256B.435 Nursing facility reimbursement system effective July 1, 2000.
Subdivision 1. In general. Effective July 1, 2000, the commissioner shall implement a performance-based contracting system to replace the current method of setting operating cost payment rates under sections 256B.431 and 256B.434 and Minnesota Rules, parts 9549.0010 to 9549.0080. A nursing facility in operation on May 1, 1998, with payment rates not established under section 256B.431 or 256B.434 on that date, is ineligible for this performance-based contracting system. In determining prospective payment rates of nursing facility services, the commissioner shall distinguish between operating costs and property-related costs. The commissioner of finance shall include an annual inflationary adjustment in operating costs for nursing facilities using the inflation factor specified in subdivision 3 as a budget change request in each biennial detailed expenditure budget submitted to the legislature under section 16A.11. Property related payment rates, including real estate taxes and special assessments, shall be determined under section 256B.431 or 256B.434 or under a new property-related reimbursement system, if one is implemented by the commissioner under subdivision 3.
Subd. 2. Contract provisions. (a) The performance-based contract with each nursing facility must include provisions that:
(1) apply the resident case mix assessment provisions of Minnesota Rules, parts 9549.0051, 9549.0058, and 9549.0059, or another assessment system, with the goal of moving to a single assessment system;
(2) monitor resident outcomes through various methods, such as quality indicators based on the minimum data set and other utilization and performance measures;
(3) require the establishment and use of a continuous quality improvement process that integrates information from quality indicators and regular resident and family satisfaction interviews;
(4) require annual reporting of facility statistical information, including resident days by case mix category, productive nursing hours, wages and benefits, and raw food costs for use by the commissioner in the development of facility profiles that include trends in payment and service utilization;
(5) require from each nursing facility an annual certified audited financial statement consisting of a balance sheet, income and expense statements, and an opinion from either a licensed or certified public accountant, if a certified audit was prepared, or unaudited financial statements if no certified audit was prepared; and
(6) establish additional requirements and penalties for nursing facilities not meeting the standards set forth in the performance-based contract.
(b) The commissioner may develop additional incentive-based payments for achieving outcomes specified in each contract. The specified facility-specific outcomes must be measurable and approved by the commissioner.
(c) The commissioner may also contract with nursing facilities in other ways through requests for proposals, including contracts on a risk or nonrisk basis, with nursing facilities or consortia of nursing facilities, to provide comprehensive long-term care coverage on a premium or capitated basis.
Subd. 3. Payment rate provisions. (a) For rate years beginning on or after July 1, 2000, within the limits of appropriations specifically for this purpose, the commissioner shall determine operating cost payment rates for each licensed and certified nursing facility by indexing its operating cost payment rates in effect on June 30, 2000, for inflation. The inflation factor to be used must be based on the change in the Consumer Price Index-All Items, United States city average (CPI-U) as forecasted by Data Resources, Inc. in the fourth quarter preceding the rate year. The CPI-U forecasted index for operating cost payment rates shall be based on the 12-month period from the midpoint of the nursing facility's prior rate year to the midpoint of the rate year for which the operating payment rate is being determined.
(b) Beginning July 1, 2000, each nursing facility subject to a performance-based contract under this section shall choose one of two methods of payment for property-related costs:
(1) the method established in section 256B.434; or
(2) the method established in section 256B.431.
Once the nursing facility has made the election in this paragraph, that election shall remain in effect for at least four years or until an alternative property payment system is developed.
(c) For rate years beginning on or after July 1, 2000, the commissioner may implement a new method of payment for property-related costs that addresses the capital needs of nursing facilities. Notwithstanding paragraph (b), the new property payment system or systems, if implemented, shall replace the current method of setting property payment rates under sections 256B.431 and 256B.434.
HIST: 1998 c 407 art 3 s 14
Official Publication of the State of Minnesota
Revisor of Statutes