1.1 	A bill for an act
1.2 	relating to human services; providing a rate increase
1.3 	for nursing facilities, intermediate care facilities,
1.4 	and community services; establishing a nursing
1.5 	facility bed closure incentive; limiting expansion of
1.6 	certain waiver programs; appropriating money; amending
1.7 	Minnesota Statutes 2004, sections 256B.431, by adding
1.8 	subdivisions; 256B.434, subdivision 4; 256B.48,
1.9 	subdivision 1; 256B.5012, by adding a subdivision.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 256B.431, is
1.12 	amended by adding a subdivision to read:
1.13 		Subd. 41.Nursing facility rate increase for july 1,
1.14 	2005. (a) For the rate year beginning July 1, 2005, the
1.15 	commissioner shall make available to each nursing facility
1.16 	reimbursed under this section or section 256B.434 an adjustment
1.17 	equal to two percent of the total operating payment rate.
1.18 	(b) Money resulting from the rate adjustment under
1.19 	paragraph (a) must be used to increase wages and benefits and
1.20 	pay associated costs for employees, except management fees, the
1.21 	administrator, and central office staff.  Money received by a
1.22 	facility as a result of the rate adjustment provided in
1.23 	paragraph (a) must be used only for wage, benefit, and staff
1.24 	increases implemented on or after July 1, 2005, and must not be
1.25 	used for increases implemented prior to that date.
1.26 	(c) Nursing facilities may apply for the rate adjustment
1.27 	under paragraph (a).  The application must be made to the
2.1 	commissioner and contain a plan by which the nursing facility
2.2 	will distribute the funds according to paragraph (b).  For
2.3 	nursing facilities in which the employees are represented by an
2.4 	exclusive bargaining representative, an agreement negotiated and
2.5 	agreed to by the employer and the exclusive bargaining
2.6 	representative constitutes the plan.  A negotiated agreement may
2.7 	constitute the plan only if the agreement is finalized after the
2.8 	date of enactment of all increases for the rate year and signed
2.9 	by both parties prior to submission to the commissioner.  The
2.10 	commissioner shall review the plan to ensure that the rate
2.11 	adjustments are used as provided in paragraph (b).  To be
2.12 	eligible, a facility must submit its distribution plan by
2.13 	December 31, 2005.  If a facility's distribution plan is
2.14 	effective after the first day of the rate year, the rate
2.15 	adjustments are effective the same date as the facility's plan.
2.16 	(d) A copy of the approved distribution plan must be made
2.17 	available to all employees by giving each employee a copy or by
2.18 	posting a copy in an area of the nursing facility to which all
2.19 	employees have access.  If an employee does not receive the wage
2.20 	and benefit adjustment described in the facility's approved plan
2.21 	and is unable to resolve the problem with the facility's
2.22 	management or through the employee's union representative, the
2.23 	employee may contact the commissioner at an address or telephone
2.24 	number provided by the commissioner and included in the approved
2.25 	plan.

2.26 	Sec. 2. Minnesota Statutes 2004, section 256B.431, is
2.27 	amended by adding a subdivision to read:
2.28 		Subd. 42.Nursing facility bed closure incentive
2.29 	adjustments effective january 1, 2006, and january 1, 2007. (a)
2.30 	For the purposes of rate adjustments under this subdivision, the
2.31 	commissioner shall divide nursing facilities reimbursed under
2.32 	this section or section 256B.434 into quartiles according to the
2.33 	number of licensed nursing homes per 1,000 persons aged 65 or
2.34 	older in the county in which the facility is located, based on
2.35 	the most recently available census population data and Minnesota
2.36 	Department of Health data on numbers of licensed beds as of
3.1 	September 30, 2005, and September 30, 2006, respectively.  The
3.2 	first quartile shall be the quartile with the lowest number of
3.3 	beds per 1,000, and the fourth quartile shall be the quartile
3.4 	with the highest number of beds per 1,000.
3.5 	(b) For the rate period beginning January 1, 2006, the
3.6 	commissioner shall adjust the rates provided to each nursing
3.7 	facility reimbursed under this section or section 256B.434, as
3.8 	follows:
3.9 	(1) for facilities in the first quartile, rates shall not
3.10 	be adjusted under this subdivision;
3.11 	(2) for facilities in the second quartile, total payment
3.12 	rates in effect on December 31, 2005, shall be reduced by two
3.13 	percent.  After this adjustment, total payment rates for
3.14 	residents in single-bed rooms shall be increased by five
3.15 	percent;
3.16 	(3) for facilities in the third quartile, total payment
3.17 	rates in effect on December 31, 2005, shall be reduced by three
3.18 	percent.  After this adjustment, total payment rates for
3.19 	residents in single-bed rooms shall be increased by 7.5 percent;
3.20 	and 
3.21 	(4) for facilities in the fourth quartile, total payment
3.22 	rates in effect on December 31, 2005, shall be reduced by four
3.23 	percent.  After this adjustment, total payment rates for
3.24 	residents in single-bed rooms shall be increased by ten percent.
3.25 	(c) For the rate period beginning January 1, 2007, the
3.26 	commissioner shall redetermine the quartiles and shall adjust
3.27 	the rates provided to each nursing facility reimbursed under
3.28 	this section or section 256B.434 as follows:
3.29 	(1) for facilities in the first quartile, rates shall not
3.30 	be adjusted under this subdivision;
3.31 	(2) for facilities in the second quartile, total payment
3.32 	rates in effect on December 31, 2006, shall be reduced by two
3.33 	percent.  After this adjustment, total payment rates for
3.34 	residents in single-bed rooms shall be increased by five
3.35 	percent;
3.36 	(3) for facilities in the third quartile, total payment
4.1 	rates in effect on December 31, 2006, shall be reduced by three
4.2 	percent.  After this adjustment, total payment rates for
4.3 	residents in single-bed rooms shall be increased by 7.5 percent;
4.4 	and 
4.5 	(4) for facilities in the fourth quartile, total payment
4.6 	rates in effect on December 31, 2006, shall be reduced by four
4.7 	percent.  After this adjustment, total payment rates for
4.8 	residents in single-bed rooms shall be increased by ten percent.
4.9 	(d) The adjustments under paragraphs (b) and (c) shall
4.10 	apply to all components of the total rate.
4.11 	(e) For rates effective January 1, 2006, and later,
4.12 	notwithstanding Minnesota Rules, part 9549.0060, subpart 11,
4.13 	items B and C, capacity days used to determine property-related
4.14 	payment rates under this section and Minnesota Rules, parts
4.15 	9549.0010 to 9549.0080, shall be the number of licensed beds at
4.16 	the end of the reporting year multiplied by the number of days
4.17 	in the reporting year.  The computation of the property-related
4.18 	rate adjustment in subdivision 30, shall be computed in this
4.19 	manner beginning with bed count changes that are effective after
4.20 	January 1, 2006.  The occupancy factor and short length of stay
4.21 	calculations in subdivision 3f, paragraph (c), are not
4.22 	superseded by this change.
4.23 	Nursing facilities with rates established under section
4.24 	256B.434, on or before January 1, 2006, that assigned greater
4.25 	costs to single-bed rooms in their base year or in a subsequent
4.26 	change under subdivision 30, shall have the rate effect of the
4.27 	assignment reversed before application of the rate adjustment in
4.28 	paragraphs (b) and (c).  The reversal must be done by
4.29 	recomputing the capacity days divisor without including the
4.30 	factor in Minnesota Rules, part 9549.0060, subpart 11, item B,
4.31 	in the last property-related payment rate computation under this
4.32 	section, and Minnesota Rules, parts 9549.0010 to 9549.0080, a
4.33 	moratorium exception project under section 144A.073, or
4.34 	adjustment under subdivision 30.
4.35 	(f) Newly constructed or newly established facilities with
4.36 	interim and settle-up rates shall have their total payment rates
5.1 	adjusted according to paragraphs (b) and (c), after the
5.2 	application of Minnesota Rules, parts 9549.0010 to 9549.0080.
5.3 	These facilities shall remain eligible to have actual resident
5.4 	days used as a divisor for their property-related rate as
5.5 	allowed in Minnesota Rules, part 9549.0060, subpart 14.
5.6 	(g) Notwithstanding Minnesota Rules, part 9549.0070,
5.7 	subpart 3, the rate for a medical assistance recipient in a
5.8 	single-bed room shall be according to paragraphs (b) and (c).
5.9 	This higher rate shall be paid regardless of whether the
5.10 	resident has a physician's order for a single-bed room.
5.11 	(h) The commissioner may, upon written application in
5.12 	response to a request for applications, delay or exempt nursing
5.13 	facilities from the rate adjustments in paragraphs (b) and (c).
5.14 	The commissioner may approve delays of up to six months for
5.15 	nursing facilities with a total of up to 4,000 beds.  In
5.16 	addition, the commissioner may approve exemptions for nursing
5.17 	facilities with a total of up to 4,000 beds.  In determining
5.18 	whether or not to approve a delay or exemption, the commissioner
5.19 	shall consider whether:
5.20 	(1) the nursing facility is no closer than 25 miles from
5.21 	another nursing facility;
5.22 	(2) the nursing facility serves a population that is at
5.23 	least 40 percent individuals with a mental health diagnosis;
5.24 	(3) the nursing facility has fewer than 30 rooms available
5.25 	for resident occupancy;
5.26 	(4) the nursing facility is located in a town in which more
5.27 	than 50 percent of the population is age 65 or older; or 
5.28 	(5) the nursing facility has a low resident turnover rate.
5.29 	(i) The commissioner may, upon written application in
5.30 	response to a request for applications, restore a portion of the
5.31 	rate reduction in paragraph (c), either permanently or on a
5.32 	time-limited basis at the sole discretion of the commissioner,
5.33 	if all nursing facilities in the state together choose to remove
5.34 	more beds from service than anticipated.  The commissioner may
5.35 	exercise this authority upon a determination that more than
5.36 	4,000 beds have been removed from service after January 1, 2006,
6.1 	and before December 31, 2006, or that more than 6,000 beds have
6.2 	been removed from service after January 1, 2006, and before
6.3 	December 31, 2007.  This authority applies only for nursing
6.4 	facilities that notify the commissioner in the facility's
6.5 	application of the facility's intent to close or remove beds
6.6 	from service if a restoration of a portion of the rate reduction
6.7 	is not provided.  In determining whether or not to approve an
6.8 	application, the commissioner shall consider the criteria in
6.9 	paragraph (h).  The cost of rate restorations approved under
6.10 	this paragraph must not exceed the estimated savings resulting
6.11 	from the closure of more than 3,500 beds between January 1,
6.12 	2006, and December 31, 2006.
6.13 	(j) A nursing facility is prohibited from discharging
6.14 	residents for purposes of establishing single-bed rooms.  A
6.15 	nursing facility must retain a statement from any resident
6.16 	discharged to another nursing facility between July 1, 2005, and
6.17 	December 31, 2007, signed by the resident or the resident's
6.18 	designated responsible party, certifying the resident requests
6.19 	to move and is under no coercion to be discharged.  This signed
6.20 	statement must be witnessed and signed by the local ombudsman.
6.21 	The commissioner shall assess a monetary penalty of $5,000 per
6.22 	occurrence against any nursing facility determined to have
6.23 	discharged a resident for purposes of establishing single-bed
6.24 	rooms.
6.25 	(k) Nursing facilities shall report information on their
6.26 	bed composition sufficient to determine that billing for
6.27 	single-bed rooms is correct and in a format and according to a
6.28 	schedule determined by the commissioner.  A single-bed room is a
6.29 	bedroom that has one bed and has a door with unshared direct
6.30 	access to the corridor.
6.31 	(l) If after the date of enactment of this section and
6.32 	before December 31, 2007, more than 4,000 nursing home beds are
6.33 	removed from service, a portion of the appropriation for nursing
6.34 	homes shall be transferred to the alternative care program.  The
6.35 	amount of this transfer shall equal the number of beds removed
6.36 	from service less 4,000, multiplied by the average monthly
7.1 	per-person cost for alternative care, multiplied by 12, and
7.2 	further multiplied by .3.
7.3 	(m) This subdivision does not apply to a residence that on
7.4 	August 1, 1984, was licensed by the commissioner of health only
7.5 	as a boarding care home, certified by the commissioner of health
7.6 	as an intermediate care facility, and licensed by the
7.7 	commissioner of human services under Minnesota Rules, parts
7.8 	9520.0500 to 9520.0690.

7.9 	Sec. 3. Minnesota Statutes 2004, section 256B.434,
7.10 	subdivision 4, is amended to read:
7.11 		Subd. 4.Alternate rates for nursing facilities.  (a) For
7.12 	nursing facilities which have their payment rates determined
7.13 	under this section rather than section 256B.431, the
7.14 	commissioner shall establish a rate under this subdivision.  The
7.15 	nursing facility must enter into a written contract with the
7.16 	commissioner.
7.17 	(b) A nursing facility's case mix payment rate for the
7.18 	first rate year of a facility's contract under this section is
7.19 	the payment rate the facility would have received under section
7.20 	256B.431.
7.21 	(c) A nursing facility's case mix payment rates for the
7.22 	second and subsequent years of a facility's contract under this
7.23 	section are the previous rate year's contract payment rates plus
7.24 	an inflation adjustment and, for facilities reimbursed under
7.25 	this section or section 256B.431, an adjustment to include the
7.26 	cost of any increase in Health Department licensing fees for the
7.27 	facility taking effect on or after July 1, 2001.  The index for
7.28 	the inflation adjustment must be based on the change in the
7.29 	Consumer Price Index-All Items (United States City average)
7.30 	(CPI-U) forecasted by the commissioner of finance's national
7.31 	economic consultant, as forecasted in the fourth quarter of the
7.32 	calendar year preceding the rate year.  The inflation adjustment
7.33 	must be based on the 12-month period from the midpoint of the
7.34 	previous rate year to the midpoint of the rate year for which
7.35 	the rate is being determined.  For the rate years beginning on
7.36 	July 1, 1999, July 1, 2000, July 1, 2001, July 1, 2002, July 1,
8.1 	2003, ~~and~~ July 1, 2004, and July 1, 2005, this paragraph shall
8.2 	apply only to the property-related payment rate, except that
8.3 	adjustments to include the cost of any increase in Health
8.4 	Department licensing fees taking effect on or after July 1,
8.5 	2001, shall be provided.  In determining the amount of the
8.6 	property-related payment rate adjustment under this paragraph,
8.7 	the commissioner shall determine the proportion of the
8.8 	facility's rates that are property-related based on the
8.9 	facility's most recent cost report.
8.10 	(d) The commissioner shall develop additional
8.11 	incentive-based payments of up to five percent above the
8.12 	standard contract rate for achieving outcomes specified in each
8.13 	contract.  The specified facility-specific outcomes must be
8.14 	measurable and approved by the commissioner.  The commissioner
8.15 	may establish, for each contract, various levels of achievement
8.16 	within an outcome.  After the outcomes have been specified the
8.17 	commissioner shall assign various levels of payment associated
8.18 	with achieving the outcome.  Any incentive-based payment cancels
8.19 	if there is a termination of the contract.  In establishing the
8.20 	specified outcomes and related criteria the commissioner shall
8.21 	consider the following state policy objectives:
8.22 	(1) improved cost effectiveness and quality of life as
8.23 	measured by improved clinical outcomes;
8.24 	(2) successful diversion or discharge to community
8.25 	alternatives;
8.26 	(3) decreased acute care costs;
8.27 	(4) improved consumer satisfaction;
8.28 	(5) the achievement of quality; or
8.29 	(6) any additional outcomes proposed by a nursing facility
8.30 	that the commissioner finds desirable.

8.31 	Sec. 4. Minnesota Statutes 2004, section 256B.48,
8.32 	subdivision 1, is amended to read:
8.33 		Subdivision 1.Prohibited practices.  A nursing facility
8.34 	is not eligible to receive medical assistance payments unless it
8.35 	refrains from all of the following:
8.36 	(a) Charging private paying residents rates for similar
9.1 	services which exceed those which are approved by the state
9.2 	agency for medical assistance recipients as determined by the
9.3 	prospective desk audit rate, except ~~under the following~~
9.4 	~~circumstances:  the nursing facility may (1) charge private~~
9.5 	~~paying residents a higher rate for a private room, and (2)~~
9.6 	~~charge~~ for special services which are not included in the daily
9.7 	rate if medical assistance residents are charged separately at
9.8 	the same rate for the same services in addition to the daily
9.9 	rate paid by the commissioner.  Services covered by the payment
9.10 	rate must be the same regardless of payment source.  Special
9.11 	services, if offered, must be available to all residents in all
9.12 	areas of the nursing facility and charged separately at the same
9.13 	rate.  Residents are free to select or decline special
9.14 	services.  Special services must not include services which must
9.15 	be provided by the nursing facility in order to comply with
9.16 	licensure or certification standards and that if not provided
9.17 	would result in a deficiency or violation by the nursing
9.18 	facility.  Services beyond those required to comply with
9.19 	licensure or certification standards must not be charged
9.20 	separately as a special service if they were included in the
9.21 	payment rate for the previous reporting year.  A nursing
9.22 	facility that charges a private paying resident a rate in
9.23 	violation of this clause is subject to an action by the state of
9.24 	Minnesota or any of its subdivisions or agencies for civil
9.25 	damages.  A private paying resident or the resident's legal
9.26 	representative has a cause of action for civil damages against a
9.27 	nursing facility that charges the resident rates in violation of
9.28 	this clause.  The damages awarded shall include three times the
9.29 	payments that result from the violation, together with costs and
9.30 	disbursements, including reasonable attorneys' fees or their
9.31 	equivalent.  A private paying resident or the resident's legal
9.32 	representative, the state, subdivision or agency, or a nursing
9.33 	facility may request a hearing to determine the allowed rate or
9.34 	rates at issue in the cause of action.  Within 15 calendar days
9.35 	after receiving a request for such a hearing, the commissioner
9.36 	shall request assignment of an administrative law judge under
10.1 	sections 14.48 to 14.56 to conduct the hearing as soon as
10.2 	possible or according to agreement by the parties.  The
10.3 	administrative law judge shall issue a report within 15 calendar
10.4 	days following the close of the hearing.  The prohibition set
10.5 	forth in this clause shall not apply to facilities licensed as
10.6 	boarding care facilities which are not certified as skilled or
10.7 	intermediate care facilities level I or II for reimbursement
10.8 	through medical assistance.
10.9 	(b)(1) Charging, soliciting, accepting, or receiving from
10.10 	an applicant for admission to the facility, or from anyone
10.11 	acting in behalf of the applicant, as a condition of admission,
10.12 	expediting the admission, or as a requirement for the
10.13 	individual's continued stay, any fee, deposit, gift, money,
10.14 	donation, or other consideration not otherwise required as
10.15 	payment under the state plan;
10.16 	(2) requiring an individual, or anyone acting in behalf of
10.17 	the individual, to loan any money to the nursing facility;
10.18 	(3) requiring an individual, or anyone acting in behalf of
10.19 	the individual, to promise to leave all or part of the
10.20 	individual's estate to the facility; or
10.21 	(4) requiring a third-party guarantee of payment to the
10.22 	facility as a condition of admission, expedited admission, or
10.23 	continued stay in the facility.
10.24 	Nothing in this paragraph would prohibit discharge for
10.25 	nonpayment of services in accordance with state and federal
10.26 	regulations.
10.27 	(c) Requiring any resident of the nursing facility to
10.28 	utilize a vendor of health care services chosen by the nursing
10.29 	facility.  A nursing facility may require a resident to use
10.30 	pharmacies that utilize unit dose packing systems approved by
10.31 	the Minnesota Board of Pharmacy, and may require a resident to
10.32 	use pharmacies that are able to meet the federal regulations for
10.33 	safe and timely administration of medications such as systems
10.34 	with specific number of doses, prompt delivery of medications,
10.35 	or access to medications on a 24-hour basis.  Notwithstanding
10.36 	the provisions of this paragraph, nursing facilities shall not
11.1 	restrict a resident's choice of pharmacy because the pharmacy
11.2 	utilizes a specific system of unit dose drug packing.
11.3 	(d) Providing differential treatment on the basis of status
11.4 	with regard to public assistance.
11.5 	(e) Discriminating in admissions, services offered, or room
11.6 	assignment on the basis of status with regard to public
11.7 	assistance or refusal to purchase special services.  Admissions
11.8 	discrimination shall include, but is not limited to:
11.9 	(1) basing admissions decisions upon assurance by the
11.10 	applicant to the nursing facility, or the applicant's guardian
11.11 	or conservator, that the applicant is neither eligible for nor
11.12 	will seek public assistance for payment of nursing facility care
11.13 	costs; and
11.14 	(2) engaging in preferential selection from waiting lists
11.15 	based on an applicant's ability to pay privately or an
11.16 	applicant's refusal to pay for a special service.
11.17 	The collection and use by a nursing facility of financial
11.18 	information of any applicant pursuant to a preadmission
11.19 	screening program established by law shall not raise an
11.20 	inference that the nursing facility is utilizing that
11.21 	information for any purpose prohibited by this paragraph.
11.22 	(f) Requiring any vendor of medical care as defined by
11.23 	section 256B.02, subdivision 7, who is reimbursed by medical
11.24 	assistance under a separate fee schedule, to pay any amount
11.25 	based on utilization or service levels or any portion of the
11.26 	vendor's fee to the nursing facility except as payment for
11.27 	renting or leasing space or equipment or purchasing support
11.28 	services from the nursing facility as limited by section
11.29 	256B.433.  All agreements must be disclosed to the commissioner
11.30 	upon request of the commissioner.  Nursing facilities and
11.31 	vendors of ancillary services that are found to be in violation
11.32 	of this provision shall each be subject to an action by the
11.33 	state of Minnesota or any of its subdivisions or agencies for
11.34 	treble civil damages on the portion of the fee in excess of that
11.35 	allowed by this provision and section 256B.433.  Damages awarded
11.36 	must include three times the excess payments together with costs
12.1 	and disbursements including reasonable attorney's fees or their
12.2 	equivalent.
12.3 	(g) Refusing, for more than 24 hours, to accept a resident
12.4 	returning to the same bed or a bed certified for the same level
12.5 	of care, in accordance with a physician's order authorizing
12.6 	transfer, after receiving inpatient hospital services.
12.7 	For a period not to exceed 180 days, the commissioner may
12.8 	continue to make medical assistance payments to a nursing
12.9 	facility or boarding care home which is in violation of this
12.10 	section if extreme hardship to the residents would result.  In
12.11 	these cases the commissioner shall issue an order requiring the
12.12 	nursing facility to correct the violation.  The nursing facility
12.13 	shall have 20 days from its receipt of the order to correct the
12.14 	violation.  If the violation is not corrected within the 20-day
12.15 	period the commissioner may reduce the payment rate to the
12.16 	nursing facility by up to 20 percent.  The amount of the payment
12.17 	rate reduction shall be related to the severity of the violation
12.18 	and shall remain in effect until the violation is corrected.
12.19 	The nursing facility or boarding care home may appeal the
12.20 	commissioner's action pursuant to the provisions of chapter 14
12.21 	pertaining to contested cases.  An appeal shall be considered
12.22 	timely if written notice of appeal is received by the
12.23 	commissioner within 20 days of notice of the commissioner's
12.24 	proposed action.
12.25 	In the event that the commissioner determines that a
12.26 	nursing facility is not eligible for reimbursement for a
12.27 	resident who is eligible for medical assistance, the
12.28 	commissioner may authorize the nursing facility to receive
12.29 	reimbursement on a temporary basis until the resident can be
12.30 	relocated to a participating nursing facility.
12.31 	Certified beds in facilities which do not allow medical
12.32 	assistance intake on July 1, 1984, or after shall be deemed to
12.33 	be decertified for purposes of section 144A.071 only.

12.34 	Sec. 5. Minnesota Statutes 2004, section 256B.5012, is
12.35 	amended by adding a subdivision to read:
12.36 		Subd. 6.Icf/mr rate increase beginning july 1, 2005. (a)
13.1 	For the rate period beginning July 1, 2005, the commissioner
13.2 	shall make available to each facility reimbursed under this
13.3 	section an adjustment to the total operating payment rate of two
13.4 	percent.
13.5 	(b) Money resulting from the rate adjustment under
13.6 	paragraph (a) must be used to increase wages and benefits and
13.7 	pay associated costs for employees, except for administrative
13.8 	and central office employees.  Money received by a facility as a
13.9 	result of the rate adjustment provided in paragraph (a) must be
13.10 	used only for wage, benefit, and staff increases implemented on
13.11 	or after July 1, 2005, and must not be used for increases
13.12 	implemented prior to that date.
13.13 	(c) For each facility, the commissioner shall make
13.14 	available an adjustment using the percentage specified in
13.15 	paragraph (a) multiplied by the total payment rate, excluding
13.16 	the property-related payment rate, in effect on the preceding
13.17 	June 30.  The total payment rate shall include the adjustment
13.18 	provided in section 256B.501, subdivision 12.
13.19 	(d) A facility whose payment rates are governed by closure
13.20 	agreements, receivership agreements, or Minnesota Rules, part
13.21 	9553.0075, is not eligible for an adjustment otherwise granted
13.22 	under this subdivision.
13.23 	(e) A facility may apply for the payment rate adjustment
13.24 	provided under paragraph (a).  The application must be made to
13.25 	the commissioner and contain a plan by which the facility will
13.26 	distribute the funds according to paragraph (b).  For facilities
13.27 	in which the employees are represented by an exclusive
13.28 	bargaining representative, an agreement negotiated and agreed to
13.29 	by the employer and the exclusive bargaining representative
13.30 	constitutes the plan.  A negotiated agreement may constitute the
13.31 	plan only if the agreement is finalized after the date of
13.32 	enactment of all rate increases for the rate year.  The
13.33 	commissioner shall review the plan to ensure that the payment
13.34 	rate adjustment per diem is used as provided in this
13.35 	subdivision.  To be eligible, a facility must submit its plan by
13.36 	December 31, 2005.  If a facility's plan is effective for its
14.1 	employees after the first day of the applicable rate period that
14.2 	the funds are available, the payment rate adjustment per diem is
14.3 	effective the same date as its plan.
14.4 	(f) A copy of the approved distribution plan must be made
14.5 	available to all employees by giving each employee a copy or by
14.6 	posting it in an area of the facility to which all employees
14.7 	have access.  If an employee does not receive the wage and
14.8 	benefit adjustment described in the facility's approved plan and
14.9 	is unable to resolve the problem with the facility's management
14.10 	or through the employee's union representative, the employee may
14.11 	contact the commissioner at an address or telephone number
14.12 	provided by the commissioner and included in the approved plan.

14.13 	Sec. 6. COMMUNITY SERVICES PROVIDER RATE INCREASES.
 14.14 	(a) The commissioner of human services shall increase
14.15 	reimbursement rates by two percent for the rate year beginning
14.16 	July 1, 2005, effective for services rendered on or after that
14.17 	date.
14.18 	(b) The two percent annual rate increase described in this
14.19 	section must be provided to:
14.20 	(1) home and community-based waivered services for persons
14.21 	with mental retardation or related conditions under Minnesota
14.22 	Statutes, section 256B.501;
14.23 	(2) home and community-based waivered services for the
14.24 	elderly under Minnesota Statutes, section 256B.0915;
14.25 	(3) waivered services under community alternatives for
14.26 	disabled individuals under Minnesota Statutes, section 256B.49;
14.27 	(4) community alternative care waivered services under
14.28 	Minnesota Statutes, section 256B.49;
14.29 	(5) traumatic brain injury waivered services under
14.30 	Minnesota Statutes, section 256B.49;
14.31 	(6) nursing services and home health services under
14.32 	Minnesota Statutes, section 256B.0625, subdivision 6a;
14.33 	(7) personal care services and nursing supervision of
14.34 	personal care services under Minnesota Statutes, section
14.35 	256B.0625, subdivision 19a;
14.36 	(8) private duty nursing services under Minnesota Statutes,
15.1 	section 256B.0625, subdivision 7;
15.2 	(9) day training and habilitation services for adults with
15.3 	mental retardation or related conditions under Minnesota
15.4 	Statutes, sections 252.40 to 252.46;
15.5 	(10) alternative care services under Minnesota Statutes,
15.6 	section 256B.0913;
15.7 	(11) adult residential program grants under Minnesota
15.8 	Rules, parts 9535.2000 to 9535.3000;
15.9 	(12) adult and family community support grants under
15.10 	Minnesota Rules, parts 9535.1700 to 9535.1760;
15.11 	(13) the group residential housing supplementary service
15.12 	rate under Minnesota Statutes, section 256I.05, subdivision 1a;
15.13 	(14) adult mental health integrated fund grants under
15.14 	Minnesota Statutes, section 245.4661;
15.15 	(15) semi-independent living services under Minnesota
15.16 	Statutes, section 252.275, including SILS funding under county
15.17 	social services grants formerly funded under Minnesota Statutes,
15.18 	chapter 256I;
15.19 	(16) community support services for deaf and
15.20 	hard-of-hearing adults with mental illness who use or wish to
15.21 	use sign language as their primary means of communication; and 
15.22 	(17) living skills training programs for persons with
15.23 	intractable epilepsy who need assistance in the transition to
15.24 	independent living.
15.25 	(c) Providers that receive a rate increase under this
15.26 	section shall use the additional revenue to increase wages and
15.27 	benefits and pay associated costs for employees, except for
15.28 	management fees, the administrator, and central office staffs.
15.29 	(d) For public employees, the increase for wages and
15.30 	benefits for certain staff is available and pay rates shall be
15.31 	increased only to the extent that they comply with laws
15.32 	governing public employees collective bargaining.  Money
15.33 	received by a provider for pay increases under this section may
15.34 	be used only for increases implemented on or after the first day
15.35 	of the state fiscal year in which the increase is available and
15.36 	must not be used for increases implemented prior to that date.
16.1 	(e) A copy of the provider's plan for complying with
16.2 	paragraph (c) must be made available to all employees by giving
16.3 	each employee a copy or by posting a copy in an area of the
16.4 	provider's operation to which all employees have access.  If an
16.5 	employee does not receive the adjustment, if any, described in
16.6 	the plan and is unable to resolve the problem with the provider,
16.7 	the employee may contact the employee's union representative.
16.8 	If the employee is not covered by a collective bargaining
16.9 	agreement, the employee may contact the commissioner at a
16.10 	telephone number provided by the commissioner and included in
16.11 	the provider's plan.

16.12 	Sec. 7. LIMITING WAIVER GROWTH.
 16.13 	(a) For each year of the biennium ending June 30, 2007, the
16.14 	commissioner of human services shall make available additional
16.15 	allocations for community alternatives for disabled individuals
16.16 	waivered services covered under Minnesota Statutes, section
16.17 	256B.49, at a rate of $105 per month or $1,260 per year, plus
16.18 	any additional legislatively authorized growth.  Priorities for
16.19 	the allocation of funds shall be for individuals anticipated to
16.20 	be discharged from institutional settings or who are at imminent
16.21 	risk of a placement in an institutional setting.
16.22 	(b) For each year of the biennium ending June 30, 2007, the
16.23 	commissioner shall make available additional allocations for
16.24 	traumatic brain injury waivered services covered under Minnesota
16.25 	Statutes, section 256B.49, at a rate of 165 per year.
16.26 	Priorities for the allocation of funds shall be for individuals
16.27 	anticipated to be discharged from institutional settings or who
16.28 	are at imminent risk of a placement in an institutional setting.
16.29 	(c) For each year of the biennium ending June 30, 2007, the
16.30 	commissioner shall limit the new diversion caseload growth in
16.31 	the mental retardation and related conditions waiver to 55
16.32 	additional allocations.  Notwithstanding Minnesota Statutes,
16.33 	section 256B.0916, subdivision 5, paragraph (b), the available
16.34 	diversion allocations shall be awarded to support individuals
16.35 	whose health and safety needs result in an imminent risk of an
16.36 	institutional placement at any time during the fiscal year.

17.1 	Sec. 8. REPORT TO THE LEGISLATURE.
 17.2 	The commissioner of human services shall report to the
17.3 	legislature by January 15, 2007, and January 15, 2008, on the
17.4 	number of beds removed from service after the enactment of
17.5 	section 1, any evidence of problems accessing long-term care
17.6 	services, and recommendations for modification of that
17.7 	subdivision.

17.8 	Sec. 9. APPROPRIATION.
 17.9 	$....... is appropriated for the biennium ending June 30,
17.10 	2007, from the general fund to the commissioner of human
17.11 	services for the purposes of sections 1 to 7.