1998 Minnesota Statutes

     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