change their managed care organization or primary 
 63.30  care provider. 
 63.31     Subd. 9.  [SERVICE DELIVERY.] (a) Managed care 
 63.32  organizations shall: 
 63.33     (1) provide the medical assistance benefit set.  
 63.34  Alternative services are available to enrollees at the option of 
 63.35  the managed care organization, and may be provided as specified 
 63.36  in the personal support plan; 
 64.1      (2) accept the capitation payment from the commissioner in 
 64.2   return for the provision of contracted services for enrollees; 
 64.3      (3) maintain internal grievance and complaint procedures, 
 64.4   including an informal complaint process in which the managed 
 64.5   care organization must respond to verbal complaints within ten 
 64.6   days and a formal grievance process in which the managed care 
 64.7   organization must respond to written complaints within 30 days; 
 64.8      (4) at the time of enrollment, inform eligible individuals 
 64.9   about the service delivery network, advocacy programs, ombudsman 
 64.10  programs, and their right to due process if they experience a 
 64.11  problem with the managed care organization or its providers; 
 64.12     (5) determine immediate needs, including services, 
 64.13  supports, and assessments, within 30 days of enrollment, or 
 64.14  within the time frame specified in the contract; 
 64.15     (6) assess the need for services of new enrollees within 60 
 64.16  days of enrollment, or within a shorter time frame if specified 
 64.17  in the contract, and periodically reassess the need for services 
 64.18  for all enrollees; 
 64.19     (7) ensure the development of a personal support plan for 
 64.20  each person within 60 days of enrollment, or within a shorter 
 64.21  time frame if specified in the contract, unless otherwise agreed 
 64.22  to by the enrollee and their legal representative, if any.  
 64.23  Until a personal support plan is developed, enrollees must have 
 64.24  access to the same amount, type, setting, duration, and 
 64.25  frequency of covered services that they had at the time of 
 64.26  enrollment; 
 64.27     (8) develop policies to address conflicts of interest, 
 64.28  including guardianship and representative payee issues; 
 64.29     (9) ensure authorization, arrangement, and continuity of 
 64.30  the provision of supports and services identified in the 
 64.31  personal support plan; 
 64.32     (10) offer service coordination that fulfills the 
 64.33  responsibilities under subdivision 12, paragraph (a), and is 
 64.34  appropriate to the enrollee's needs, choices, and preferences, 
 64.35  including a choice of service coordinator vendors; 
 64.36     (11) develop and implement strategies to acknowledge and 
 65.1   respect diversity for all enrollees in a manner that affirms 
 65.2   their worth and preserves the dignity of individuals, families, 
 65.3   and their communities.  Enrollees shall have the right to 
 65.4   privacy and to consideration of their health, individuality, and 
 65.5   cultural identity as related to their social, psychological, and 
 65.6   spiritual and religious well-being; 
 65.7      (12) establish a definition and standards to ensure 
 65.8   culturally competent service delivery, based on consultation 
 65.9   with affected groups; and 
 65.10     (13) comply with other requirements as specified in the 
 65.11  contract. 
 65.12     (b) To the extent that alternatives are approved under 
 65.13  subdivision 18, managed care organizations must provide for the 
 65.14  health and safety of enrollees and protect the rights to privacy 
 65.15  and to provide informed consent. 
 65.16     (c) With approval of the commissioner, the managed care 
 65.17  organization may contract to provide the full medical assistance 
 65.18  benefit set or may contract for acute care services or 
 65.19  continuing care services only. 
 65.20     Subd. 10.  [CAPITATION PAYMENT.] The commissioner shall 
 65.21  develop capitation payment rates for the initial contract period 
 65.22  for managed care organizations in consultation with an 
 65.23  independent actuary, to ensure that the cost of services under 
 65.24  this demonstration project does not exceed the estimated cost 
 65.25  for medical assistance services for the covered population under 
 65.26  the fee-for-service system for the demonstration period.  Rates 
 65.27  will be adjusted within the limits of the available risk 
 65.28  adjustment technology, as mandated by section 62Q.03.  In 
 65.29  addition, the commissioner shall implement appropriate risk and 
 65.30  profit sharing provisions with managed care organizations within 
 65.31  the projected budget limits.  Payments to providers 
 65.32  participating in the project are exempt from the requirements of 
 65.33  sections 256.966 and 256B.03, subdivision 2. 
 65.34     Subd. 11.  [INTEGRATION OF FUNDING SOURCES.] If the local 
 65.35  agency contracts as a managed care organization with the 
 65.36  commissioner or enters into a joint purchasing agreement with 
 66.1   the commissioner, the local agency may integrate other local, 
 66.2   state, and federal funding sources with medical assistance 
 66.3   funding.  If the local agency chooses to integrate funding, the 
 66.4   managed care organization must comply with the reporting 
 66.5   requirements of the commissioner, as specified in the contract 
 66.6   to account for federal Medicaid expenditures.  The commissioner, 
 66.7   upon the request and concurrence of a local agency, may transfer 
 66.8   state grant funds that would otherwise be made available to the 
 66.9   local agency to provide continuing care for enrollees to the 
 66.10  medical assistance account.  Within the limits of federal 
 66.11  authority and available federal funding, the commissioner shall 
 66.12  adjust the capitation based on the amount of transfer made under 
 66.13  this subdivision. 
 66.14     Subd. 12.  [SERVICE COORDINATION.] (a) The service 
 66.15  coordinator shall have the knowledge, skills, and abilities to, 
 66.16  and is responsible to: 
 66.17     (1) arrange for the assessment of supports and services 
 66.18  based on the person's strengths, needs, choices, and preferences 
 66.19  in life domain areas; 
 66.20     (2) develop the personal support plan based on relevant 
 66.21  ongoing assessment; 
 66.22     (3) arrange for the provision of supports and services, 
 66.23  including knowledgeable and skilled specialty services, within 
 66.24  the limitations negotiated with the managed care organization; 
 66.25     (4) assist the person to maximize informed choice of and 
 66.26  control over services and supports; 
 66.27     (5) monitor the progress toward achieving the person's 
 66.28  outcomes in order to evaluate and adjust the timeliness and 
 66.29  adequacy of the implementation of the personal support plan; 
 66.30     (6) inform, educate, and assist the person in the exercise 
 66.31  of the person's rights and advocate on the person's behalf; 
 66.32     (7) facilitate meetings and effectively collaborate with a 
 66.33  variety of agencies and persons; 
 66.34     (8) solicit and analyze relevant information; 
 66.35     (9) communicate effectively with the person and with other 
 66.36  individuals participating in the person's plan; 
 67.1      (10) educate and communicate to the person about good 
 67.2   health care practices and risk to the person's health with 
 67.3   certain behaviors; 
 67.4      (11) have knowledge of basic enrollee protection 
 67.5   requirements, including data privacy; and 
 67.6      (12) provide other services as identified in the personal 
 67.7   support plan.  
 67.8      (b) Each managed care organization must annually evaluate 
 67.9   the knowledge, skills, and abilities of the service coordinators 
 67.10  in the areas described in paragraph (a).  The managed care 
 67.11  organization must take remedial or corrective action if the 
 67.12  service coordinator does not fulfill their responsibilities or 
 67.13  have adequate knowledge, skills, or abilities in one or more 
 67.14  areas. 
 67.15     Subd. 13.  [ENROLLEE CERTIFICATE OF COVERAGE.] The managed 
 67.16  care organization shall provide a certificate of coverage to 
 67.17  each enrollee which describes the benefits covered by the 
 67.18  managed care organization and any limitations on those 
 67.19  benefits.  This certificate is subject to approval by the 
 67.20  commissioner.  The managed care organization must also present 
 67.21  evidence of an internal process to approve benefits exceptions 
 67.22  under appropriate circumstances. 
 67.23     Subd. 14.  [OMBUDSPERSON.] Enrollees shall have access to 
 67.24  services established in section 256.031, subdivision 6.  
 67.25  Enrollees shall have access to advocacy services provided by the 
 67.26  ombudsman for mental health and mental retardation established 
 67.27  in sections 245.91 to 245.97.  The managed care ombudsman and 
 67.28  the ombudsman for mental health and mental retardation shall 
 67.29  coordinate services provided to avoid duplication of services.  
 67.30     Subd. 15.  [EXTERNAL ADVOCACY.] In addition to ombudsperson 
 67.31  services, enrollees will have access to advocacy services on a 
 67.32  local or regional basis, which are independent of the managed 
 67.33  care organization. 
 67.34     Subd. 16.  [DUE PROCESS.] Enrollees have the appeal rights 
 67.35  specified in section 256.045, subdivision 3a.  Enrollees may 
 67.36  request the conciliation process as outlined under section 
 68.1   256.045, subdivision 4a.  
 68.2      Subd. 17.  [SERVICES PENDING APPEAL.] If a person appeals 
 68.3   in writing to the state agency on or before the tenth day after 
 68.4   the person has received the decision of the managed care 
 68.5   organization to reduce, suspend, or terminate ongoing services 
 68.6   which the recipient had been receiving, and if the person 
 68.7   requests, the managed care organization must continue to provide 
 68.8   services at a level equal to the level previously authorized by 
 68.9   the managed care organization until the state agency renders its 
 68.10  decision.  Prior to January 1, 1998, the commissioner shall 
 68.11  establish guidelines for department action to facilitate timely 
 68.12  resolution of appeals.  
 68.13     Subd. 18.  [APPROVAL OF ALTERNATIVES.] The commissioner may 
 68.14  approve alternatives to administrative rules that the 
 68.15  commissioner determines are incompatible with the efficient 
 68.16  implementation of this demonstration project if the commissioner 
 68.17  determines that adequate alternative measures are in place to 
 68.18  protect the health, safety, and rights of enrollees, and to 
 68.19  provide quality services.  Prior approved waivers, if needed by 
 68.20  the demonstration project, shall be extended.  Upon request by 
 68.21  the demonstration project, the commissioner will act on a 
 68.22  request for alternatives to state rules within 30 days.  The 
 68.23  commissioner shall not waive the rights or procedural 
 68.24  protections under sections 245.825; 245.91 to 245.97; 252.41, 
 68.25  subdivision 9; 256B.092, subdivision 10; 626.556; and 626.557; 
 68.26  or procedures for the monitoring of psychotropic medications.  
 68.27  Prohibited practices as defined in statutes and rules governing 
 68.28  service delivery to persons with disabilities are applicable to 
 68.29  services delivered under this demonstration project.  
 68.30     The commissioner may exempt counties which are included in 
 68.31  the demonstration site from their social services obligations 
 68.32  and fiscal sanctions for noncompliance with requirements in laws 
 68.33  and rules to the extent that the commissioner determines those 
 68.34  obligations are met under this chapter and are incompatible with 
 68.35  the implementation of this demonstration project. 
 68.36     Subd. 19.  [REPORTING.] Each managed care organization 
 69.1   shall submit information as required by the commissioner in the 
 69.2   contract.  A managed care organization under contract to provide 
 69.3   services must provide the most current listing of the providers 
 69.4   who are participating in the plan.  This reporting will be 
 69.5   shared with enrollees and the public. 
 69.6      Subd. 20.  [QUALITY MANAGEMENT AND EVALUATION.] Local 
 69.7   agencies, contracted managed care organizations, consumers, 
 69.8   advocates, advocacy organizations, providers, and the department 
 69.9   must work together to design, develop, and implement a quality 
 69.10  management and evaluation system for each demonstration site 
 69.11  which fits into the overall project evaluation framework.  
 69.12     The department shall design an evaluation framework that 
 69.13  encompasses the array of desired outcomes defined by the managed 
 69.14  care organization, including indicators for each outcome, 
 69.15  methods of data collection, and performance targets; seek 
 69.16  funding for the overall project evaluation; and provide 
 69.17  technical assistance to managed care organizations. 
 69.18     Subd. 21.  [LIMITATION ON REIMBURSEMENT.] A managed care 
 69.19  organization may limit any reimbursement it may be required to 
 69.20  pay to providers not employed by or under contract with the 
 69.21  managed care organization to the medical assistance rates paid 
 69.22  by the commissioner of human services to providers for services 
 69.23  to recipients not participating in a managed care organization. 
 69.24     Subd. 22.  [COUNTY SOCIAL SERVICES OBLIGATIONS.] Eligible 
 69.25  individuals in excluded time, as defined in chapter 256G, at the 
 69.26  onset of the demonstration period will remain in excluded time 
 69.27  status for the duration of the demonstration project.  For 
 69.28  services for enrollees that are outside of the medical 
 69.29  assistance benefit set, local agencies must negotiate the 
 69.30  provision and payment of services with the county of financial 
 69.31  responsibility. 
 69.32     Subd. 23.  [MINNESOTA COMMITMENT ACT SERVICES.] Services 
 69.33  for enrollees receiving treatment under the Minnesota Commitment 
 69.34  Act, chapter 253B, and covered by medical assistance will be 
 69.35  considered medically necessary and will be the financial 
 69.36  responsibility of the managed care organization.  The local 
 70.1   agency shall seek input from the managed care organization in 
 70.2   giving the court information about services the enrollee needs 
 70.3   and least restrictive alternatives.  Voluntary hospitalization 
 70.4   for enrollees at regional treatment centers must be covered by 
 70.5   the managed care organization.  The regional treatment center 
 70.6   shall not accept a voluntary admission of an enrollee without 
 70.7   the authorization of the managed care organization.  An eligible 
 70.8   individual will maintain enrollee status while receiving 
 70.9   treatment under the Minnesota Commitment Act, or voluntary 
 70.10  services in a regional treatment center.  The commissioner may 
 70.11  adjust capitation payments, as specified in the contract, for 
 70.12  individuals admitted to regional treatment centers. 
 70.13     Subd. 24.  [STAKEHOLDER COMMITTEE.] The commissioner shall 
 70.14  appoint a stakeholder committee to review and provide 
 70.15  recommendations on requests for proposals for managed care 
 70.16  organization contracts, alternatives granted under subdivision 
 70.17  18, and other demonstration project policies and procedures as 
 70.18  requested by the commissioner.  The stakeholder committee shall 
 70.19  include representatives from the following stakeholders:  
 70.20  enrollees and their family members, advocacy agencies, 
 70.21  advocates, service providers, local agencies, state government, 
 70.22  and managed care organizations.  The stakeholder committee shall 
 70.23  be in operation for the demonstration period.