2006 Minnesota Statutes

CHAPTER 256B. MEDICAL ASSISTANCE FOR NEEDY PERSONS

256B.001 APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.
State agencies shall use the terminology changes specified in Laws 2005, chapter 56, section
1, when printed material and signage are replaced and new printed material and signage are
obtained. State agencies do not have to replace existing printed material and signage to comply
with Laws 2005, chapter 56, sections 1 and 2. Language changes made according to Laws 2005,
chapter 56, sections 1 and 2, shall not expand or exclude eligibility to services.
History: 2005 c 56 s 3

256B.01 POLICY.
Medical assistance for needy persons whose resources are not adequate to meet the cost of
such care is hereby declared to be a matter of state concern. To provide such care, a statewide
program of medical assistance, with free choice of vendor, is hereby established.
History: Ex1967 c 16 s 1

256B.011 POLICY FOR CHILDBIRTH AND ABORTION FUNDING.
Between normal childbirth and abortion it is the policy of the state of Minnesota that normal
childbirth is to be given preference, encouragement and support by law and by state action, it
being in the best interests of the well being and common good of Minnesota citizens.
History: 1978 c 508 s 1

256B.0185 REQUIRED REPORT.
    Subdivision 1. Pending application. By December 15 of both 2005 and 2006, the
commissioner must deliver to the legislature a report that identifies:
(1) each county in which an application for medical assistance from a person identified
as residing in a long-term care facility is or was pending, at any time between January 1 and
December 1 of the calendar year to which the report relates, for more than 60 days in the case of a
person who is disabled, or for more than 45 days in the case of a person who is age 65 or older; and
(2) for each of the identified counties: the number of applications described in clause (1), the
average number of days the applications were pending, the distribution of days for applications
that were pending, and what percentage of the applications, respectively, the county approved
and denied.
    Subd. 2. Time to process application. The report must include specific recommendations
for how counties, as a group, could shorten the time it takes to act on the applications described in
subdivision 1, clause (1).
History: 1Sp2005 c 4 art 7 s 3

256B.02 DEFINITIONS.
    Subdivision 1.[Repealed, 1987 c 363 s 14]
    Subd. 2.[Repealed, 1987 c 363 s 14]
    Subd. 3.[Repealed, 1987 c 363 s 14]
    Subd. 4. Medical institution. "Medical institution" means any licensed medical facility that
receives a license from the Minnesota Health Department or Department of Human Services or
appropriate licensing authority of this state, any other state, or a Canadian province.
    Subd. 5. State agency. "State agency" means the commissioner of human services.
    Subd. 6. County agency. "County agency" means a local social service agency operating
under and pursuant to the provisions of chapter 393.
    Subd. 7. Vendor of medical care. (a) "Vendor of medical care" means any person or persons
furnishing, within the scope of the vendor's respective license, any or all of the following goods or
services: medical, surgical, hospital, ambulatory surgical center services, optical, visual, dental and
nursing services; drugs and medical supplies; appliances; laboratory, diagnostic, and therapeutic
services; nursing home and convalescent care; screening and health assessment services provided
by public health nurses as defined in section 145A.02, subdivision 18; health care services
provided at the residence of the patient if the services are performed by a public health nurse and
the nurse indicates in a statement submitted under oath that the services were actually provided;
and such other medical services or supplies provided or prescribed by persons authorized by
state law to give such services and supplies. The term includes, but is not limited to, directors
and officers of corporations or members of partnerships who, either individually or jointly with
another or others, have the legal control, supervision, or responsibility of submitting claims for
reimbursement to the medical assistance program. The term only includes directors and officers
of corporations who personally receive a portion of the distributed assets upon liquidation or
dissolution, and their liability is limited to the portion of the claim that bears the same proportion
to the total claim as their share of the distributed assets bears to the total distributed assets.
(b) "Vendor of medical care" also includes any person who is credentialed as a health
professional under standards set by the governing body of a federally recognized Indian tribe
authorized under an agreement with the federal government according to United States Code,
title 25, section 450f, to provide health services to its members, and who through a tribal facility
provides covered services to American Indian people within a contract health service delivery area
of a Minnesota reservation, as defined under Code of Federal Regulations, title 42, section 36.22.
(c) A federally recognized Indian tribe that intends to implement standards for credentialing
health professionals must submit the standards to the commissioner of human services, along
with evidence of meeting, exceeding, or being exempt from corresponding state standards. The
commissioner shall maintain a copy of the standards and supporting evidence, and shall use
those standards to enroll tribal-approved health professionals as medical assistance providers.
For purposes of this section, "Indian" and "Indian tribe" mean persons or entities that meet the
definition in United States Code, title 25, section 450b.
    Subd. 8. Medical assistance; medical care. "Medical assistance" or "medical care" means
payment of part or all of the cost of the care and services identified in section 256B.0625, for
eligible individuals whose income and resources are insufficient to meet all of this cost.
    Subd. 8a.[Renumbered 256B.0625, subdivision 1]
    Subd. 8b.[Renumbered 256B.0625, subd 2]
    Subd. 8c.[Renumbered 256B.0625, subd 3]
    Subd. 8d.[Renumbered 256B.0625, subd 4]
    Subd. 8e.[Renumbered 256B.0625, subd 5]
    Subd. 8f.[Renumbered 256B.0625, subd 6]
    Subd. 8g.[Renumbered 256B.0625, subd 7]
    Subd. 8h.[Renumbered 256B.0625, subd 8]
    Subd. 8i.[Renumbered 256B.0625, subd 9]
    Subd. 8j.[Renumbered 256B.0625, subd 10]
    Subd. 8k.[Renumbered 256B.0625, subd 11]
    Subd. 8l.[Renumbered 256B.0625, subd 12]
    Subd. 8m.[Renumbered 256B.0625, subd 13]
    Subd. 8n.[Renumbered 256B.0625, subd 14]
    Subd. 8o.[Renumbered 256B.0625, subd 15]
    Subd. 8p.[Renumbered 256B.0625, subd 16]
    Subd. 8q.[Renumbered 256B.0625, subd 17]
    Subd. 8r.[Renumbered 256B.0625, subd 18]
    Subd. 8s.[Renumbered 256B.0625, subd 19]
    Subd. 8t.[Renumbered 256B.0625, subd 20]
    Subd. 8u.[Renumbered 256B.0625, subd 21]
    Subd. 8v.[Renumbered 256B.0625, subd 22]
    Subd. 8w.[Renumbered 256B.0625, subd 23]
    Subd. 8x.[Renumbered 256B.0625, subd 24]
    Subd. 8y.[Renumbered 256B.0625, subd 25]
    Subd. 9. Private health care coverage. "Private health care coverage" means any plan
regulated by chapter 62A, 62C or 64B. Private health care coverage also includes any self-insured
plan providing health care benefits, pharmacy benefit manager, service benefit plan, managed
care organization, and other parties that are by contract legally responsible for payment of a
claim for a health care item or service for an individual receiving medical benefits under chapter
256B, 256D, or 256L.
    Subd. 10. Automobile accident coverage. "Automobile accident coverage" means any
plan, or that portion of a plan, regulated under chapter 65B, which provides benefits for medical
expenses incurred in an automobile accident.
    Subd. 11. Related condition. "Related condition" means that condition defined in section
252.27, subdivision 1a.
    Subd. 12. Third-party payer. "Third-party payer" means a person, entity, or agency or
government program that has a probable obligation to pay all or part of the costs of a medical
assistance recipient's health services. Third-party payer includes an entity under contract with the
recipient to cover all or part of the recipient's medical costs.
    Subd. 13. Prepaid health plan. "Prepaid health plan" means a vendor who receives a
capitation payment and assumes financial risk for the provision of medical assistance services
under a contract with the commissioner.
    Subd. 14. Group health plan. "Group health plan" means any plan of, or contributed to
by, an employer, including a self-insured plan, to provide health care directly or otherwise to the
employer's employees, former employees, or the families of the employees or former employees,
and includes continuation coverage pursuant to title XXII of the Public Health Service Act,
section 4980B of the Internal Revenue Code of 1986, or title VI of the Employee Retirement
Income Security Act of 1974.
    Subd. 15. Cost-effective. "Cost-effective" means that the amount paid by the state for
premiums, coinsurance, deductibles, other cost-sharing obligations under a health insurance plan,
and other administrative costs is likely to be less than the amount paid for an equivalent set of
services paid by medical assistance.
History: Ex1967 c 16 s 2; 1969 c 395 s 1; 1973 c 717 s 17; 1975 c 247 s 9; 1975 c 384 s 1;
1975 c 437 art 2 s 3; 1976 c 173 s 56; 1976 c 236 s 1; 1976 c 312 s 1; 1978 c 508 s 2; 1978 c 560
s 10; 1981 c 360 art 2 s 26,54; 1Sp1981 c 2 s 12; 1Sp1981 c 4 art 4 s 22; 3Sp1981 c 2 art 1 s 31;
1982 c 562 s 2; 1983 c 151 s 1,2; 1983 c 312 art 1 s 27; art 5 s 10; art 9 s 4; 1984 c 654 art 5 s
58; 1985 c 21 s 52-54; 1985 c 49 s 41; 1985 c 252 s 19,20; 1Sp1985 c 3 s 19; 1986 c 394 s 17;
1986 c 444; 1987 c 370 art 1 s 3; art 2 s 4; 1987 c 374 s 1; 1987 c 309 s 24; 1987 c 403 art 2 s
73,74; art 5 s 16; 1988 c 689 art 2 s 141,268; 1992 c 464 art 1 s 55; 1992 c 513 art 7 s 31,32;
1994 c 631 s 31; 2002 c 275 s 2; 2004 c 198 s 17; 1Sp2005 c 4 art 8 s 17; 2006 c 282 art 17 s 24

256B.03 PAYMENTS TO VENDORS.
    Subdivision 1. General limit. All payments for medical assistance hereunder must be made
to the vendor. The maximum payment for new vendors enrolled in the medical assistance program
after the base year shall be determined from the average usual and customary charge of the
same vendor type enrolled in the base year.
    Subd. 2.[Repealed, 2000 c 449 s 15]
    Subd. 3. Tribal purchasing model. (a) Notwithstanding subdivision 1 and sections
256B.0625 and 256D.03, subdivision 4, paragraph (i), the commissioner may make payments to
federally recognized Indian tribes with a reservation in the state to provide medical assistance
and general assistance medical care to Indians, as defined under federal law, who reside on or
near the reservation. The payments may be made in the form of a block grant or other payment
mechanism determined in consultation with the tribe. Any alternative payment mechanism agreed
upon by the tribes and the commissioner under this subdivision is not dependent upon county or
health plan agreement but is intended to create a direct payment mechanism between the state
and the tribe for the administration of the medical assistance and general assistance medical care
programs, and for covered services.
(b) A tribe that implements a purchasing model under this subdivision shall report to the
commissioner at least annually on the operation of the model. The commissioner and the tribe
shall cooperatively determine the data elements, format, and timetable for the report.
(c) For purposes of this subdivision, "Indian tribe" means a tribe, band, or nation, or other
organized group or community of Indians that is recognized as eligible for the special programs
and services provided by the United States to Indians because of their status as Indians and for
which a reservation exists as is consistent with Public Law 100-485, as amended.
(d) Payments under this subdivision may not result in an increase in expenditures that would
not otherwise occur in the medical assistance program under this chapter or the general assistance
medical care program under chapter 256D.
History: Ex1967 c 16 s 3; 1981 c 360 art 2 s 27,54; 1Sp1981 c 2 s 13; 1Sp1981 c 4 art 4 s
22; 3Sp1982 c 1 art 2 s 4; 1983 c 312 art 1 s 27; 1987 c 384 art 2 s 63; 1987 c 403 art 2 s 75;
1996 c 451 art 5 s 14; 1998 c 407 art 4 s 11

NOTE: Subdivision 3, as added by Laws 1996, chapter 451, article 5, section 14, is effective
October 1, 1996, or upon receipt of any necessary federal approval, whichever date is later.
Laws 1996, chapter 451, article 5, section 40.

256B.031 PREPAID HEALTH PLANS.
    Subdivision 1. Contracts. The commissioner may contract with health insurers licensed
and operating under chapters 60A and 62A, nonprofit health service plans licensed and operating
under chapter 62C, health maintenance organizations licensed and operating under chapter
62D, and vendors of medical care and organizations participating in prepaid programs under
section 256D.03, subdivision 4, clause (b), to provide medical services to medical assistance
recipients. Notwithstanding any other law, health insurers may enter into contracts with the
commissioner under this section. As a condition of the contract, health insurers and health
service plan corporations must agree to comply with the requirements of section 62D.04,
subdivision 1 , clauses (a), (b), (c), (d), and (f), and provide a complaint procedure that satisfies
the requirements of section 62D.11. Nothing in this section permits health insurers not licensed
as health maintenance organizations under chapter 62D to offer a prepaid health plan as defined
in section 256B.02, subdivision 12, to persons other than those receiving medical assistance or
general assistance medical care under this section. Contracts between the commissioner and a
prepaid health plan are exempt from the set-aside and preference provisions of section 16C.16,
subdivisions 6, paragraph (a) , and 7. Contracts must specify the services that are included in
the per capita rate. Contracts must specify those services that are to be eligible for risk sharing
between the prepaid health plan and the state. Contracts must also state that payment must be
made within 60 days after the month of coverage.
    Subd. 2. Services. State contracts for these services must assure recipients of at least the
comprehensive health services defined in sections 256B.02, subdivision 8, and 256B.0625, except
services defined in section 256B.0625, subdivisions 2, 5, 18, and 19a, and except services defined
as chemical dependency services and mental health services.
Contracts under this section must include provision for assessing pregnant women to
determine their risk of poor pregnancy outcome. Contracts must also include provision for
treatment of women found to be at risk of poor pregnancy outcome.
    Subd. 3. Information required. Prepaid health plans under contract must provide
information to the commissioner according to the contract specifications. The information must
include, at a minimum, the number of people receiving services, the number of encounters, the
types of services received, evidence of an operating quality assurance program, and information
about the use of and actual recoveries of available third-party resources. A plan under contract to
provide services in a county must provide the county agency with the most current listing of the
health care providers whose services are covered by the plan.
    Subd. 4. Prepaid health plan rates. For payments made during calendar year 1988,
the monthly maximum allowable rate established by the commissioner of human services for
payment to prepaid health plans must not exceed 90 percent of the projected average monthly per
capita fee-for-service medical assistance costs for state fiscal year 1988 for recipients of the aid to
families with dependent children program formerly codified in sections 256.72 to 256.87. The
base year for projecting the average monthly per capita fee-for-service medical assistance costs
is state fiscal year 1986. A maximum allowable per capita rate must be established collectively
for Anoka, Carver, Dakota, Hennepin, Ramsey, St. Louis, Scott, and Washington Counties.
A separate maximum allowable per capita rate must be established collectively for all other
counties. The maximum allowable per capita rate may be adjusted to reflect utilization differences
among eligible classes of recipients. For payments made during calendar year 1989, the maximum
allowable rate must be calculated in the same way as 1988 rates, except the base year is state
fiscal year 1987. For payments made during calendar year 1990 and later years, the commissioner
shall consult with an independent actuary in establishing prepayment rates, but shall retain final
control over the rate methodology. Rates established for prepaid health plans must be based on the
services that the prepaid health plan provides under contract with the commissioner.
    Subd. 5. Free choice limited. (a) The commissioner may require recipients of the Minnesota
family investment program to enroll in a prepaid health plan and receive services from or through
the prepaid health plan, with the following exceptions:
(1) recipients who are refugees and whose health services are reimbursed 100 percent by
the federal government; and
(2) recipients who are placed in a foster home or facility. If placement occurs before the
seventh day prior to the end of any month, the recipient will be disenrolled from the recipient's
prepaid health plan effective the first day of the following month. If placement occurs after the
seventh day before the end of any month, that recipient will be disenrolled from the prepaid health
plan on the first day of the second month following placement. The prepaid health plan must
provide all services set forth in subdivision 2 during the interim period.
Enrollment in a prepaid health plan is mandatory only when recipients have a choice of at
least two prepaid health plans.
(b) Recipients who become eligible on or after December 1, 1987, must choose a health plan
within 30 days of the date eligibility is determined. At the time of application, the local agency
shall ask the recipient whether the recipient has a primary health care provider. If the recipient has
not chosen a health plan within 30 days but has provided the local agency with the name of a
primary health care provider, the local agency shall determine whether the provider participates in
a prepaid health plan available to the recipient and, if so, the local agency shall select that plan
on the recipient's behalf. If the recipient has not provided the name of a primary health care
provider who participates in an available prepaid health plan, commissioner shall randomly
assign the recipient to a health plan.
(c) If possible, the local agency shall ask whether the recipient has a primary health care
provider and the procedures under paragraph (b) shall apply. If a recipient does not choose a
prepaid health plan by this date, the commissioner shall randomly assign the recipient to a health
plan.
(d) The commissioner shall request a waiver from the federal Centers for Medicare and
Medicaid Services to limit a recipient's ability to change health plans to once every six or 12
months. If such a waiver is obtained, each recipient must be enrolled in the health plan for a
minimum of six or 12 months. A recipient may change health plans once within the first 60
days after initial enrollment.
(e) Women who are receiving medical assistance due to pregnancy and later become eligible
for the Minnesota family investment program are not required to choose a prepaid health plan
until 60 days postpartum. An infant born as a result of that pregnancy must be enrolled in a
prepaid health plan at the same time as the mother.
(f) If third-party coverage is available to a recipient through enrollment in a prepaid health
plan through employment, through coverage by the former spouse, or if a duty of support has
been imposed by law, order, decree, or judgment of a court under chapter 518A, the obligee or
recipient shall participate in the prepaid health plan in which the obligee has enrolled provided
that the commissioner has contracted with the plan.
    Subd. 6. Ombudsman. The commissioner shall designate an ombudsman to advocate for
persons required to enroll in prepaid health plans under this section. The ombudsman shall
advocate for recipients enrolled in prepaid health plans through complaint and appeal procedures
and ensure that necessary medical services are provided either by the prepaid health plan directly
or by referral to appropriate social services. At the time of enrollment in a prepaid health plan,
the local agency shall inform recipients about the ombudsman program and their right to a
resolution of a complaint by the prepaid health plan if they experience a problem with the plan
or its providers.
    Subd. 7. Services pending appeal. If the recipient appeals in writing to the state agency
on or before the tenth day after the decision of the prepaid health plan to reduce, suspend, or
terminate services which the recipient had been receiving, and the treating physician or another
plan physician orders the services to be continued at the previous level, the prepaid health plan
must continue to provide services at a level equal to the level ordered by the plan's physician until
the state agency renders its decision.
    Subd. 8. Case management. The commissioner shall prepare a report to the legislature by
January 1988, that describes the issues involved in successfully implementing a case management
system in counties where the commissioner has fewer than two prepaid health plans under contract
to provide health care services to eligible classes of recipients. In the report the commissioner
shall address which health care providers could be case managers, the responsibilities of the case
manager, the assumption of risk by the case manager, the services to be provided either directly or
by referral, reimbursement concerns, federal waivers that may be required, and other issues that
may affect the quality and cost of care under such a system.
    Subd. 9. Prepayment coordinator. The local agency shall designate a prepayment
coordinator to assist the state agency in implementing this section, section 256B.69, and section
256D.03, subdivision 4. Assistance must include educating recipients about available health care
options, enrolling recipients under subdivision 5, providing necessary eligibility and enrollment
information to health plans and the state agency, and coordinating complaints and appeals with
the ombudsman established in subdivision 6.
    Subd. 10. Impact on public or teaching hospitals and community clinics. (a) Before
implementing prepaid programs in counties with a county operated or affiliated public teaching
hospital or a hospital or clinic operated by the University of Minnesota, the commissioner shall
consider the risks the prepaid program creates for the hospital and allow the county or hospital the
opportunity to participate in the program, provided the terms of participation in the program are
competitive with the terms of other participants.
(b) Prepaid health plans serving counties with a nonprofit community clinic or community
health services agency must contract with the clinic or agency to provide services to clients who
choose to receive services from the clinic or agency, if the clinic or agency agrees to payment rates
that are competitive with rates paid to other health plan providers for the same or similar services.
    Subd. 11. Reimbursement limitation; providers not with prepaid health plan. A prepaid
health plan may limit any reimbursement it may be required to pay to providers not employed
by or under contract with the prepaid health plan to the medical assistance rates for medical
assistance enrollees, and the general assistance medical care rates for general assistance medical
care enrollees, paid by the commissioner of human services to providers for services to recipients
not enrolled in a prepaid health plan.
History: 1987 c 403 art 2 s 76; 1988 c 689 art 2 s 142,268; 1989 c 282 art 3 s 40; 1991 c
292 art 4 s 31,32; 1998 c 386 art 2 s 77; 1999 c 159 s 51,52; 2000 c 260 s 30; 2002 c 277 s 32;
2005 c 164 s 29; 1Sp2005 c 7 s 28

256B.035 MANAGED CARE.
The commissioner of human services may contract with public or private entities or operate
a preferred provider program to deliver health care services to medical assistance, general
assistance medical care, and MinnesotaCare program recipients. The commissioner may enter into
risk-based and non-risk-based contracts. Contracts may be for the full range of health services,
or a portion thereof, for medical assistance and general assistance medical care populations to
determine the effectiveness of various provider reimbursement and care delivery mechanisms.
The commissioner may seek necessary federal waivers and implement projects when approval of
the waivers is obtained from the Centers for Medicare and Medicaid Services of the United States
Department of Health and Human Services.
History: 1990 c 568 art 3 s 20; 1992 c 513 art 7 s 33; 1995 c 234 art 8 s 56; 2002 c 277 s 32

256B.037 PROSPECTIVE PAYMENT OF DENTAL SERVICES.
    Subdivision 1. Contract for dental services. The commissioner may conduct a
demonstration project to contract, on a prospective per capita payment basis, with an organization
or organizations licensed under chapter 62C, 62D, or 62N for the provision of all dental care
services beginning July 1, 1994, under the medical assistance, general assistance medical care,
and MinnesotaCare programs, or when necessary waivers are granted by the secretary of health
and human services, whichever occurs later. The commissioner shall identify a geographic area or
areas, including both urban and rural areas, where access to dental services has been inadequate,
in which to conduct demonstration projects. The commissioner shall seek any federal waivers or
approvals necessary to implement this section from the secretary of health and human services.
The commissioner may exclude from participation in the demonstration project any or all
groups currently excluded from participation in the prepaid medical assistance program under
section 256B.69. Except for persons excluded from participation in the demonstration project, all
persons who have been determined eligible for medical assistance, general assistance medical
care and, if applicable, MinnesotaCare and reside in the designated geographic areas are required
to enroll in a dental plan to receive their dental care services. Except for emergency services or
out-of-plan services authorized by the dental plan, recipients must receive their dental services
from dental care providers who are part of the dental plan provider network.
The commissioner shall select either multiple dental plans or a single dental plan in a
designated area. A dental plan under contract with the department must serve both medical
assistance recipients and general assistance medical care recipients in a designated geographic
area and may serve MinnesotaCare recipients. The commissioner may limit the number of dental
plans with which the department contracts within a designated geographic area, taking into
consideration the number of recipients within the designated geographic area; the number of
potential dental plan contractors; the size of the provider network offered by dental plans; the
dental care services offered by a dental plan; qualifications of dental plan personnel; accessibility
of services to recipients; dental plan assurances of recipient confidentiality; dental plan marketing
and enrollment activities; dental plan compliance with this section; dental plan performance under
other contracts with the department to serve medical assistance, general assistance medical care,
or MinnesotaCare recipients; or any other factors necessary to provide the most economical care
consistent with high standards of dental care.
For purposes of this section, "dental plan" means an organization licensed under chapter
62C, 62D, or 62N that contracts with the department to provide covered dental care services to
recipients on a prepaid capitation basis. "Emergency services" has the meaning given in section
256B.0625, subdivision 4. "Multiple dental plan area" means a designated area in which more
than one dental plan is offered. "Participating provider" means a dentist or dental clinic who is
employed by or under contract with a dental plan to provide dental care services to recipients.
"Single dental plan area" means a designated area in which only one dental plan is available.
    Subd. 1a. Multiple dental plan areas. After the department has executed contracts with
dental plans to provide covered dental care services in a multiple dental plan area, the department
shall:
(1) inform applicants and recipients, in writing, of available dental plans, when written
notice of dental plan selection must be submitted to the department, and when dental plan
participation begins;
(2) assign to a dental plan recipients who fail to notify the department in writing of their
dental plan choice; and
(3) notify recipients, in writing, of their assigned dental plan before the effective date of the
recipient's dental plan participation.
    Subd. 1b. Single dental plan areas. After the department has executed a contract with a
dental plan to provide covered dental care services as the sole dental plan in a geographic area,
the provisions in paragraphs (a) to (c) apply.
(a) The department shall assure that applicants and recipients are informed, in writing, of
participating providers in the dental plan and when dental plan participation begins.
(b) The dental plan may require the recipient to select a specific dentist or dental clinic and
may assign to a specific dentist or dental clinic recipients who fail to notify the dental plan of
their selection.
(c) The dental plan shall notify recipients in writing of their assigned providers before
the effective date of dental plan participation.
    Subd. 1c. Dental choice. (a) In multiple dental plan areas, recipients may change dental
plans once within the first year the recipient participates in a dental plan. After the first year of
dental plan participation, recipients may change dental plans during the annual 30-day open
enrollment period.
(b) In single dental plan areas, recipients may change their specific dentist or clinic at
least once during the first year of dental plan participation. After the first year of dental plan
participation, recipients may change their specific dentist or clinic at least once annually. The
dental plan shall notify recipients of this change option.
(c) If a dental plan's contract with the department is terminated for any reason, recipients in
that dental plan shall select a new dental plan and may change dental plans or a specific dentist or
clinic within the first 60 days of participation in the second dental plan.
(d) Recipients may change dental plans or a specific dentist or clinic at any time as follows:
(1) in multiple dental plan areas, if the travel time from the recipient's residence to a general
practice dentist is over 30 minutes, the recipient may change dental plans;
(2) in single dental plan areas, if the travel time from the recipient's residence to the
recipient's specific dentist or clinic is over 30 minutes, the recipient may change providers; or
(3) if the recipient's dental plan or specific dentist or clinic was incorrectly designated due
to department or dental plan error.
(e) Requests for change under this subdivision must be submitted to the department or dental
plan in writing. The department or dental plan shall notify recipients whether the request is
approved or denied within 30 days after receipt of the written request.
    Subd. 2. Establishment of prepayment rates. The commissioner shall consult with an
independent actuary to establish prepayment rates, but shall retain final authority over the
methodology used to establish the rates. The prepayment rates shall not result in payments that
exceed the per capita expenditures that would have been made for dental services by the programs
under a fee-for-service reimbursement system. The package of dental benefits provided to
individuals under this subdivision shall not be less than the package of benefits provided under the
medical assistance fee-for-service reimbursement system for dental services.
    Subd. 3. Appeals. All recipients of services under this section have the right to appeal to the
commissioner under section 256.045. A recipient participating in a dental plan may utilize the
dental plan's internal complaint procedure but is not required to exhaust the internal complaint
procedure before appealing to the commissioner. The appeal rights and procedures in Minnesota
Rules, part 9500.1463, apply to recipients who enroll in dental plans.
    Subd. 4. Information required by commissioner. A contractor shall submit
encounter-specific information as required by the commissioner, including, but not limited to,
information required for assessing client satisfaction, quality of care, and cost and utilization of
services. Dental plans and participating providers must provide the commissioner access to
recipient dental records to monitor compliance with the requirements of this section.
    Subd. 5. Other contracts permitted. Nothing in this section prohibits the commissioner
from contracting with an organization for comprehensive health services, including dental
services, under section 256B.031, 256B.035, 256B.69, or 256D.03, subdivision 4, paragraph (c).
    Subd. 6. Recipient costs. A dental plan and its participating providers or nonparticipating
providers who provide emergency services or services authorized by the dental plan shall not
charge recipients for any costs for covered services.
    Subd. 7. Financial accountability. A dental plan is accountable to the commissioner for the
fiscal management of covered dental care services. The state of Minnesota and recipients shall
be held harmless for the payment of obligations incurred by a dental plan if the dental plan or
a participating provider becomes insolvent and the department has made the payments due to
the dental plan under the contract.
    Subd. 8. Quality improvement. A dental plan shall have an internal quality improvement
system. A dental plan shall permit the commissioner or the commissioner's agents to evaluate the
quality, appropriateness, and timeliness of covered dental care services through inspections, site
visits, and review of dental records.
    Subd. 9. Third-party liability. To the extent required under section 62A.046 and Minnesota
Rules, part 9506.0080, a dental plan shall coordinate benefits for or recover the cost of dental
care services provided recipients who have other dental care coverage. Coordination of benefits
includes the dental plan paying applicable co-payments or deductibles on behalf of a recipient.
    Subd. 10. Financial capacity. A dental plan shall demonstrate that its financial risk
capacity is acceptable to its participating providers; except, an organization licensed as a health
maintenance organization under chapter 62D, a nonprofit health service plan under chapter 62C,
or a community integrated service network under chapter 62N, is not required to demonstrate
financial risk capacity beyond the requirements in those chapters for licensure or a certificate of
authority.
    Subd. 11. Data privacy. The contract between the commissioner and the dental plan must
specify that the dental plan is an agent of the welfare system and shall have access to welfare
data on recipients to the extent necessary to carry out the dental plan's responsibilities under
the contract. The dental plan shall comply with chapter 13, the Minnesota Government Data
Practices Act.
History: 1Sp1993 c 1 art 5 s 27; 1995 c 234 art 6 s 22-33; 1997 c 203 art 9 s 9; 1997 c
225 art 2 s 62

256B.038 PROVIDER RATE INCREASES AFTER JUNE 30, 1999.
(a) For fiscal years beginning on or after July 1, 1999, the commissioner of finance shall
include an annual inflationary adjustment in payment rates for the services listed in paragraph
(b) as a budget change request in each biennial detailed expenditure budget submitted to the
legislature under section 16A.11. The adjustment shall be accomplished by indexing the rates in
effect for inflation 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 of the prior year for
the calendar year during which the rate increase occurs.
(b) Within the limits of appropriations specifically for this purpose, the commissioner shall
apply the rate increases in paragraph (a) to home and community-based waiver services for
persons with developmental disabilities under section 256B.501; home and community-based
waiver services for the elderly under section 256B.0915; waivered services under community
alternatives for disabled individuals under section 256B.49; community alternative care waivered
services under section 256B.49; traumatic brain injury waivered services under section 256B.49;
nursing services and home health services under section 256B.0625, subdivision 6a; personal care
services and nursing supervision of personal care services under section 256B.0625, subdivision
19a ; private duty nursing services under section 256B.0625, subdivision 7; day training and
habilitation services for adults with developmental disabilities under sections 252.40 to 252.46;
physical therapy services under sections 256B.0625, subdivision 8, and 256D.03, subdivision 4;
occupational therapy services under sections 256B.0625, subdivision 8a, and 256D.03, subdivision
4 ; speech-language therapy services under section 256D.03, subdivision 4, and Minnesota Rules,
part 9505.0390; respiratory therapy services under section 256D.03, subdivision 4, and Minnesota
Rules, part 9505.0295; physician services under section 256B.0625, subdivision 3; dental
services under sections 256B.0625, subdivision 9, and 256D.03, subdivision 4; alternative care
services under section 256B.0913; adult residential program grants under Minnesota Rules, parts
9535.2000 to 9535.3000; adult and family community support grants under Minnesota Rules,
parts 9535.1700 to 9535.1760; and semi-independent living services under section 252.275,
including SILS funding under county social services grants formerly funded under chapter 256I.
(c) The commissioner shall increase prepaid medical assistance program capitation rates as
appropriate to reflect the rate increases in this section.
(d) In implementing this section, the commissioner shall consider proposing a schedule to
equalize rates paid by different programs for the same service.
History: 1998 c 407 art 4 s 12; 2005 c 56 s 1

256B.039 REPORTING OF SUPPLEMENTAL NURSING SERVICES AGENCY USE.
Beginning March 1, 2002, the commissioner shall report to the legislature annually on the
use of supplemental nursing services, including the number of hours worked by supplemental
nursing services agency personnel and payments to supplemental nursing services agencies.
History: 1Sp2001 c 9 art 7 s 7; 2002 c 379 art 1 s 113

256B.04 DUTIES OF STATE AGENCY.
    Subdivision 1. General. The state agency shall supervise the administration of medical
assistance for eligible recipients by the county agencies hereunder.
    Subd. 1a. Comprehensive health services system. The commissioner shall carry out the
duties in this section with the participation of the boards of county commissioners, and with
full consideration for the interests of counties, to plan and implement a unified, accountable,
comprehensive health services system that:
(1) promotes accessible and quality health care for all Minnesotans;
(2) assures provision of adequate health care within limited state and county resources;
(3) avoids shifting funding burdens to county tax resources;
(4) provides statewide eligibility, benefit, and service expectations;
(5) manages care, develops risk management strategies, and contains cost in all health and
human services; and
(6) supports effective implementation of publicly funded health and human services for
all areas of the state.
    Subd. 1b. Contract for administrative services for American Indian children.
Notwithstanding subdivision 1, the commissioner may contract with federally recognized Indian
tribes with a reservation in Minnesota for the provision of early and periodic screening, diagnosis,
and treatment administrative services for American Indian children, according to Code of Federal
Regulations, title 42, section 441, subpart B, and Minnesota Rules, part 9505.1693 et seq., when
the tribe chooses to provide such services. For purposes of this subdivision, "American Indian"
has the meaning given to persons to whom services will be provided for in Code of Federal
Regulations, title 42, section 36.12. Notwithstanding Minnesota Rules, part 9505.1748, subpart 1,
the commissioner, the local agency, and the tribe may contract with any entity for the provision of
early and periodic screening, diagnosis, and treatment administrative services.
    Subd. 2. Rulemaking authority. Make uniform rules, not inconsistent with law, for carrying
out and enforcing the provisions hereof in an efficient, economical, and impartial manner, and to
the end that the medical assistance system may be administered uniformly throughout the state,
having regard for varying costs of medical care in different parts of the state and the conditions in
each case, and in all things to carry out the spirit and purpose of this program, which rules shall be
furnished immediately to all county agencies, and shall be binding on such county agencies.
    Subd. 3. Required forms. Prescribe the form of, print, and supply to the county agencies,
blanks for applications, reports, affidavits, and such other forms as it may deem necessary or
advisable.
    Subd. 4. Cooperation with federal agency. Cooperate with the federal Centers for Medicare
and Medicaid Services in any reasonable manner as may be necessary to qualify for federal aid in
connection with the medical assistance program, including the making of such reports in such
form and containing such information as the Department of Health, Education, and Welfare may,
from time to time, require, and comply with such provisions as such department may, from time
to time, find necessary to assure the correctness and verifications of such reports.
    Subd. 4a. Medicare prescription drug subsidy. The commissioner shall perform all duties
necessary to administer eligibility determinations for the Medicare Part D prescription drug
subsidy and facilitate the enrollment of eligible medical assistance recipients into Medicare
prescription drug plans as required by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA), Public Law 108-173, and Code of Federal Regulations, title
42, sections 423.30 to 423.56 and 423.771 to 423.800.
    Subd. 5. Annual report required. The state agency within 60 days after the close of each
fiscal year, shall prepare and print for the fiscal year a report that includes a full account of the
operations and expenditure of funds under this chapter, a full account of the activities undertaken
in accordance with subdivision 10, adequate and complete statistics divided by counties about
all medical assistance provided in accordance with this chapter, and any other information it
may deem advisable.
    Subd. 6. Monthly statement. Prepare and release a summary statement monthly showing by
counties the amount paid hereunder and the total number of persons assisted.
    Subd. 7. Program safeguards. Establish and enforce safeguards to prevent unauthorized
disclosure or improper use of the information contained in applications, reports of investigations
and medical examinations, and correspondence in the individual case records of recipients
of medical assistance.
    Subd. 8. Information. Furnish information to acquaint needy persons and the public
generally with the plan for medical assistance of this state.
    Subd. 9. Reciprocal agreements. Cooperate with agencies in other states in establishing
reciprocal agreements to provide for payment of medical assistance to recipients who have moved
to another state, consistent with the provisions hereof and of Title XIX of the Social Security
Act of the United States of America.
    Subd. 10. Investigation of certain claims. Establish by rule general criteria and procedures
for the identification and prompt investigation of suspected medical assistance fraud, theft, abuse,
presentment of false or duplicate claims, presentment of claims for services not medically
necessary, or false statement or representation of material facts by a vendor of medical care,
and for the imposition of sanctions against a vendor of medical care. If it appears to the state
agency that a vendor of medical care may have acted in a manner warranting civil or criminal
proceedings, it shall so inform the attorney general in writing.
    Subd. 11.[Repealed, 1997 c 7 art 2 s 67]
    Subd. 12. Limitation on services. Place limits on the types of services covered by medical
assistance, the frequency with which the same or similar services may be covered by medical
assistance for an individual recipient, and the amount paid for each covered service. The state
agency shall promulgate rules establishing maximum reimbursement rates for emergency and
nonemergency transportation.
The rules shall provide:
(a) An opportunity for all recognized transportation providers to be reimbursed for
nonemergency transportation consistent with the maximum rates established by the agency;
(b) Reimbursement of public and private nonprofit providers serving the disabled population
generally at reasonable maximum rates that reflect the cost of providing the service regardless of
the fare that might be charged by the provider for similar services to individuals other than those
receiving medical assistance or medical care under this chapter; and
(c) Reimbursement for each additional passenger carried on a single trip at a substantially
lower rate than the first passenger carried on that trip.
The commissioner shall encourage providers reimbursed under this chapter to coordinate
their operation with similar services that are operating in the same community. To the extent
practicable, the commissioner shall encourage eligible individuals to utilize less expensive
providers capable of serving their needs.
For the purpose of this subdivision and section 256B.02, subdivision 8, and effective on
January 1, 1981, "recognized provider of transportation services" means an operator of special
transportation service as defined in section 174.29 that has been issued a current certificate of
compliance with operating standards of the commissioner of transportation or, if those standards
do not apply to the operator, that the agency finds is able to provide the required transportation in
a safe and reliable manner. Until January 1, 1981, "recognized transportation provider" includes
an operator of special transportation service that the agency finds is able to provide the required
transportation in a safe and reliable manner.
    Subd. 13. Medical necessity review. Each person appointed by the commissioner to
participate in decisions whether medical care to be provided to eligible recipients is medically
necessary shall abstain from participation in those cases in which the appointee(a) has issued
treatment orders in the care of the patient or participated in the formulation or execution of the
patient's treatment plan or (b) has, or a member of the appointee's family has, an ownership
interest of five percent or more in the institution that provided or proposed to provide the services
being reviewed.
    Subd. 14. Competitive bidding. (a) When determined to be effective, economical, and
feasible, the commissioner may utilize volume purchase through competitive bidding and
negotiation under the provisions of chapter 16C, to provide items under the medical assistance
program including but not limited to the following:
(1) eyeglasses;
(2) oxygen. The commissioner shall provide for oxygen needed in an emergency situation on
a short-term basis, until the vendor can obtain the necessary supply from the contract dealer;
(3) hearing aids and supplies; and
(4) durable medical equipment, including but not limited to:
(i) hospital beds;
(ii) commodes;
(iii) glide-about chairs;
(iv) patient lift apparatus;
(v) wheelchairs and accessories;
(vi) oxygen administration equipment;
(vii) respiratory therapy equipment;
(viii) electronic diagnostic, therapeutic and life support systems;
(5) special transportation services; and
(6) drugs.
(b) Rate changes under this chapter and chapters 256D and 256L do not affect contract
payments under this subdivision unless specifically identified.
    Subd. 15. Utilization review. (1) Establish on a statewide basis a new program to safeguard
against unnecessary or inappropriate use of medical assistance services, against excess payments,
against unnecessary or inappropriate hospital admissions or lengths of stay, and against
underutilization of services in prepaid health plans, long-term care facilities or any health care
delivery system subject to fixed rate reimbursement. In implementing the program, the state
agency shall utilize both prepayment and postpayment review systems to determine if utilization
is reasonable and necessary. The determination of whether services are reasonable and necessary
shall be made by the commissioner in consultation with a professional services advisory group or
health care consultant appointed by the commissioner.
(2) Contracts entered into for purposes of meeting the requirements of this subdivision shall
not be subject to the set-aside provisions of chapter 16C.
(3) A recipient aggrieved by the commissioner's termination of services or denial of future
services may appeal pursuant to section 256.045. A vendor aggrieved by the commissioner's
determination that services provided were not reasonable or necessary may appeal pursuant to the
contested case procedures of chapter 14. To appeal, the vendor shall notify the commissioner in
writing within 30 days of receiving the commissioner's notice. The appeal request shall specify
each disputed item, the reason for the dispute, an estimate of the dollar amount involved for each
disputed item, the computation that the vendor believes is correct, the authority in statute or
rule upon which the vendor relies for each disputed item, the name and address of the person
or firm with whom contacts may be made regarding the appeal, and other information required
by the commissioner.
(4) The commissioner may select providers to provide case management services to
recipients who use health care services inappropriately or to recipients who are eligible for other
managed care projects. The providers shall be selected based upon criteria that may include a
comparison with a peer group of providers related to the quality, quantity, or cost of health care
services delivered or a review of sanctions previously imposed by health care services programs
or the provider's professional licensing board.
    Subd. 16. Personal care services. (a) Notwithstanding any contrary language in this
paragraph, the commissioner of human services and the commissioner of health shall jointly
promulgate rules to be applied to the licensure of personal care services provided under the
medical assistance program. The rules shall consider standards for personal care services that
are based on the World Institute on Disability's recommendations regarding personal care
services. These rules shall at a minimum consider the standards and requirements adopted by
the commissioner of health under section 144A.45, which the commissioner of human services
determines are applicable to the provision of personal care services, in addition to other standards
or modifications which the commissioner of human services determines are appropriate.
The commissioner of human services shall establish an advisory group including personal
care consumers and providers to provide advice regarding which standards or modifications
should be adopted. The advisory group membership must include not less than 15 members, of
which at least 60 percent must be consumers of personal care services and representatives of
recipients with various disabilities and diagnoses and ages. At least 51 percent of the members of
the advisory group must be recipients of personal care.
The commissioner of human services may contract with the commissioner of health to
enforce the jointly promulgated licensure rules for personal care service providers.
Prior to final promulgation of the joint rule the commissioner of human services shall report
preliminary findings along with any comments of the advisory group and a plan for monitoring
and enforcement by the Department of Health to the legislature by February 15, 1992.
Limits on the extent of personal care services that may be provided to an individual must be
based on the cost-effectiveness of the services in relation to the costs of inpatient hospital care,
nursing home care, and other available types of care. The rules must provide, at a minimum:
(1) that agencies be selected to contract with or employ and train staff to provide and
supervise the provision of personal care services;
(2) that agencies employ or contract with a qualified applicant that a qualified recipient
proposes to the agency as the recipient's choice of assistant;
(3) that agencies bill the medical assistance program for a personal care service by a personal
care assistant and supervision by a qualified professional supervising the personal care assistant
unless the recipient selects the fiscal agent option under section 256B.0627, subdivision 10;
(4) that agencies establish a grievance mechanism; and
(5) that agencies have a quality assurance program.
(b) The commissioner may waive the requirement for the provision of personal care services
through an agency in a particular county, when there are less than two agencies providing services
in that county and shall waive the requirement for personal care assistants required to join an
agency for the first time during 1993 when personal care services are provided under a relative
hardship waiver under Minnesota Statutes 1992, section 256B.0627, subdivision 4, paragraph (b),
clause (7), and at least two agencies providing personal care services have refused to employ or
contract with the independent personal care assistant.
    Subd. 17. Prenatal care outreach. (a) The commissioner of human services shall award a
grant to an eligible organization to conduct a statewide media campaign promoting early prenatal
care. The goals of the campaign are to increase public awareness of the importance of early
and continuous prenatal care and to inform the public about public and private funds available
for prenatal care.
(b) In order to receive a grant under this section, an applicant must:
(1) have experience conducting prenatal care outreach;
(2) have an established statewide constituency or service area; and
(3) demonstrate an ability to accomplish the purposes in this subdivision.
(c) Money received under this subdivision may be used for purchase of materials and
supplies, staff fees and salaries, consulting fees, and other goods and services necessary to
accomplish the goals of the campaign. Money may not be used for capital expenditures.
    Subd. 18. Applications for medical assistance. The state agency may take applications for
medical assistance and conduct eligibility determinations for MinnesotaCare enrollees.
    Subd. 19. Performance data reporting unit. The commissioner of human services shall
establish a performance data reporting unit that serves counties and the state. The department
shall support this unit and provide technical assistance and access to the data warehouse. The
performance data reporting unit, which will operate within the department's central office and
consist of both county and department staff, shall provide performance data reports to individual
counties, share expertise from counties and the department perspective, and participate in
joint planning to link with county databases and other county data sources in order to provide
information on services provided to public clients from state, federal, and county funding sources.
The performance data reporting unit shall provide counties both individual and group summary
level standard or unique reports on health care eligibility and services provided to clients for
whom they have financial responsibility.
History: Ex1967 c 16 s 4; 1976 c 273 s 1-3; 1977 c 185 s 1; 1977 c 347 s 39,40; 1978 c
560 s 11; Ex1979 c 1 s 46; 1980 c 349 s 3,4; 1982 c 640 s 3; 1983 c 312 art 5 s 11,12; 1984 c
640 s 32; 1985 c 248 s 70; 1Sp1985 c 9 art 2 s 37; 1986 c 444; 1987 c 378 s 15; 1987 c 403 art
2 s 77,78; 1988 c 532 s 13; 1989 c 282 art 3 s 41,42; 1990 c 568 art 3 s 21,22; 1991 c 292 art
7 s 8; 1Sp1993 c 1 art 5 s 28; 1995 c 233 art 2 s 56; 1995 c 234 art 6 s 34; 1997 c 7 art 1 s
101; 1997 c 203 art 4 s 18; 1998 c 386 art 2 s 78,79; 1998 c 407 art 5 s 2; 1999 c 245 art 4 s
26,27; 1Sp2001 c 9 art 2 s 14; 2002 c 277 s 32; 2002 c 379 art 1 s 113; 2005 c 56 s 1; 2005 c
98 art 2 s 1; 1Sp2005 c 4 art 8 s 18

256B.041 CENTRALIZED DISBURSEMENT OF MEDICAL ASSISTANCE PAYMENTS.
    Subdivision 1. Statewide disbursement system. The state agency shall establish on a
statewide basis a system for the centralized disbursement of medical assistance payments to
vendors.
    Subd. 2. Account. An account is established in the state treasury from which medical
assistance payments to vendors shall be made. Into this account there shall be deposited federal
funds, state funds, county funds, and other moneys which are available and which may be paid to
the state agency for medical assistance payments and reimbursements from counties or others for
their share of such payments.
    Subd. 3. Vendor forms. The state agency shall prescribe and furnish vendors suitable forms
for submitting claims under the medical assistance program.
    Subd. 4. Comply with federal requirements. The state agency in establishing a statewide
system of centralized disbursement of medical assistance payments shall comply with federal
requirements in order to receive the maximum amount of federal funds which are available for
the purpose, together with such additional federal funds which may be made available for the
operation of a centralized system of disbursement of medical assistance payments to vendors.
    Subd. 5. Payment by county to commissioner of finance. If required by federal law or
rules promulgated thereunder, or by authorized rule of the state agency, each county shall pay
to the commissioner of finance the portion of medical assistance paid by the state for which it
is responsible.
The county shall advance medical assistance costs not met by federal funds, based upon
estimates submitted by the state agency to the county agency, stating the estimated expenditures
for the succeeding month. Upon the direction of the county agency, payment shall be made
monthly by the county to the state for the estimated expenditures for each month. Adjustment of
any overestimate or underestimate based on actual expenditures shall be made by the state agency
by adjusting the estimate for any succeeding month.
Payment to counties under this subdivision is subject to the provisions of section 256.017.
    Subd. 6. Contracted services. The commissioners of human services and administration
may contract with any agency of government or any corporation for providing all or a portion
of the services for carrying out the provisions of this section. Local welfare agencies may pay
vendors of transportation for nonemergency medical care when so authorized by rule of the
commissioner of human services.
    Subd. 7. Disbursement of federal funds. Federal funds available for administrative purposes
shall be distributed between the state and the county on the same basis that reimbursements are
earned, except as provided for under section 256.017.
History: 1973 c 717 s 2; 1975 c 437 art 2 s 4; 1978 c 560 s 12; 1983 c 312 art 5 s 13,14;
1984 c 654 art 5 s 58; 1985 c 248 s 70; 1988 c 719 art 8 s 11,12; 1989 c 277 art 2 s 7; 1Sp1989 c
1 art 16 s 6; 2002 c 277 s 9; 2003 c 112 art 2 s 50

256B.042 THIRD PARTY LIABILITY.
    Subdivision 1. Lien for cost of care. When the state agency provides, pays for, or becomes
liable for medical care, it shall have a lien for the cost of the care upon any and all causes of action
or recovery rights under any policy, plan, or contract providing benefits for health care or injury,
which accrue to the person to whom the care was furnished, or to the person's legal representatives,
as a result of the illness or injuries which necessitated the medical care. For purposes of this
section, "state agency" includes prepaid health plans under contract with the commissioner
according to sections 256B.69, 256D.03, subdivision 4, paragraph (c), and 256L.12; children's
mental health collaboratives under section 245.493; demonstration projects for persons with
disabilities under section 256B.77; nursing facilities under the alternative payment demonstration
project under section 256B.434; and county-based purchasing entities under section 256B.692.
    Subd. 2. Lien enforcement. (a) The state agency may perfect and enforce its lien by
following the procedures set forth in sections 514.69, 514.70 and 514.71, and its verified lien
statement shall be filed with the appropriate court administrator in the county of financial
responsibility. The verified lien statement shall contain the following: the name and address of
the person to whom medical care was furnished, the date of injury, the name and address of the
vendor or vendors furnishing medical care, the dates of the service, the amount claimed to be
due for the care, and, to the best of the state agency's knowledge, the names and addresses of all
persons, firms, or corporations claimed to be liable for damages arising from the injuries. This
section shall not affect the priority of any attorney's lien.
(b) The state agency is not subject to any limitations period referred to in section 514.69 or
514.71 and has one year from the date notice is first received by it under subdivision 4, paragraph
(c), even if the notice is untimely, or one year from the date medical bills are first paid by the state
agency, whichever is later, to file its verified lien statement. The state agency may commence an
action to enforce the lien within one year of (1) the date the notice required by subdivision 4,
paragraph (c), is received or (2) the date the recipient's cause of action is concluded by judgment,
award, settlement, or otherwise, whichever is later.
(c) If the notice required in subdivision 4 is not provided by any of the parties to the claim at
any stage of the claim, the state agency will have one year from the date the state agency learns of
the lack of notice to commence an action. If amounts on the claim or cause of action are paid and
the amount required to be paid to the state agency under subdivision 5, is not paid to the state
agency, the state agency may commence an action to recover on the lien against any or all of the
parties or entities which have either paid or received the payments.
    Subd. 3. Attorney general representation. The attorney general shall represent the
commissioner to enforce the lien created under this section or, if no action has been brought, may
initiate and prosecute an independent action on behalf of the commissioner against a person, firm,
or corporation that may be liable to the person to whom the care was furnished.
Any prepaid health plan providing services under sections 256B.69, 256D.03, subdivision
4 , paragraph (c), and 256L.12; children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; nursing homes under
the alternative payment demonstration project under section 256B.434; or the county-based
purchasing entity providing services under section 256B.692 may retain legal representation to
enforce their lien created under this section or, if no action has been brought, may initiate and
prosecute an independent action on their behalf against a person, firm, or corporation that may be
liable to the person to whom the care or payment was furnished.
    Subd. 4. Notice. The state agency must be given notice of monetary claims against a person,
firm, or corporation that may be liable to pay part or all of the cost of medical care when the state
agency has paid or become liable for the cost of that care. Notice must be given as follows:
(a) Applicants for medical assistance shall notify the state or local agency of any possible
claims when they submit the application. Recipients of medical assistance shall notify the state or
local agency of any possible claims when those claims arise.
(b) A person providing medical care services to a recipient of medical assistance shall
notify the state agency when the person has reason to believe that a third party may be liable for
payment of the cost of medical care.
(c) A party to a claim upon which the state agency may be entitled to a lien under this section
shall notify the state agency of its potential lien claim at each of the following stages of a claim:
(1) when a claim is filed;
(2) when an action is commenced; and
(3) when a claim is concluded by payment, award, judgment, settlement, or otherwise.
Every party involved in any stage of a claim under this subdivision is required to provide notice to
the state agency at that stage of the claim. However, when one of the parties to the claim provides
notice at that stage, every other party to the claim is deemed to have provided the required notice
at that stage of the claim. If the required notice under this paragraph is not provided to the state
agency, all parties to the claim are deemed to have failed to provide the required notice. A party
to a claim includes the injured person or the person's legal representative, the plaintiff, the
defendants, or persons alleged to be responsible for compensating the injured person or plaintiff,
and any other party to the cause of action or claim, regardless of whether the party knows the state
agency has a potential or actual lien claim.
Notice given to the local agency is not sufficient to meet the requirements of paragraphs
(b) and (c).
    Subd. 5. Costs deducted. Upon any judgment, award, or settlement of a cause of action,
or any part of it, upon which the state agency has filed its lien, including compensation for
liquidated, unliquidated, or other damages, reasonable costs of collection, including attorney fees,
must be deducted first. The full amount of medical assistance paid to or on behalf of the person as
a result of the injury must be deducted next, and paid to the state agency. The rest must be paid to
the medical assistance recipient or other plaintiff. The plaintiff, however, must receive at least
one-third of the net recovery after attorney fees and other collection costs.
History: 1975 c 247 s 6; 1976 c 236 s 2; 1986 c 444; 1Sp1986 c 3 art 1 s 82; 1987 c 370 art
2 s 5-8; 1988 c 689 art 2 s 143; 1Sp1993 c 1 art 5 s 29; 1995 c 207 art 6 s 26; 1997 c 217 art 2 s
5-7; 1999 c 245 art 4 s 28-30; 2004 c 228 art 1 s 75

256B.043 COST-CONTAINMENT EFFORTS.
    Subdivision 1. Alternative and complementary health care. The commissioner of human
services, through the medical director and in consultation with the Health Services Policy
Committee established under section 256B.0625, subdivision 3c, as part of the commissioner's
ongoing duties, shall consider the potential for improving quality and obtaining cost savings
through greater use of alternative and complementary treatment methods and clinical practice;
shall incorporate these methods into the medical assistance, MinnesotaCare, and general
assistance medical care programs; and shall make related legislative recommendations as
appropriate. The commissioner shall post the recommendations required under this subdivision on
agency Web sites according to section 144.0506, subdivision 1.
    Subd. 2. Access to care. (a) The commissioners of human services and health, as part of
their ongoing duties, shall consider the adequacy of the current system of community health
clinics and centers both statewide and in urban areas with significant disparities in health status
and access to services across racial and ethnic groups, including:
(1) methods to provide 24-hour availability of care through the clinics and centers;
(2) methods to expand the availability of care through the clinics and centers;
(3) the use of grants to expand the number of clinics and centers, the services provided, and
the availability of care; and
(4) the extent to which increased use of physician assistants, nurse practitioners, medical
residents and interns, and other allied health professionals in clinics and centers would increase
the availability of services.
(b) The commissioners shall make departmental modifications and legislative
recommendations as appropriate on the basis of their considerations under paragraph (a).
History: 2006 c 267 art 1 s 9

256B.05 ADMINISTRATION BY COUNTY AGENCIES.
    Subdivision 1. Administration of medical assistance. The county agencies shall administer
medical assistance in their respective counties under the supervision of the state agency and the
commissioner of human services as specified in section 256.01, and shall make such reports,
prepare such statistics, and keep such records and accounts in relation to medical assistance as the
state agency may require under section 256.01, subdivision 2, paragraph (17).
    Subd. 2. Fee or charges. In administering the medical assistance program, no local social
services agency shall pay a fee or charge for medical, dental, surgical, hospital, nursing, licensed
nursing home care, medicine, or medical supplies in excess of the schedules of maximum fees
and charges as established by the state agency.
    Subd. 3. Maximum allowances. Notwithstanding the provisions of subdivision 2, the
commissioner of human services shall establish a schedule of maximum allowances to be paid by
the state on behalf of recipients of medical assistance toward fees charged for services rendered
such medical assistance recipients.
    Subd. 4.[Repealed, 1987 c 403 art 2 s 164]
History: Ex1967 c 16 s 5; 1971 c 961 s 28; 1982 c 640 s 4; 1984 c 580 s 3; 1984 c 654 art 5
s 58; 1988 c 719 art 8 s 13; 1989 c 89 s 10; 1994 c 631 s 31

256B.055 ELIGIBILITY CATEGORIES.
    Subdivision 1. Children eligible for subsidized adoption assistance. Medical assistance
may be paid for a child eligible for or receiving adoption assistance payments under title IV-E
of the Social Security Act, United States Code, title 42, sections 670 to 676, and to any child
who is not title IV-E eligible but who was determined eligible for adoption assistance under
Minnesota Statutes, section 259.67, subdivision 4, clauses (a) to (c), and has a special need
for medical or rehabilitative care.
    Subd. 2. Subsidized foster children. Medical assistance may be paid for a child eligible
for or receiving foster care maintenance payments under Title IV-E of the Social Security Act,
United States Code, title 42, sections 670 to 676.
    Subd. 3. AFDC families. Until March 31, 1998, medical assistance may be paid for a person
who is eligible for or receiving, or who would be eligible for, except for excess income or assets,
public assistance under the aid to families with dependent children program in effect as of July
16, 1996, as required by the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA), Public Law 104-193.
    Subd. 3a. Families with children. Beginning July 1, 2002, medical assistance may be paid
for a person who is a child under the age of 18, or age 18 if a full-time student in a secondary
school, or in the equivalent level of vocational or technical training, and reasonably expected
to complete the program before reaching age 19; the parent of a dependent child, including a
pregnant woman; or a caretaker relative of a dependent child.
    Subd. 4. Recipients of Minnesota supplemental aid. Medical assistance may be paid for a
person who is receiving public assistance under the Minnesota supplemental aid program.
    Subd. 5. Pregnant women; dependent unborn child. Medical assistance may be paid for a
pregnant woman who has written verification of a positive pregnancy test from a physician or
licensed registered nurse, who meets the other eligibility criteria of this section and who would be
categorically eligible for assistance under the state's AFDC plan in effect as of July 16, 1996,
as required by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA), Public Law 104-193, if the child had been born and was living with the woman. For
purposes of this subdivision, a woman is considered pregnant for 60 days postpartum.
    Subd. 6. Pregnant women; needy unborn child. Medical assistance may be paid for a
pregnant woman who has written verification of a positive pregnancy test from a physician or
licensed registered nurse, who meets the other eligibility criteria of this section and whose unborn
child would be eligible as a needy child under subdivision 10 if born and living with the woman.
For purposes of this subdivision, a woman is considered pregnant for 60 days postpartum.
    Subd. 7. Aged, blind, or disabled persons. Medical assistance may be paid for a person
who meets the categorical eligibility requirements of the supplemental security income program
or, who would meet those requirements except for excess income or assets, and who meets the
other eligibility requirements of this section.
    Subd. 7a. Special category for disabled children. Medical assistance may be paid for a
person who is under age 18 and who meets income and asset eligibility requirements of the
Supplemental Security Income program if the person was receiving Supplemental Security
Income payments on the date of enactment of section 211(a) of Public Law 104-193, the Personal
Responsibility and Work Opportunity Act of 1996, and the person would have continued to
receive the payments except for the change in the childhood disability criteria in section 211(a) of
Public Law 104-193.
    Subd. 8.[Repealed, 1990 c 568 art 3 s 104]
    Subd. 9. Children. Medical assistance may be paid for a person who is under 21 years of age
and in need of medical care that neither the person nor the person's relatives responsible under
sections 256B.01 to 256B.26 are financially able to provide.
    Subd. 10. Infants. Medical assistance may be paid for an infant less than one year of age,
whose mother was eligible for and receiving medical assistance at the time of birth and who
remains in the mother's household or who is in a family with countable income that is equal to or
less than the income standard established under section 256B.057, subdivision 1.
    Subd. 10a.[Repealed, 1Sp2003 c 14 art 12 s 101]
    Subd. 10b. Children. This subdivision supersedes subdivision 10 as long as the Minnesota
health care reform waiver remains in effect. When the waiver expires, the commissioner of human
services shall publish a notice in the State Register and notify the revisor of statutes. Medical
assistance may be paid for a child less than two years of age with countable family income as
established for infants under section 256B.057, subdivision 1.
    Subd. 11. Elderly hospital inpatients. Medical assistance may be paid for a person who is
residing in a hospital for treatment of mental disease or tuberculosis and is 65 years of age or
older and without means sufficient to pay the per capita hospital charge.
    Subd. 12. Disabled children. (a) A person is eligible for medical assistance if the person is
under age 19 and qualifies as a disabled individual under United States Code, title 42, section
1382c(a), and would be eligible for medical assistance under the state plan if residing in a
medical institution, and the child requires a level of care provided in a hospital, nursing facility,
or intermediate care facility for persons with developmental disabilities, for whom home care is
appropriate, provided that the cost to medical assistance under this section is not more than the
amount that medical assistance would pay for if the child resides in an institution. After the child
is determined to be eligible under this section, the commissioner shall review the child's disability
under United States Code, title 42, section 1382c(a) and level of care defined under this section no
more often than annually and may elect, based on the recommendation of health care professionals
under contract with the state medical review team, to extend the review of disability and level of
care up to a maximum of four years. The commissioner's decision on the frequency of continuing
review of disability and level of care is not subject to administrative appeal under section 256.045.
Nothing in this subdivision shall be construed as affecting other redeterminations of medical
assistance eligibility under this chapter and annual cost-effective reviews under this section.
(b) For purposes of this subdivision, "hospital" means an institution as defined in section
144.696, subdivision 3, 144.55, subdivision 3, or Minnesota Rules, part 4640.3600, and licensed
pursuant to sections 144.50 to 144.58. For purposes of this subdivision, a child requires a level of
care provided in a hospital if the child is determined by the commissioner to need an extensive
array of health services, including mental health services, for an undetermined period of time,
whose health condition requires frequent monitoring and treatment by a health care professional
or by a person supervised by a health care professional, who would reside in a hospital or require
frequent hospitalization if these services were not provided, and the daily care needs are more
complex than a nursing facility level of care.
A child with serious emotional disturbance requires a level of care provided in a hospital
if the commissioner determines that the individual requires 24-hour supervision because the
person exhibits recurrent or frequent suicidal or homicidal ideation or behavior, recurrent or
frequent psychosomatic disorders or somatopsychic disorders that may become life threatening,
recurrent or frequent severe socially unacceptable behavior associated with psychiatric disorder,
ongoing and chronic psychosis or severe, ongoing and chronic developmental problems requiring
continuous skilled observation, or severe disabling symptoms for which office-centered outpatient
treatment is not adequate, and which overall severely impact the individual's ability to function.
(c) For purposes of this subdivision, "nursing facility" means a facility which provides
nursing care as defined in section 144A.01, subdivision 5, licensed pursuant to sections 144A.02
to 144A.10, which is appropriate if a person is in active restorative treatment; is in need of
special treatments provided or supervised by a licensed nurse; or has unpredictable episodes
of active disease processes requiring immediate judgment by a licensed nurse. For purposes
of this subdivision, a child requires the level of care provided in a nursing facility if the child
is determined by the commissioner to meet the requirements of the preadmission screening
assessment document under section 256B.0911 and the home care independent rating document
under section 256B.0655, subdivision 4, clause (3), adjusted to address age-appropriate standards
for children age 18 and under, pursuant to section 256B.0655, subdivision 3.
(d) For purposes of this subdivision, "intermediate care facility for persons with
developmental disabilities" or "ICF/MR" means a program licensed to provide services to
persons with developmental disabilities under section 252.28, and chapter 245A, and a physical
plant licensed as a supervised living facility under chapter 144, which together are certified by
the Minnesota Department of Health as meeting the standards in Code of Federal Regulations,
title 42, part 483, for an intermediate care facility which provides services for persons with
developmental disabilities who require 24-hour supervision and active treatment for medical,
behavioral, or habilitation needs. For purposes of this subdivision, a child requires a level of care
provided in an ICF/MR if the commissioner finds that the child has a developmental disability
in accordance with section 256B.092, is in need of a 24-hour plan of care and active treatment
similar to persons with developmental disabilities, and there is a reasonable indication that the
child will need ICF/MR services.
(e) For purposes of this subdivision, a person requires the level of care provided in a nursing
facility if the person requires 24-hour monitoring or supervision and a plan of mental health
treatment because of specific symptoms or functional impairments associated with a serious
mental illness or disorder diagnosis, which meet severity criteria for mental health established by
the commissioner and published in March 1997 as the Minnesota Mental Health Level of Care for
Children and Adolescents with Severe Emotional Disorders.
(f) The determination of the level of care needed by the child shall be made by the
commissioner based on information supplied to the commissioner by the parent or guardian,
the child's physician or physicians, and other professionals as requested by the commissioner.
The commissioner shall establish a screening team to conduct the level of care determinations
according to this subdivision.
(g) If a child meets the conditions in paragraph (b), (c), (d), or (e), the commissioner must
assess the case to determine whether:
(1) the child qualifies as a disabled individual under United States Code, title 42, section
1382c(a), and would be eligible for medical assistance if residing in a medical institution; and
(2) the cost of medical assistance services for the child, if eligible under this subdivision,
would not be more than the cost to medical assistance if the child resides in a medical institution
to be determined as follows:
(i) for a child who requires a level of care provided in an ICF/MR, the cost of care for the
child in an institution shall be determined using the average payment rate established for the
regional treatment centers that are certified as ICF's/MR;
(ii) for a child who requires a level of care provided in an inpatient hospital setting according
to paragraph (b), cost-effectiveness shall be determined according to Minnesota Rules, part
9505.3520, items F and G; and
(iii) for a child who requires a level of care provided in a nursing facility according to
paragraph (c) or (e), cost-effectiveness shall be determined according to Minnesota Rules,
part 9505.3040, except that the nursing facility average rate shall be adjusted to reflect rates
which would be paid for children under age 16. The commissioner may authorize an amount up
to the amount medical assistance would pay for a child referred to the commissioner by the
preadmission screening team under section 256B.0911.
(h) Children eligible for medical assistance services under section 256B.055, subdivision
12 , as of June 30, 1995, must be screened according to the criteria in this subdivision prior to
January 1, 1996. Children found to be ineligible may not be removed from the program until
January 1, 1996.
    Subd. 13. Residents of institutions for mental diseases. Beginning October 1, 2003,
persons who would be eligible for medical assistance under this chapter but for residing in a
facility that is determined by the commissioner or the federal Centers for Medicare and Medicaid
Services to be an institution for mental diseases are eligible for medical assistance without federal
financial participation, except that coverage shall not include payment for a nursing facility
determined to be an institution for mental diseases.
    Subd. 14. Persons detained by law. (a) Medical assistance may be paid for an inmate of a
correctional facility who is conditionally released as authorized under section 241.26, 244.065, or
631.425, if the individual does not require the security of a public detention facility and is housed
in a halfway house or community correction center, or under house arrest and monitored by
electronic surveillance in a residence approved by the commissioner of corrections, and if the
individual meets the other eligibility requirements of this chapter.
(b) An individual, regardless of age, who is considered an inmate of a public institution as
defined in Code of Federal Regulations, title 42, section 435.1009, is not eligible for medical
assistance.
History: Ex1967 c 16 s 6; 1969 c 841 s 1; 1973 c 717 s 18; 1974 c 525 s 1,2; 1975 c 247 s
10; 1976 c 236 s 3; 1977 c 448 s 6; 1978 c 760 s 1; 1979 c 309 s 4; 1980 c 509 s 106; 1980 c 527
s 1; 1981 c 360 art 2 s 28; 1Sp1981 c 2 s 14; 3Sp1981 c 2 art 1 s 32; 3Sp1981 c 3 s 17; 1982 c
553 s 6; 1982 c 640 s 5; 1983 c 312 art 5 s 15; 1984 c 422 s 1; 1984 c 534 s 22; 1984 c 654 art 5
s 58; 1985 c 248 s 70; 1985 c 252 s 21; 1986 c 444; 1Sp1986 c 1 art 8 s 5; 1987 c 403 art 2 s
79,80; 1988 c 689 art 2 s 144,145,268; 1989 c 282 art 3 s 43,44; 1990 c 568 art 3 s 23-27; 1991 c
292 art 4 s 33,34; 1Sp1993 c 1 art 5 s 30; 1994 c 631 s 31; 1995 c 207 art 6 s 27; 1995 c 234 art
6 s 35; 1996 c 451 art 2 s 7; 1997 c 85 art 3 s 10-12; 1997 c 203 art 4 s 19; 1998 c 407 art 4 s
13,14; 1999 c 245 art 4 s 31; 1Sp2001 c 9 art 2 s 15; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 12
s 15; 2004 c 288 art 3 s 21; 2005 c 10 art 1 s 47; 2005 c 56 s 1; 1Sp2005 c 4 art 8 s 19

256B.056 ELIGIBILITY REQUIREMENTS FOR MEDICAL ASSISTANCE.
    Subdivision 1. Residency. To be eligible for medical assistance, a person must reside in
Minnesota, or, if absent from the state, be deemed to be a resident of Minnesota in accordance
with the rules of the state agency.
    Subd. 1a. Income and assets generally. Unless specifically required by state law or rule or
federal law or regulation, the methodologies used in counting income and assets to determine
eligibility for medical assistance for persons whose eligibility category is based on blindness,
disability, or age of 65 or more years, the methodologies for the supplemental security income
program shall be used. Increases in benefits under title II of the Social Security Act shall not be
counted as income for purposes of this subdivision until July 1 of each year. Effective upon
federal approval, for children eligible under section 256B.055, subdivision 12, or for home and
community-based waiver services whose eligibility for medical assistance is determined without
regard to parental income, child support payments, including any payments made by an obligor
in satisfaction of or in addition to a temporary or permanent order for child support, and Social
Security payments are not counted as income. For families and children, which includes all
other eligibility categories, the methodologies under the state's AFDC plan in effect as of July
16, 1996, as required by the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA), Public Law 104-193, shall be used, except that effective October 1, 2003,
the earned income disregards and deductions are limited to those in subdivision 1c. For these
purposes, a "methodology" does not include an asset or income standard, or accounting method,
or method of determining effective dates.
    Subd. 1b. Aged, blind, and disabled income methodology. The $20 general income
disregard allowed under the supplemental security income program is included in the standard and
shall not be allowed as a deduction from income for a person eligible under section 256B.055,
subdivisions 7, 7a, and 12 .
    Subd. 1c. Families with children income methodology. (a)(1) [Expired, 1Sp2003 c 14
art 12 s 17]
(2) For applications processed within one calendar month prior to July 1, 2003, eligibility
shall be determined by applying the income standards and methodologies in effect prior to July 1,
2003, for any months in the six-month budget period before July 1, 2003, and the income standards
and methodologies in effect on July 1, 2003, for any months in the six-month budget period on or
after that date. The income standards for each month shall be added together and compared to the
applicant's total countable income for the six-month budget period to determine eligibility.
(3) For children ages one through 18 whose eligibility is determined under section 256B.057,
subdivision 2 , the following deductions shall be applied to income counted toward the child's
eligibility as allowed under the state's AFDC plan in effect as of July 16, 1996: $90 work expense,
dependent care, and child support paid under court order. This clause is effective October 1, 2003.
(b) For families with children whose eligibility is determined using the standard specified
in section 256B.056, subdivision 4, paragraph (c), 17 percent of countable earned income shall
be disregarded for up to four months and the following deductions shall be applied to each
individual's income counted toward eligibility as allowed under the state's AFDC plan in effect as
of July 16, 1996: dependent care and child support paid under court order.
(c) If the four-month disregard in paragraph (b) has been applied to the wage earner's income
for four months, the disregard shall not be applied again until the wage earner's income has not
been considered in determining medical assistance eligibility for 12 consecutive months.
(d) The commissioner shall adjust the income standards under this section each July 1 by
the annual update of the federal poverty guidelines following publication by the United States
Department of Health and Human Services.
    Subd. 2. Homestead exclusion and homestead equity limit for institutionalized persons.
(a) The homestead shall be excluded for the first six calendar months of a person's stay in a
long-term care facility and shall continue to be excluded for as long as the recipient can be
reasonably expected to return to the homestead. For purposes of this subdivision, "reasonably
expected to return to the homestead" means the recipient's attending physician has certified that
the expectation is reasonable, and the recipient can show that the cost of care upon returning
home will be met through medical assistance or other sources. The homestead shall continue to
be excluded for persons residing in a long-term care facility if it is used as a primary residence
by one of the following individuals:
(1) the spouse;
(2) a child under age 21;
(3) a child of any age who is blind or permanently and totally disabled as defined in the
supplemental security income program;
(4) a sibling who has equity interest in the home and who resided in the home for at least one
year immediately before the date of the person's admission to the facility; or
(5) a child of any age, or, subject to federal approval, a grandchild of any age, who resided
in the home for at least two years immediately before the date of the person's admission to the
facility, and who provided care to the person that permitted the person to reside at home rather
than in an institution.
(b) Effective for applications filed on or after July 1, 2006, and for renewals after July 1,
2006, for persons who first applied for payment of long-term care services on or after January 2,
2006, the equity interest in the homestead of an individual whose eligibility for long-term care
services is determined on or after January 1, 2006, shall not exceed $500,000, unless it is the
lawful residence of the individual's spouse or child who is under age 21, blind, or disabled. The
amount specified in this paragraph shall be increased beginning in year 2011, from year to year
based on the percentage increase in the Consumer Price Index for all urban consumers (all items;
United States city average), rounded to the nearest $1,000. This provision may be waived in the
case of demonstrated hardship by a process to be determined by the secretary of health and human
services pursuant to section 6014 of the Deficit Reduction Act of 2005, Public Law 109-171.
    Subd. 3. Asset limitations for individuals and families. To be eligible for medical
assistance, a person must not individually own more than $3,000 in assets, or if a member of a
household with two family members, husband and wife, or parent and child, the household
must not own more than $6,000 in assets, plus $200 for each additional legal dependent. In
addition to these maximum amounts, an eligible individual or family may accrue interest on these
amounts, but they must be reduced to the maximum at the time of an eligibility redetermination.
The accumulation of the clothing and personal needs allowance according to section 256B.35
must also be reduced to the maximum at the time of the eligibility redetermination. The value
of assets that are not considered in determining eligibility for medical assistance is the value of
those assets excluded under the supplemental security income program for aged, blind, and
disabled persons, with the following exceptions:
(a) Household goods and personal effects are not considered.
(b) Capital and operating assets of a trade or business that the local agency determines are
necessary to the person's ability to earn an income are not considered.
(c) Motor vehicles are excluded to the same extent excluded by the supplemental security
income program.
(d) Assets designated as burial expenses are excluded to the same extent excluded by the
supplemental security income program. Burial expenses funded by annuity contracts or life
insurance policies must irrevocably designate the individual's estate as contingent beneficiary to
the extent proceeds are not used for payment of selected burial expenses.
(e) Effective upon federal approval, for a person who no longer qualifies as an employed
person with a disability due to loss of earnings, assets allowed while eligible for medical assistance
under section 256B.057, subdivision 9, are not considered for 12 months, beginning with the first
month of ineligibility as an employed person with a disability, to the extent that the person's total
assets remain within the allowed limits of section 256B.057, subdivision 9, paragraph (b).
    Subd. 3a.[Repealed, 1992 c 513 art 7 s 135]
    Subd. 3b. Treatment of trusts. (a) A "medical assistance qualifying trust" is a revocable or
irrevocable trust, or similar legal device, established on or before August 10, 1993, by a person
or the person's spouse under the terms of which the person receives or could receive payments
from the trust principal or income and the trustee has discretion in making payments to the
person from the trust principal or income. Notwithstanding that definition, a medical assistance
qualifying trust does not include: (1) a trust set up by will; (2) a trust set up before April 7, 1986,
solely to benefit a person with a developmental disability living in an intermediate care facility for
persons with developmental disabilities; or (3) a trust set up by a person with payments made
by the Social Security Administration pursuant to the United States Supreme Court decision in
Sullivan v. Zebley, 110 S. Ct. 885 (1990). The maximum amount of payments that a trustee
of a medical assistance qualifying trust may make to a person under the terms of the trust is
considered to be available assets to the person, without regard to whether the trustee actually
makes the maximum payments to the person and without regard to the purpose for which the
medical assistance qualifying trust was established.
(b) Trusts established after August 10, 1993, are treated according to section 13611(b) of the
Omnibus Budget Reconciliation Act of 1993 (OBRA), Public Law 103-66.
    Subd. 3c. Asset limitations for families and children. A household of two or more persons
must not own more than $20,000 in total net assets, and a household of one person must not
own more than $10,000 in total net assets. In addition to these maximum amounts, an eligible
individual or family may accrue interest on these amounts, but they must be reduced to the
maximum at the time of an eligibility redetermination. The value of assets that are not considered
in determining eligibility for medical assistance for families and children is the value of those
assets excluded under the AFDC state plan as of July 16, 1996, as required by the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Public Law
104-193, with the following exceptions:
(1) household goods and personal effects are not considered;
(2) capital and operating assets of a trade or business up to $200,000 are not considered;
(3) one motor vehicle is excluded for each person of legal driving age who is employed or
seeking employment;
(4) one burial plot and all other burial expenses equal to the supplemental security income
program asset limit are not considered for each individual;
(5) court-ordered settlements up to $10,000 are not considered;
(6) individual retirement accounts and funds are not considered; and
(7) assets owned by children are not considered.
    Subd. 3d. Reduction of excess assets. Assets in excess of the limits in subdivisions 3 to 3c
may be reduced to allowable limits as follows:
(a) Assets may be reduced in any of the three calendar months before the month of
application in which the applicant seeks coverage by:
(1) designating burial funds up to $1,500 for each applicant, spouse, and MA-eligible
dependent child; and
(2) paying health service bills incurred in the retroactive period for which the applicant seeks
eligibility, starting with the oldest bill. After assets are reduced to allowable limits, eligibility
begins with the next dollar of MA-covered health services incurred in the retroactive period.
Applicants reducing assets under this subdivision who also have excess income shall first spend
excess assets to pay health service bills and may meet the income spenddown on remaining bills.
(b) Assets may be reduced beginning the month of application by:
(1) paying bills for health services that would otherwise be paid by medical assistance; and
(2) using any means other than a transfer of assets for less than fair market value as defined
in section 256B.0595, subdivision 1, paragraph (b).
    Subd. 3e. Continuing care retirement and life care community entrance fees. An
entrance fee paid by an individual to a continuing care retirement or life care community shall be
treated as an available asset to the extent that:
(1) the individual has the ability to use the entrance fee, or the contract provides that the
entrance fee may be used, to pay for care should other resources or income of the individual be
insufficient to pay for care;
(2) the individual is eligible for a refund of any remaining entrance fees when the individual
dies or terminates the continuing care retirement or life care community contract and leaves
the community; and
(3) the entrance fee does not confer an ownership interest in the continuing care retirement or
life care community.
    Subd. 4. Income. (a) To be eligible for medical assistance, a person eligible under section
256B.055, subdivisions 7, 7a, and 12, may have income up to 100 percent of the federal poverty
guidelines. Effective January 1, 2000, and each successive January, recipients of supplemental
security income may have an income up to the supplemental security income standard in effect on
that date.
(b) To be eligible for medical assistance, families and children may have an income up to
133-1/3 percent of the AFDC income standard in effect under the July 16, 1996, AFDC state plan.
Effective July 1, 2000, the base AFDC standard in effect on July 16, 1996, shall be increased
by three percent.
(c) Effective July 1, 2002, to be eligible for medical assistance, families and children may
have an income up to 100 percent of the federal poverty guidelines for the family size.
(d) In computing income to determine eligibility of persons under paragraphs (a) to (c)
who are not residents of long-term care facilities, the commissioner shall disregard increases in
income as required by Public Law Numbers 94-566, section 503; 99-272; and 99-509. Veterans
aid and attendance benefits and Veterans Administration unusual medical expense payments are
considered income to the recipient.
    Subd. 4a. Asset verification. For purposes of verification, the value of a life estate shall be
considered not salable unless the owner of the remainder interest intends to purchase the life
estate, or the owner of the life estate and the owner of the remainder sell the entire property.
    Subd. 4b. Income verification. The local agency shall not require a monthly income
verification form for a recipient who is a resident of a long-term care facility and who has monthly
earned income of $80 or less. The commissioner or county agency shall use electronic verification
as the primary method of income verification. If there is a discrepancy between reported income
and electronically verified income, an individual may be required to submit additional verification.
    Subd. 5. Excess income. A person who has excess income is eligible for medical assistance
if the person has expenses for medical care that are more than the amount of the person's excess
income, computed by deducting incurred medical expenses from the excess income to reduce
the excess to the income standard specified in subdivision 5c. The person shall elect to have the
medical expenses deducted at the beginning of a one-month budget period or at the beginning
of a six-month budget period. The commissioner shall allow persons eligible for assistance on
a one-month spenddown basis under this subdivision to elect to pay the monthly spenddown
amount in advance of the month of eligibility to the state agency in order to maintain eligibility
on a continuous basis. If the recipient does not pay the spenddown amount on or before the last
business day of the month, the recipient is ineligible for this option for the following month. The
local agency shall code the Medicaid Management Information System (MMIS) to indicate
that the recipient has elected this option. The state agency shall convey recipient eligibility
information relative to the collection of the spenddown to providers through the Electronic
Verification System (EVS). A recipient electing advance payment must pay the state agency the
monthly spenddown amount on or before noon on the last business day of the month in order to
be eligible for this option in the following month.
    Subd. 5a. Individuals on fixed or excluded income. Recipients of medical assistance who
receive only fixed unearned or excluded income, when that income is excluded from consideration
as income or unvarying in amount and timing of receipt throughout the year, shall report and
verify their income every 12 months. The 12-month period begins with the month of application.
    Subd. 5b. Individuals with low income. Recipients of medical assistance not residing
in a long-term care facility who have slightly fluctuating income which is below the medical
assistance income limit shall report and verify their income every six months. The six-month
period begins the month of application.
    Subd. 5c. Excess income standard. (a) The excess income standard for families with
children is the standard specified in subdivision 4.
(b) The excess income standard for a person whose eligibility is based on blindness,
disability, or age of 65 or more years is 70 percent of the federal poverty guidelines for the family
size. Effective July 1, 2002, the excess income standard for this paragraph shall equal 75 percent
of the federal poverty guidelines.
    Subd. 6. Assignment of benefits. To be eligible for medical assistance a person must have
applied or must agree to apply all proceeds received or receivable by the person or the person's
legal representative from any third party liable for the costs of medical care. By accepting
or receiving assistance, the person is deemed to have assigned the person's rights to medical
support and third party payments as required by title 19 of the Social Security Act. Persons must
cooperate with the state in establishing paternity and obtaining third party payments. By accepting
medical assistance, a person assigns to the Department of Human Services all rights the person
may have to medical support or payments for medical expenses from any other person or entity
on their own or their dependent's behalf and agrees to cooperate with the state in establishing
paternity and obtaining third party payments. Any rights or amounts so assigned shall be applied
against the cost of medical care paid for under this chapter. Any assignment takes effect upon
the determination that the applicant is eligible for medical assistance and up to three months
prior to the date of application if the applicant is determined eligible for and receives medical
assistance benefits. The application must contain a statement explaining this assignment. For the
purposes of this section, "the Department of Human Services or the state" includes prepaid health
plans under contract with the commissioner according to sections 256B.031, 256B.69, 256D.03,
subdivision 4 , paragraph (c), and 256L.12; children's mental health collaboratives under section
245.493; demonstration projects for persons with disabilities under section 256B.77; nursing
facilities under the alternative payment demonstration project under section 256B.434; and the
county-based purchasing entities under section 256B.692.
    Subd. 7. Period of eligibility. Eligibility is available for the month of application and for
three months prior to application if the person was eligible in those prior months. Eligibility
for months prior to application is determined independently from eligibility for the month of
application and future months. A redetermination of eligibility must occur every 12 months. The
12-month period begins with the month of application.
    Subd. 8. Cooperation. To be eligible for medical assistance, applicants and recipients
must cooperate with the state and local agency to identify potentially liable third-party payers
and assist the state in obtaining third party payments, unless good cause for noncooperation is
determined according to Code of Federal Regulations, title 42, part 433.147. "Cooperation"
includes identifying any third party who may be liable for care and services provided under
this chapter to the applicant, recipient, or any other family member for whom application is
made and providing relevant information to assist the state in pursuing a potentially liable third
party. Cooperation also includes providing information about a group health plan for which
the person may be eligible and if the plan is determined cost-effective by the state agency and
premiums are paid by the local agency or there is no cost to the recipient, they must enroll or
remain enrolled with the group. For purposes of this subdivision, coverage provided by the
Minnesota Comprehensive Health Association under chapter 62E shall not be considered group
health plan coverage or cost-effective by the state and local agency. Cost-effective insurance
premiums approved for payment by the state agency and paid by the local agency are eligible for
reimbursement according to section 256B.19.
    Subd. 9. Notice. The state agency must be given notice of monetary claims against a person,
entity, or corporation that may be liable to pay all or part of the cost of medical care when the
state agency has paid or becomes liable for the cost of that care. Notice must be given according
to paragraphs (a) to (d).
(a) An applicant for medical assistance shall notify the state or local agency of any possible
claims when the applicant submits the application. A recipient of medical assistance shall notify
the state or local agency of any possible claims when those claims arise.
(b) A person providing medical care services to a recipient of medical assistance shall
notify the state agency when the person has reason to believe that a third party may be liable for
payment of the cost of medical care.
(c) A party to a claim that may be assigned to the state agency under this section shall notify
the state agency of its potential assignment claim in writing at each of the following stages
of a claim:
(1) when a claim is filed;
(2) when an action is commenced; and
(3) when a claim is concluded by payment, award, judgment, settlement, or otherwise.
(d) Every party involved in any stage of a claim under this subdivision is required to provide
notice to the state agency at that stage of the claim. However, when one of the parties to the
claim provides notice at that stage, every other party to the claim is deemed to have provided
the required notice for that stage of the claim. If the required notice under this paragraph is
not provided to the state agency, all parties to the claim are deemed to have failed to provide
the required notice. A party to the claim includes the injured person or the person's legal
representative, the plaintiff, the defendants, or persons alleged to be responsible for compensating
the injured person or plaintiff, and any other party to the cause of action or claim, regardless of
whether the party knows the state agency has a potential or actual assignment claim.
    Subd. 10. Eligibility verification. (a) The commissioner shall require women who are
applying for the continuation of medical assistance coverage following the end of the 60-day
postpartum period to update their income and asset information and to submit any required
income or asset verification.
(b) The commissioner shall determine the eligibility of private-sector health care coverage
for infants less than one year of age eligible under section 256B.055, subdivision 10, or 256B.057,
subdivision 1 , paragraph (d), and shall pay for private-sector coverage if this is determined to be
cost-effective.
(c) The commissioner shall modify the application for Minnesota health care programs to
require more detailed information related to verification of assets and income, and shall verify
assets and income for all applicants, and for all recipients upon renewal.
(d) The commissioner shall require Minnesota health care program recipients to report new
or an increase in earned income within ten days of the change, and to verify new or an increase in
earned income that affects eligibility within ten days of notification by the agency that the new
or increased earned income affects eligibility. Recipients who fail to verify new or an increase
in earned income that affects eligibility shall be disenrolled.
    Subd. 11. Treatment of annuities. (a) Any individual applying for or seeking recertification
of eligibility for medical assistance payment of long-term care services shall provide a complete
description of any interest either the individual or the individual's spouse has in annuities. The
individual and the individual's spouse shall furnish the agency responsible for determining
eligibility with complete current copies of their annuities and related documents for review as
part of the application process on disclosure forms provided by the department as part of their
application.
(b) The disclosure form shall include a statement that the department becomes the remainder
beneficiary under the annuity or similar financial instrument by virtue of the receipt of medical
assistance. The disclosure form shall include a notice to the issuer of the department's right under
this section as a preferred remainder beneficiary under the annuity or similar financial instrument
for medical assistance furnished to the individual or the individual's spouse, and require the
issuer to provide confirmation that a remainder beneficiary designation has been made and to
notify the county agency when there is a change in the amount of the income or principal being
withdrawn from the annuity or other similar financial instrument at the time of the most recent
disclosure required under this section. The individual and the individual's spouse shall execute
separate disclosure forms for each annuity or similar financial instrument that they are required to
disclose under this section and in which they have an interest.
(c) An issuer of an annuity or similar financial instrument who receives notice on a disclosure
form as described in paragraph (b) shall provide confirmation to the requesting agency that a
remainder beneficiary designating the state has been made and shall notify the county agency
when there is a change in the amount of income or principal being withdrawn from the annuity
or other similar financial instrument. The county agency shall provide the issuer with the name,
address, and telephone number of a unit within the department that the issuer can contact to
comply with this paragraph.
History: Ex1967 c 16 s 6; 1969 c 841 s 1; 1973 c 717 s 18; 1974 c 525 s 1,2; 1975 c 247 s
10; 1976 c 236 s 3; 1977 c 448 s 6; 1978 c 760 s 1; 1979 c 309 s 4; 1980 c 509 s 106; 1980 c 527
s 1; 1981 c 360 art 2 s 28; 1Sp1981 c 2 s 14; 3Sp1981 c 2 art 1 s 32; 3Sp1981 c 3 s 17; 1982 c
553 s 6; 1982 c 640 s 5; 1983 c 312 art 5 s 15; 1984 c 422 s 1; 1984 c 534 s 22; 1984 c 654 art 5
s 58; 1985 c 248 s 70; 1985 c 252 s 21; 1986 c 444; 1Sp1986 c 1 art 8 s 5; 1987 c 403 art 2 s
79,80; 1988 c 689 art 2 s 144,145,268; 1989 c 282 art 3 s 45-47; 1989 c 332 s 1; 1990 c 568 art 3
s 28-32; 1992 c 513 art 7 s 34-38; 1993 c 339 s 13; 1Sp1993 c 1 art 5 s 31; art 6 s 25; 1995 c
207 art 6 s 28,29; 1995 c 248 art 17 s 1-4; 1996 c 451 art 2 s 8,9; 1997 c 85 art 3 s 13-15; 1997
c 203 art 4 s 20,21; 1997 c 225 art 6 s 4; 1998 c 407 art 4 s 15,16; 1999 c 245 art 4 s 32; art
10 s 10; 2001 c 203 s 5,6; 1Sp2001 c 9 art 2 s 16-24; 2002 c 220 art 15 s 6; 2002 c 379 art 1 s
113; 1Sp2003 c 14 art 2 s 16; art 12 s 16-18; 2004 c 228 art 1 s 75; 2005 c 56 s 1; 2005 c 98 art
2 s 2; 1Sp2005 c 4 art 8 s 20-26; 2006 c 282 art 17 s 25-27

NOTE: The amendments to subdivisions 5, 5a, 5b, and 7, by Laws 2005, First Special
Session chapter 4, article 8, sections 21 to 24, are effective August 1, 2007, or upon HealthMatch
implementation, whichever is later. Laws 2005, First Special Session chapter 4, article 8, sections
21 to 24, the effective dates.

256B.057 ELIGIBILITY REQUIREMENTS FOR SPECIAL CATEGORIES.
    Subdivision 1. Infants and pregnant women. (a)(1) An infant less than one year of age is
eligible for medical assistance if countable family income is equal to or less than 275 percent
of the federal poverty guideline for the same family size. A pregnant woman who has written
verification of a positive pregnancy test from a physician or licensed registered nurse is eligible
for medical assistance if countable family income is equal to or less than 200 percent of the
federal poverty guideline for the same family size. For purposes of this subdivision, "countable
family income" means the amount of income considered available using the methodology of the
AFDC program under the state's AFDC plan as of July 16, 1996, as required by the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Public Law
104-193, except for the earned income disregard and employment deductions.
(2) For applications processed within one calendar month prior to the effective date,
eligibility shall be determined by applying the income standards and methodologies in effect
prior to the effective date for any months in the six-month budget period before that date and
the income standards and methodologies in effect on the effective date for any months in the
six-month budget period on or after that date. The income standards for each month shall be
added together and compared to the applicant's total countable income for the six-month budget
period to determine eligibility.
(b)(1) [Expired, 1Sp2003 c 14 art 12 s 19]
(2) For applications processed within one calendar month prior to July 1, 2003, eligibility
shall be determined by applying the income standards and methodologies in effect prior to July
1, 2003, for any months in the six-month budget period before July 1, 2003, and the income
standards and methodologies in effect on the expiration date for any months in the six-month
budget period on or after July 1, 2003. The income standards for each month shall be added
together and compared to the applicant's total countable income for the six-month budget period
to determine eligibility.
(c) Dependent care and child support paid under court order shall be deducted from the
countable income of pregnant women.
(d) An infant born on or after January 1, 1991, to a woman who was eligible for and
receiving medical assistance on the date of the child's birth shall continue to be eligible for
medical assistance without redetermination until the child's first birthday, as long as the child
remains in the woman's household.
    Subd. 1a.[Repealed, 1998 c 407 art 5 s 48]
    Subd. 1b.[Repealed, 1Sp2003 c 14 art 12 s 101]
    Subd. 1c. No asset test for pregnant women. Beginning September 30, 1998, eligibility for
medical assistance for a pregnant woman must be determined without regard to asset standards
established in section 256B.056, subdivision 3.
    Subd. 2. Children. (a) Except as specified in subdivision 1b, effective October 1, 2003, a
child one through 18 years of age in a family whose countable income is no greater than 150
percent of the federal poverty guidelines for the same family size, is eligible for medical assistance.
(b) For applications processed within one calendar month prior to the effective date,
eligibility shall be determined by applying the income standards and methodologies in effect
prior to the effective date for any months in the six-month budget period before that date and
the income standards and methodologies in effect on the effective date for any months in the
six-month budget period on or after that date. The income standards for each month shall be
added together and compared to the applicant's total countable income for the six-month budget
period to determine eligibility.
    Subd. 2a.[Repealed, 1997 c 203 art 4 s 73]
    Subd. 2b.[Repealed, 1997 c 203 art 4 s 73]
    Subd. 3. Qualified Medicare beneficiaries. A person who is entitled to Part A Medicare
benefits, whose income is equal to or less than 100 percent of the federal poverty guidelines, and
whose assets are no more than $10,000 for a single individual and $18,000 for a married couple
or family of two or more, is eligible for medical assistance reimbursement of Part A and Part
B premiums, Part A and Part B coinsurance and deductibles, and cost-effective premiums for
enrollment with a health maintenance organization or a competitive medical plan under section
1876 of the Social Security Act. Reimbursement of the Medicare coinsurance and deductibles,
when added to the amount paid by Medicare, must not exceed the total rate the provider would
have received for the same service or services if the person were a medical assistance recipient
with Medicare coverage. Increases in benefits under Title II of the Social Security Act shall not be
counted as income for purposes of this subdivision until July 1 of each year.
    Subd. 3a. Eligibility for payment of Medicare Part B premiums. A person who would
otherwise be eligible as a qualified Medicare beneficiary under subdivision 3, except the person's
income is in excess of the limit, is eligible for medical assistance reimbursement of Medicare
Part B premiums if the person's income is less than 120 percent of the official federal poverty
guidelines for the applicable family size.
    Subd. 3b. Qualifying individuals. Beginning July 1, 1998, contingent upon federal funding,
a person who would otherwise be eligible as a qualified Medicare beneficiary under subdivision
3, except that the person's income is in excess of the limit, is eligible as a qualifying individual
according to the following criteria:
(1) if the person's income is greater than 120 percent, but less than 135 percent of the official
federal poverty guidelines for the applicable family size, the person is eligible for medical
assistance reimbursement of Medicare Part B premiums; or
(2) if the person's income is equal to or greater than 135 percent but less than 175 percent
of the official federal poverty guidelines for the applicable family size, the person is eligible for
medical assistance reimbursement of that portion of the Medicare Part B premium attributable
to an increase in Part B expenditures which resulted from the shift of home care services from
Medicare Part A to Medicare Part B under Public Law 105-33, section 4732, the Balanced
Budget Act of 1997.
The commissioner shall limit enrollment of qualifying individuals under this subdivision
according to the requirements of Public Law 105-33, section 4732.
    Subd. 4. Qualified working disabled adults. A person who is entitled to Medicare Part A
benefits under section 1818A of the Social Security Act; whose income does not exceed 200
percent of the federal poverty guidelines for the applicable family size; whose nonexempt assets
do not exceed twice the maximum amount allowable under the supplemental security income
program, according to family size; and who is not otherwise eligible for medical assistance, is
eligible for medical assistance reimbursement of the Medicare Part A premium.
    Subd. 5. Disabled adult children. A person who is at least 18 years old, who was eligible
for supplemental security income benefits on the basis of blindness or disability, who became
disabled or blind before reaching the age of 22, and who lost eligibility as a result of becoming
entitled to a child's insurance benefits on or after July 1, 1987, under section 202(d) of the Social
Security Act, or because of an increase in those benefits effective on or after July 1, 1987, is
eligible for medical assistance as long as the person would be entitled to supplemental security
income in the absence of child's insurance benefits or increases in those benefits.
    Subd. 6. Disabled widows and widowers. A person who is at least 50 years old who is
entitled to disabled widow's or widower's benefits under United States Code, title 42, section
402(e) or (f), who is not entitled to Medicare Part A, and who received supplemental security
income or Minnesota supplemental aid in the month before the month the widow's or widower's
benefits began, is eligible for medical assistance as long as the person would be entitled to
supplemental security income or Minnesota supplemental aid in the absence of the widow's or
widower's benefits.
    Subd. 7. Waiver of maintenance of effort requirement. Unless a federal waiver of the
maintenance of effort requirement of section 2105(d) of title XXI of the Balanced Budget Act
of 1997, Public Law 105-33, Statutes at Large, volume 111, page 251, is granted by the federal
Department of Health and Human Services by September 30, 1998, eligibility for children under
age 21 must be determined without regard to asset standards established in section 256B.056,
subdivision 3c . The commissioner of human services shall publish a notice in the State Register
upon receipt of a federal waiver.
    Subd. 8. Children under age two. Medical assistance may be paid for a child under
two years of age whose countable family income is above 275 percent of the federal poverty
guidelines for the same size family but less than or equal to 280 percent of the federal poverty
guidelines for the same size family.
    Subd. 9. Employed persons with disabilities. (a) Medical assistance may be paid for a
person who is employed and who:
(1) meets the definition of disabled under the supplemental security income program;
(2) is at least 16 but less than 65 years of age;
(3) meets the asset limits in paragraph (b); and
(4) effective November 1, 2003, pays a premium and other obligations under paragraph (d).
Any spousal income or assets shall be disregarded for purposes of eligibility and premium
determinations.
After the month of enrollment, a person enrolled in medical assistance under this subdivision
who:
(1) is temporarily unable to work and without receipt of earned income due to a medical
condition, as verified by a physician, may retain eligibility for up to four calendar months; or
(2) effective January 1, 2004, loses employment for reasons not attributable to the enrollee,
may retain eligibility for up to four consecutive months after the month of job loss. To receive
a four-month extension, enrollees must verify the medical condition or provide notification of
job loss. All other eligibility requirements must be met and the enrollee must pay all calculated
premium costs for continued eligibility.
(b) For purposes of determining eligibility under this subdivision, a person's assets must not
exceed $20,000, excluding:
(1) all assets excluded under section 256B.056;
(2) retirement accounts, including individual accounts, 401(k) plans, 403(b) plans, Keogh
plans, and pension plans; and
(3) medical expense accounts set up through the person's employer.
(c)(1) Effective January 1, 2004, for purposes of eligibility, there will be a $65 earned income
disregard. To be eligible, a person applying for medical assistance under this subdivision must
have earned income above the disregard level.
(2) Effective January 1, 2004, to be considered earned income, Medicare, Social Security,
and applicable state and federal income taxes must be withheld. To be eligible, a person must
document earned income tax withholding.
(d)(1) A person whose earned and unearned income is equal to or greater than 100 percent
of federal poverty guidelines for the applicable family size must pay a premium to be eligible
for medical assistance under this subdivision. The premium shall be based on the person's gross
earned and unearned income and the applicable family size using a sliding fee scale established
by the commissioner, which begins at one percent of income at 100 percent of the federal poverty
guidelines and increases to 7.5 percent of income for those with incomes at or above 300 percent
of the federal poverty guidelines. Annual adjustments in the premium schedule based upon
changes in the federal poverty guidelines shall be effective for premiums due in July of each year.
(2) Effective January 1, 2004, all enrollees must pay a premium to be eligible for medical
assistance under this subdivision. An enrollee shall pay the greater of a $35 premium or the
premium calculated in clause (1).
(3) Effective November 1, 2003, all enrollees who receive unearned income must pay
one-half of one percent of unearned income in addition to the premium amount.
(4) Effective November 1, 2003, for enrollees whose income does not exceed 200 percent of
the federal poverty guidelines and who are also enrolled in Medicare, the commissioner must
reimburse the enrollee for Medicare Part B premiums under section 256B.0625, subdivision 15,
paragraph (a).
(5) Increases in benefits under title II of the Social Security Act shall not be counted as
income for purposes of this subdivision until July 1 of each year.
(e) A person's eligibility and premium shall be determined by the local county agency.
Premiums must be paid to the commissioner. All premiums are dedicated to the commissioner.
(f) Any required premium shall be determined at application and redetermined at the
enrollee's six-month income review or when a change in income or household size is reported.
Enrollees must report any change in income or household size within ten days of when the change
occurs. A decreased premium resulting from a reported change in income or household size shall
be effective the first day of the next available billing month after the change is reported. Except
for changes occurring from annual cost-of-living increases, a change resulting in an increased
premium shall not affect the premium amount until the next six-month review.
(g) Premium payment is due upon notification from the commissioner of the premium
amount required. Premiums may be paid in installments at the discretion of the commissioner.
(h) Nonpayment of the premium shall result in denial or termination of medical assistance
unless the person demonstrates good cause for nonpayment. Good cause exists if the requirements
specified in Minnesota Rules, part 9506.0040, subpart 7, items B to D, are met. Except when an
installment agreement is accepted by the commissioner, all persons disenrolled for nonpayment
of a premium must pay any past due premiums as well as current premiums due prior to being
reenrolled. Nonpayment shall include payment with a returned, refused, or dishonored instrument.
The commissioner may require a guaranteed form of payment as the only means to replace a
returned, refused, or dishonored instrument.
    Subd. 10. Certain persons needing treatment for breast or cervical cancer. (a) Medical
assistance may be paid for a person who:
(1) has been screened for breast or cervical cancer by the Minnesota breast and cervical
cancer control program, and program funds have been used to pay for the person's screening;
(2) according to the person's treating health professional, needs treatment, including
diagnostic services necessary to determine the extent and proper course of treatment, for breast or
cervical cancer, including precancerous conditions and early stage cancer;
(3) meets the income eligibility guidelines for the Minnesota breast and cervical cancer
control program;
(4) is under age 65;
(5) is not otherwise eligible for medical assistance under United States Code, title 42, section
1396a(a)(10)(A)(i); and
(6) is not otherwise covered under creditable coverage, as defined under United States
Code, title 42, section 1396a(aa).
(b) Medical assistance provided for an eligible person under this subdivision shall be limited
to services provided during the period that the person receives treatment for breast or cervical
cancer.
(c) A person meeting the criteria in paragraph (a) is eligible for medical assistance without
meeting the eligibility criteria relating to income and assets in section 256B.056, subdivisions
1a to 5b .
History: 1986 c 444; 1989 c 282 art 3 s 48; 1990 c 568 art 3 s 33-36; 1991 c 292 art 4 s
35-39; 1992 c 513 art 7 s 39; 1992 c 549 art 4 s 12; 1993 c 345 art 9 s 11-13; 1Sp1993 c 6 s
9; 1995 c 234 art 6 s 36,37; 1997 c 85 art 3 s 16-18; 1997 c 203 art 4 s 22-24; 1998 c 407 art
5 s 3-5; 1998 c 407 art 4 s 17,18; 1999 c 245 art 4 s 33,34; 2000 c 260 s 97; 2000 c 340 s 3;
2000 c 488 art 9 s 15; 1Sp2001 c 9 art 2 s 25-29; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art
12 s 19-23; 1Sp2005 c 4 art 7 s 4

NOTE: The amendment to subdivision 1 by Laws 2003, First Special Session chapter 14,
article 12, section 19, is effective February 1, 2004, or upon federal approval, whichever is later,
except where a different date is specified in the text. Laws 2003, First Special Session chapter
14, article 12, section 19, the effective date.

256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.
    Subdivision 1. Definitions. For purposes of this section, the following terms have the
meanings given them.
    Subd. 2.[Repealed, 2006 c 282 art 17 s 37]
    Subd. 3. Long-term care insurance. "Long-term care insurance" means a policy described
in section 62S.01.
    Subd. 4. Medical assistance. "Medical assistance" means the program of medical assistance
established under section 256B.01.
    Subd. 5.[Repealed, 2006 c 282 art 17 s 37]
    Subd. 6. Partnership policy. "Partnership policy" means a long-term care insurance policy
that meets the requirements under subdivision 10 and was issued on or after the effective date of
the state plan amendment implementing the partnership program in Minnesota.
    Subd. 7. Partnership program. "Partnership program" means the Minnesota partnership for
long-term care program established under this section.
    Subd. 7a. Protected assets. "Protected assets" means assets or proceeds of assets that are
protected from recovery under subdivisions 13 and 15.
    Subd. 8. Program established. (a) The commissioner, in cooperation with the commissioner
of commerce, shall establish the Minnesota partnership for long-term care program to provide for
the financing of long-term care through a combination of private insurance and medical assistance.
(b) An individual who meets the requirements in this paragraph is eligible to participate in
the partnership program. The individual must:
(1) be a Minnesota resident at the time coverage first became effective under the partnership
policy;
(2) be a beneficiary of a partnership policy that (i) is issued on or after the effective date of
the state plan amendment implementing the partnership program in Minnesota, or (ii) qualifies as
a partnership policy under the provisions of subdivision 8a; and
(3) have exhausted all of the benefits under the partnership policy as described in this section.
Benefits received under a long-term care insurance policy before July 1, 2006, do not count
toward the exhaustion of benefits required in this subdivision.
    Subd. 8a. Exchange for long-term care partnership policy; addition of policy rider. (a)
If authorized by federal law or if federal approval is granted with respect to the partnership
program established in this section, a long-term care insurance policy that was issued before the
effective date of the state plan amendment implementing the partnership program in Minnesota
that was exchanged after the effective date of the state plan amendment for a long-term care
partnership policy that meets the requirements of Public Law 109-171, section 6021, qualifies
as a long-term care partnership policy under this section, unless the policy is paying benefits
on the date the policy is exchanged.
(b) If authorized by federal law or if federal approval is granted with respect to the
partnership program established in this section, a long-term care insurance policy that was issued
before the effective date of the state plan amendment implementing the partnership program in
Minnesota that has a rider added after the effective date of the state plan amendment that meets
the requirements of Public Law 109-171, section 6021, qualifies as a long-term care partnership
policy under this section, unless the policy is paying benefits on the date the rider is added.
    Subd. 9. Medical assistance eligibility. (a) Upon application for medical assistance program
payment of long-term care services by an individual who meets the requirements described in
subdivision 8, the commissioner shall determine the individual's eligibility for medical assistance
according to paragraphs (b) to (i).
(b) After determining assets subject to the asset limit under section 256B.056, subdivision 3
or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall allow the individual to designate
assets to be protected from recovery under subdivisions 13 and 15 up to the dollar amount of the
benefits utilized under the partnership policy. Designated assets shall be disregarded for purposes
of determining eligibility for payment of long-term care services.
(c) The individual shall identify the designated assets and the full fair market value of those
assets and designate them as assets to be protected at the time of initial application for medical
assistance. The full fair market value of real property or interests in real property shall be based
on the most recent full assessed value for property tax purposes for the real property, unless the
individual provides a complete professional appraisal by a licensed appraiser to establish the full
fair market value. The extent of a life estate in real property shall be determined using the life
estate table in the health care program's manual. Ownership of any asset in joint tenancy shall
be treated as ownership as tenants in common for purposes of its designation as a disregarded
asset. The unprotected value of any protected asset is subject to estate recovery according
to subdivisions 13 and 15.
(d) The right to designate assets to be protected is personal to the individual and ends when
the individual dies, except as otherwise provided in subdivisions 13 and 15. It does not include
the increase in the value of the protected asset and the income, dividends, or profits from the
asset. It may be exercised by the individual or by anyone with the legal authority to do so on the
individual's behalf. It shall not be sold, assigned, transferred, or given away.
(e) If the dollar amount of the benefits utilized under a partnership policy is greater than the
full fair market value of all assets protected at the time of the application for medical assistance
long-term care services, the individual may designate additional assets that become available
during the individual's lifetime for protection under this section. The individual must make the
designation in writing to the county agency no later than the last date on which the individual
must report a change in circumstances to the county agency, as provided for under the medical
assistance program. Any excess used for this purpose shall not be available to the individual's
estate to protect assets in the estate from recovery under section 256B.15 or 524.3-1202, or
otherwise.
(f) This section applies only to estate recovery under United States Code, title 42, section
1396p, subsections (a) and (b), and does not apply to recovery authorized by other provisions of
federal law, including, but not limited to, recovery from trusts under United States Code, title
42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from annuities, or similar legal
instruments, subject to section 6012, subsections (a) and (b), of the Deficit Reduction Act of
2005, Public Law 109-171.
(g) An individual's protected assets owned by the individual's spouse who applies for
payment of medical assistance long-term care services shall not be protected assets or disregarded
for purposes of eligibility of the individual's spouse solely because they were protected assets of
the individual.
(h) Assets designated under this subdivision shall not be subject to penalty under section
256B.0595.
(i) The commissioner shall otherwise determine the individual's eligibility for payment of
long-term care services according to medical assistance eligibility requirements.
    Subd. 10. Long-term care partnership policy inflation protection. A long-term care
partnership policy must provide the inflation protection described in this subdivision. If the
policy is sold to an individual who:
(1) has not attained age 61 as of the date of purchase, the policy must provide compound
annual inflation protection;
(2) has attained age 61, but has not attained age 76 as of such date, the policy must provide
some level of inflation protection; and
(3) has attained age 76 as of such date, the policy may, but is not required to, provide some
level of inflation protection.
    Subd. 11.[Repealed, 2006 c 282 art 17 s 37]
    Subd. 12. Compliance with federal law. An issuer of a partnership policy must comply
with Public Law 109-171, section 6021, including any federal regulations, as amended, adopted
under that law.
    Subd. 13. Limitations on estate recovery. (a) Protected assets of the individual shall not be
subject to recovery under section 256B.15 or 524.3-1201 for medical assistance or alternative care
paid on behalf of the individual. Protected assets of the individual in the estate of the individual's
surviving spouse shall not be liable to pay a claim for recovery of medical assistance paid for the
predeceased individual that is filed in the estate of the surviving spouse under section 256B.15.
Protected assets of the individual shall not be protected assets in the surviving spouse's estate
by reason of the preceding sentence and shall be subject to recovery under section 256B.15 or
524.3-1201 for medical assistance paid on behalf of the surviving spouse.
(b) The personal representative may protect the full fair market value of an individual's
unprotected assets in the individual's estate in an amount equal to the unused amount of asset
protection the individual had on the date of death. The personal representative shall apply the
asset protection so that the full fair market value of any unprotected asset in the estate is protected.
When or if the asset protection available to the personal representative is or becomes less than
the full fair market value of any remaining unprotected asset, it shall be applied to partially
protect one unprotected asset.
(c) The asset protection described in paragraph (a) terminates with respect to an asset
includable in the individual's estate under chapter 524 or section 256B.15:
(1) when the estate distributes the asset; or
(2) if the estate of the individual has not been probated within one year from the date of death.
(d) If an individual owns a protected asset on the date of death and the estate is opened for
probate more than one year after death, the state or a county agency may file and collect claims in
the estate under section 256B.15, and no statute of limitations in chapter 524 that would otherwise
limit or bar the claim shall apply.
(e) Except as otherwise provided, nothing in this section shall limit or prevent recovery
of medical assistance.
    Subd. 14. Implementation. (a) The commissioner, in cooperation with the commissioner of
commerce, may alter the requirements of this section so as to be in compliance with forthcoming
requirements of the federal Department of Health and Human Services and the National
Association of Insurance Commissioners necessary to implement the long-term care partnership
program requirements of Public Law 109-171, section 6021.
(b) The commissioner shall submit a state plan amendment to the federal government to
implement the long-term care partnership program in accordance with this section.
    Subd. 15. Limitation on liens. (a) An individual's interest in real property shall not be
subject to a medical assistance lien or a notice of potential claim while and to the extent it is
protected under subdivision 9.
(b) Medical assistance liens or liens arising under notices of potential claims against an
individual's interests in real property in the individual's estate that are designated as protected
under subdivision 13, paragraph (b), shall be released to the extent of the dollar value of the
protection applied to the interest.
(c) If an interest in real property is protected from a lien for recovery of medical assistance
paid on behalf of the individual under paragraph (a) or (b), no lien for recovery of medical
assistance paid on behalf of that individual shall be filed against the protected interest in real
property after it is distributed to the individual's heirs or devisees.
    Subd. 16. Burden of proof. Any individual or the personal representative of the individual's
estate who asserts that an asset is a disregarded or protected asset under this section in connection
with any determination of eligibility for benefits under the medical assistance program or any
appeal, case, controversy, or other proceedings, shall have the initial burden of:
(1) documenting and proving by clear and convincing evidence that the asset or source of
funds for the asset in question was designated as disregarded or protected;
(2) tracing the asset and the proceeds of the asset from that time forward; and
(3) documenting that the asset or proceeds of the asset remained disregarded or protected
at all relevant times.
History: 1Sp2005 c 4 art 7 s 5; 2006 c 255 s 74; 2006 c 282 art 17 s 28

256B.0575 AVAILABILITY OF INCOME FOR INSTITUTIONALIZED PERSONS.
When an institutionalized person is determined eligible for medical assistance, the income
that exceeds the deductions in paragraphs (a) and (b) must be applied to the cost of institutional
care.
(a) The following amounts must be deducted from the institutionalized person's income in
the following order:
(1) the personal needs allowance under section 256B.35 or, for a veteran who does not have
a spouse or child, or a surviving spouse of a veteran having no child, the amount of an improved
pension received from the veteran's administration not exceeding $90 per month;
(2) the personal allowance for disabled individuals under section 256B.36;
(3) if the institutionalized person has a legally appointed guardian or conservator, five
percent of the recipient's gross monthly income up to $100 as reimbursement for guardianship or
conservatorship services;
(4) a monthly income allowance determined under section 256B.058, subdivision 2, but only
to the extent income of the institutionalized spouse is made available to the community spouse;
(5) a monthly allowance for children under age 18 which, together with the net income of the
children, would provide income equal to the medical assistance standard for families and children
according to section 256B.056, subdivision 4, for a family size that includes only the minor
children. This deduction applies only if the children do not live with the community spouse and
only to the extent that the deduction is not included in the personal needs allowance under section
256B.35, subdivision 1, as child support garnished under a court order;
(6) a monthly family allowance for other family members, equal to one-third of the
difference between 122 percent of the federal poverty guidelines and the monthly income for
that family member;
(7) reparations payments made by the Federal Republic of Germany and reparations
payments made by the Netherlands for victims of Nazi persecution between 1940 and 1945;
(8) all other exclusions from income for institutionalized persons as mandated by federal
law; and
(9) amounts for reasonable expenses incurred for necessary medical or remedial care for
the institutionalized person that are not medical assistance covered expenses and that are not
subject to payment by a third party.
Reasonable expenses are limited to expenses that have not been previously used as a
deduction from income and are incurred during the enrollee's current period of eligibility,
including retroactive months associated with the current period of eligibility, for medical
assistance payment of long-term care services.
For purposes of clause (6), "other family member" means a person who resides with the
community spouse and who is a minor or dependent child, dependent parent, or dependent sibling
of either spouse. "Dependent" means a person who could be claimed as a dependent for federal
income tax purposes under the Internal Revenue Code.
(b) Income shall be allocated to an institutionalized person for a period of up to three
calendar months, in an amount equal to the medical assistance standard for a family size of one if:
(1) a physician certifies that the person is expected to reside in the long-term care facility
for three calendar months or less;
(2) if the person has expenses of maintaining a residence in the community; and
(3) if one of the following circumstances apply:
(i) the person was not living together with a spouse or a family member as defined in
paragraph (a) when the person entered a long-term care facility; or
(ii) the person and the person's spouse become institutionalized on the same date, in which
case the allocation shall be applied to the income of one of the spouses.
For purposes of this paragraph, a person is determined to be residing in a licensed nursing home,
regional treatment center, or medical institution if the person is expected to remain for a period of
one full calendar month or more.
History: 1986 c 444; 1989 c 282 art 3 s 49; 1990 c 568 art 3 s 37; 1991 c 292 art 4 s 40;
1Sp1993 c 1 art 5 s 32; 1995 c 207 art 6 s 30,125; 1996 c 451 art 2 s 10; 1999 c 245 art 4 s
35; 2002 c 277 s 10; 1Sp2005 c 4 art 8 s 27

256B.058 TREATMENT OF INCOME OF INSTITUTIONALIZED SPOUSE.
    Subdivision 1. Income not available. The income described in subdivisions 2 and 3 shall be
deducted from an institutionalized spouse's monthly income and is not considered available for
payment of the monthly costs of an institutionalized person in the institution after the person has
been determined eligible for medical assistance.
    Subd. 2. Monthly income allowance for community spouse. (a) For an institutionalized
spouse with a spouse residing in the community, monthly income may be allocated to the
community spouse as a monthly income allowance for the community spouse. Beginning with
the first full calendar month the institutionalized spouse is in the institution, the monthly income
allowance is not considered available to the institutionalized spouse for monthly payment of costs
of care in the institution as long as the income is made available to the community spouse.
(b) The monthly income allowance is the amount by which the community spouse's monthly
maintenance needs allowance under paragraphs (c) and (d) exceeds the amount of monthly
income otherwise available to the community spouse.
(c) The community spouse's monthly maintenance needs allowance is the lesser of $1,500 or
122 percent of the monthly federal poverty guideline for a family of two plus an excess shelter
allowance. The excess shelter allowance is for the amount of shelter expenses that exceed 30
percent of 122 percent of the federal poverty guideline line for a family of two. Shelter expenses
are the community spouse's expenses for rent, mortgage payments including principal and
interest, taxes, insurance, required maintenance charges for a cooperative or condominium that
is the community spouse's principal residence, and the standard utility allowance under section
5(e) of the federal Food Stamp Act of 1977. If the community spouse has a required maintenance
charge for a cooperative or condominium, the standard utility allowance must be reduced by the
amount of utility expenses included in the required maintenance charge.
If the community or institutionalized spouse establishes that the community spouse needs
income greater than the monthly maintenance needs allowance determined in this paragraph due
to exceptional circumstances resulting in significant financial duress, the monthly maintenance
needs allowance may be increased to an amount that provides needed additional income.
(d) The percentage of the federal poverty guideline used to determine the monthly
maintenance needs allowance in paragraph (c) is increased to 133 percent on July 1, 1991, and
to 150 percent on July 1, 1992. Adjustments in the income limits due to annual changes in the
federal poverty guidelines shall be implemented the first day of July following publication of the
annual changes. The $1,500 maximum must be adjusted January 1, 1990, and every January 1
after that by the same percentage increase in the Consumer Price Index for All Urban Consumers
(all items; United States city average) between the two previous Septembers.
(e) If a court has entered an order against an institutionalized spouse for monthly income for
support of the community spouse, the community spouse's monthly income allowance under this
subdivision shall not be less than the amount of the monthly income ordered.
    Subd. 3. Family allowance. (a) A family allowance determined under paragraph (b) is not
considered available to the institutionalized spouse for monthly payment of costs of care in
the institution.
(b) The family allowance is equal to one-third of the amount by which 122 percent of the
monthly federal poverty guideline for a family of two exceeds the monthly income for that
family member.
(c) For purposes of this subdivision, the term family member only includes a minor or
dependent child, dependent parent, or dependent sibling of the institutionalized or community
spouse if the sibling resides with the community spouse.
(d) The percentage of the federal poverty guideline used to determine the family allowance
in paragraph (b) is increased to 133 percent on July 1, 1991, and to 150 percent on July 1, 1992.
Adjustments in the income limits due to annual changes in the federal poverty guidelines shall be
implemented the first day of July following publication of the annual changes.
    Subd. 4. Treatment of income. (a) No income of the community spouse will be considered
available to an eligible institutionalized spouse, beginning the first full calendar month of
institutionalization, except as provided in this subdivision.
(b) In determining the income of an institutionalized spouse or community spouse, after
the institutionalized spouse has been determined eligible for medical assistance, the following
rules apply.
(1) For income that is not from a trust, availability is determined according to items (i) to (v),
unless the instrument providing the income otherwise specifically provides:
(i) if payment is made solely in the name of one spouse, the income is considered available
only to that spouse;
(ii) if payment is made in the names of both spouses, one-half of the income is considered
available to each;
(iii) if payment is made in the names of one or both spouses together with one or more other
persons, the income is considered available to each spouse according to the spouse's interest, or
one-half of the joint interest is considered available to each spouse if each spouse's interest
is not specified;
(iv) if there is no instrument that establishes ownership, one-half of the income is considered
available to each spouse; and
(v) either spouse may rebut the determination of availability of income by showing by a
preponderance of the evidence that ownership interests are different than provided above.
(2) For income from a trust, income is considered available to each spouse as provided in the
trust. If the trust does not specify an amount available to either or both spouses, availability will
be determined according to items (i) to (iii):
(i) if payment of income is made only to one spouse, the income is considered available
only to that spouse;
(ii) if payment of income is made to both spouses, one-half is considered available to
each; and
(iii) if payment is made to either or both spouses and one or more other persons, the income
is considered available to each spouse in proportion to each spouse's interest, or if no such interest
is specified, one-half of the joint interest is considered available to each spouse.
History: 1989 c 282 art 3 s 50

256B.059 TREATMENT OF ASSETS WHEN A SPOUSE IS INSTITUTIONALIZED.
    Subdivision 1. Definitions. (a) For purposes of this section and section 256B.0595, the terms
defined in this subdivision have the meanings given them.
(b) "Community spouse" means the spouse of an institutionalized spouse.
(c) "Spousal share" means one-half of the total value of all assets, to the extent that either
the institutionalized spouse or the community spouse had an ownership interest at the time of
institutionalization.
(d) "Assets otherwise available to the community spouse" means assets individually or jointly
owned by the community spouse, other than assets excluded by subdivision 5, paragraph (c).
(e) "Community spouse asset allowance" is the value of assets that can be transferred under
subdivision 3.
(f) "Institutionalized spouse" means a person who is:
(1) in a hospital, nursing facility, or intermediate care facility for persons with developmental
disabilities, or receiving home and community-based services under section 256B.0915 or
256B.49, and is expected to remain in the facility or institution or receive the home and
community-based services for at least 30 consecutive days; and
(2) married to a person who is not in a hospital, nursing facility, or intermediate care facility
for persons with developmental disabilities, and is not receiving home and community-based
services under section 256B.0915 or 256B.49.
(g) "For the sole benefit of" means no other individual or entity can benefit in any way from
the assets or income at the time of a transfer or at any time in the future.
    Subd. 1a. Institutionalized spouse. The provisions of this section apply only when a spouse
is institutionalized for a continuous period beginning on or after October 1, 1989.
    Subd. 2. Assessment of spousal share. At the beginning of the first continuous period of
institutionalization of a person beginning on or after October 1, 1989, at the request of either the
institutionalized spouse or the community spouse, or upon application for medical assistance, the
total value of assets in which either the institutionalized spouse or the community spouse had an
interest at the time of the first period of institutionalization of 30 days or more shall be assessed
and documented and the spousal share shall be assessed and documented.
    Subd. 3. Community spouse asset allowance. An institutionalized spouse may transfer
assets to the community spouse for the sole benefit of the community spouse. Except for
increased amounts allowable under subdivision 4, the maximum amount of assets allowed to be
transferred is the amount which, when added to the assets otherwise available to the community
spouse, is as follows:
(1) prior to July 1, 1994, the greater of:
(i) $14,148;
(ii) the lesser of the spousal share or $70,740; or
(iii) the amount required by court order to be paid to the community spouse; and
(2) for persons whose date of initial determination of eligibility for medical assistance
following their first continuous period of institutionalization occurs on or after July 1, 1994,
the greater of:
(i) $20,000;
(ii) the lesser of the spousal share or $70,740; or
(iii) the amount required by court order to be paid to the community spouse.
If the assets available to the community spouse are already at the limit permissible under
this section, or the higher limit attributable to increases under subdivision 4, no assets may be
transferred from the institutionalized spouse to the community spouse. The transfer must be made
as soon as practicable after the date the institutionalized spouse is determined eligible for medical
assistance, or within the amount of time needed for any court order required for the transfer. On
January 1, 1994, and every January 1 thereafter, the limits in this subdivision shall be adjusted by
the same percentage change in the Consumer Price Index for All Urban Consumers (all items;
United States city average) between the two previous Septembers. These adjustments shall also be
applied to the limits in subdivision 5.
    Subd. 4. Increased community spouse asset allowance; when allowed. (a) If either the
institutionalized spouse or community spouse establishes that the community spouse asset
allowance under subdivision 3 (in relation to the amount of income generated by such an
allowance) is not sufficient to raise the community spouse's income to the minimum monthly
maintenance needs allowance in section 256B.058, subdivision 2, paragraph (c), there shall
be substituted for the amount allowed to be transferred an amount sufficient, when combined
with the monthly income otherwise available to the spouse, to provide the minimum monthly
maintenance needs allowance. A substitution under this paragraph may be made only if the assets
of the couple have been arranged so that the maximum amount of income-producing assets, at the
maximum rate of return, are available to the community spouse under the community spouse asset
allowance. The maximum rate of return is the average rate of return available from the financial
institution holding the asset, or a rate determined by the commissioner to be reasonable according
to community standards, if the asset is not held by a financial institution.
(b) The community spouse asset allowance under subdivision 3 can be increased by court
order or hearing that complies with the requirements of United States Code, title 42, section
1396r-5.
    Subd. 5. Asset availability. (a) At the time of initial determination of eligibility for medical
assistance benefits following the first continuous period of institutionalization on or after October
1, 1989, assets considered available to the institutionalized spouse shall be the total value of all
assets in which either spouse has an ownership interest, reduced by the following amount for the
community spouse:
(1) prior to July 1, 1994, the greater of:
(i) $14,148;
(ii) the lesser of the spousal share or $70,740; or
(iii) the amount required by court order to be paid to the community spouse;
(2) for persons whose date of initial determination of eligibility for medical assistance
following their first continuous period of institutionalization occurs on or after July 1, 1994,
the greater of:
(i) $20,000;
(ii) the lesser of the spousal share or $70,740; or
(iii) the amount required by court order to be paid to the community spouse.
The value of assets transferred for the sole benefit of the community spouse under section
256B.0595, subdivision 4, in combination with other assets available to the community spouse
under this section, cannot exceed the limit for the community spouse asset allowance determined
under subdivision 3 or 4. Assets that exceed this allowance shall be considered available to the
institutionalized spouse whether or not converted to income. If the community spouse asset
allowance has been increased under subdivision 4, then the assets considered available to the
institutionalized spouse under this subdivision shall be further reduced by the value of additional
amounts allowed under subdivision 4.
(b) An institutionalized spouse may be found eligible for medical assistance even though
assets in excess of the allowable amount are found to be available under paragraph (a) if the assets
are owned jointly or individually by the community spouse, and the institutionalized spouse
cannot use those assets to pay for the cost of care without the consent of the community spouse,
and if: (i) the institutionalized spouse assigns to the commissioner the right to support from the
community spouse under section 256B.14, subdivision 3; (ii) the institutionalized spouse lacks
the ability to execute an assignment due to a physical or mental impairment; or (iii) the denial of
eligibility would cause an imminent threat to the institutionalized spouse's health and well-being.
(c) After the month in which the institutionalized spouse is determined eligible for medical
assistance, during the continuous period of institutionalization, no assets of the community spouse
are considered available to the institutionalized spouse, unless the institutionalized spouse has
been found eligible under paragraph (b).
(d) Assets determined to be available to the institutionalized spouse under this section must
be used for the health care or personal needs of the institutionalized spouse.
(e) For purposes of this section, assets do not include assets excluded under the supplemental
security income program.
History: 1989 c 282 art 3 s 51; 1990 c 568 art 3 s 38,39; 1991 c 199 art 1 s 61; 1992 c
513 art 7 s 40,41; 1Sp1993 c 1 art 5 s 33,34; 1995 c 207 art 6 s 31-33; 1997 c 107 s 3-6; 2002
c 220 art 15 s 7-9; 2005 c 56 s 1

256B.0594 PAYMENT OF BENEFITS FROM AN ANNUITY.
When payment becomes due under an annuity that names the department a remainder
beneficiary as described in section 256B.056, subdivision 11, the issuer shall request and the
department shall, within 45 days after receipt of the request, provide a written statement of the
total amount of the medical assistance paid. Upon timely receipt of the written statement of
the amount of medical assistance paid, the issuer shall pay the department an amount equal to
the lesser of the amount due the department under the annuity or the total amount of medical
assistance paid on behalf of the individual or the individual's spouse. Any amounts remaining
after the issuer's payment to the department shall be payable according to the terms of the annuity
or similar financial instrument. The county agency or the department shall provide the issuer with
the name, address, and telephone number of a unit within the department the issuer can contact to
comply with this section. The requirements of section 72A.201, subdivision 4, clause (3), shall not
apply to payments made under this section until the issuer has received final payment information
from the department, if the issuer has notified the beneficiary of the requirements of this section at
the time it initially requests payment information from the department.
History: 2006 c 282 art 17 s 29

256B.0595 PROHIBITIONS ON TRANSFER; EXCEPTIONS.
    Subdivision 1. Prohibited transfers. (a) For transfers of assets made on or before August
10, 1993, if a person or the person's spouse has given away, sold, or disposed of, for less than
fair market value, any asset or interest therein, except assets other than the homestead that are
excluded under the supplemental security program, within 30 months before or any time after the
date of institutionalization if the person has been determined eligible for medical assistance, or
within 30 months before or any time after the date of the first approved application for medical
assistance if the person has not yet been determined eligible for medical assistance, the person is
ineligible for long-term care services for the period of time determined under subdivision 2.
(b) Effective for transfers made after August 10, 1993, a person, a person's spouse, or any
person, court, or administrative body with legal authority to act in place of, on behalf of, at
the direction of, or upon the request of the person or person's spouse, may not give away, sell,
or dispose of, for less than fair market value, any asset or interest therein, except assets other
than the homestead that are excluded under the supplemental security income program, for the
purpose of establishing or maintaining medical assistance eligibility. This applies to all transfers,
including those made by a community spouse after the month in which the institutionalized
spouse is determined eligible for medical assistance. For purposes of determining eligibility for
long-term care services, any transfer of such assets within 36 months before or any time after an
institutionalized person applies for medical assistance, or 36 months before or any time after a
medical assistance recipient becomes institutionalized, for less than fair market value may be
considered. Any such transfer is presumed to have been made for the purpose of establishing or
maintaining medical assistance eligibility and the person is ineligible for long-term care services
for the period of time determined under subdivision 2, unless the person furnishes convincing
evidence to establish that the transaction was exclusively for another purpose, or unless the
transfer is permitted under subdivision 3 or 4. In the case of payments from a trust or portions of a
trust that are considered transfers of assets under federal law, or in the case of any other disposal
of assets made on or after February 8, 2006, any transfers made within 60 months before or any
time after an institutionalized person applies for medical assistance and within 60 months before
or any time after a medical assistance recipient becomes institutionalized, may be considered.
(c) This section applies to transfers, for less than fair market value, of income or assets,
including assets that are considered income in the month received, such as inheritances, court
settlements, and retroactive benefit payments or income to which the person or the person's
spouse is entitled but does not receive due to action by the person, the person's spouse, or any
person, court, or administrative body with legal authority to act in place of, on behalf of, at the
direction of, or upon the request of the person or the person's spouse.
(d) This section applies to payments for care or personal services provided by a relative,
unless the compensation was stipulated in a notarized, written agreement which was in existence
when the service was performed, the care or services directly benefited the person, and the
payments made represented reasonable compensation for the care or services provided. A
notarized written agreement is not required if payment for the services was made within 60
days after the service was provided.
(e) This section applies to the portion of any asset or interest that a person, a person's
spouse, or any person, court, or administrative body with legal authority to act in place of, on
behalf of, at the direction of, or upon the request of the person or the person's spouse, transfers
to any annuity that exceeds the value of the benefit likely to be returned to the person or spouse
while alive, based on estimated life expectancy using the life expectancy tables employed by
the supplemental security income program to determine the value of an agreement for services
for life. The commissioner may adopt rules reducing life expectancies based on the need for
long-term care. This section applies to an annuity described in this paragraph purchased on or
after March 1, 2002, that:
(1) is not purchased from an insurance company or financial institution that is subject to
licensing or regulation by the Minnesota Department of Commerce or a similar regulatory agency
of another state;
(2) does not pay out principal and interest in equal monthly installments; or
(3) does not begin payment at the earliest possible date after annuitization.
(f) Effective for transactions, including the purchase of an annuity, occurring on or after
February 8, 2006, the purchase of an annuity by or on behalf of an individual who has applied for
or is receiving long-term care services or the individual's spouse shall be treated as the disposal
of an asset for less than fair market value unless the department is named as the remainder
beneficiary in first position for an amount equal to at least the total amount of medical assistance
paid on behalf of the individual or the individual's spouse; or the department is named as the
remainder beneficiary in second position for an amount equal to at least the total amount of
medical assistance paid on behalf of the individual or the individual's spouse after the individual's
community spouse or minor or disabled child and is named as the remainder beneficiary in the
first position if the community spouse or a representative of the minor or disabled child disposes
of the remainder for less than fair market value. Any subsequent change to the designation of
the department as a remainder beneficiary shall result in the annuity being treated as a disposal
of assets for less than fair market value. The amount of such transfer shall be the maximum
amount the individual or the individual's spouse could receive from the annuity or similar
financial instrument. Any change in the amount of the income or principal being withdrawn from
the annuity or other similar financial instrument at the time of the most recent disclosure shall
be deemed to be a transfer of assets for less than fair market value unless the individual or the
individual's spouse demonstrates that the transaction was for fair market value.
(g) Effective for transactions, including the purchase of an annuity, occurring on or after
February 8, 2006, the purchase of an annuity by or on behalf of an individual applying for
or receiving long-term care services shall be treated as a disposal of assets for less than fair
market value unless it is:
(i) an annuity described in subsection (b) or (q) of section 408 of the Internal Revenue
Code of 1986; or
(ii) purchased with proceeds from:
(A) an account or trust described in subsection (a), (c), or (p) of section 408 of the Internal
Revenue Code;
(B) a simplified employee pension within the meaning of section 408(k) of the Internal
Revenue Code; or
(C) a Roth IRA described in section 408A of the Internal Revenue Code; or
(iii) an annuity that is irrevocable and nonassignable; is actuarially sound as determined in
accordance with actuarial publications of the Office of the Chief Actuary of the Social Security
Administration; and provides for payments in equal amounts during the term of the annuity, with
no deferral and no balloon payments made.
(h) For purposes of this section, long-term care services include services in a nursing facility,
services that are eligible for payment according to section 256B.0625, subdivision 2, because they
are provided in a swing bed, intermediate care facility for persons with developmental disabilities,
and home and community-based services provided pursuant to sections 256B.0915, 256B.092,
and 256B.49. For purposes of this subdivision and subdivisions 2, 3, and 4, "institutionalized
person" includes a person who is an inpatient in a nursing facility or in a swing bed, or
intermediate care facility for persons with developmental disabilities or who is receiving home
and community-based services under sections 256B.0915, 256B.092, and 256B.49.
(i) This section applies to funds used to purchase a promissory note, loan, or mortgage
unless the note, loan, or mortgage:
(1) has a repayment term that is actuarially sound;
(2) provides for payments to be made in equal amounts during the term of the loan, with no
deferral and no balloon payments made; and
(3) prohibits the cancellation of the balance upon the death of the lender.
In the case of a promissory note, loan, or mortgage that does not meet an exception in clauses
(1) to (3), the value of such note, loan, or mortgage shall be the outstanding balance due as of the
date of the individual's application for long-term care services.
(j) This section applies to the purchase of a life estate interest in another individual's home
unless the purchaser resides in the home for a period of at least one year after the date of purchase.
    Subd. 1a.[Repealed, 2001 c 203 s 19]
    Subd. 1b. Prohibited transfers. (a) Notwithstanding any contrary provisions of this section,
this subdivision applies to transfers involving recipients of medical assistance that are made on or
after July 1, 2003, and to all transfers involving persons who apply for medical assistance on or
after July 1, 2003, if the transfer occurred within 72 months before the person applies for medical
assistance, except that this subdivision does not apply to transfers made prior to July 1, 2003. A
person, a person's spouse, or any person, court, or administrative body with legal authority to
act in place of, on behalf of, at the direction of, or upon the request of the person or the person's
spouse, may not give away, sell, dispose of, or reduce ownership or control of any income, asset,
or interest therein for less than fair market value for the purpose of establishing or maintaining
medical assistance eligibility. This applies to all transfers, including those made by a community
spouse after the month in which the institutionalized spouse is determined eligible for medical
assistance. For purposes of determining eligibility for medical assistance services, any transfer of
such income or assets for less than fair market value within 72 months before or any time after a
person applies for medical assistance may be considered. Any such transfer is presumed to have
been made for the purpose of establishing or maintaining medical assistance eligibility, and
the person is ineligible for medical assistance services for the period of time determined under
subdivision 2b, unless the person furnishes convincing evidence to establish that the transaction
was exclusively for another purpose or unless the transfer is permitted under subdivision 3b or 4b.
Convincing evidence of any one of the following facts shall establish that a gift that is a
charitable contribution to an organization described in section 170(c) of the Internal Revenue
Code of 1986, as amended, was made exclusively for a purpose other than establishing or
maintaining medical assistance eligibility, unless at the time of the gift the donor or donor's
spouse was receiving long-term care services, was advised by a medical professional of the need
for long-term care services, or was a medical assistance applicant or recipient:
(1) the donor made one or more gifts to the same donee organization more than 180 days
prior to the date of the gift in question; or
(2) the gift was made to an organization for which the donor had provided volunteer services,
acknowledged in writing by the organization, prior to the date of the gift.
A person may alternatively establish with other convincing evidence that a charitable gift was
made exclusively for a purpose other than establishing or maintaining medical assistance
eligibility.
(b) This section applies to transfers to trusts. The commissioner shall determine valid trust
purposes under this section. Assets placed into a trust that is not for a valid purpose shall always
be considered available for the purposes of medical assistance eligibility, regardless of when the
trust is established.
(c) This section applies to transfers of income or assets for less than fair market value,
including assets that are considered income in the month received, such as inheritances, court
settlements, and retroactive benefit payments or income to which the person or the person's
spouse is entitled but does not receive due to action by the person, the person's spouse, or any
person, court, or administrative body with legal authority to act in place of, on behalf of, at the
direction of, or upon the request of the person or the person's spouse.
(d) This section applies to payments for care or personal services provided by a relative,
unless the compensation was stipulated in a notarized written agreement that was in existence
when the service was performed, the care or services directly benefited the person, and the
payments made represented reasonable compensation for the care or services provided. A
notarized written agreement is not required if payment for the services was made within 60
days after the service was provided.
(e) This section applies to the portion of any income, asset, or interest therein that a person, a
person's spouse, or any person, court, or administrative body with legal authority to act in place of,
on behalf of, at the direction of, or upon the request of the person or the person's spouse, transfers
to any annuity that exceeds the value of the benefit likely to be returned to the person or the
person's spouse while alive, based on estimated life expectancy, using the life expectancy tables
employed by the supplemental security income program, or based on a shorter life expectancy if
the annuitant had a medical condition that would shorten the annuitant's life expectancy and that
was diagnosed before funds were placed into the annuity. The agency may request and receive a
physician's statement to determine if the annuitant had a diagnosed medical condition that would
shorten the annuitant's life expectancy. If so, the agency shall determine the expected value of the
benefits based upon the physician's statement instead of using a life expectancy table. This section
applies to an annuity described in this paragraph purchased on or after March 1, 2002, that:
(1) is not purchased from an insurance company or financial institution that is subject to
licensing or regulation by the Minnesota Department of Commerce or a similar regulatory agency
of another state;
(2) does not pay out principal and interest in equal monthly installments; or
(3) does not begin payment at the earliest possible date after annuitization.
(f) Transfers under this section shall affect determinations of eligibility for all medical
assistance services or long-term care services, whichever receives federal approval.
    Subd. 2. Period of ineligibility. (a) For any uncompensated transfer occurring on or before
August 10, 1993, the number of months of ineligibility for long-term care services shall be the
lesser of 30 months, or the uncompensated transfer amount divided by the average medical
assistance rate for nursing facility services in the state in effect on the date of application. The
amount used to calculate the average medical assistance payment rate shall be adjusted each
July 1 to reflect payment rates for the previous calendar year. The period of ineligibility begins
with the month in which the assets were transferred. If the transfer was not reported to the local
agency at the time of application, and the applicant received long-term care services during what
would have been the period of ineligibility if the transfer had been reported, a cause of action
exists against the transferee for the cost of long-term care services provided during the period of
ineligibility, or for the uncompensated amount of the transfer, whichever is less. The action may
be brought by the state or the local agency responsible for providing medical assistance under
chapter 256G. The uncompensated transfer amount is the fair market value of the asset at the time
it was given away, sold, or disposed of, less the amount of compensation received.
(b) For uncompensated transfers made after August 10, 1993, the number of months of
ineligibility for long-term care services shall be the total uncompensated value of the resources
transferred divided by the average medical assistance rate for nursing facility services in the state
in effect on the date of application. The amount used to calculate the average medical assistance
payment rate shall be adjusted each July 1 to reflect payment rates for the previous calendar year.
The period of ineligibility begins with the first day of the month after the month in which the
assets were transferred except that if one or more uncompensated transfers are made during a
period of ineligibility, the total assets transferred during the ineligibility period shall be combined
and a penalty period calculated to begin on the first day of the month after the month in which the
first uncompensated transfer was made. If the transfer was reported to the local agency after the
date that advance notice of a period of ineligibility that affects the next month could be provided
to the recipient and the recipient received medical assistance services or the transfer was not
reported to the local agency, and the applicant or recipient received medical assistance services
during what would have been the period of ineligibility if the transfer had been reported, a cause
of action exists against the transferee for the cost of medical assistance services provided during
the period of ineligibility, or for the uncompensated amount of the transfer, whichever is less.
The action may be brought by the state or the local agency responsible for providing medical
assistance under chapter 256G. The uncompensated transfer amount is the fair market value of
the asset at the time it was given away, sold, or disposed of, less the amount of compensation
received. Effective for transfers made on or after March 1, 1996, involving persons who apply for
medical assistance on or after April 13, 1996, no cause of action exists for a transfer unless:
(1) the transferee knew or should have known that the transfer was being made by a
person who was a resident of a long-term care facility or was receiving that level of care in the
community at the time of the transfer;
(2) the transferee knew or should have known that the transfer was being made to assist the
person to qualify for or retain medical assistance eligibility; or
(3) the transferee actively solicited the transfer with intent to assist the person to qualify
for or retain eligibility for medical assistance.
(c) For uncompensated transfers made on or after February 8, 2006, the period of ineligibility
begins on the first day of the month in which advance notice can be given following the month
in which assets have been transferred for less than fair market value, or the date on which the
individual is eligible for medical assistance under the Medicaid state plan and would otherwise
be receiving long-term care services based on an approved application for such care but for
the application of the penalty period, whichever is later, and which does not occur during any
other period of ineligibility.
(d) If a calculation of a penalty period results in a partial month, payments for long-term care
services shall be reduced in an amount equal to the fraction.
(e) In the case of multiple fractional transfers of assets in more than one month for less
than fair market value on or after February 8, 2006, the period of ineligibility is calculated by
treating the total, cumulative, uncompensated value of all assets transferred during all months
on or after February 8, 2006, as one transfer.
    Subd. 2a.[Repealed, 2001 c 203 s 19]
    Subd. 2b. Period of ineligibility. (a) Notwithstanding any contrary provisions of this section,
this subdivision applies to transfers, including transfers to trusts, involving recipients of medical
assistance that are made on or after July 1, 2003, and to all transfers involving persons who
apply for medical assistance on or after July 1, 2003, regardless of when the transfer occurred,
except that this subdivision does not apply to transfers made prior to July 1, 2003. For any
uncompensated transfer occurring within 72 months prior to the date of application, at any time
after application, or while eligible, the number of months of cumulative ineligibility for medical
assistance services shall be the total uncompensated value of the assets and income transferred
divided by the statewide average per-person nursing facility payment made by the state in effect
at the time a penalty for a transfer is determined. The amount used to calculate the average
per-person nursing facility payment shall be adjusted each July 1 to reflect average payments for
the previous calendar year. For applicants, the period of ineligibility begins with the month in
which the person applied for medical assistance and satisfied all other requirements for eligibility,
or the first month the local agency becomes aware of the transfer and can give proper notice, if
later. For recipients, the period of ineligibility begins in the first month after the month the agency
becomes aware of the transfer and can give proper notice, except that penalty periods for transfers
made during a period of ineligibility as determined under this section shall begin in the month
following the existing period of ineligibility. If the transfer was not reported to the local agency,
and the applicant received medical assistance services during what would have been the period
of ineligibility if the transfer had been reported, a cause of action exists against the transferee
for the cost of medical assistance services provided during the period of ineligibility or for the
uncompensated amount of the transfer that was not recovered from the transferor through the
implementation of a penalty period under this subdivision, whichever is less. Recovery shall
include the costs incurred due to the action. The action may be brought by the state or the local
agency responsible for providing medical assistance under this chapter. The total uncompensated
value is the fair market value of the income or asset at the time it was given away, sold, or disposed
of, less the amount of compensation received. No cause of action exists for a transfer unless:
(1) the transferee knew or should have known that the transfer was being made by a
person who was a resident of a long-term care facility or was receiving that level of care in the
community at the time of the transfer;
(2) the transferee knew or should have known that the transfer was being made to assist the
person to qualify for or retain medical assistance eligibility; or
(3) the transferee actively solicited the transfer with intent to assist the person to qualify
for or retain eligibility for medical assistance.
(b) If a calculation of a penalty period results in a partial month, payments for medical
assistance services shall be reduced in an amount equal to the fraction, except that in calculating
the value of uncompensated transfers, if the total value of all uncompensated transfers made in a
month not included in an existing penalty period does not exceed $200, then such transfers shall
be disregarded for each month prior to the month of application for or during receipt of medical
assistance.
(c) Ineligibility under this section shall apply to medical assistance services or long-term
care services, whichever receives federal approval.
    Subd. 3. Homestead exception to transfer prohibition. (a) An institutionalized person is
not ineligible for long-term care services due to a transfer of assets for less than fair market value
if the asset transferred was a homestead and:
(1) title to the homestead was transferred to the individual's:
(i) spouse;
(ii) child who is under age 21;
(iii) blind or permanently and totally disabled child as defined in the supplemental security
income program;
(iv) sibling who has equity interest in the home and who was residing in the home for a period
of at least one year immediately before the date of the individual's admission to the facility; or
(v) son or daughter who was residing in the individual's home for a period of at least two
years immediately before the date of the individual's admission to the facility, and who provided
care to the individual that, as certified by the individual's attending physician, permitted the
individual to reside at home rather than in an institution or facility;
(2) a satisfactory showing is made that the individual intended to dispose of the homestead at
fair market value or for other valuable consideration; or
(3) the local agency grants a waiver of a penalty resulting from a transfer for less than fair
market value because denial of eligibility would cause undue hardship for the individual, based
on imminent threat to the individual's health and well-being. Whenever an applicant or recipient
is denied eligibility because of a transfer for less than fair market value, the local agency shall
notify the applicant or recipient that the applicant or recipient may request a waiver of the penalty
if the denial of eligibility will cause undue hardship. With the written consent of the individual or
the personal representative of the individual, a long-term care facility in which an individual is
residing may file an undue hardship waiver request, on behalf of the individual who is denied
eligibility for long-term care services on or after July 1, 2006, due to a period of ineligibility
resulting from a transfer on or after February 8, 2006. In evaluating a waiver, the local agency
shall take into account whether the individual was the victim of financial exploitation, whether the
individual has made reasonable efforts to recover the transferred property or resource, and other
factors relevant to a determination of hardship. If the local agency does not approve a hardship
waiver, the local agency shall issue a written notice to the individual stating the reasons for the
denial and the process for appealing the local agency's decision.
(b) When a waiver is granted under paragraph (a), clause (3), a cause of action exists against
the person to whom the homestead was transferred for that portion of long-term care services
granted within:
(1) 30 months of a transfer made on or before August 10, 1993;
(2) 60 months if the homestead was transferred after August 10, 1993, to a trust or portion of
a trust that is considered a transfer of assets under federal law;
(3) 36 months if transferred in any other manner after August 10, 1993, but prior to February
8, 2006; or
(4) 60 months if the homestead was transferred on or after February 8, 2006,
or the amount of the uncompensated transfer, whichever is less, together with the costs incurred
due to the action. The action shall be brought by the state unless the state delegates this
responsibility to the local agency responsible for providing medical assistance under chapter
256G.
    Subd. 3a.[Repealed, 2001 c 203 s 19]
    Subd. 3b. Homestead exception to transfer prohibition. (a) This subdivision applies to
transfers involving recipients of medical assistance that are made on or after July 1, 2003, and
to all transfers involving persons who apply for medical assistance on or after July 1, 2003,
regardless of when the transfer occurred, except that this subdivision does not apply to transfers
made prior to July 1, 2003. A person is not ineligible for medical assistance services due to
a transfer of assets for less than fair market value as described in subdivision 1b, if the asset
transferred was a homestead, and:
(1) a satisfactory showing is made that the individual intended to dispose of the homestead at
fair market value or for other valuable consideration; or
(2) the local agency grants a waiver of a penalty resulting from a transfer for less than fair
market value because denial of eligibility would cause undue hardship for the individual and there
exists an imminent threat to the individual's health and well-being. Whenever an applicant or
recipient is denied eligibility because of a transfer for less than fair market value, the local agency
shall notify the applicant or recipient that the applicant or recipient may request a waiver of the
penalty if the denial of eligibility will cause undue hardship. In evaluating a waiver, the local
agency shall take into account whether the individual was the victim of financial exploitation,
whether the individual has made reasonable efforts to recover the transferred property or resource,
and other factors relevant to a determination of hardship. If the local agency does not approve a
hardship waiver, the local agency shall issue a written notice to the individual stating the reasons
for the denial and the process for appealing the local agency's decision.
(b) When a waiver is granted under paragraph (a), clause (2), a cause of action exists against
the person to whom the homestead was transferred for that portion of medical assistance services
granted within 72 months of the date the transferor applied for medical assistance and satisfied
all other requirements for eligibility or the amount of the uncompensated transfer, whichever is
less, together with the costs incurred due to the action. The action shall be brought by the state
unless the state delegates this responsibility to the local agency responsible for providing medical
assistance under this chapter.
    Subd. 4. Other exceptions to transfer prohibition. An institutionalized person who has
made, or whose spouse has made a transfer prohibited by subdivision 1, is not ineligible for
long-term care services if one of the following conditions applies:
(1) the assets were transferred to the individual's spouse or to another for the sole benefit of
the spouse; or
(2) the institutionalized spouse, prior to being institutionalized, transferred assets to a spouse,
provided that the spouse to whom the assets were transferred does not then transfer those assets to
another person for less than fair market value. (At the time when one spouse is institutionalized,
assets must be allocated between the spouses as provided under section 256B.059); or
(3) the assets were transferred to the individual's child who is blind or permanently and
totally disabled as determined in the supplemental security income program; or
(4) a satisfactory showing is made that the individual intended to dispose of the assets either
at fair market value or for other valuable consideration; or
(5) the local agency determines that denial of eligibility for long-term care services would
work an undue hardship and grants a waiver of a penalty resulting from a transfer for less than fair
market value based on an imminent threat to the individual's health and well-being. Whenever an
applicant or recipient is denied eligibility because of a transfer for less than fair market value, the
local agency shall notify the applicant or recipient that the applicant or recipient may request a
waiver of the penalty if the denial of eligibility will cause undue hardship. With the written
consent of the individual or the personal representative of the individual, a long-term care facility
in which an individual is residing may file an undue hardship waiver request, on behalf of the
individual who is denied eligibility for long-term care services on or after July 1, 2006, due to
a period of ineligibility resulting from a transfer on or after February 8, 2006. In evaluating a
waiver, the local agency shall take into account whether the individual was the victim of financial
exploitation, whether the individual has made reasonable efforts to recover the transferred
property or resource, whether the individual has taken any action to prevent the designation
of the department as a remainder beneficiary on an annuity as described in section 256B.056,
subdivision 11, and other factors relevant to a determination of hardship. If the local agency does
not approve a hardship waiver, the local agency shall issue a written notice to the individual
stating the reasons for the denial and the process for appealing the local agency's decision. When
a waiver is granted, a cause of action exists against the person to whom the assets were transferred
for that portion of long-term care services granted within:
(i) 30 months of a transfer made on or before August 10, 1993;
(ii) 60 months of a transfer if the assets were transferred after August 30, 1993, to a trust or
portion of a trust that is considered a transfer of assets under federal law;
(iii) 36 months of a transfer if transferred in any other manner after August 10, 1993, but
prior to February 8, 2006; or
(iv) 60 months of any transfer made on or after February 8, 2006,
or the amount of the uncompensated transfer, whichever is less, together with the costs incurred
due to the action. The action shall be brought by the state unless the state delegates this
responsibility to the local agency responsible for providing medical assistance under this chapter;
or
(6) for transfers occurring after August 10, 1993, the assets were transferred by the person or
person's spouse: (i) into a trust established for the sole benefit of a son or daughter of any age who
is blind or disabled as defined by the Supplemental Security Income program; or (ii) into a trust
established for the sole benefit of an individual who is under 65 years of age who is disabled as
defined by the Supplemental Security Income program.
"For the sole benefit of" has the meaning found in section 256B.059, subdivision 1.
    Subd. 4a.[Repealed, 2001 c 203 s 19]
    Subd. 4b. Other exceptions to transfer prohibition. This subdivision applies to transfers
involving recipients of medical assistance that are made on or after July 1, 2003, and to all
transfers involving persons who apply for medical assistance on or after July 1, 2003, regardless
of when the transfer occurred, except that this subdivision does not apply to transfers made prior
to July 1, 2003. A person or a person's spouse who made a transfer prohibited by subdivision 1b is
not ineligible for medical assistance services if one of the following conditions applies:
(1) the assets or income were transferred to the individual's spouse or to another for the sole
benefit of the spouse, except that after eligibility is established and the assets have been divided
between the spouses as part of the asset allowance under section 256B.059, no further transfers
between spouses may be made;
(2) the institutionalized spouse, prior to being institutionalized, transferred assets or income
to a spouse, provided that the spouse to whom the assets or income were transferred does not
then transfer those assets or income to another person for less than fair market value. At the time
when one spouse is institutionalized, assets must be allocated between the spouses as provided
under section 256B.059;
(3) the assets or income were transferred to a trust for the sole benefit of the individual's
child who is blind or permanently and totally disabled as determined in the supplemental security
income program and the trust reverts to the state upon the disabled child's death to the extent the
medical assistance has paid for services for the grantor or beneficiary of the trust. This clause
applies to a trust established after the commissioner publishes a notice in the State Register that
the commissioner has been authorized to implement this clause due to a change in federal law
or the approval of a federal waiver;
(4) a satisfactory showing is made that the individual intended to dispose of the assets or
income either at fair market value or for other valuable consideration; or
(5) the local agency determines that denial of eligibility for medical assistance services
would cause undue hardship and grants a waiver of a penalty resulting from a transfer for less
than fair market value because there exists an imminent threat to the individual's health and
well-being. Whenever an applicant or recipient is denied eligibility because of a transfer for less
than fair market value, the local agency shall notify the applicant or recipient that the applicant or
recipient may request a waiver of the penalty if the denial of eligibility will cause undue hardship.
In evaluating a waiver, the local agency shall take into account whether the individual was the
victim of financial exploitation, whether the individual has made reasonable efforts to recover the
transferred property or resource, and other factors relevant to a determination of hardship. If the
local agency does not approve a hardship waiver, the local agency shall issue a written notice to
the individual stating the reasons for the denial and the process for appealing the local agency's
decision. When a waiver is granted, a cause of action exists against the person to whom the
assets were transferred for that portion of medical assistance services granted within 72 months
of the date the transferor applied for medical assistance and satisfied all other requirements for
eligibility, or the amount of the uncompensated transfer, whichever is less, together with the costs
incurred due to the action. The action shall be brought by the state unless the state delegates this
responsibility to the local agency responsible for providing medical assistance under this chapter.
    Subd. 5. Notice of receipt of federal waiver. In every instance in which a federal waiver
that allows the implementation of a provision in this section is granted, the commissioner shall
publish notice of receipt of the waiver in the State Register.
    Subd. 6. No bad effect on realty conveyance, encumbrance. This section does not
invalidate or impair the effectiveness of a conveyance or encumbrance of real estate.
    Subd. 7. Notice of rights. If a period of ineligibility is imposed under subdivision 2 or 2a,
the local agency shall inform the applicant or recipient subject to the penalty of the person's
rights under section 325F.71, subdivision 2.
History: 1986 c 444; 1989 c 282 art 3 s 52; 1990 c 568 art 3 s 40-42; 1992 c 513 art 7 s
42; 1Sp1993 c 1 art 5 s 35; 1994 c 388 art 1 s 2; 1995 c 207 art 6 s 34-37; 1996 c 451 art 2 s
11-19,62; 2001 c 203 s 7,8,19; 2002 c 220 art 15 s 10-12; 1Sp2003 c 14 art 12 s 24-29; 2004 c
266 s 1; 2005 c 56 s 1; 2005 c 155 art 3 s 1; 2006 c 282 art 17 s 30-33

NOTE: The amendments to subdivisions 1, 2, 3, and 4, by Laws 1995, chapter 207, article
6, sections 34 to 37, are effective retroactive to August 11, 1993, except that portion amending
subdivision 2, paragraph (c), is effective retroactive to transfers of income or assets made on or
after September 1, 1994. Laws 1995, chapter 207, article 6, section 125, subdivision 2, and
Laws 1995, chapter 263, section 6.

NOTE: Subdivisions 1b, 2b, 3b, and 4b, as added by Laws 2003, First Special Session
chapter 14, article 12, sections 25, 27, 28, and 29, are effective July 1, 2003, to the extent
permitted by law. If any provision is prohibited by federal law, the provision shall become
effective when federal law is changed to permit its application or a waiver is received. The
commissioner of human services shall notify the revisor of statutes when federal law is enacted
or a waiver or other federal approval is received and publish a notice in the first State Register
published after the federal change is effective. Laws 2003, First Special Session chapter 14, article
12, sections 25, 27, 28, and 29, the effective dates.

NOTE: The amendment to subdivision 1b by Laws 2004, chapter 266, section 1, is effective
upon publication in the State Register of receipt of federal approval for the 72-month lookback
period described in paragraph (a). Laws 2004, chapter 266, section 1, the effective date.

256B.0596 MENTAL HEALTH CASE MANAGEMENT.
Counties shall contract with eligible providers willing to provide mental health case
management services under section 256B.0625, subdivision 20. In order to be eligible, in addition
to general provider requirements under this chapter, the provider must:
(1) be willing to provide the mental health case management services; and
(2) have a minimum of at least one contact with the client per week. This section is not
intended to limit the ability of a county to provide its own mental health case management
services.
History: 1Sp2003 c 2 art 5 s 6; 1Sp2003 c 14 art 12 s 30; 2004 c 288 art 3 s 22

256B.06 ELIGIBILITY; MIGRANT WORKERS; CITIZENSHIP.
    Subdivision 1.[Renumbered 256B.055, subdivision 1]
    Subd. 1a.[Renumbered 256B.055, subd 2]
    Subd. 1b.[Renumbered 256B.055, subd 3]
    Subd. 1c.[Renumbered 256B.055, subd 4]
    Subd. 1d.[Renumbered 256B.055, subd 5]
    Subd. 1e.[Renumbered 256B.055, subd 6]
    Subd. 1f.[Renumbered 256B.055, subd 7]
    Subd. 1g.[Renumbered 256B.055, subd 8]
    Subd. 1h.[Renumbered 256B.055, subd 9]
    Subd. 1i.[Renumbered 256B.055, subd 10]
    Subd. 1j.[Renumbered 256B.055, subd 11]
    Subd. 1k.[Renumbered 256B.056, subdivision 1]
    Subd. 1l.[Renumbered 256B.056, subd 2]
    Subd. 1m.[Renumbered 256B.056, subd 3]
    Subd. 1n.[Renumbered 256B.056, subd 4]
    Subd. 1o.[Renumbered 256B.056, subd 5]
    Subd. 1p.[Renumbered 256B.056, subd 6]
    Subd. 1q.[Renumbered 256B.055, subd 12]
    Subd. 1r.[Renumbered 256B.056, subd 7]
    Subd. 2.[Repealed, 1974 c 525 s 3]
    Subd. 3. Migrant worker. Notwithstanding any law to the contrary, a migrant worker who
meets all of the eligibility requirements of this section except for having a permanent place of
abode in another state, shall be eligible for medical assistance and shall have medical needs met
by the county in which the worker resides at the time of making application.
    Subd. 4. Citizenship requirements. (a) Eligibility for medical assistance is limited to
citizens of the United States, qualified noncitizens as defined in this subdivision, and other
persons residing lawfully in the United States. Citizens or nationals of the United States must
cooperate in obtaining satisfactory documentary evidence of citizenship or nationality according
to the requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171.
(b) "Qualified noncitizen" means a person who meets one of the following immigration
criteria:
(1) admitted for lawful permanent residence according to United States Code, title 8;
(2) admitted to the United States as a refugee according to United States Code, title 8,
section 1157;
(3) granted asylum according to United States Code, title 8, section 1158;
(4) granted withholding of deportation according to United States Code, title 8, section
1253(h);
(5) paroled for a period of at least one year according to United States Code, title 8, section
1182(d)(5);
(6) granted conditional entrant status according to United States Code, title 8, section
1153(a)(7);
(7) determined to be a battered noncitizen by the United States Attorney General according
to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, title V of the
Omnibus Consolidated Appropriations Bill, Public Law 104-200;
(8) is a child of a noncitizen determined to be a battered noncitizen by the United States
Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act
of 1996, title V, of the Omnibus Consolidated Appropriations Bill, Public Law 104-200; or
(9) determined to be a Cuban or Haitian entrant as defined in section 501(e) of Public Law
96-422, the Refugee Education Assistance Act of 1980.
(c) All qualified noncitizens who were residing in the United States before August 22,
1996, who otherwise meet the eligibility requirements of this chapter, are eligible for medical
assistance with federal financial participation.
(d) All qualified noncitizens who entered the United States on or after August 22, 1996, and
who otherwise meet the eligibility requirements of this chapter, are eligible for medical assistance
with federal financial participation through November 30, 1996.
Beginning December 1, 1996, qualified noncitizens who entered the United States on or
after August 22, 1996, and who otherwise meet the eligibility requirements of this chapter are
eligible for medical assistance with federal participation for five years if they meet one of the
following criteria:
(i) refugees admitted to the United States according to United States Code, title 8, section
1157;
(ii) persons granted asylum according to United States Code, title 8, section 1158;
(iii) persons granted withholding of deportation according to United States Code, title 8,
section 1253(h);
(iv) veterans of the United States armed forces with an honorable discharge for a reason other
than noncitizen status, their spouses and unmarried minor dependent children; or
(v) persons on active duty in the United States armed forces, other than for training, their
spouses and unmarried minor dependent children.
Beginning December 1, 1996, qualified noncitizens who do not meet one of the criteria
in items (i) to (v) are eligible for medical assistance without federal financial participation as
described in paragraph (j).
(e) Noncitizens who are not qualified noncitizens as defined in paragraph (b), who are
lawfully residing in the United States and who otherwise meet the eligibility requirements of
this chapter, are eligible for medical assistance under clauses (1) to (3). These individuals must
cooperate with the Immigration and Naturalization Service to pursue any applicable immigration
status, including citizenship, that would qualify them for medical assistance with federal financial
participation.
(1) Persons who were medical assistance recipients on August 22, 1996, are eligible for
medical assistance with federal financial participation through December 31, 1996.
(2) Beginning January 1, 1997, persons described in clause (1) are eligible for medical
assistance without federal financial participation as described in paragraph (j).
(3) Beginning December 1, 1996, persons residing in the United States prior to August 22,
1996, who were not receiving medical assistance and persons who arrived on or after August
22, 1996, are eligible for medical assistance without federal financial participation as described
in paragraph (j).
(f) Nonimmigrants who otherwise meet the eligibility requirements of this chapter are
eligible for the benefits as provided in paragraphs (g) to (i). For purposes of this subdivision, a
"nonimmigrant" is a person in one of the classes listed in United States Code, title 8, section
1101(a)(15).
(g) Payment shall also be made for care and services that are furnished to noncitizens,
regardless of immigration status, who otherwise meet the eligibility requirements of this chapter,
if such care and services are necessary for the treatment of an emergency medical condition,
except for organ transplants and related care and services and routine prenatal care.
(h) For purposes of this subdivision, the term "emergency medical condition" means a
medical condition that meets the requirements of United States Code, title 42, section 1396b(v).
(i) Pregnant noncitizens who are undocumented, nonimmigrants, or eligible for medical
assistance as described in paragraph (j), and who are not covered by a group health plan or health
insurance coverage according to Code of Federal Regulations, title 42, section 457.310, and who
otherwise meet the eligibility requirements of this chapter, are eligible for medical assistance
through the period of pregnancy, including labor and delivery, to the extent federal funds are
available under title XXI of the Social Security Act, and the state children's health insurance
program, followed by 60 days postpartum without federal financial participation.
(j) Qualified noncitizens as described in paragraph (d), and all other noncitizens lawfully
residing in the United States as described in paragraph (e), who are ineligible for medical
assistance with federal financial participation and who otherwise meet the eligibility requirements
of chapter 256B and of this paragraph, are eligible for medical assistance without federal financial
participation. Qualified noncitizens as described in paragraph (d) are only eligible for medical
assistance without federal financial participation for five years from their date of entry into the
United States.
(k) Beginning October 1, 2003, persons who are receiving care and rehabilitation services
from a nonprofit center established to serve victims of torture and are otherwise ineligible
for medical assistance under this chapter are eligible for medical assistance without federal
financial participation. These individuals are eligible only for the period during which they are
receiving services from the center. Individuals eligible under this paragraph shall not be required
to participate in prepaid medical assistance.
    Subd. 5. Deeming of sponsor income and resources. When determining eligibility for
any federal or state funded medical assistance under this section, the income and resources of
all noncitizens shall be deemed to include their sponsors' income and resources as required
under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, title IV,
Public Law 104-193, sections 421 and 422, and subsequently set out in federal rules. This section
is effective May 1, 1997.
History: Ex1967 c 16 s 6; 1969 c 841 s 1; 1973 c 717 s 18; 1974 c 525 s 1,2; 1975 c 247 s
10; 1976 c 236 s 3; 1977 c 448 s 6; 1978 c 760 s 1; 1979 c 309 s 4; 1980 c 509 s 106; 1980 c 527
s 1; 1981 c 360 art 2 s 28; 1Sp1981 c 2 s 14; 3Sp1981 c 2 art 1 s 32; 3Sp1981 c 3 s 17; 1982 c
553 s 6; 1982 c 640 s 5; 1983 c 312 art 5 s 15; 1984 c 422 s 1; 1984 c 534 s 22; 1984 c 654 art 5
s 58; 1985 c 248 s 70; 1985 c 252 s 21; 1986 c 444; 1Sp1986 c 1 art 8 s 5; 1987 c 403 art 2 s
79,80; 1988 c 689 art 2 s 144,145,268; 1991 c 199 art 2 s 1; 1995 c 207 art 6 s 38; 1997 c 85
art 3 s 19,20; 1997 c 203 art 12 s 2; 1998 c 407 art 4 s 19; 1Sp2003 c 14 art 12 s 31; 2004 c
288 art 6 s 21; 1Sp2005 c 4 art 8 s 28; 2006 c 282 art 17 s 34

256B.061 ELIGIBILITY; RETROACTIVE EFFECT; RESTRICTIONS.
If any individual has been determined to be eligible for medical assistance, it will be made
available for care and services included under the plan and furnished in or after the third month
before the month in which the individual made application for such assistance, if such individual
was, or upon application would have been, eligible for medical assistance at the time the care and
services were furnished. The commissioner may limit, restrict, or suspend the eligibility of an
individual for up to one year upon that individual's conviction of a criminal offense related to
application for or receipt of medical assistance benefits.
History: 1973 c 717 s 3; 1983 c 312 art 5 s 16; 1986 c 444; 1999 c 245 art 4 s 36; 1Sp2003
c 14 art 12 s 32

256B.062 [Repealed, 1998 c 407 art 6 s 12,118]

256B.0621 COVERED SERVICES: TARGETED CASE MANAGEMENT SERVICES.
    Subdivision 1.[Repealed, 2002 c 375 art 2 s 56]
    Subd. 2. Targeted case management; definitions. For purposes of subdivisions 3 to 10, the
following terms have the meanings given them:
(1) "home care service recipients" means those individuals receiving the following services
under sections 256B.0651 to 256B.0656: skilled nursing visits, home health aide visits, private
duty nursing, personal care assistants, or therapies provided through a home health agency;
(2) "home care targeted case management" means the provision of targeted case management
services for the purpose of assisting home care service recipients to gain access to needed services
and supports so that they may remain in the community;
(3) "institutions" means hospitals, consistent with Code of Federal Regulations, title 42,
section 440.10; regional treatment center inpatient services, consistent with section 245.474;
nursing facilities; and intermediate care facilities for persons with developmental disabilities;
(4) "relocation targeted case management" includes the provision of both county targeted
case management and public or private vendor service coordination services for the purpose of
assisting recipients to gain access to needed services and supports if they choose to move from an
institution to the community. Relocation targeted case management may be provided during the
last 180 consecutive days of an eligible recipient's institutional stay; and
(5) "targeted case management" means case management services provided to help recipients
gain access to needed medical, social, educational, and other services and supports.
    Subd. 3. Eligibility. The following persons are eligible for relocation targeted case
management or home care targeted case management:
(1) medical assistance eligible persons residing in institutions who choose to move into the
community are eligible for relocation targeted case management services; and
(2) medical assistance eligible persons receiving home care services, who are not eligible
for any other medical assistance reimbursable case management service, are eligible for home
care targeted case management services beginning July 1, 2005.
    Subd. 4. Relocation targeted county case management provider qualifications. (a) A
relocation targeted county case management provider is an enrolled medical assistance provider
who is determined by the commissioner to have all of the following characteristics:
(1) the legal authority to provide public welfare under sections 393.01, subdivision 7; and
393.07; or a federally recognized Indian tribe;
(2) the demonstrated capacity and experience to provide the components of case management
to coordinate and link community resources needed by the eligible population;
(3) the administrative capacity and experience to serve the target population for whom it will
provide services and ensure quality of services under state and federal requirements;
(4) the legal authority to provide complete investigative and protective services under
section 626.556, subdivision 10; and child welfare and foster care services under section 393.07,
subdivisions 1 and 2 ; or a federally recognized Indian tribe;
(5) a financial management system that provides accurate documentation of services and
costs under state and federal requirements; and
(6) the capacity to document and maintain individual case records under state and federal
requirements.
(b) A provider of targeted case management under section 256B.0625, subdivision 20, may
be deemed a certified provider of relocation targeted case management.
(c) A relocation targeted county case management provider may subcontract with another
provider to deliver relocation targeted case management services. Subcontracted providers must
demonstrate the ability to provide the services outlined in subdivision 6, and have a procedure
in place that notifies the recipient and the recipient's legal representative of any conflict of
interest if the contracted targeted case management provider also provides, or will provide, the
recipient's services and supports. Counties must require that contracted providers must provide
information on all conflicts of interest and obtain the recipient's informed consent or provide the
recipient with alternatives.
    Subd. 5. Specific provider qualifications. Providers of home care targeted case management
and relocation service coordination must meet the qualifications under subdivision 4 for county
vendors or the qualifications and certification standards under paragraphs (a) and (b) for private
vendors.
(a) The commissioner must certify each provider of home care targeted case management
and relocation service coordination before enrollment. The certification process shall examine
the provider's ability to meet the requirements in this subdivision and other state and federal
requirements of this service.
(b) Both home care targeted case management providers and relocation service coordination
providers are enrolled medical assistance providers who have a minimum of a bachelor's degree
or a license in a health or human services field, comparable training and two years of experience
in human services, or who have been credentialed by an American Indian tribe under section
256B.02, subdivision 7, and have been determined by the commissioner to have all of the
following characteristics:
(1) the demonstrated capacity and experience to provide the components of case management
to coordinate and link community resources needed by the eligible population;
(2) the administrative capacity and experience to serve the target population for whom it will
provide services and ensure quality of services under state and federal requirements;
(3) a financial management system that provides accurate documentation of services and
costs under state and federal requirements;
(4) the capacity to document and maintain individual case records under state and federal
requirements;
(5) the capacity to coordinate with county administrative functions;
(6) have no financial interest in the provision of out-of-home residential services to persons
for whom home care targeted case management or relocation service coordination is provided; and
(7) if a provider has a financial interest in services other than out-of-home residential
services provided to persons for whom home care targeted case management or relocation service
coordination is also provided, the county must determine each year that:
(i) any possible conflict of interest is explained annually at a face-to-face meeting and in
writing and the person provides written informed consent consistent with section 256B.77,
subdivision 2 , paragraph (p); and
(ii) information on a range of other feasible service provider options has been provided.
(c) The state of Minnesota, a county board, or agency acting on behalf of a county board
shall not be liable for damages, injuries, or liabilities sustained because of services provided to a
client by a private service coordination vendor.
    Subd. 6. Eligible services. (a) Services eligible for medical assistance reimbursement as
targeted case management include:
(1) assessment of the recipient's need for targeted case management services and for persons
choosing to relocate, the county must provide service coordination provider options at the first
contact and upon request;
(2) development, completion, and regular review of a written individual service plan, which
is based upon the assessment of the recipient's needs and choices, and which will ensure access to
medical, social, educational, and other related services and supports;
(3) routine contact or communication with the recipient, recipient's family, primary caregiver,
legal representative, substitute care provider, service providers, or other relevant persons identified
as necessary to the development or implementation of the goals of the individual service plan;
(4) coordinating referrals for, and the provision of, case management services for the recipient
with appropriate service providers, consistent with section 1902(a)(23) of the Social Security Act;
(5) coordinating and monitoring the overall service delivery and engaging in advocacy as
needed to ensure quality of services, appropriateness, and continued need;
(6) completing and maintaining necessary documentation that supports and verifies the
activities in this subdivision;
(7) assisting individuals in order to access needed services, including travel to conduct a
visit with the recipient or other relevant person necessary to develop or implement the goals
of the individual service plan; and
(8) coordinating with the institution discharge planner in the 180-day period before the
recipient's discharge.
(b) Relocation targeted county case management includes services under paragraph (a),
clauses (1), (2), and (4). Relocation service coordination includes services under paragraph (a),
clauses (3) and (5) to (8). Home care targeted case management includes services under paragraph
(a), clauses (1) to (8).
    Subd. 7. Time lines. The following time lines must be met for assigning a case manager:
(a) For relocation targeted case management, an eligible recipient must be assigned a county
case manager who visits the person within 20 working days of requesting a case manager from
their county of financial responsibility as determined under chapter 256G.
(1) If a county agency, its contractor, or federally recognized tribe does not provide case
management services as required, the recipient may obtain relocation service coordination from a
provider qualified under subdivision 5.
(2) The commissioner may waive the provider requirements in subdivision 4, paragraph
(a), clauses (1) and (4), to ensure recipient access to the assistance necessary to move from an
institution to the community. The recipient or the recipient's legal guardian shall provide written
notice to the county or tribe of the decision to obtain services from an alternative provider.
(3) Providers of relocation targeted case management enrolled under this subdivision shall:
(i) meet the provider requirements under subdivision 4 that are not waived by the
commissioner;
(ii) be qualified to provide the services specified in subdivision 6;
(iii) coordinate efforts with local social service agencies and tribes; and
(iv) comply with the conflict of interest provisions established under subdivision 4,
paragraph (c).
(4) Local social service agencies and federally recognized tribes shall cooperate with
providers certified by the commissioner under this subdivision to facilitate the recipient's
successful relocation from an institution to the community.
(b) For home care targeted case management, an eligible recipient must be assigned a case
manager within 20 working days of requesting a case manager from a home care targeted case
management provider, as defined in subdivision 5.
    Subd. 8. Evaluation. The commissioner shall evaluate the delivery of targeted case
management, including, but not limited to, access to case management services, consumer
satisfaction with case management services, and quality of case management services.
    Subd. 9. Contact documentation. The case manager must document each face-to-face and
telephone contact with the recipient and others involved in the recipient's individual service plan.
    Subd. 10. Payment rates. The commissioner shall set payment rates for targeted case
management under this subdivision. Case managers may bill according to the following criteria:
(1) for relocation targeted case management, case managers may bill for direct case
management activities, including face-to-face and telephone contacts, in the 180 days preceding
an eligible recipient's discharge from an institution;
(2) for home care targeted case management, case managers may bill for direct case
management activities, including face-to-face and telephone contacts; and
(3) billings for targeted case management services under this subdivision shall not duplicate
payments made under other program authorities for the same purpose.
    Subd. 11. Data use agreement; notice of relocation assistance. The commissioner shall
execute a data use agreement with the Centers for Medicare and Medicaid Services to obtain the
long-term care minimum data set data to assist residents of nursing facilities who have indicated a
desire to live in the community. The commissioner shall in turn enter into agreements with the
Centers for Independent Living to provide information about assistance for persons who want to
move to the community. The commissioner shall work with the Centers for Independent Living
on both the content of the information to be provided and privacy protections for the individual
residents.
History: 1Sp2001 c 9 art 2 s 39; art 3 s 20-28; 1Sp2003 c 14 art 3 s 17,18; 2005 c 56 s
1; 1Sp2005 c 4 art 7 s 6-12

256B.0622 INTENSIVE REHABILITATIVE MENTAL HEALTH SERVICES.
    Subdivision 1. Scope. Subject to federal approval, medical assistance covers medically
necessary, intensive nonresidential and residential rehabilitative mental health services as defined
in subdivision 2, for recipients as defined in subdivision 3, when the services are provided by an
entity meeting the standards in this section.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given them.
(a) "Intensive nonresidential rehabilitative mental health services" means adult rehabilitative
mental health services as defined in section 256B.0623, subdivision 2, paragraph (a), except that
these services are provided by a multidisciplinary staff using a total team approach consistent
with assertive community treatment, the Fairweather Lodge treatment model, as defined by the
standards established by the National Coalition for Community Living, and other evidence-based
practices, and directed to recipients with a serious mental illness who require intensive services.
(b) "Intensive residential rehabilitative mental health services" means short-term,
time-limited services provided in a residential setting to recipients who are in need of more
restrictive settings and are at risk of significant functional deterioration if they do not receive
these services. Services are designed to develop and enhance psychiatric stability, personal and
emotional adjustment, self-sufficiency, and skills to live in a more independent setting. Services
must be directed toward a targeted discharge date with specified client outcomes and must be
consistent with the Fairweather Lodge treatment model as defined in paragraph (a), and other
evidence-based practices.
(c) "Evidence-based practices" are nationally recognized mental health services that are
proven by substantial research to be effective in helping individuals with serious mental illness
obtain specific treatment goals.
(d) "Overnight staff" means a member of the intensive residential rehabilitative mental health
treatment team who is responsible during hours when recipients are typically asleep.
(e) "Treatment team" means all staff who provide services under this section to recipients.
At a minimum, this includes the clinical supervisor, mental health professionals, mental health
practitioners, and mental health rehabilitation workers.
    Subd. 3. Eligibility. An eligible recipient is an individual who:
(1) is age 18 or older;
(2) is eligible for medical assistance;
(3) is diagnosed with a mental illness;
(4) because of a mental illness, has substantial disability and functional impairment in
three or more of the areas listed in section 245.462, subdivision 11a, so that self-sufficiency
is markedly reduced;
(5) has one or more of the following: a history of two or more inpatient hospitalizations in
the past year, significant independent living instability, homelessness, or very frequent use of
mental health and related services yielding poor outcomes; and
(6) in the written opinion of a licensed mental health professional, has the need for mental
health services that cannot be met with other available community-based services, or is likely to
experience a mental health crisis or require a more restrictive setting if intensive rehabilitative
mental health services are not provided.
    Subd. 4. Provider certification and contract requirements. (a) The intensive nonresidential
rehabilitative mental health services provider must:
(1) have a contract with the host county to provide intensive adult rehabilitative mental
health services; and
(2) be certified by the commissioner as being in compliance with this section and section
256B.0623.
(b) The intensive residential rehabilitative mental health services provider must:
(1) be licensed under Minnesota Rules, parts 9520.0500 to 9520.0670;
(2) not exceed 16 beds per site;
(3) comply with the additional standards in this section; and
(4) have a contract with the host county to provide these services.
(c) The commissioner shall develop procedures for counties and providers to submit
contracts and other documentation as needed to allow the commissioner to determine whether
the standards in this section are met.
    Subd. 5. Standards applicable to both nonresidential and residential providers. (a)
Services must be provided by qualified staff as defined in section 256B.0623, subdivision 5, who
are trained and supervised according to section 256B.0623, subdivision 6, except that mental
health rehabilitation workers acting as overnight staff are not required to comply with section
256B.0623, subdivision 5, clause (3)(iv).
(b) The clinical supervisor must be an active member of the treatment team. The treatment
team must meet with the clinical supervisor at least weekly to discuss recipients' progress and make
rapid adjustments to meet recipients' needs. The team meeting shall include recipient-specific case
reviews and general treatment discussions among team members. Recipient-specific case reviews
and planning must be documented in the individual recipient's treatment record.
(c) Treatment staff must have prompt access in person or by telephone to a mental health
practitioner or mental health professional. The provider must have the capacity to promptly and
appropriately respond to emergent needs and make any necessary staffing adjustments to assure
the health and safety of recipients.
(d) The initial functional assessment must be completed within ten days of intake and
updated at least every three months or prior to discharge from the service, whichever comes first.
(e) The initial individual treatment plan must be completed within ten days of intake and
reviewed and updated at least monthly with the recipient.
    Subd. 6. Standards for intensive residential rehabilitative mental health services. (a) The
provider of intensive residential services must have sufficient staff to provide 24-hour-per-day
coverage to deliver the rehabilitative services described in the treatment plan and to safely
supervise and direct the activities of recipients given the recipient's level of behavioral and
psychiatric stability, cultural needs, and vulnerability. The provider must have the capacity within
the facility to provide integrated services for chemical dependency, illness management services,
and family education when appropriate.
(b) At a minimum:
(1) staff must be available and provide direction and supervision whenever recipients are
present in the facility;
(2) staff must remain awake during all work hours;
(3) there must be a staffing ratio of at least one to nine recipients for each day and evening
shift. If more than nine recipients are present at the residential site, there must be a minimum
of two staff during day and evening shifts, one of whom must be a mental health practitioner or
mental health professional;
(4) if services are provided to recipients who need the services of a medical professional, the
provider shall assure that these services are provided either by the provider's own medical staff or
through referral to a medical professional; and
(5) the provider must assure the timely availability of a licensed registered nurse, either
directly employed or under contract, who is responsible for ensuring the effectiveness and safety
of medication administration in the facility and assessing patients for medication side effects
and drug interactions.
    Subd. 7. Additional standards for nonresidential services. The standards in this
subdivision apply to intensive nonresidential rehabilitative mental health services.
(1) The treatment team must use team treatment, not an individual treatment model.
(2) The clinical supervisor must function as a practicing clinician at least on a part-time basis.
(3) The staffing ratio must not exceed ten recipients to one full-time equivalent treatment
team position.
(4) Services must be available at times that meet client needs.
(5) The treatment team must actively and assertively engage and reach out to the recipient's
family members and significant others, after obtaining the recipient's permission.
(6) The treatment team must establish ongoing communication and collaboration between
the team, family, and significant others and educate the family and significant others about mental
illness, symptom management, and the family's role in treatment.
(7) The treatment team must provide interventions to promote positive interpersonal
relationships.
    Subd. 8. Medical assistance payment for intensive rehabilitative mental health services.
(a) Payment for residential and nonresidential services in this section shall be based on one
daily rate per provider inclusive of the following services received by an eligible recipient in a
given calendar day: all rehabilitative services under this section, staff travel time to provide
rehabilitative services under this section, and nonresidential crisis stabilization services under
section 256B.0624.
(b) Except as indicated in paragraph (c), payment will not be made to more than one entity
for each recipient for services provided under this section on a given day. If services under this
section are provided by a team that includes staff from more than one entity, the team must
determine how to distribute the payment among the members.
(c) The host county shall recommend to the commissioner one rate for each entity that
will bill medical assistance for residential services under this section and two rates for each
nonresidential provider. The first nonresidential rate is for recipients who are not receiving
residential services. The second nonresidential rate is for recipients who are temporarily receiving
residential services and need continued contact with the nonresidential team to assure timely
discharge from residential services. In developing these rates, the host county shall consider
and document:
(1) the cost for similar services in the local trade area;
(2) actual costs incurred by entities providing the services;
(3) the intensity and frequency of services to be provided to each recipient;
(4) the degree to which recipients will receive services other than services under this section;
(5) the costs of other services that will be separately reimbursed; and
(6) input from the local planning process authorized by the adult mental health initiative
under section 245.4661, regarding recipients' service needs.
(d) The rate for intensive rehabilitative mental health services must exclude room and board,
as defined in section 256I.03, subdivision 6, and services not covered under this section, such
as partial hospitalization, home care, and inpatient services. Physician services that are not
separately billed may be included in the rate to the extent that a psychiatrist is a member of the
treatment team. The county's recommendation shall specify the period for which the rate will be
applicable, not to exceed two years.
(e) When services under this section are provided by an assertive community team, case
management functions must be an integral part of the team.
(f) The rate for a provider must not exceed the rate charged by that provider for the same
service to other payors.
(g) The commissioner shall approve or reject the county's rate recommendation, based on the
commissioner's own analysis of the criteria in paragraph (c).
    Subd. 9. Provider enrollment; rate setting for county-operated entities. Counties
that employ their own staff to provide services under this section shall apply directly to the
commissioner for enrollment and rate setting. In this case, a county contract is not required
and the commissioner shall perform the program review and rate setting duties which would
otherwise be required of counties under this section.
    Subd. 10. Provider enrollment; rate setting for specialized program. A provider
proposing to serve a subpopulation of eligible recipients may bypass the county approval
procedures in this section and receive approval for provider enrollment and rate setting directly
from the commissioner under the following circumstances:
(1) the provider demonstrates that the subpopulation to be served requires a specialized
program which is not available from county-approved entities; and
(2) the subpopulation to be served is of such a low incidence that it is not feasible to develop
a program serving a single county or regional group of counties.
For providers meeting the criteria in clauses (1) and (2), the commissioner shall perform
the program review and rate setting duties which would otherwise be required of counties under
this section.
History: 1Sp2003 c 14 art 3 s 19; 2004 c 288 art 3 s 23; 1Sp2005 c 4 art 2 s 7

256B.0623 ADULT REHABILITATIVE MENTAL HEALTH SERVICES COVERED.
    Subdivision 1. Scope. Medical assistance covers adult rehabilitative mental health services
as defined in subdivision 2, subject to federal approval, if provided to recipients as defined in
subdivision 3 and provided by a qualified provider entity meeting the standards in this section and
by a qualified individual provider working within the provider's scope of practice and identified
in the recipient's individual treatment plan as defined in section 245.462, subdivision 14, and if
determined to be medically necessary according to section 62Q.53.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given them.
(a) "Adult rehabilitative mental health services" means mental health services which are
rehabilitative and enable the recipient to develop and enhance psychiatric stability, social
competencies, personal and emotional adjustment, and independent living and community skills,
when these abilities are impaired by the symptoms of mental illness. Adult rehabilitative mental
health services are also appropriate when provided to enable a recipient to retain stability and
functioning, if the recipient would be at risk of significant functional decompensation or more
restrictive service settings without these services.
(1) Adult rehabilitative mental health services instruct, assist, and support the recipient in
areas such as: interpersonal communication skills, community resource utilization and integration
skills, crisis assistance, relapse prevention skills, health care directives, budgeting and shopping
skills, healthy lifestyle skills and practices, cooking and nutrition skills, transportation skills,
medication education and monitoring, mental illness symptom management skills, household
management skills, employment-related skills, and transition to community living services.
(2) These services shall be provided to the recipient on a one-to-one basis in the recipient's
home or another community setting or in groups.
(b) "Medication education services" means services provided individually or in groups
which focus on educating the recipient about mental illness and symptoms; the role and effects
of medications in treating symptoms of mental illness; and the side effects of medications.
Medication education is coordinated with medication management services and does not duplicate
it. Medication education services are provided by physicians, pharmacists, physician's assistants,
or registered nurses.
(c) "Transition to community living services" means services which maintain continuity
of contact between the rehabilitation services provider and the recipient and which facilitate
discharge from a hospital, residential treatment program under Minnesota Rules, chapter 9505,
board and lodging facility, or nursing home. Transition to community living services are not
intended to provide other areas of adult rehabilitative mental health services.
    Subd. 3. Eligibility. An eligible recipient is an individual who:
(1) is age 18 or older;
(2) is diagnosed with a medical condition, such as mental illness or traumatic brain injury,
for which adult rehabilitative mental health services are needed;
(3) has substantial disability and functional impairment in three or more of the areas listed in
section 245.462, subdivision 11a, so that self-sufficiency is markedly reduced; and
(4) has had a recent diagnostic assessment by a qualified professional that documents adult
rehabilitative mental health services are medically necessary to address identified disability and
functional impairments and individual recipient goals.
    Subd. 4. Provider entity standards. (a) The provider entity must be certified by the state
following the certification process and procedures developed by the commissioner.
(b) The certification process is a determination as to whether the entity meets the standards in
this subdivision. The certification must specify which adult rehabilitative mental health services
the entity is qualified to provide.
(c) A noncounty provider entity must obtain additional certification from each county in
which it will provide services. The additional certification must be based on the adequacy of the
entity's knowledge of that county's local health and human service system, and the ability of the
entity to coordinate its services with the other services available in that county. A county-operated
entity must obtain this additional certification from any other county in which it will provide
services.
(d) Recertification must occur at least every three years.
(e) The commissioner may intervene at any time and decertify providers with cause. The
decertification is subject to appeal to the state. A county board may recommend that the state
decertify a provider for cause.
(f) The adult rehabilitative mental health services provider entity must meet the following
standards:
(1) have capacity to recruit, hire, manage, and train mental health professionals, mental
health practitioners, and mental health rehabilitation workers;
(2) have adequate administrative ability to ensure availability of services;
(3) ensure adequate preservice and inservice and ongoing training for staff;
(4) ensure that mental health professionals, mental health practitioners, and mental health
rehabilitation workers are skilled in the delivery of the specific adult rehabilitative mental health
services provided to the individual eligible recipient;
(5) ensure that staff is capable of implementing culturally specific services that are culturally
competent and appropriate as determined by the recipient's culture, beliefs, values, and language
as identified in the individual treatment plan;
(6) ensure enough flexibility in service delivery to respond to the changing and intermittent
care needs of a recipient as identified by the recipient and the individual treatment plan;
(7) ensure that the mental health professional or mental health practitioner, who is under the
clinical supervision of a mental health professional, involved in a recipient's services participates
in the development of the individual treatment plan;
(8) assist the recipient in arranging needed crisis assessment, intervention, and stabilization
services;
(9) ensure that services are coordinated with other recipient mental health services
providers and the county mental health authority and the federally recognized American Indian
authority and necessary others after obtaining the consent of the recipient. Services must also be
coordinated with the recipient's case manager or care coordinator if the recipient is receiving case
management or care coordination services;
(10) develop and maintain recipient files, individual treatment plans, and contact charting;
(11) develop and maintain staff training and personnel files;
(12) submit information as required by the state;
(13) establish and maintain a quality assurance plan to evaluate the outcome of services
provided;
(14) keep all necessary records required by law;
(15) deliver services as required by section 245.461;
(16) comply with all applicable laws;
(17) be an enrolled Medicaid provider;
(18) maintain a quality assurance plan to determine specific service outcomes and the
recipient's satisfaction with services; and
(19) develop and maintain written policies and procedures regarding service provision and
administration of the provider entity.
    Subd. 5. Qualifications of provider staff. Adult rehabilitative mental health services must
be provided by qualified individual provider staff of a certified provider entity. Individual provider
staff must be qualified under one of the following criteria:
(1) a mental health professional as defined in section 245.462, subdivision 18, clauses (1) to
(5). If the recipient has a current diagnostic assessment by a licensed mental health professional
as defined in section 245.462, subdivision 18, clauses (1) to (5), recommending receipt of adult
mental health rehabilitative services, the definition of mental health professional for purposes of
this section includes a person who is qualified under section 245.462, subdivision 18, clause (6),
and who holds a current and valid national certification as a certified rehabilitation counselor or
certified psychosocial rehabilitation practitioner;
(2) a mental health practitioner as defined in section 245.462, subdivision 17. The mental
health practitioner must work under the clinical supervision of a mental health professional; or
(3) a mental health rehabilitation worker. A mental health rehabilitation worker means a staff
person working under the direction of a mental health practitioner or mental health professional
and under the clinical supervision of a mental health professional in the implementation of
rehabilitative mental health services as identified in the recipient's individual treatment plan who:
(i) is at least 21 years of age;
(ii) has a high school diploma or equivalent;
(iii) has successfully completed 30 hours of training during the past two years in all
of the following areas: recipient rights, recipient-centered individual treatment planning,
behavioral terminology, mental illness, co-occurring mental illness and substance abuse,
psychotropic medications and side effects, functional assessment, local community resources,
adult vulnerability, recipient confidentiality; and
(iv) meets the qualifications in subitem (A) or (B):
(A) has an associate of arts degree in one of the behavioral sciences or human services, or is
a registered nurse without a bachelor's degree, or who within the previous ten years has:
(1) three years of personal life experience with serious and persistent mental illness;
(2) three years of life experience as a primary caregiver to an adult with a serious mental
illness or traumatic brain injury; or
(3) 4,000 hours of supervised paid work experience in the delivery of mental health services
to adults with a serious mental illness or traumatic brain injury; or
(B)(1) is fluent in the non-English language or competent in the culture of the ethnic group to
which at least 20 percent of the mental health rehabilitation worker's clients belong;
(2) receives during the first 2,000 hours of work, monthly documented individual clinical
supervision by a mental health professional;
(3) has 18 hours of documented field supervision by a mental health professional or
practitioner during the first 160 hours of contact work with recipients, and at least six hours of
field supervision quarterly during the following year;
(4) has review and cosignature of charting of recipient contacts during field supervision by a
mental health professional or practitioner; and
(5) has 40 hours of additional continuing education on mental health topics during the
first year of employment.
    Subd. 6. Required training and supervision. (a) Mental health rehabilitation workers must
receive ongoing continuing education training of at least 30 hours every two years in areas of
mental illness and mental health services and other areas specific to the population being served.
Mental health rehabilitation workers must also be subject to the ongoing direction and clinical
supervision standards in paragraphs (c) and (d).
(b) Mental health practitioners must receive ongoing continuing education training as
required by their professional license; or if the practitioner is not licensed, the practitioner must
receive ongoing continuing education training of at least 30 hours every two years in areas of
mental illness and mental health services. Mental health practitioners must meet the ongoing
clinical supervision standards in paragraph (c).
(c) Clinical supervision may be provided by a full- or part-time qualified professional
employed by or under contract with the provider entity. Clinical supervision may be provided by
interactive videoconferencing according to procedures developed by the commissioner. A mental
health professional providing clinical supervision of staff delivering adult rehabilitative mental
health services must provide the following guidance:
(1) review the information in the recipient's file;
(2) review and approve initial and updates of individual treatment plans;
(3) meet with mental health rehabilitation workers and practitioners, individually or in small
groups, at least monthly to discuss treatment topics of interest to the workers and practitioners;
(4) meet with mental health rehabilitation workers and practitioners, individually or in small
groups, at least monthly to discuss treatment plans of recipients, and approve by signature and
document in the recipient's file any resulting plan updates;
(5) meet at least monthly with the directing mental health practitioner, if there is one, to
review needs of the adult rehabilitative mental health services program, review staff on-site
observations and evaluate mental health rehabilitation workers, plan staff training, review
program evaluation and development, and consult with the directing practitioner; and
(6) be available for urgent consultation as the individual recipient needs or the situation
necessitates.
(d) An adult rehabilitative mental health services provider entity must have a treatment
director who is a mental health practitioner or mental health professional. The treatment director
must ensure the following:
(1) while delivering direct services to recipients, a newly hired mental health rehabilitation
worker must be directly observed delivering services to recipients by a mental health practitioner
or mental health professional for at least six hours per 40 hours worked during the first 160 hours
that the mental health rehabilitation worker works;
(2) the mental health rehabilitation worker must receive ongoing on-site direct service
observation by a mental health professional or mental health practitioner for at least six hours for
every six months of employment;
(3) progress notes are reviewed from on-site service observation prepared by the mental
health rehabilitation worker and mental health practitioner for accuracy and consistency with
actual recipient contact and the individual treatment plan and goals;
(4) immediate availability by phone or in person for consultation by a mental health
professional or a mental health practitioner to the mental health rehabilitation services worker
during service provision;
(5) oversee the identification of changes in individual recipient treatment strategies, revise
the plan, and communicate treatment instructions and methodologies as appropriate to ensure that
treatment is implemented correctly;
(6) model service practices which: respect the recipient, include the recipient in planning and
implementation of the individual treatment plan, recognize the recipient's strengths, collaborate
and coordinate with other involved parties and providers;
(7) ensure that mental health practitioners and mental health rehabilitation workers are able
to effectively communicate with the recipients, significant others, and providers; and
(8) oversee the record of the results of on-site observation and charting evaluation and
corrective actions taken to modify the work of the mental health practitioners and mental health
rehabilitation workers.
(e) A mental health practitioner who is providing treatment direction for a provider entity
must receive supervision at least monthly from a mental health professional to:
(1) identify and plan for general needs of the recipient population served;
(2) identify and plan to address provider entity program needs and effectiveness;
(3) identify and plan provider entity staff training and personnel needs and issues; and
(4) plan, implement, and evaluate provider entity quality improvement programs.
    Subd. 7. Personnel file. The adult rehabilitative mental health services provider entity must
maintain a personnel file on each staff. Each file must contain:
(1) an annual performance review;
(2) a summary of on-site service observations and charting review;
(3) a criminal background check of all direct service staff;
(4) evidence of academic degree and qualifications;
(5) a copy of professional license;
(6) any job performance recognition and disciplinary actions;
(7) any individual staff written input into own personnel file;
(8) all clinical supervision provided; and
(9) documentation of compliance with continuing education requirements.
    Subd. 8. Diagnostic assessment. Providers of adult rehabilitative mental health services
must complete a diagnostic assessment as defined in section 245.462, subdivision 9, within five
days after the recipient's second visit or within 30 days after intake, whichever occurs first. In
cases where a diagnostic assessment is available that reflects the recipient's current status, and has
been completed within 180 days preceding admission, an update must be completed. An update
shall include a written summary by a mental health professional of the recipient's current mental
health status and service needs. If the recipient's mental health status has changed significantly
since the adult's most recent diagnostic assessment, a new diagnostic assessment is required.
For initial implementation of adult rehabilitative mental health services, until June 30, 2005, a
diagnostic assessment that reflects the recipient's current status and has been completed within the
past three years preceding admission is acceptable.
    Subd. 9. Functional assessment. Providers of adult rehabilitative mental health services
must complete a written functional assessment as defined in section 245.462, subdivision 11a,
for each recipient. The functional assessment must be completed within 30 days of intake, and
reviewed and updated at least every six months after it is developed, unless there is a significant
change in the functioning of the recipient. If there is a significant change in functioning, the
assessment must be updated. A single functional assessment can meet case management and
adult rehabilitative mental health services requirements if agreed to by the recipient. Unless
the recipient refuses, the recipient must have significant participation in the development of
the functional assessment.
    Subd. 10. Individual treatment plan. All providers of adult rehabilitative mental health
services must develop and implement an individual treatment plan for each recipient. The
provisions in clauses (1) and (2) apply:
(1) Individual treatment plan means a plan of intervention, treatment, and services for an
individual recipient written by a mental health professional or by a mental health practitioner
under the clinical supervision of a mental health professional. The individual treatment plan must
be based on diagnostic and functional assessments. To the extent possible, the development and
implementation of a treatment plan must be a collaborative process involving the recipient, and
with the permission of the recipient, the recipient's family and others in the recipient's support
system. Providers of adult rehabilitative mental health services must develop the individual
treatment plan within 30 calendar days of intake. The treatment plan must be updated at least
every six months thereafter, or more often when there is significant change in the recipient's
situation or functioning, or in services or service methods to be used, or at the request of the
recipient or the recipient's legal guardian.
(2) The individual treatment plan must include:
(i) a list of problems identified in the assessment;
(ii) the recipient's strengths and resources;
(iii) concrete, measurable goals to be achieved, including time frames for achievement;
(iv) specific objectives directed toward the achievement of each one of the goals;
(v) documentation of participants in the treatment planning. The recipient, if possible, must
be a participant. The recipient or the recipient's legal guardian must sign the treatment plan, or
documentation must be provided why this was not possible. A copy of the plan must be given to
the recipient or legal guardian. Referral to formal services must be arranged, including specific
providers where applicable;
(vi) cultural considerations, resources, and needs of the recipient must be included;
(vii) planned frequency and type of services must be initiated; and
(viii) clear progress notes on outcome of goals.
(3) The individual community support plan defined in section 245.462, subdivision 12, may
serve as the individual treatment plan if there is involvement of a mental health case manager,
and with the approval of the recipient. The individual community support plan must include the
criteria in clause (2).
    Subd. 11. Recipient file. Providers of adult rehabilitative mental health services must
maintain a file for each recipient that contains the following information:
(1) diagnostic assessment or verification of its location that is current and that was reviewed
by a mental health professional who is employed by or under contract with the provider entity;
(2) functional assessments;
(3) individual treatment plans signed by the recipient and the mental health professional, or
if the recipient refused to sign the plan, the date and reason stated by the recipient as to why the
recipient would not sign the plan;
(4) recipient history;
(5) signed release forms;
(6) recipient health information and current medications;
(7) emergency contacts for the recipient;
(8) case records which document the date of service, the place of service delivery, signature of
the person providing the service, nature, extent and units of service, and place of service delivery;
(9) contacts, direct or by telephone, with recipient's family or others, other providers, or other
resources for service coordination;
(10) summary of recipient case reviews by staff; and
(11) written information by the recipient that the recipient requests be included in the file.
    Subd. 12. Additional requirements. (a) Providers of adult rehabilitative mental health
services must comply with the requirements relating to referrals for case management in section
245.467, subdivision 4.
(b) Adult rehabilitative mental health services are provided for most recipients in the
recipient's home and community. Services may also be provided at the home of a relative or
significant other, job site, psychosocial clubhouse, drop-in center, social setting, classroom, or
other places in the community. Except for "transition to community services," the place of service
does not include a regional treatment center, nursing home, residential treatment facility licensed
under Minnesota Rules, parts 9520.0500 to 9520.0670 (Rule 36), or an acute care hospital.
(c) Adult rehabilitative mental health services may be provided in group settings if
appropriate to each participating recipient's needs and treatment plan. A group is defined as two to
ten clients, at least one of whom is a recipient, who is concurrently receiving a service which is
identified in this section. The service and group must be specified in the recipient's treatment plan.
No more than two qualified staff may bill Medicaid for services provided to the same group of
recipients. If two adult rehabilitative mental health workers bill for recipients in the same group
session, they must each bill for different recipients.
    Subd. 13. Excluded services. The following services are excluded from reimbursement
as adult rehabilitative mental health services:
(1) recipient transportation services;
(2) a service provided and billed by a provider who is not enrolled to provide adult
rehabilitative mental health service;
(3) adult rehabilitative mental health services performed by volunteers;
(4) provider performance of household tasks, chores, or related activities, such as laundering
clothes, moving the recipient's household, housekeeping, and grocery shopping for the recipient;
(5) direct billing of time spent "on call" when not delivering services to recipients;
(6) activities which are primarily social or recreational in nature, rather than rehabilitative,
for the individual recipient, as determined by the individual's needs and treatment plan;
(7) job-specific skills services, such as on-the-job training;
(8) provider service time included in case management reimbursement;
(9) outreach services to potential recipients;
(10) a mental health service that is not medically necessary; and
(11) any services provided by a hospital, board and lodging, or residential facility to an
individual who is a patient in or resident of that facility.
    Subd. 14. Billing when services are provided by qualified state staff. When rehabilitative
services are provided by qualified state staff who are assigned to pilot projects under section
245.4661, the county or other local entity to which the qualified state staff are assigned may
consider these staff part of the local provider entity for which certification is sought under this
section and may bill the medical assistance program for qualifying services provided by the
qualified state staff. Payments for services provided by state staff who are assigned to adult
mental health initiatives shall only be made from federal funds.
History: 1Sp2001 c 9 art 9 s 39; 2002 c 277 s 11; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art
3 s 20-24

256B.0624 ADULT CRISIS RESPONSE SERVICES COVERED.
    Subdivision 1. Scope. Medical assistance covers adult mental health crisis response services
as defined in subdivision 2, paragraphs (c) to (e), subject to federal approval, if provided to a
recipient as defined in subdivision 3 and provided by a qualified provider entity as defined in this
section and by a qualified individual provider working within the provider's scope of practice and
as defined in this subdivision and identified in the recipient's individual crisis treatment plan as
defined in subdivision 11 and if determined to be medically necessary.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given them.
(a) "Mental health crisis" is an adult behavioral, emotional, or psychiatric situation which, but
for the provision of crisis response services, would likely result in significantly reduced levels of
functioning in primary activities of daily living, or in an emergency situation, or in the placement
of the recipient in a more restrictive setting, including, but not limited to, inpatient hospitalization.
(b) "Mental health emergency" is an adult behavioral, emotional, or psychiatric situation
which causes an immediate need for mental health services and is consistent with section 62Q.55.
A mental health crisis or emergency is determined for medical assistance service
reimbursement by a physician, a mental health professional, or crisis mental health practitioner
with input from the recipient whenever possible.
(c) "Mental health crisis assessment" means an immediate face-to-face assessment by
a physician, a mental health professional, or mental health practitioner under the clinical
supervision of a mental health professional, following a screening that suggests that the adult may
be experiencing a mental health crisis or mental health emergency situation.
(d) "Mental health mobile crisis intervention services" means face-to-face, short-term
intensive mental health services initiated during a mental health crisis or mental health emergency
to help the recipient cope with immediate stressors, identify and utilize available resources and
strengths, and begin to return to the recipient's baseline level of functioning.
(1) This service is provided on-site by a mobile crisis intervention team outside of an
inpatient hospital setting. Mental health mobile crisis intervention services must be available
24 hours a day, seven days a week.
(2) The initial screening must consider other available services to determine which service
intervention would best address the recipient's needs and circumstances.
(3) The mobile crisis intervention team must be available to meet promptly face-to-face with
a person in mental health crisis or emergency in a community setting.
(4) The intervention must consist of a mental health crisis assessment and a crisis treatment
plan.
(5) The treatment plan must include recommendations for any needed crisis stabilization
services for the recipient.
(e) "Mental health crisis stabilization services" means individualized mental health services
provided to a recipient following crisis intervention services which are designed to restore the
recipient to the recipient's prior functional level. Mental health crisis stabilization services may be
provided in the recipient's home, the home of a family member or friend of the recipient, another
community setting, or a short-term supervised, licensed residential program. Mental health crisis
stabilization does not include partial hospitalization or day treatment.
    Subd. 3. Eligibility. An eligible recipient is an individual who:
(1) is age 18 or older;
(2) is screened as possibly experiencing a mental health crisis or emergency where a mental
health crisis assessment is needed; and
(3) is assessed as experiencing a mental health crisis or emergency, and mental health crisis
intervention or crisis intervention and stabilization services are determined to be medically
necessary.
    Subd. 4. Provider entity standards. (a) A provider entity is an entity that meets the
standards listed in paragraph (b) and:
(1) is a county board operated entity; or
(2) is a provider entity that is under contract with the county board in the county where the
potential crisis or emergency is occurring. To provide services under this section, the provider
entity must directly provide the services; or if services are subcontracted, the provider entity must
maintain responsibility for services and billing.
(b) The adult mental health crisis response services provider entity must meet the following
standards:
(1) has the capacity to recruit, hire, and manage and train mental health professionals,
practitioners, and rehabilitation workers;
(2) has adequate administrative ability to ensure availability of services;
(3) is able to ensure adequate preservice and in-service training;
(4) is able to ensure that staff providing these services are skilled in the delivery of mental
health crisis response services to recipients;
(5) is able to ensure that staff are capable of implementing culturally specific treatment
identified in the individual treatment plan that is meaningful and appropriate as determined by the
recipient's culture, beliefs, values, and language;
(6) is able to ensure enough flexibility to respond to the changing intervention and care needs
of a recipient as identified by the recipient during the service partnership between the recipient
and providers;
(7) is able to ensure that mental health professionals and mental health practitioners have
the communication tools and procedures to communicate and consult promptly about crisis
assessment and interventions as services occur;
(8) is able to coordinate these services with county emergency services and mental health
crisis services;
(9) is able to ensure that mental health crisis assessment and mobile crisis intervention
services are available 24 hours a day, seven days a week;
(10) is able to ensure that services are coordinated with other mental health service providers,
county mental health authorities, or federally recognized American Indian authorities and others
as necessary, with the consent of the adult. Services must also be coordinated with the recipient's
case manager if the adult is receiving case management services;
(11) is able to ensure that crisis intervention services are provided in a manner consistent
with sections 245.461 to 245.486;
(12) is able to submit information as required by the state;
(13) maintains staff training and personnel files;
(14) is able to establish and maintain a quality assurance and evaluation plan to evaluate the
outcomes of services and recipient satisfaction;
(15) is able to keep records as required by applicable laws;
(16) is able to comply with all applicable laws and statutes;
(17) is an enrolled medical assistance provider; and
(18) develops and maintains written policies and procedures regarding service provision and
administration of the provider entity, including safety of staff and recipients in high-risk situations.
    Subd. 4a. Alternative provider standards. If a county demonstrates that, due to geographic
or other barriers, it is not feasible to provide mobile crisis intervention services according to the
standards in subdivision 4, paragraph (b), clause (9), the commissioner may approve a crisis
response provider based on an alternative plan proposed by a county or group of counties. The
alternative plan must:
(1) result in increased access and a reduction in disparities in the availability of crisis services;
(2) provide mobile services outside of the usual nine-to-five office hours and on weekends
and holidays; and
(3) comply with standards for emergency mental health services in section 245.469.
    Subd. 5. Mobile crisis intervention staff qualifications. For provision of adult mental
health mobile crisis intervention services, a mobile crisis intervention team is comprised of at
least two mental health professionals as defined in section 245.462, subdivision 18, clauses (1) to
(5), or a combination of at least one mental health professional and one mental health practitioner
as defined in section 245.462, subdivision 17, with the required mental health crisis training and
under the clinical supervision of a mental health professional on the team. The team must have at
least two people with at least one member providing on-site crisis intervention services when
needed. Team members must be experienced in mental health assessment, crisis intervention
techniques, and clinical decision-making under emergency conditions and have knowledge of
local services and resources. The team must recommend and coordinate the team's services with
appropriate local resources such as the county social services agency, mental health services,
and local law enforcement when necessary.
    Subd. 6. Crisis assessment and mobile intervention treatment planning. (a) Prior to
initiating mobile crisis intervention services, a screening of the potential crisis situation must be
conducted. The screening may use the resources of crisis assistance and emergency services as
defined in sections 245.462, subdivision 6, and 245.469, subdivisions 1 and 2. The screening must
gather information, determine whether a crisis situation exists, identify parties involved, and
determine an appropriate response.
(b) If a crisis exists, a crisis assessment must be completed. A crisis assessment evaluates any
immediate needs for which emergency services are needed and, as time permits, the recipient's
current life situation, sources of stress, mental health problems and symptoms, strengths, cultural
considerations, support network, vulnerabilities, and current functioning.
(c) If the crisis assessment determines mobile crisis intervention services are needed, the
intervention services must be provided promptly. As opportunity presents during the intervention,
at least two members of the mobile crisis intervention team must confer directly or by telephone
about the assessment, treatment plan, and actions taken and needed. At least one of the team
members must be on site providing crisis intervention services. If providing on-site crisis
intervention services, a mental health practitioner must seek clinical supervision as required in
subdivision 9.
(d) The mobile crisis intervention team must develop an initial, brief crisis treatment plan
as soon as appropriate but no later than 24 hours after the initial face-to-face intervention. The
plan must address the needs and problems noted in the crisis assessment and include measurable
short-term goals, cultural considerations, and frequency and type of services to be provided to
achieve the goals and reduce or eliminate the crisis. The treatment plan must be updated as
needed to reflect current goals and services.
(e) The team must document which short-term goals have been met and when no further
crisis intervention services are required.
(f) If the recipient's crisis is stabilized, but the recipient needs a referral to other services,
the team must provide referrals to these services. If the recipient has a case manager, planning
for other services must be coordinated with the case manager.
    Subd. 7. Crisis stabilization services. (a) Crisis stabilization services must be provided
by qualified staff of a crisis stabilization services provider entity and must meet the following
standards:
(1) a crisis stabilization treatment plan must be developed which meets the criteria in
subdivision 11;
(2) staff must be qualified as defined in subdivision 8; and
(3) services must be delivered according to the treatment plan and include face-to-face
contact with the recipient by qualified staff for further assessment, help with referrals, updating of
the crisis stabilization treatment plan, supportive counseling, skills training, and collaboration
with other service providers in the community.
(b) If crisis stabilization services are provided in a supervised, licensed residential setting,
the recipient must be contacted face-to-face daily by a qualified mental health practitioner or
mental health professional. The program must have 24-hour-a-day residential staffing which may
include staff who do not meet the qualifications in subdivision 8. The residential staff must have
24-hour-a-day immediate direct or telephone access to a qualified mental health professional
or practitioner.
(c) If crisis stabilization services are provided in a supervised, licensed residential setting
that serves no more than four adult residents, and no more than two are recipients of crisis
stabilization services, the residential staff must include, for at least eight hours per day, at least
one individual who meets the qualifications in subdivision 8.
(d) If crisis stabilization services are provided in a supervised, licensed residential setting
that serves more than four adult residents, and one or more are recipients of crisis stabilization
services, the residential staff must include, for 24 hours a day, at least one individual who meets
the qualifications in subdivision 8. During the first 48 hours that a recipient is in the residential
program, the residential program must have at least two staff working 24 hours a day. Staffing
levels may be adjusted thereafter according to the needs of the recipient as specified in the crisis
stabilization treatment plan.
    Subd. 8. Adult crisis stabilization staff qualifications. (a) Adult mental health crisis
stabilization services must be provided by qualified individual staff of a qualified provider entity.
Individual provider staff must have the following qualifications:
(1) be a mental health professional as defined in section 245.462, subdivision 18, clauses
(1) to (5);
(2) be a mental health practitioner as defined in section 245.462, subdivision 17. The mental
health practitioner must work under the clinical supervision of a mental health professional; or
(3) be a mental health rehabilitation worker who meets the criteria in section 256B.0623,
subdivision 5 , clause (3); works under the direction of a mental health practitioner as defined in
section 245.462, subdivision 17, or under direction of a mental health professional; and works
under the clinical supervision of a mental health professional.
(b) Mental health practitioners and mental health rehabilitation workers must have completed
at least 30 hours of training in crisis intervention and stabilization during the past two years.
    Subd. 9. Supervision. Mental health practitioners may provide crisis assessment and mobile
crisis intervention services if the following clinical supervision requirements are met:
(1) the mental health provider entity must accept full responsibility for the services provided;
(2) the mental health professional of the provider entity, who is an employee or under
contract with the provider entity, must be immediately available by phone or in person for
clinical supervision;
(3) the mental health professional is consulted, in person or by phone, during the first three
hours when a mental health practitioner provides on-site service;
(4) the mental health professional must:
(i) review and approve of the tentative crisis assessment and crisis treatment plan;
(ii) document the consultation; and
(iii) sign the crisis assessment and treatment plan within the next business day;
(5) if the mobile crisis intervention services continue into a second calendar day, a mental
health professional must contact the recipient face-to-face on the second day to provide services
and update the crisis treatment plan; and
(6) the on-site observation must be documented in the recipient's record and signed by the
mental health professional.
    Subd. 10. Recipient file. Providers of mobile crisis intervention or crisis stabilization
services must maintain a file for each recipient containing the following information:
(1) individual crisis treatment plans signed by the recipient, mental health professional, and
mental health practitioner who developed the crisis treatment plan, or if the recipient refused to
sign the plan, the date and reason stated by the recipient as to why the recipient would not sign the
plan;
(2) signed release forms;
(3) recipient health information and current medications;
(4) emergency contacts for the recipient;
(5) case records which document the date of service, place of service delivery, signature of
the person providing the service, and the nature, extent, and units of service. Direct or telephone
contact with the recipient's family or others should be documented;
(6) required clinical supervision by mental health professionals;
(7) summary of the recipient's case reviews by staff; and
(8) any written information by the recipient that the recipient wants in the file.
Documentation in the file must comply with all requirements of the commissioner.
    Subd. 11. Treatment plan. The individual crisis stabilization treatment plan must include,
at a minimum:
(1) a list of problems identified in the assessment;
(2) a list of the recipient's strengths and resources;
(3) concrete, measurable short-term goals and tasks to be achieved, including time frames
for achievement;
(4) specific objectives directed toward the achievement of each one of the goals;
(5) documentation of the participants involved in the service planning. The recipient, if
possible, must be a participant. The recipient or the recipient's legal guardian must sign the
service plan or documentation must be provided why this was not possible. A copy of the plan
must be given to the recipient and the recipient's legal guardian. The plan should include services
arranged, including specific providers where applicable;
(6) planned frequency and type of services initiated;
(7) a crisis response action plan if a crisis should occur;
(8) clear progress notes on outcome of goals;
(9) a written plan must be completed within 24 hours of beginning services with the
recipient; and
(10) a treatment plan must be developed by a mental health professional or mental health
practitioner under the clinical supervision of a mental health professional. The mental health
professional must approve and sign all treatment plans.
    Subd. 12. Excluded services. The following services are excluded from reimbursement
under this section:
(1) room and board services;
(2) services delivered to a recipient while admitted to an inpatient hospital;
(3) recipient transportation costs may be covered under other medical assistance provisions,
but transportation services are not an adult mental health crisis response service;
(4) services provided and billed by a provider who is not enrolled under medical assistance
to provide adult mental health crisis response services;
(5) services performed by volunteers;
(6) direct billing of time spent "on call" when not delivering services to a recipient;
(7) provider service time included in case management reimbursement. When a provider is
eligible to provide more than one type of medical assistance service, the recipient must have a
choice of provider for each service, unless otherwise provided for by law;
(8) outreach services to potential recipients; and
(9) a mental health service that is not medically necessary.
History: 1Sp2001 c 9 art 9 s 40; 2002 c 379 art 1 s 113; 2005 c 165 art 1 s 3

256B.0625 COVERED SERVICES.
    Subdivision 1. Inpatient hospital services. Medical assistance covers inpatient hospital
services. A second medical opinion is required prior to reimbursement for elective surgeries
requiring a second opinion. The commissioner shall publish in the State Register a list of elective
surgeries that require a second medical opinion prior to reimbursement, and the criteria and
standards for deciding whether an elective surgery should require a second medical opinion. The
list and the criteria and standards are not subject to the requirements of sections 14.001 to 14.69.
The commissioner's decision whether a second medical opinion is required, made in accordance
with rules governing that decision, is not subject to administrative appeal.
    Subd. 1a. Services provided in a hospital emergency room. Medical assistance does
not cover visits to a hospital emergency room that are not for emergency and emergency
poststabilization care or urgent care, and does not pay for any services provided in a hospital
emergency room that are not for emergency and emergency poststabilization care or urgent care.
    Subd. 2. Skilled and intermediate nursing care. Medical assistance covers skilled nursing
home services and services of intermediate care facilities, including training and habilitation
services, as defined in section 252.41, subdivision 3, for persons with developmental disabilities
who are residing in intermediate care facilities for persons with developmental disabilities.
Medical assistance must not be used to pay the costs of nursing care provided to a patient in a
swing bed as defined in section 144.562, unless (a) the facility in which the swing bed is located
is eligible as a sole community provider, as defined in Code of Federal Regulations, title 42,
section 412.92, or the facility is a public hospital owned by a governmental entity with 15 or
fewer licensed acute care beds; (b) the Centers for Medicare and Medicaid Services approves
the necessary state plan amendments; (c) the patient was screened as provided by law; (d) the
patient no longer requires acute care services; and (e) no nursing home beds are available within
25 miles of the facility. The commissioner shall exempt a facility from compliance with the
sole community provider requirement in clause (a) if, as of January 1, 2004, the facility had an
agreement with the commissioner to provide medical assistance swing bed services. Medical
assistance also covers up to ten days of nursing care provided to a patient in a swing bed if: (1)
the patient's physician certifies that the patient has a terminal illness or condition that is likely to
result in death within 30 days and that moving the patient would not be in the best interests of the
patient and patient's family; (2) no open nursing home beds are available within 25 miles of the
facility; and (3) no open beds are available in any Medicare hospice program within 50 miles of
the facility. The daily medical assistance payment for nursing care for the patient in the swing bed
is the statewide average medical assistance skilled nursing care per diem as computed annually
by the commissioner on July 1 of each year.
    Subd. 2a. Skilled nursing facility and hospice services for dual eligibles. Medical
assistance covers skilled nursing facility services for individuals eligible for both medical
assistance and Medicare who have waived the Medicare skilled nursing facility room and board
benefit and have enrolled in the Medicare hospice program. Medical assistance covers skilled
nursing facility services regardless of whether an individual enrolled in the Medicare hospice
program prior to, on, or after the date of the hospitalization that qualified the individual for
Medicare skilled nursing facility services.
    Subd. 3. Physicians' services. Medical assistance covers physicians' services. Rates paid
for anesthesiology services provided by physicians shall be according to the formula utilized
in the Medicare program and shall use a conversion factor "at percentile of calendar year set
by legislature."
    Subd. 3a. Sex reassignment surgery. Sex reassignment surgery is not covered.
    Subd. 3b. Telemedicine consultations. Medical assistance covers telemedicine consultations.
Telemedicine consultations must be made via two-way, interactive video or store-and-forward
technology. Store-and-forward technology includes telemedicine consultations that do not occur
in real time via synchronous transmissions, and that do not require a face-to-face encounter with
the patient for all or any part of any such telemedicine consultation. The patient record must
include a written opinion from the consulting physician providing the telemedicine consultation.
A communication between two physicians that consists solely of a telephone conversation is not a
telemedicine consultation. Coverage is limited to three telemedicine consultations per recipient
per calendar week. Telemedicine consultations shall be paid at the full allowable rate.
    Subd. 3c. Health Services Policy Committee. The commissioner, after receiving
recommendations from professional physician associations, professional associations representing
licensed nonphysician health care professionals, and consumer groups, shall establish a
13-member Health Services Policy Committee, which consists of 12 voting members and one
nonvoting member. The Health Services Policy Committee shall advise the commissioner
regarding health services pertaining to the administration of health care benefits covered under the
medical assistance, general assistance medical care, and MinnesotaCare programs. The Health
Services Policy Committee shall meet at least quarterly. The Health Services Policy Committee
shall annually elect a physician chair from among its members, who shall work directly with the
commissioner's medical director, to establish the agenda for each meeting.
    Subd. 3d. Health Services Policy Committee members. The Health Services Policy
Committee consists of:
(1) seven voting members who are licensed physicians actively engaged in the practice
of medicine in Minnesota, one of whom must be actively engaged in the treatment of persons
with mental illness, and three of whom must represent health plans currently under contract to
serve medical assistance recipients;
(2) two voting members who are physician specialists actively practicing their specialty in
Minnesota;
(3) two voting members who are nonphysician health care professionals licensed or registered
in their profession and actively engaged in their practice of their profession in Minnesota;
(4) one consumer who shall serve as a voting member; and
(5) the commissioner's medical director who shall serve as a nonvoting member.
Members of the Health Services Policy Committee shall not be employed by the Department
of Human Services, except for the medical director.
    Subd. 3e. Health Services Policy Committee terms and compensation. Committee
members shall serve staggered three-year terms, with one-third of the voting members' terms
expiring annually. Members may be reappointed by the commissioner. The commissioner may
require more frequent Health Services Policy Committee meetings as needed. An honorarium of
$200 per meeting and reimbursement for mileage and parking shall be paid to each committee
member in attendance except the medical director. The Health Services Policy Committee does
not expire as provided in section 15.059, subdivision 6.
    Subd. 3f. Circumcision for newborns. Newborn circumcision is not covered, unless the
procedure is medically necessary or required because of a well-established religious practice.
    Subd. 4. Outpatient and physician-directed clinic services. Medical assistance covers
outpatient hospital or physician-directed clinic services. The physician-directed clinic staff shall
include at least two physicians and all services shall be provided under the direct supervision of a
physician. Hospital outpatient departments are subject to the same limitations and reimbursements
as other enrolled vendors for all services, except initial triage, emergency services, and services
not provided or immediately available in clinics, physicians' offices, or by other enrolled providers.
"Emergency services" means those medical services required for the immediate diagnosis and
treatment of medical conditions that, if not immediately diagnosed and treated, could lead to
serious physical or mental disability or death or are necessary to alleviate severe pain. Neither
the hospital, its employees, nor any physician or dentist, shall be liable in any action arising out
of a determination not to render emergency services or care if reasonable care is exercised in
determining the condition of the person, or in determining the appropriateness of the facilities, or
the qualifications and availability of personnel to render these services consistent with this section.
    Subd. 4a. Second medical opinion for surgery. Certain surgeries require a second medical
opinion to confirm the necessity of the procedure, in order for reimbursement to be made. The
commissioner shall publish in the State Register a list of surgeries that require a second medical
opinion and the criteria and standards for deciding whether a surgery should require a second
medical opinion. The list and the criteria and standards are not subject to the requirements of
sections 14.01 to 14.69. The commissioner's decision about whether a second medical opinion is
required, made according to rules governing that decision, is not subject to administrative appeal.
    Subd. 5. Community mental health center services. Medical assistance covers community
mental health center services provided by a community mental health center that meets the
requirements in paragraphs (a) to (j).
(a) The provider is licensed under Minnesota Rules, parts 9520.0750 to 9520.0870.
(b) The provider provides mental health services under the clinical supervision of a
mental health professional who is licensed for independent practice at the doctoral level or by
a board-certified psychiatrist or a psychiatrist who is eligible for board certification. Clinical
supervision has the meaning given in Minnesota Rules, part 9505.0323, subpart 1, item F.
(c) The provider must be a private nonprofit corporation or a governmental agency and have
a community board of directors as specified by section 245.66.
(d) The provider must have a sliding fee scale that meets the requirements in section
245.481, and agree to serve within the limits of its capacity all individuals residing in its service
delivery area.
(e) At a minimum, the provider must provide the following outpatient mental health services:
diagnostic assessment; explanation of findings; family, group, and individual psychotherapy,
including crisis intervention psychotherapy services, multiple family group psychotherapy,
psychological testing, and medication management. In addition, the provider must provide or be
capable of providing upon request of the local mental health authority day treatment services and
professional home-based mental health services. The provider must have the capacity to provide
such services to specialized populations such as the elderly, families with children, persons who
are seriously and persistently mentally ill, and children who are seriously emotionally disturbed.
(f) The provider must be capable of providing the services specified in paragraph (e) to
individuals who are diagnosed with both mental illness or emotional disturbance, and chemical
dependency, and to individuals dually diagnosed with a mental illness or emotional disturbance
and developmental disability.
(g) The provider must provide 24-hour emergency care services or demonstrate the capacity
to assist recipients in need of such services to access such services on a 24-hour basis.
(h) The provider must have a contract with the local mental health authority to provide one
or more of the services specified in paragraph (e).
(i) The provider must agree, upon request of the local mental health authority, to enter into a
contract with the county to provide mental health services not reimbursable under the medical
assistance program.
(j) The provider may not be enrolled with the medical assistance program as both a hospital
and a community mental health center. The community mental health center's administrative,
organizational, and financial structure must be separate and distinct from that of the hospital.
    Subd. 5a. Services for children with autism spectrum disorders. (a) Medical assistance
covers home-based intensive early intervention behavior therapy for children with autism
spectrum disorders, effective July 1, 2007. Children with autism spectrum disorder, and their
custodial parents or foster parents, may access other covered services to treat autism spectrum
disorder, and are not required to receive intensive early intervention behavior therapy services
under this subdivision.
(b) Intensive early intervention behavior therapy does not include coverage for services to
treat developmental disorders of language, early onset psychosis, Rett's disorder, selective mutism,
social anxiety disorder, stereotypic movement disorder, dementia, obsessive compulsive disorder,
schizoid personality disorder, avoidant personality disorder, or reactive attachment disorder.
(c) If a child with autism spectrum disorder is diagnosed to have one or more of these
conditions, intensive early intervention behavior therapy includes coverage only for services
necessary to treat the autism spectrum disorder.
    Subd. 5b. Purpose of intensive early intervention behavior therapy services (IEIBTS).
The purpose of IEIBTS is to improve the child's behavioral functioning, to prevent development
of challenging behaviors, to eliminate autistic behaviors, to reduce the risk of out-of-home
placement, and to establish independent typical functioning in language and social behavior. The
procedures used to accomplish these goals are based upon research in applied behavior analysis.
    Subd. 5c. Eligible children. A child is eligible to initiate IEIBTS if, the child meets the
additional eligibility criteria in paragraph (d) and in a diagnostic assessment by a mental health
professional who is not under the employ of the service provider, the child:
(1) is found to have an autism spectrum disorder;
(2) has a current IQ of either untestable, or at least 30;
(3) if nonverbal, initiated behavior therapy by 42 months of age;
(4) if verbal, initiated behavior therapy by 48 months of age; or
(5) if having an IQ of at least 50, initiated behavior therapy by 84 months of age.
To continue after six-month individualized treatment plan (ITP) reviews, at least one of the
child's custodial parents or foster parents must participate in an average of at least five hours of
documented behavior therapy per week for six months, and consistently implement behavior
therapy recommendations 24 hours a day. To continue after six-month individualized treatment
plan (ITP) reviews, the child must show documented progress toward mastery of six-month
benchmark behavior objectives. The maximum number of months during which services may be
billed is 54, or up to the month of August in the first year in which the child completes first grade,
whichever comes last. If significant progress towards treatment goals has not been achieved after
24 months of treatment, treatment must be discontinued.
    Subd. 5d. Additional eligibility criteria. A child is eligible to initiate IEIBTS if:
(1) in medical and diagnostic assessments by medical and mental health professionals, it is
determined that the child does not have severe or profound developmental disabilities;
(2) an accurate assessment of the child's hearing has been performed, including audiometry
if the brain stem auditory evokes response;
(3) a blood lead test has been performed prior to initiation of treatment; and
(4) an EEG or neurologic evaluation is done, prior to initiation of treatment, if the child has a
history of staring spells or developmental regression.
    Subd. 5e. Covered services. The focus of IEIBTS must be to treat the principal diagnostic
features of the autism spectrum disorder. All IEIBTS must be delivered by a team of practitioners
under the consistent supervision of a single clinical supervisor. A mental health professional must
develop the ITP for IEIBTS. The ITP must include six-month benchmark behavior objectives. All
behavior therapy must be based upon research in applied behavior analysis, with an emphasis
upon positive reinforcement of carefully task-analyzed skills for optimum rates of progress. All
behavior therapy must be consistently applied and generalized throughout the 24-hour day and
seven-day week by all of the child's regular care providers. When placing the child in school
activities, a majority of the peers must have no mental health diagnosis, and the child must have
sufficient social skills to succeed with 80 percent of the school activities. Reactive consequences,
such as redirection, correction, positive practice, or time-out, must be used only when necessary
to improve the child's success when proactive procedures alone have not been effective. IEIBTS
must be delivered by a team of behavior therapy practitioners who are employed under the
direction of the same agency. The team may deliver up to 200 billable hours per year of direct
clinical supervisor services, up to 700 billable hours per year of senior behavior therapist services,
and up to 1,800 billable hours per year of direct behavior therapist services. A one-hour clinical
review meeting for the child, parents, and staff must be scheduled 50 weeks a year, at which
behavior therapy is reviewed and planned. At least one-quarter of the annual clinical supervisor
billable hours shall consist of on-site clinical meeting time. At least one-half of the annual senior
behavior therapist billable hours shall consist of direct services to the child or parents. All of the
behavioral therapist billable hours shall consist of direct on-site services to the child or parents.
None of the senior behavior therapist billable hours or behavior therapist billable hours shall
consist of clinical meeting time. If there is any regression of the autistic spectrum disorder after
12 months of therapy, a neurologic consultation must be performed.
    Subd. 5f. Provider qualifications. The provider agency must be capable of delivering
consistent applied behavior analysis (ABA) based behavior therapy in the home. The site director
of the agency must be a mental health professional and a board certified behavior analyst certified
by the Behavior Analyst Certification Board. Each clinical supervisor must be a certified associate
behavior analyst certified by the Behavior Analyst Certification Board or have equivalent
experience in applied behavior analysis.
    Subd. 5g. Supervision requirements. (a) Each behavior therapist practitioner must be
continuously supervised while in the home until the practitioner has mastered competencies for
independent practice. Each behavior therapist must have mastered three credits of academic
content and practice in an applied behavior analysis sequence at an accredited university before
providing more than 12 months of therapy. A college degree or minimum hours of experience are
not required. Each behavior therapist must continue training through weekly direct observation by
the senior behavior therapist, through demonstrated performance in clinical meetings with the
clinical supervisor, and annual training in applied behavior analysis.
(b) Each senior behavior therapist practitioner must have mastered the senior behavior
therapy competencies, completed one year of practice as a behavior therapist, and six months
of co-therapy training with another senior behavior therapist or have an equivalent amount of
experience in applied behavior analysis. Each senior behavior therapist must have mastered 12
credits of academic content and practice in an applied behavior analysis sequence at an accredited
university before providing more than 12 months of senior behavior therapy. Each senior behavior
therapist must continue training through demonstrated performance in clinical meetings with the
clinical supervisor, and annual training in applied behavior analysis.
(c) Each clinical supervisor practitioner must have mastered the clinical supervisor and
family consultation competencies, completed two years of practice as a senior behavior therapist
and one year of co-therapy training with another clinical supervisor, or equivalent experience
in applied behavior analysis. Each clinical supervisor must continue training through annual
training in applied behavior analysis.
    Subd. 5h. Place of service. IEIBTS are provided primarily in the child's home and
community. Services may be provided in the child's natural school or preschool classroom, home
of a relative, natural recreational setting, or day care.
    Subd. 5i. Prior authorization requirements. Prior authorization shall be required for
services provided after 200 hours of clinical supervisor, 700 hours of senior behavior therapist, or
1,800 hours of behavior therapist services per year.
    Subd. 5j. Payment rates. The following payment rates apply:
(1) for an IEIBTS clinical supervisor practitioner under supervision of a mental health
professional, the lower of the submitted charge or $67 per hour unit;
(2) for an IEIBTS senior behavior therapist practitioner under supervision of a mental health
professional, the lower of the submitted charge or $37 per hour unit; or
(3) for an IEIBTS behavior therapist practitioner under supervision of a mental health
professional, the lower of the submitted charge or $27 per hour unit.
An IEIBTS practitioner may receive payment for travel time which exceeds 50 minutes one-way.
The maximum payment allowed will be $0.51 per minute for up to a maximum of 300 hours per
year.
For any week during which the above charges are made to medical assistance, payments
for the following services are excluded: supervising mental health professional hours and
personal care attendant, home-based mental health, family-community support, or mental health
behavioral aide hours.
    Subd. 5k. Report. The commissioner shall collect evidence of the effectiveness of intensive
early intervention behavior therapy services and present a report to the legislature by July 1, 2010.
    Subd. 6.[Repealed, 1991 c 292 art 7 s 26]
    Subd. 6a. Home health services. Home health services are those services specified in
Minnesota Rules, part 9505.0295. Medical assistance covers home health services at a recipient's
home residence. Medical assistance does not cover home health services for residents of a
hospital, nursing facility, or intermediate care facility, unless the commissioner of human services
has prior authorized skilled nurse visits for less than 90 days for a resident at an intermediate care
facility for persons with developmental disabilities, to prevent an admission to a hospital or
nursing facility or unless a resident who is otherwise eligible is on leave from the facility and
the facility either pays for the home health services or forgoes the facility per diem for the leave
days that home health services are used. Home health services must be provided by a Medicare
certified home health agency. All nursing and home health aide services must be provided
according to sections 256B.0651 to 256B.0656.
    Subd. 7. Private duty nursing. Medical assistance covers private duty nursing services in a
recipient's home. Recipients who are authorized to receive private duty nursing services in their
home may use approved hours outside of the home during hours when normal life activities
take them outside of their home. To use private duty nursing services at school, the recipient or
responsible party must provide written authorization in the care plan identifying the chosen
provider and the daily amount of services to be used at school. Medical assistance does not cover
private duty nursing services for residents of a hospital, nursing facility, intermediate care facility,
or a health care facility licensed by the commissioner of health, except as authorized in section
256B.64 for ventilator-dependent recipients in hospitals or unless a resident who is otherwise
eligible is on leave from the facility and the facility either pays for the private duty nursing
services or forgoes the facility per diem for the leave days that private duty nursing services are
used. Total hours of service and payment allowed for services outside the home cannot exceed that
which is otherwise allowed in an in-home setting according to sections 256B.0651 and 256B.0653
to 256B.0656. All private duty nursing services must be provided according to the limits
established under sections 256B.0651 and 256B.0653 to 256B.0656. Private duty nursing services
may not be reimbursed if the nurse is the foster care provider of a recipient who is under age 18.
    Subd. 8. Physical therapy. Medical assistance covers physical therapy and related services,
including specialized maintenance therapy. Services provided by a physical therapy assistant shall
be reimbursed at the same rate as services performed by a physical therapist when the services
of the physical therapy assistant are provided under the direction of a physical therapist who is
on the premises. Services provided by a physical therapy assistant that are provided under the
direction of a physical therapist who is not on the premises shall be reimbursed at 65 percent of
the physical therapist rate.
    Subd. 8a. Occupational therapy. Medical assistance covers occupational therapy and
related services, including specialized maintenance therapy. Services provided by an occupational
therapy assistant shall be reimbursed at the same rate as services performed by an occupational
therapist when the services of the occupational therapy assistant are provided under the direction
of the occupational therapist who is on the premises. Services provided by an occupational
therapy assistant that are provided under the direction of an occupational therapist who is not on
the premises shall be reimbursed at 65 percent of the occupational therapist rate.
    Subd. 8b. Speech language pathology and audiology services. Medical assistance covers
speech language pathology and related services, including specialized maintenance therapy.
Medical assistance covers audiology services and related services. Services provided by a person
who has been issued a temporary registration under section 148.5161 shall be reimbursed at the
same rate as services performed by a speech language pathologist or audiologist as long as the
requirements of section 148.5161, subdivision 3, are met.
    Subd. 8c. Care management; rehabilitation services. (a) Effective July 1, 1999, onetime
thresholds shall replace annual thresholds for provision of rehabilitation services described in
subdivisions 8, 8a, and 8b. The onetime thresholds will be the same in amount and description as
the thresholds prescribed by the Department of Human Services health care programs provider
manual for calendar year 1997, except they will not be renewed annually, and they will include
sensory skills and cognitive training skills.
(b) A care management approach for authorization of services beyond the threshold shall
be instituted in conjunction with the onetime thresholds. The care management approach shall
require the provider and the department rehabilitation reviewer to work together directly through
written communication, or telephone communication when appropriate, to establish a medically
necessary care management plan. Authorization for rehabilitation services shall include approval
for up to 12 months of services at a time without additional documentation from the provider
during the extended period, when the rehabilitation services are medically necessary due to an
ongoing health condition.
(c) The commissioner shall implement an expedited five-day turnaround time to review
authorization requests for recipients who need emergency rehabilitation services and who have
exhausted their onetime threshold limit for those services.
    Subd. 9. Dental services. Medical assistance covers dental services. Dental services
include, with prior authorization, fixed bridges that are cost-effective for persons who cannot use
removable dentures because of their medical condition.
    Subd. 10. Laboratory and x-ray services. Medical assistance covers laboratory and x-ray
services.
    Subd. 11. Nurse anesthetist services. Medical assistance covers nurse anesthetist services.
Rates paid for anesthesiology services provided by certified registered nurse anesthetists shall be
according to the formula utilized in the Medicare program and shall use the conversion factor that
is used by the Medicare program.
    Subd. 12. Eyeglasses, dentures, and prosthetic devices. Medical assistance covers
eyeglasses, dentures, and prosthetic devices if prescribed by a licensed practitioner.
    Subd. 13. Drugs. (a) Medical assistance covers drugs, except for fertility drugs when
specifically used to enhance fertility, if prescribed by a licensed practitioner and dispensed
by a licensed pharmacist, by a physician enrolled in the medical assistance program as a
dispensing physician, or by a physician or a nurse practitioner employed by or under contract
with a community health board as defined in section 145A.02, subdivision 5, for the purposes
of communicable disease control.
(b) The dispensed quantity of a prescription drug must not exceed a 34-day supply, unless
authorized by the commissioner.
(c) Medical assistance covers the following over-the-counter drugs when prescribed by
a licensed practitioner or by a licensed pharmacist who meets standards established by the
commissioner, in consultation with the board of pharmacy: antacids, acetaminophen, family
planning products, aspirin, insulin, products for the treatment of lice, vitamins for adults with
documented vitamin deficiencies, vitamins for children under the age of seven and pregnant
or nursing women, and any other over-the-counter drug identified by the commissioner, in
consultation with the formulary committee, as necessary, appropriate, and cost-effective
for the treatment of certain specified chronic diseases, conditions, or disorders, and this
determination shall not be subject to the requirements of chapter 14. A pharmacist may prescribe
over-the-counter medications as provided under this paragraph for purposes of receiving
reimbursement under Medicaid. When prescribing over-the-counter drugs under this paragraph,
licensed pharmacists must consult with the recipient to determine necessity, provide drug
counseling, review drug therapy for potential adverse interactions, and make referrals as needed
to other health care professionals.
(d) Effective January 1, 2006, medical assistance shall not cover drugs that are coverable
under Medicare Part D as defined in the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, section 1860D-2(e), for individuals eligible for
drug coverage as defined in the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, Public Law 108-173, section 1860D-1(a)(3)(A). For these individuals, medical
assistance may cover drugs from the drug classes listed in United States Code, title 42, section
1396r-8(d)(2), subject to this subdivision and subdivisions 13a to 13g, except that drugs listed in
United States Code, title 42, section 1396r-8(d)(2)(E), shall not be covered.
    Subd. 13a. Drug Utilization Review Board. The commissioner, after receiving
recommendations from professional medical associations, professional pharmacy associations,
and consumer groups shall designate a nine-member Drug Utilization Review Board. The board
shall be comprised of at least three but no more than four licensed physicians actively engaged in
the practice of medicine in Minnesota; at least three licensed pharmacists actively engaged in the
practice of pharmacy in Minnesota; and one consumer representative; the remainder to be made
up of health care professionals who are licensed in their field and have recognized knowledge
in the clinically appropriate prescribing, dispensing, and monitoring of covered outpatient
drugs. The board shall be staffed by an employee of the department who shall serve as an ex
officio nonvoting member of the board. The department's medical director shall also serve as an
ex officio, nonvoting member of the board. The members of the board shall be appointed by
the commissioner and shall serve three-year terms. The commissioner shall appoint the initial
members of the board for terms expiring as follows: three members for terms expiring June 30,
1996; three members for terms expiring June 30, 1997; and three members for terms expiring
June 30, 1998. Members may be reappointed by the commissioner. The board shall annually elect
a chair from among the members.
The commissioner shall, with the advice of the board:
(1) implement a medical assistance retrospective and prospective drug utilization review
program as required by United States Code, title 42, section 1396r-8(g)(3);
(2) develop and implement the predetermined criteria and practice parameters for appropriate
prescribing to be used in retrospective and prospective drug utilization review;
(3) develop, select, implement, and assess interventions for physicians, pharmacists, and
patients that are educational and not punitive in nature;
(4) establish a grievance and appeals process for physicians and pharmacists under this
section;
(5) publish and disseminate educational information to physicians and pharmacists regarding
the board and the review program;
(6) adopt and implement procedures designed to ensure the confidentiality of any information
collected, stored, retrieved, assessed, or analyzed by the board, staff to the board, or contractors to
the review program that identifies individual physicians, pharmacists, or recipients;
(7) establish and implement an ongoing process to (i) receive public comment regarding
drug utilization review criteria and standards, and (ii) consider the comments along with other
scientific and clinical information in order to revise criteria and standards on a timely basis; and
(8) adopt any rules necessary to carry out this section.
The board may establish advisory committees. The commissioner may contract with
appropriate organizations to assist the board in carrying out the board's duties. The commissioner
may enter into contracts for services to develop and implement a retrospective and prospective
review program.
The board shall report to the commissioner annually on the date the Drug Utilization Review
Annual Report is due to the Centers for Medicare and Medicaid Services. This report is to cover
the preceding federal fiscal year. The commissioner shall make the report available to the public
upon request. The report must include information on the activities of the board and the program;
the effectiveness of implemented interventions; administrative costs; and any fiscal impact
resulting from the program. An honorarium of $100 per meeting and reimbursement for mileage
shall be paid to each board member in attendance.
    Subd. 13b.[Repealed, 1997 c 203 art 4 s 73]
    Subd. 13c. Formulary committee. The commissioner, after receiving recommendations
from professional medical associations and professional pharmacy associations, and consumer
groups shall designate a Formulary Committee to carry out duties as described in subdivisions
13 to 13g. The Formulary Committee shall be comprised of four licensed physicians actively
engaged in the practice of medicine in Minnesota one of whom must be actively engaged in the
treatment of persons with mental illness; at least three licensed pharmacists actively engaged
in the practice of pharmacy in Minnesota; and one consumer representative; the remainder to
be made up of health care professionals who are licensed in their field and have recognized
knowledge in the clinically appropriate prescribing, dispensing, and monitoring of covered
outpatient drugs. Members of the Formulary Committee shall not be employed by the Department
of Human Services, but the committee shall be staffed by an employee of the department who
shall serve as an ex officio, nonvoting member of the board. The department's medical director
shall also serve as an ex officio, nonvoting member for the committee. Committee members shall
serve three-year terms and may be reappointed by the commissioner. The Formulary Committee
shall meet at least quarterly. The commissioner may require more frequent Formulary Committee
meetings as needed. An honorarium of $100 per meeting and reimbursement for mileage shall be
paid to each committee member in attendance.
    Subd. 13d. Drug formulary. The commissioner shall establish a drug formulary. Its
establishment and publication shall not be subject to the requirements of the Administrative
Procedure Act, but the Formulary Committee shall review and comment on the formulary
contents.
The formulary shall not include:
(1) drugs or products for which there is no federal funding;
(2) over-the-counter drugs, except as provided in subdivision 13;
(3) drugs used for weight loss, except that medically necessary lipase inhibitors may be
covered for a recipient with type II diabetes;
(4) drugs when used for the treatment of impotence or erectile dysfunction;
(5) drugs for which medical value has not been established; and
(6) drugs from manufacturers who have not signed a rebate agreement with the Department
of Health and Human Services pursuant to section 1927 of title XIX of the Social Security Act.
    Subd. 13e. Payment rates. (a) The basis for determining the amount of payment shall be
the lower of the actual acquisition costs of the drugs plus a fixed dispensing fee; the maximum
allowable cost set by the federal government or by the commissioner plus the fixed dispensing
fee; or the usual and customary price charged to the public. The amount of payment basis must be
reduced to reflect all discount amounts applied to the charge by any provider/insurer agreement
or contract for submitted charges to medical assistance programs. The net submitted charge
may not be greater than the patient liability for the service. The pharmacy dispensing fee shall
be $3.65, except that the dispensing fee for intravenous solutions which must be compounded
by the pharmacist shall be $8 per bag, $14 per bag for cancer chemotherapy products, and $30
per bag for total parenteral nutritional products dispensed in one liter quantities, or $44 per bag
for total parenteral nutritional products dispensed in quantities greater than one liter. Actual
acquisition cost includes quantity and other special discounts except time and cash discounts. The
actual acquisition cost of a drug shall be estimated by the commissioner, at average wholesale
price minus 12 percent. The actual acquisition cost of antihemophilic factor drugs shall be
estimated at the average wholesale price minus 30 percent. The maximum allowable cost of a
multisource drug may be set by the commissioner and it shall be comparable to, but no higher
than, the maximum amount paid by other third-party payors in this state who have maximum
allowable cost programs. Establishment of the amount of payment for drugs shall not be subject
to the requirements of the Administrative Procedure Act.
(b) An additional dispensing fee of $.30 may be added to the dispensing fee paid to
pharmacists for legend drug prescriptions dispensed to residents of long-term care facilities
when a unit dose blister card system, approved by the department, is used. Under this type of
dispensing system, the pharmacist must dispense a 30-day supply of drug. The National Drug
Code (NDC) from the drug container used to fill the blister card must be identified on the claim
to the department. The unit dose blister card containing the drug must meet the packaging
standards set forth in Minnesota Rules, part 6800.2700, that govern the return of unused drugs
to the pharmacy for reuse. The pharmacy provider will be required to credit the department
for the actual acquisition cost of all unused drugs that are eligible for reuse. Over-the-counter
medications must be dispensed in the manufacturer's unopened package. The commissioner may
permit the drug clozapine to be dispensed in a quantity that is less than a 30-day supply.
(c) Whenever a generically equivalent product is available, payment shall be on the basis of
the actual acquisition cost of the generic drug, or on the maximum allowable cost established
by the commissioner.
(d) The basis for determining the amount of payment for drugs administered in an outpatient
setting shall be the lower of the usual and customary cost submitted by the provider or the amount
established for Medicare by the United States Department of Health and Human Services pursuant
to title XVIII, section 1847a of the federal Social Security Act.
(e) The commissioner may negotiate lower reimbursement rates for specialty pharmacy
products than the rates specified in paragraph (a). The commissioner may require individuals
enrolled in the health care programs administered by the department to obtain specialty pharmacy
products from providers with whom the commissioner has negotiated lower reimbursement
rates. Specialty pharmacy products are defined as those used by a small number of recipients
or recipients with complex and chronic diseases that require expensive and challenging drug
regimens. Examples of these conditions include, but are not limited to: multiple sclerosis,
HIV/AIDS, transplantation, hepatitis C, growth hormone deficiency, Crohn's Disease, rheumatoid
arthritis, and certain forms of cancer. Specialty pharmaceutical products include injectable and
infusion therapies, biotechnology drugs, high-cost therapies, and therapies that require complex
care. The commissioner shall consult with the formulary committee to develop a list of specialty
pharmacy products subject to this paragraph. In consulting with the formulary committee in
developing this list, the commissioner shall take into consideration the population served by
specialty pharmacy products, the current delivery system and standard of care in the state, and
access to care issues. The commissioner shall have the discretion to adjust the reimbursement
rate to prevent access to care issues.
    Subd. 13f. Prior authorization. (a) The Formulary Committee shall review and recommend
drugs which require prior authorization. The Formulary Committee shall establish general criteria
to be used for the prior authorization of brand-name drugs for which generically equivalent drugs
are available, but the committee is not required to review each brand-name drug for which a
generically equivalent drug is available.
(b) Prior authorization may be required by the commissioner before certain formulary drugs
are eligible for payment. The Formulary Committee may recommend drugs for prior authorization
directly to the commissioner. The commissioner may also request that the Formulary Committee
review a drug for prior authorization. Before the commissioner may require prior authorization
for a drug:
(1) the commissioner must provide information to the Formulary Committee on the impact
that placing the drug on prior authorization may have on the quality of patient care and on
program costs, information regarding whether the drug is subject to clinical abuse or misuse, and
relevant data from the state Medicaid program if such data is available;
(2) the Formulary Committee must review the drug, taking into account medical and clinical
data and the information provided by the commissioner; and
(3) the Formulary Committee must hold a public forum and receive public comment for
an additional 15 days.
The commissioner must provide a 15-day notice period before implementing the prior
authorization.
(c) Prior authorization shall not be required or utilized for any atypical antipsychotic drug
prescribed for the treatment of mental illness if:
(1) there is no generically equivalent drug available; and
(2) the drug was initially prescribed for the recipient prior to July 1, 2003; or
(3) the drug is part of the recipient's current course of treatment.
This paragraph applies to any multistate preferred drug list or supplemental drug rebate program
established or administered by the commissioner. Prior authorization shall automatically be
granted for 60 days for brand name drugs prescribed for treatment of mental illness within 60
days of when a generically equivalent drug becomes available, provided that the brand name
drug was part of the recipient's course of treatment at the time the generically equivalent drug
became available.
(d) Prior authorization shall not be required or utilized for any antihemophilic factor drug
prescribed for the treatment of hemophilia and blood disorders where there is no generically
equivalent drug available if the prior authorization is used in conjunction with any supplemental
drug rebate program or multistate preferred drug list established or administered by the
commissioner.
(e) The commissioner may require prior authorization for brand name drugs whenever a
generically equivalent product is available, even if the prescriber specifically indicates "dispense
as written-brand necessary" on the prescription as required by section 151.21, subdivision 2.
(f) Notwithstanding this subdivision, the commissioner may automatically require prior
authorization, for a period not to exceed 180 days, for any drug that is approved by the United
States Food and Drug Administration on or after July 1, 2005. The 180-day period begins no
later than the first day that a drug is available for shipment to pharmacies within the state. The
Formulary Committee shall recommend to the commissioner general criteria to be used for the
prior authorization of the drugs, but the committee is not required to review each individual drug.
In order to continue prior authorizations for a drug after the 180-day period has expired, the
commissioner must follow the provisions of this subdivision.
    Subd. 13g. Preferred drug list. (a) The commissioner shall adopt and implement a preferred
drug list by January 1, 2004. The commissioner may enter into a contract with a vendor or one or
more states for the purpose of participating in a multistate preferred drug list and supplemental
rebate program. The commissioner shall ensure that any contract meets all federal requirements
and maximizes federal financial participation. The commissioner shall publish the preferred
drug list annually in the State Register and shall maintain an accurate and up-to-date list on
the agency Web site.
(b) The commissioner may add to, delete from, and otherwise modify the preferred drug list,
after consulting with the Formulary Committee and appropriate medical specialists and providing
public notice and the opportunity for public comment.
(c) The commissioner shall adopt and administer the preferred drug list as part of the
administration of the supplemental drug rebate program. Reimbursement for prescription drugs
not on the preferred drug list may be subject to prior authorization, unless the drug manufacturer
signs a supplemental rebate contract.
(d) For purposes of this subdivision, "preferred drug list" means a list of prescription drugs
within designated therapeutic classes selected by the commissioner, for which prior authorization
based on the identity of the drug or class is not required.
(e) The commissioner shall seek any federal waivers or approvals necessary to implement
this subdivision.
    Subd. 13h. Medication therapy management services. (a) Medical assistance and general
assistance medical care cover medication therapy management services for a recipient taking four
or more prescriptions to treat or prevent two or more chronic medical conditions, or a recipient
with a drug therapy problem that is identified or prior authorized by the commissioner that has
resulted or is likely to result in significant nondrug program costs. The commissioner may cover
medical therapy management services under MinnesotaCare if the commissioner determines this
is cost-effective. For purposes of this subdivision, "medication therapy management" means the
provision of the following pharmaceutical care services by a licensed pharmacist to optimize the
therapeutic outcomes of the patient's medications:
(1) performing or obtaining necessary assessments of the patient's health status;
(2) formulating a medication treatment plan;
(3) monitoring and evaluating the patient's response to therapy, including safety and
effectiveness;
(4) performing a comprehensive medication review to identify, resolve, and prevent
medication-related problems, including adverse drug events;
(5) documenting the care delivered and communicating essential information to the patient's
other primary care providers;
(6) providing verbal education and training designed to enhance patient understanding and
appropriate use of the patient's medications;
(7) providing information, support services, and resources designed to enhance patient
adherence with the patient's therapeutic regimens; and
(8) coordinating and integrating medication therapy management services within the broader
health care management services being provided to the patient.
Nothing in this subdivision shall be construed to expand or modify the scope of practice of the
pharmacist as defined in section 151.01, subdivision 27.
(b) To be eligible for reimbursement for services under this subdivision, a pharmacist must
meet the following requirements:
(1) have a valid license issued under chapter 151;
(2) have graduated from an accredited college of pharmacy on or after May 1996, or
completed a structured and comprehensive education program approved by the Board of Pharmacy
and the American Council of Pharmaceutical Education for the provision and documentation of
pharmaceutical care management services that has both clinical and didactic elements;
(3) be practicing in an ambulatory care setting as part of a multidisciplinary team or have
developed a structured patient care process that is offered in a private or semiprivate patient care
area that is separate from the commercial business that also occurs in the setting; and
(4) make use of an electronic patient record system that meets state standards.
(c) For purposes of reimbursement for medication therapy management services, the
commissioner may enroll individual pharmacists as medical assistance and general assistance
medical care providers. The commissioner may also establish contact requirements between
the pharmacist and recipient, including limiting the number of reimbursable consultations per
recipient.
(d) The commissioner, after receiving recommendations from professional medical
associations, professional pharmacy associations, and consumer groups, shall convene an
11-member Medication Therapy Management Advisory Committee to advise the commissioner
on the implementation and administration of medication therapy management services. The
committee shall be comprised of: two licensed physicians; two licensed pharmacists; two
consumer representatives; two health plan company representatives; and three members with
expertise in the area of medication therapy management, who may be licensed physicians or
licensed pharmacists. The committee is governed by section 15.059, except that committee
members do not receive compensation or reimbursement for expenses. The advisory committee
expires on June 30, 2007.
(e) The commissioner shall evaluate the effect of medication therapy management on quality
of care, patient outcomes, and program costs, and shall include a description of any savings
generated in the medical assistance and general assistance medical care programs that can be
attributable to this coverage. The evaluation shall be submitted to the legislature by December 15,
2007. The commissioner may contract with a vendor or an academic institution that has expertise
in evaluating health care outcomes for the purpose of completing the evaluation.
    Subd. 14. Diagnostic, screening, and preventive services. (a) Medical assistance covers
diagnostic, screening, and preventive services.
(b) "Preventive services" include services related to pregnancy, including:
(1) services for those conditions which may complicate a pregnancy and which may be
available to a pregnant woman determined to be at risk of poor pregnancy outcome;
(2) prenatal HIV risk assessment, education, counseling, and testing; and
(3) alcohol abuse assessment, education, and counseling on the effects of alcohol usage
while pregnant. Preventive services available to a woman at risk of poor pregnancy outcome
may differ in an amount, duration, or scope from those available to other individuals eligible
for medical assistance.
(c) "Screening services" include, but are not limited to, blood lead tests.
    Subd. 15. Health plan premiums and co-payments. (a) Medical assistance covers health
care prepayment plan premiums, insurance premiums, and co-payments if determined to be
cost-effective by the commissioner. For purposes of obtaining Medicare Part A and Part B, and
co-payments, expenditures may be made even if federal funding is not available.
(b) Effective for all premiums due on or after June 30, 1997, medical assistance does not
cover premiums that a recipient is required to pay under a qualified or Medicare supplement
plan issued by the Minnesota comprehensive health association. Medical assistance shall
continue to cover premiums for recipients who are covered under a plan issued by the Minnesota
Comprehensive Health Association on June 30, 1997, for a period of six months following receipt
of the notice of termination or until December 31, 1997, whichever is later.
    Subd. 16. Abortion services. Medical assistance covers abortion services, but only if one
of the following conditions is met:
(a) The abortion is a medical necessity. "Medical necessity" means (1) the signed written
statement of two physicians indicating the abortion is medically necessary to prevent the death of
the mother, and (2) the patient has given her consent to the abortion in writing unless the patient is
physically or legally incapable of providing informed consent to the procedure, in which case
consent will be given as otherwise provided by law;
(b) The pregnancy is the result of criminal sexual conduct as defined in section 609.342,
clauses (c), (d), (e)(i), and (f), and the incident is reported within 48 hours after the incident
occurs to a valid law enforcement agency for investigation, unless the victim is physically unable
to report the criminal sexual conduct, in which case the report shall be made within 48 hours after
the victim becomes physically able to report the criminal sexual conduct; or
(c) The pregnancy is the result of incest, but only if the incident and relative are reported to a
valid law enforcement agency for investigation prior to the abortion.
    Subd. 17. Transportation costs. (a) Medical assistance covers transportation costs incurred
solely for obtaining emergency medical care or transportation costs incurred by eligible persons
in obtaining emergency or nonemergency medical care when paid directly to an ambulance
company, common carrier, or other recognized providers of transportation services.
(b) Medical assistance covers special transportation, as defined in Minnesota Rules, part
9505.0315, subpart 1, item F, if the recipient has a physical or mental impairment that would
prohibit the recipient from safely accessing and using a bus, taxi, other commercial transportation,
or private automobile.
The commissioner may use an order by the recipient's attending physician to certify that the
recipient requires special transportation services. Special transportation includes driver-assisted
service to eligible individuals. Driver-assisted service includes passenger pickup at and return to
the individual's residence or place of business, assistance with admittance of the individual to the
medical facility, and assistance in passenger securement or in securing of wheelchairs or stretchers
in the vehicle. Special transportation providers must obtain written documentation from the health
care service provider who is serving the recipient being transported, identifying the time that the
recipient arrived. Special transportation providers may not bill for separate base rates for the
continuation of a trip beyond the original destination. Special transportation providers must take
recipients to the nearest appropriate health care provider, using the most direct route available.
The maximum medical assistance reimbursement rates for special transportation services are:
(1) $17 for the base rate and $1.35 per mile for services to eligible persons who need a
wheelchair-accessible van;
(2) $11.50 for the base rate and $1.30 per mile for services to eligible persons who do not
need a wheelchair-accessible van; and
(3) $60 for the base rate and $2.40 per mile, and an attendant rate of $9 per trip, for services
to eligible persons who need a stretcher-accessible vehicle.
    Subd. 17a. Payment for ambulance services. Effective for services rendered on or after
July 1, 2001, medical assistance payments for ambulance services shall be paid at the Medicare
reimbursement rate or at the medical assistance payment rate in effect on July 1, 2000, whichever
is greater.
    Subd. 18. Bus or taxicab transportation. To the extent authorized by rule of the state
agency, medical assistance covers costs of the most appropriate and cost-effective form of
transportation incurred by any ambulatory eligible person for obtaining nonemergency medical
care.
    Subd. 18a. Access to medical services. (a) Medical assistance reimbursement for meals for
persons traveling to receive medical care may not exceed $5.50 for breakfast, $6.50 for lunch,
or $8 for dinner.
(b) Medical assistance reimbursement for lodging for persons traveling to receive medical
care may not exceed $50 per day unless prior authorized by the local agency.
(c) Medical assistance direct mileage reimbursement to the eligible person or the eligible
person's driver may not exceed 20 cents per mile.
(d) Medical assistance covers oral language interpreter services when provided by an
enrolled health care provider during the course of providing a direct, person-to-person covered
health care service to an enrolled recipient with limited English proficiency.
    Subd. 19.[Repealed, 1991 c 292 art 7 s 26]
    Subd. 19a. Personal care assistant services. Medical assistance covers personal care
assistant services in a recipient's home. To qualify for personal care assistant services, recipients
or responsible parties must be able to identify the recipient's needs, direct and evaluate task
accomplishment, and provide for health and safety. Approved hours may be used outside the home
when normal life activities take them outside the home. To use personal care assistant services
at school, the recipient or responsible party must provide written authorization in the care plan
identifying the chosen provider and the daily amount of services to be used at school. Total hours
for services, whether actually performed inside or outside the recipient's home, cannot exceed that
which is otherwise allowed for personal care assistant services in an in-home setting according to
sections 256B.0651 and 256B.0653 to 256B.0656. Medical assistance does not cover personal
care assistant services for residents of a hospital, nursing facility, intermediate care facility,
health care facility licensed by the commissioner of health, or unless a resident who is otherwise
eligible is on leave from the facility and the facility either pays for the personal care assistant
services or forgoes the facility per diem for the leave days that personal care assistant services are
used. All personal care assistant services must be provided according to sections 256B.0651 and
256B.0653 to 256B.0656. Personal care assistant services may not be reimbursed if the personal
care assistant is the spouse or legal guardian of the recipient or the parent of a recipient under
age 18, or the responsible party or the foster care provider of a recipient who cannot direct the
recipient's own care unless, in the case of a foster care provider, a county or state case manager
visits the recipient as needed, but not less than every six months, to monitor the health and safety
of the recipient and to ensure the goals of the care plan are met. Parents of adult recipients, adult
children of the recipient or adult siblings of the recipient may be reimbursed for personal care
assistant services, if they are granted a waiver under sections 256B.0651 and 256B.0653 to
256B.0656. Notwithstanding the provisions of section 256B.0655, subdivision 2, paragraph (b),
clause (4), the noncorporate legal guardian or conservator of an adult, who is not the responsible
party and not the personal care provider organization, may be granted a hardship waiver under
sections 256B.0651 and 256B.0653 to 256B.0656, to be reimbursed to provide personal care
assistant services to the recipient, and shall not be considered to have a service provider interest
for purposes of participation on the screening team under section 256B.092, subdivision 7.
    Subd. 19b. No automatic adjustment. For fiscal years beginning on or after July 1, 1993,
the commissioner of human services shall not provide automatic annual inflation adjustments
for home care services. The commissioner of finance shall include as a budget change request
in each biennial detailed expenditure budget submitted to the legislature under section 16A.11
annual adjustments in reimbursement rates for home care services.
    Subd. 19c. Personal care. Medical assistance covers personal care assistant services
provided by an individual who is qualified to provide the services according to subdivision 19a
and sections 256B.0651 and 256B.0653 to 256B.0656, where the services have a statement of
need by a physician, provided in accordance with a plan, and are supervised by the recipient or a
qualified professional. The physician's statement of need for personal care assistant services shall
be documented on a form approved by the commissioner and include the diagnosis or condition
of the person that results in a need for personal care assistant services and be updated when
the person's medical condition requires a change, but at least annually if the need for personal
care assistant services is ongoing.
"Qualified professional" means a mental health professional as defined in section 245.462,
subdivision 18 , or 245.4871, subdivision 27; or a registered nurse as defined in sections 148.171
to 148.285, or a licensed social worker as defined in section 148B.21. As part of the assessment,
the county public health nurse will assist the recipient or responsible party to identify the most
appropriate person to provide supervision of the personal care assistant. The qualified professional
shall perform the duties described in Minnesota Rules, part 9505.0335, subpart 4.
    Subd. 20. Mental health case management. (a) To the extent authorized by rule of the
state agency, medical assistance covers case management services to persons with serious and
persistent mental illness and children with severe emotional disturbance. Services provided under
this section must meet the relevant standards in sections 245.461 to 245.4887, the Comprehensive
Adult and Children's Mental Health Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and
9505.0322, excluding subpart 10.
(b) Entities meeting program standards set out in rules governing family community support
services as defined in section 245.4871, subdivision 17, are eligible for medical assistance
reimbursement for case management services for children with severe emotional disturbance
when these services meet the program standards in Minnesota Rules, parts 9520.0900 to
9520.0926 and 9505.0322, excluding subparts 6 and 10.
(c) Medical assistance and MinnesotaCare payment for mental health case management shall
be made on a monthly basis. In order to receive payment for an eligible child, the provider must
document at least a face-to-face contact with the child, the child's parents, or the child's legal
representative. To receive payment for an eligible adult, the provider must document:
(1) at least a face-to-face contact with the adult or the adult's legal representative; or
(2) at least a telephone contact with the adult or the adult's legal representative and document
a face-to-face contact with the adult or the adult's legal representative within the preceding two
months.
(d) Payment for mental health case management provided by county or state staff shall be
based on the monthly rate methodology under section 256B.094, subdivision 6, paragraph (b),
with separate rates calculated for child welfare and mental health, and within mental health,
separate rates for children and adults.
(e) Payment for mental health case management provided by Indian health services or
by agencies operated by Indian tribes may be made according to this section or other relevant
federally approved rate setting methodology.
(f) Payment for mental health case management provided by vendors who contract with a
county or Indian tribe shall be based on a monthly rate negotiated by the host county or tribe.
The negotiated rate must not exceed the rate charged by the vendor for the same service to other
payers. If the service is provided by a team of contracted vendors, the county or tribe may
negotiate a team rate with a vendor who is a member of the team. The team shall determine how
to distribute the rate among its members. No reimbursement received by contracted vendors shall
be returned to the county or tribe, except to reimburse the county or tribe for advance funding
provided by the county or tribe to the vendor.
(g) If the service is provided by a team which includes contracted vendors, tribal staff, and
county or state staff, the costs for county or state staff participation in the team shall be included
in the rate for county-provided services. In this case, the contracted vendor, the tribal agency, and
the county may each receive separate payment for services provided by each entity in the same
month. In order to prevent duplication of services, each entity must document, in the recipient's
file, the need for team case management and a description of the roles of the team members.
(h) The commissioner shall calculate the nonfederal share of actual medical assistance and
general assistance medical care payments for each county, based on the higher of calendar year
1995 or 1996, by service date, project that amount forward to 1999, and transfer one-half of
the result from medical assistance and general assistance medical care to each county's mental
health grants under section 256E.12 for calendar year 1999. The annualized minimum amount
added to each county's mental health grant shall be $3,000 per year for children and $5,000
per year for adults. The commissioner may reduce the statewide growth factor in order to fund
these minimums. The annualized total amount transferred shall become part of the base for
future mental health grants for each county.
(i) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of costs for mental
health case management shall be provided by the recipient's county of responsibility, as defined
in sections 256G.01 to 256G.12, from sources other than federal funds or funds used to match
other federal funds. If the service is provided by a tribal agency, the nonfederal share, if any, shall
be provided by the recipient's tribe.
(j) The commissioner may suspend, reduce, or terminate the reimbursement to a provider that
does not meet the reporting or other requirements of this section. The county of responsibility, as
defined in sections 256G.01 to 256G.12, or, if applicable, the tribal agency, is responsible for
any federal disallowances. The county or tribe may share this responsibility with its contracted
vendors.
(k) The commissioner shall set aside a portion of the federal funds earned under this section
to repay the special revenue maximization account under section 256.01, subdivision 2, clause
(15). The repayment is limited to:
(1) the costs of developing and implementing this section; and
(2) programming the information systems.
(l) Payments to counties and tribal agencies for case management expenditures under this
section shall only be made from federal earnings from services provided under this section.
Payments to county-contracted vendors shall include both the federal earnings and the county
share.
(m) Notwithstanding section 256B.041, county payments for the cost of mental health case
management services provided by county or state staff shall not be made to the commissioner
of finance. For the purposes of mental health case management services provided by county or
state staff under this section, the centralized disbursement of payments to counties under section
256B.041 consists only of federal earnings from services provided under this section.
(n) Case management services under this subdivision do not include therapy, treatment,
legal, or outreach services.
(o) If the recipient is a resident of a nursing facility, intermediate care facility, or hospital,
and the recipient's institutional care is paid by medical assistance, payment for case management
services under this subdivision is limited to the last 180 days of the recipient's residency in that
facility and may not exceed more than six months in a calendar year.
(p) Payment for case management services under this subdivision shall not duplicate
payments made under other program authorities for the same purpose.
(q) By July 1, 2000, the commissioner shall evaluate the effectiveness of the changes
required by this section, including changes in number of persons receiving mental health case
management, changes in hours of service per person, and changes in caseload size.
(r) For each calendar year beginning with the calendar year 2001, the annualized amount
of state funds for each county determined under paragraph (h) shall be adjusted by the county's
percentage change in the average number of clients per month who received case management
under this section during the fiscal year that ended six months prior to the calendar year in
question, in comparison to the prior fiscal year.
(s) For counties receiving the minimum allocation of $3,000 or $5,000 described in
paragraph (h), the adjustment in paragraph (s) shall be determined so that the county receives
the higher of the following amounts:
(1) a continuation of the minimum allocation in paragraph (h); or
(2) an amount based on that county's average number of clients per month who received
case management under this section during the fiscal year that ended six months prior to the
calendar year in question, times the average statewide grant per person per month for counties not
receiving the minimum allocation.
(t) The adjustments in paragraphs (s) and (t) shall be calculated separately for children
and adults.
    Subd. 20a. Case management; developmental disabilities. To the extent defined in the state
Medicaid plan, case management service activities for persons with developmental disabilities
as defined in section 256B.092, and rules promulgated thereunder, are covered services under
medical assistance.
    Subd. 21.[Repealed, 1989 c 282 art 3 s 98]
    Subd. 22. Hospice care. Medical assistance covers hospice care services under Public Law
99-272, section 9505, to the extent authorized by rule.
    Subd. 23. Day treatment services. Medical assistance covers day treatment services as
specified in sections 245.462, subdivision 8, and 245.4871, subdivision 10, that are provided
under contract with the county board. Notwithstanding Minnesota Rules, part 9505.0323, subpart
15, the commissioner may set authorization thresholds for day treatment for adults according
to section 256B.0625, subdivision 25. Effective July 1, 2004, medical assistance covers day
treatment services for children as specified under section 256B.0943.
    Subd. 24. Other medical or remedial care. Medical assistance covers any other medical
or remedial care licensed and recognized under state law unless otherwise prohibited by law,
except licensed chemical dependency treatment programs or primary treatment or extended
care treatment units in hospitals that are covered under chapter 254B. The commissioner shall
include chemical dependency services in the state medical assistance plan for federal reporting
purposes, but payment must be made under chapter 254B. The commissioner shall publish in the
State Register a list of elective surgeries that require a second medical opinion before medical
assistance reimbursement, and the criteria and standards for deciding whether an elective surgery
should require a second medical opinion. The list and criteria and standards are not subject to
the requirements of sections 14.01 to 14.69.
    Subd. 25. Prior authorization required. The commissioner shall publish in the State
Register a list of health services that require prior authorization, as well as the criteria and
standards used to select health services on the list. The list and the criteria and standards used to
formulate it are not subject to the requirements of sections 14.001 to 14.69. The commissioner's
decision whether prior authorization is required for a health service is not subject to administrative
appeal.
    Subd. 26. Special education services. (a) Medical assistance covers medical services
identified in a recipient's individualized education plan and covered under the medical assistance
state plan. Covered services include occupational therapy, physical therapy, speech-language
therapy, clinical psychological services, nursing services, school psychological services, school
social work services, personal care assistants serving as management aides, assistive technology
devices, transportation services, health assessments, and other services covered under the medical
assistance state plan. Mental health services eligible for medical assistance reimbursement must
be provided or coordinated through a children's mental health collaborative where a collaborative
exists if the child is included in the collaborative operational target population. The provision
or coordination of services does not require that the individual education plan be developed
by the collaborative.
The services may be provided by a Minnesota school district that is enrolled as a medical
assistance provider or its subcontractor, and only if the services meet all the requirements
otherwise applicable if the service had been provided by a provider other than a school
district, in the following areas: medical necessity, physician's orders, documentation, personnel
qualifications, and prior authorization requirements. The nonfederal share of costs for services
provided under this subdivision is the responsibility of the local school district as provided in
section 125A.74. Services listed in a child's individual education plan are eligible for medical
assistance reimbursement only if those services meet criteria for federal financial participation
under the Medicaid program.
(b) Approval of health-related services for inclusion in the individual education plan does not
require prior authorization for purposes of reimbursement under this chapter. The commissioner
may require physician review and approval of the plan not more than once annually or upon any
modification of the individual education plan that reflects a change in health-related services.
(c) Services of a speech-language pathologist provided under this section are covered
notwithstanding Minnesota Rules, part 9505.0390, subpart 1, item L, if the person:
(1) holds a masters degree in speech-language pathology;
(2) is licensed by the Minnesota Board of Teaching as an educational speech-language
pathologist; and
(3) either has a certificate of clinical competence from the American Speech and Hearing
Association, has completed the equivalent educational requirements and work experience
necessary for the certificate or has completed the academic program and is acquiring supervised
work experience to qualify for the certificate.
(d) Medical assistance coverage for medically necessary services provided under other
subdivisions in this section may not be denied solely on the basis that the same or similar services
are covered under this subdivision.
(e) The commissioner shall develop and implement package rates, bundled rates, or per diem
rates for special education services under which separately covered services are grouped together
and billed as a unit in order to reduce administrative complexity.
(f) The commissioner shall develop a cost-based payment structure for payment of these
services.
(g) Effective July 1, 2000, medical assistance services provided under an individual
education plan or an individual family service plan by local school districts shall not count against
medical assistance authorization thresholds for that child.
(h) Nursing services as defined in section 148.171, subdivision 15, and provided as an
individual education plan health-related service, are eligible for medical assistance payment if
they are otherwise a covered service under the medical assistance program. Medical assistance
covers the administration of prescription medications by a licensed nurse who is employed by
or under contract with a school district when the administration of medications is identified in
the child's individualized education plan. The simple administration of medications alone is not
covered under medical assistance when administered by a provider other than a school district or
when it is not identified in the child's individualized education plan.
    Subd. 27. Organ and tissue transplants. All organ transplants must be performed at
transplant centers meeting united network for organ sharing criteria or at Medicare-approved
organ transplant centers. Stem cell or bone marrow transplant centers must meet the standards
established by the Foundation for the Accreditation of Hematopoietic Cell Therapy.
    Subd. 28. Certified nurse practitioner services. Medical assistance covers services
performed by a certified pediatric nurse practitioner, a certified family nurse practitioner, a
certified adult nurse practitioner, a certified obstetric/gynecological nurse practitioner, a certified
neonatal nurse practitioner, or a certified geriatric nurse practitioner in independent practice, if:
(1) the service provided on an inpatient basis is not included as part of the cost for inpatient
services included in the operating payment rate;
(2) the service is otherwise covered under this chapter as a physician service; and
(3) the service is within the scope of practice of the nurse practitioner's license as a registered
nurse, as defined in section 148.171.
    Subd. 28a. Registered physician assistant services. Medical assistance covers services
performed by a registered physician assistant if the service is otherwise covered under this chapter
as a physician service and if the service is within the scope of practice of a registered physician
assistant as defined in section 147A.09.
    Subd. 29. Public health nursing clinic services. Medical assistance covers the services of
a certified public health nurse or a registered nurse practicing in a public health nursing clinic
that is a department of, or that operates under the direct authority of, a unit of government, if
the service is within the scope of practice of the public health or registered nurse's license as a
registered nurse, as defined in section 148.171.
    Subd. 30. Other clinic services. (a) Medical assistance covers rural health clinic services,
federally qualified health center services, nonprofit community health clinic services, public
health clinic services, and the services of a clinic meeting the criteria established in rule by the
commissioner. Rural health clinic services and federally qualified health center services mean
services defined in United States Code, title 42, section 1396d(a)(2)(B) and (C). Payment for rural
health clinic and federally qualified health center services shall be made according to applicable
federal law and regulation.
(b) A federally qualified health center that is beginning initial operation shall submit an
estimate of budgeted costs and visits for the initial reporting period in the form and detail required
by the commissioner. A federally qualified health center that is already in operation shall submit
an initial report using actual costs and visits for the initial reporting period. Within 90 days of
the end of its reporting period, a federally qualified health center shall submit, in the form and
detail required by the commissioner, a report of its operations, including allowable costs actually
incurred for the period and the actual number of visits for services furnished during the period,
and other information required by the commissioner. Federally qualified health centers that file
Medicare cost reports shall provide the commissioner with a copy of the most recent Medicare
cost report filed with the Medicare program intermediary for the reporting year which support the
costs claimed on their cost report to the state.
(c) In order to continue cost-based payment under the medical assistance program according
to paragraphs (a) and (b), a federally qualified health center or rural health clinic must apply for
designation as an essential community provider within six months of final adoption of rules
by the Department of Health according to section 62Q.19, subdivision 7. For those federally
qualified health centers and rural health clinics that have applied for essential community provider
status within the six-month time prescribed, medical assistance payments will continue to be
made according to paragraphs (a) and (b) for the first three years after application. For federally
qualified health centers and rural health clinics that either do not apply within the time specified
above or who have had essential community provider status for three years, medical assistance
payments for health services provided by these entities shall be according to the same rates and
conditions applicable to the same service provided by health care providers that are not federally
qualified health centers or rural health clinics.
(d) Effective July 1, 1999, the provisions of paragraph (c) requiring a federally qualified
health center or a rural health clinic to make application for an essential community provider
designation in order to have cost-based payments made according to paragraphs (a) and (b)
no longer apply.
(e) Effective January 1, 2000, payments made according to paragraphs (a) and (b) shall be
limited to the cost phase-out schedule of the Balanced Budget Act of 1997.
(f) Effective January 1, 2001, each federally qualified health center and rural health clinic
may elect to be paid either under the prospective payment system established in United States
Code, title 42, section 1396a(aa), or under an alternative payment methodology consistent with
the requirements of United States Code, title 42, section 1396a(aa), and approved by the Centers
for Medicare and Medicaid Services. The alternative payment methodology shall be 100 percent
of cost as determined according to Medicare cost principles.
    Subd. 31. Medical supplies and equipment. Medical assistance covers medical supplies
and equipment. Separate payment outside of the facility's payment rate shall be made for
wheelchairs and wheelchair accessories for recipients who are residents of intermediate care
facilities for the developmentally disabled. Reimbursement for wheelchairs and wheelchair
accessories for ICF/MR recipients shall be subject to the same conditions and limitations as
coverage for recipients who do not reside in institutions. A wheelchair purchased outside of the
facility's payment rate is the property of the recipient.
    Subd. 31a. Augmentative and alternative communication systems. (a) Medical assistance
covers augmentative and alternative communication systems consisting of electronic or
nonelectronic devices and the related components necessary to enable a person with severe
expressive communication limitations to produce or transmit messages or symbols in a manner
that compensates for that disability.
(b) Until the volume of systems purchased increases to allow a discount price, the
commissioner shall reimburse augmentative and alternative communication manufacturers
and vendors at the manufacturer's suggested retail price for augmentative and alternative
communication systems and related components. The commissioner shall separately reimburse
providers for purchasing and integrating individual communication systems which are unavailable
as a package from an augmentative and alternative communication vendor.
(c) Reimbursement rates established by this purchasing program are not subject to Minnesota
Rules, part 9505.0445, item S or T.
    Subd. 32. Nutritional products. Medical assistance covers nutritional products needed for
nutritional supplementation because solid food or nutrients thereof cannot be properly absorbed
by the body or needed for treatment of phenylketonuria, hyperlysinemia, maple syrup urine
disease, a combined allergy to human milk, cow's milk, and soy formula, or any other childhood
or adult diseases, conditions, or disorders identified by the commissioner as requiring a similarly
necessary nutritional product. Nutritional products needed for the treatment of a combined allergy
to human milk, cow's milk, and soy formula require prior authorization. Separate payment shall
not be made for nutritional products for residents of long-term care facilities. Payment for dietary
requirements is a component of the per diem rate paid to these facilities.
    Subd. 33. Child welfare targeted case management. Medical assistance, subject to federal
approval, covers child welfare targeted case management services as defined in section 256B.094
to children under age 21 who have been assessed and determined in accordance with section
256F.095 to be:
(1) at risk of placement or in placement as defined in section 260C.212, subdivision 1;
(2) at risk of maltreatment or experiencing maltreatment as defined in section 626.556,
subdivision 10e ; or
(3) in need of protection or services as defined in section 260C.007, subdivision 6.
    Subd. 34. Indian health services facilities. Medical assistance payments and MinnesotaCare
payments to facilities of the Indian health service and facilities operated by a tribe or tribal
organization under funding authorized by United States Code, title 25, sections 450f to 450n, or
title III of the Indian Self-Determination and Education Assistance Act, Public Law 93-638, for
enrollees who are eligible for federal financial participation, shall be at the option of the facility in
accordance with the rate published by the United States Assistant Secretary for Health under the
authority of United States Code, title 42, sections 248(a) and 249(b). General assistance medical
care payments to facilities of the Indian health services and facilities operated by a tribe or tribal
organization for the provision of outpatient medical care services billed after June 30, 1990, must
be in accordance with the general assistance medical care rates paid for the same services when
provided in a facility other than a facility of the Indian health service or a facility operated by a
tribe or tribal organization. MinnesotaCare payments for enrollees who are not eligible for federal
financial participation at facilities of the Indian health service and facilities operated by a tribe or
tribal organization for the provision of outpatient medical services must be in accordance with the
medical assistance rates paid for the same services when provided in a facility other than a facility
of the Indian health service or a facility operated by a tribe or tribal organization.
    Subd. 35.[Repealed, 1Sp2003 c 14 art 4 s 24]
    Subd. 35a. Children's mental health crisis response services. Medical assistance covers
children's mental health crisis response services according to section 256B.0944.
    Subd. 35b. Children's therapeutic services and supports. Medical assistance covers
children's therapeutic services and supports according to section 256B.0943.
    Subd. 36.[Repealed, 1Sp2003 c 14 art 4 s 24]
    Subd. 37. Individualized rehabilitation services. Medical assistance covers individualized
rehabilitation services as defined in section 245.492, subdivision 23, that are provided by a
collaborative, county, or an entity under contract with a county through an integrated service
system, as described in section 245.4931, that is approved by the state coordinating council,
subject to federal approval.
    Subd. 38. Payments for mental health services. Payments for mental health services
covered under the medical assistance program that are provided by masters-prepared mental health
professionals shall be 80 percent of the rate paid to doctoral-prepared professionals. Payments
for mental health services covered under the medical assistance program that are provided by
masters-prepared mental health professionals employed by community mental health centers shall
be 100 percent of the rate paid to doctoral-prepared professionals. For purposes of reimbursement
of mental health professionals under the medical assistance program, all social workers who:
(1) have received a master's degree in social work from a program accredited by the Council
on Social Work Education;
(2) are licensed at the level of graduate social worker or independent social worker; and
(3) are practicing clinical social work under appropriate supervision, as defined by chapter
148D; meet all requirements under Minnesota Rules, part 9505.0323, subpart 24, and shall be
paid accordingly.
    Subd. 39. Childhood immunizations. Providers who administer pediatric vaccines within
the scope of their licensure, and who are enrolled as a medical assistance provider, must enroll in
the pediatric vaccine administration program established by section 13631 of the Omnibus Budget
Reconciliation Act of 1993. Medical assistance shall pay an $8.50 fee per dose for administration
of the vaccine to children eligible for medical assistance. Medical assistance does not pay for
vaccines that are available at no cost from the pediatric vaccine administration program.
    Subd. 40. Tuberculosis related services. (a) For persons infected with tuberculosis,
medical assistance covers case management services and direct observation of the intake of
drugs prescribed to treat tuberculosis.
(b) "Case management services" means services furnished to assist persons infected with
tuberculosis in gaining access to needed medical services. Case management services include
at a minimum:
(1) assessing a person's need for medical services to treat tuberculosis;
(2) developing a care plan that addresses the needs identified in clause (1);
(3) assisting the person in accessing medical services identified in the care plan; and
(4) monitoring the person's compliance with the care plan to ensure completion of
tuberculosis therapy. Medical assistance covers case management services under this subdivision
only if the services are provided by a certified public health nurse who is employed by a
community health board as defined in section 145A.02, subdivision 5.
(c) To be covered by medical assistance, direct observation of the intake of drugs prescribed
to treat tuberculosis must be provided by a community outreach worker, licensed practical nurse,
registered nurse who is trained and supervised by a public health nurse employed by a community
health board as defined in section 145A.02, subdivision 5, or a public health nurse employed by a
community health board.
    Subd. 41. Residential services for children with severe emotional disturbance. Medical
assistance covers rehabilitative services in accordance with section 256B.0945 that are provided
by a county through a residential facility, for children who have been diagnosed with severe
emotional disturbance and have been determined to require the level of care provided in a
residential facility.
    Subd. 42. Mental health professional. Notwithstanding Minnesota Rules, part 9505.0175,
subpart 28, the definition of a mental health professional shall include a person who is qualified as
specified in section 245.462, subdivision 18, clause (5); or 245.4871, subdivision 27, clause (5),
for the purpose of this section and Minnesota Rules, parts 9505.0170 to 9505.0475.
    Subd. 43. Mental health provider travel time. Medical assistance covers provider travel
time if a recipient's individual treatment plan requires the provision of mental health services
outside of the provider's normal place of business. This does not include any travel time which
is included in other billable services, and is only covered when the mental health service being
provided to a recipient is covered under medical assistance.
    Subd. 44. Targeted case management services. Medical assistance covers case management
services for vulnerable adults and adults with developmental disabilities, as provided under
section 256B.0924.
    Subd. 45. Subacute psychiatric care for persons under 21 years of age. Medical assistance
covers subacute psychiatric care for person under 21 years of age when:
(1) the services meet the requirements of Code of Federal Regulations, title 42, section
440.160;
(2) the facility is accredited as a psychiatric treatment facility by the Joint Commission on
Accreditation of Healthcare Organizations, the Commission on Accreditation of Rehabilitation
Facilities, or the Council on Accreditation; and
(3) the facility is licensed by the commissioner of health under section 144.50.
    Subd. 46. Mental health telemedicine. Effective January 1, 2006, and subject to federal
approval, mental health services that are otherwise covered by medical assistance as direct
face-to-face services may be provided via two-way interactive video. Use of two-way interactive
video must be medically appropriate to the condition and needs of the person being served.
Reimbursement is at the same rates and under the same conditions that would otherwise apply
to the service. The interactive video equipment and connection must comply with Medicare
standards in effect at the time the service is provided.
    Subd. 47. Treatment foster care services. Effective July 1, 2006, and subject to federal
approval, medical assistance covers treatment foster care services according to section 256B.0946.
    Subd. 48. Psychiatric consultation to primary care practitioners. Effective January 1,
2006, medical assistance covers consultation provided by a psychiatrist via telephone, e-mail,
facsimile, or other means of communication to primary care practitioners, including pediatricians.
The need for consultation and the receipt of the consultation must be documented in the patient
record maintained by the primary care practitioner. If the patient consents, and subject to federal
limitations and data privacy provisions, the consultation may be provided without the patient
present.
History: Ex1967 c 16 s 2; 1969 c 395 s 1; 1973 c 717 s 17; 1975 c 247 s 9; 1975 c 384 s 1;
1975 c 437 art 2 s 3; 1976 c 173 s 56; 1976 c 236 s 1; 1976 c 312 s 1; 1978 c 508 s 2; 1978 c 560
s 10; 1981 c 360 art 2 s 26,54; 1Sp1981 c 2 s 12; 1Sp1981 c 4 art 4 s 22; 3Sp1981 c 2 art 1 s 31;
1982 c 562 s 2; 1983 c 151 s 1,2; 1983 c 312 art 1 s 27; art 5 s 10; art 9 s 4; 1984 c 654 art 5 s 58;
1985 c 21 s 52-54; 1985 c 49 s 41; 1985 c 252 s 19,20; 1Sp1985 c 3 s 19; 1986 c 394 s 17; 1986 c
444; 1987 c 309 s 24; 1987 c 370 art 1 s 3; art 2 s 4; 1987 c 374 s 1; 1987 c 403 art 2 s 73,74; art
5 s 16; 1988 c 689 art 2 s 141,268; 1989 c 282 art 3 s 54-58; 1990 c 422 s 10; 1990 c 568 art 3 s
43-50,104; 1991 c 199 art 2 s 1; 1991 c 292 art 4 s 41-49; art 6 s 45; art 7 s 5,9-11; 1992 c 391 s
1,2; 1992 c 513 art 7 s 43-49; art 9 s 25; 1993 c 246 s 1,2; 1993 c 247 art 4 s 11; 1993 c 345 art
13 s 1; 1Sp1993 c 1 art 3 s 23; art 5 s 36-49; art 7 s 41-44; art 9 s 71; 1Sp1993 c 6 s 10; 1994 c
465 art 3 s 52; 1994 c 625 art 8 s 72; 1995 c 178 art 2 s 26; 1995 c 207 art 6 s 38-51; art 8 s 33;
1995 c 234 art 6 s 38; 1995 c 263 s 10; 1996 c 451 art 2 s 20; art 5 s 15,16; 1997 c 203 art 2 s 25;
art 4 s 25,26; 1997 c 225 art 4 s 3; art 6 s 5,8; 1998 c 398 art 2 s 46; 1998 c 407 art 4 s 20-28;
1999 c 86 art 2 s 4; 1999 c 139 art 4 s 2; 1999 c 245 art 4 s 37-49,121; art 5 s 20; art 8 s 5,87; art
10 s 10; 2000 c 298 s 3; 2000 c 347 s 1; 2000 c 474 s 6,7; 2000 c 488 art 9 s 16; 2001 c 178 art 1
s 44; 2001 c 203 s 9; 1Sp2001 c 9 art 2 s 30-38; art 3 s 16-19; art 9 s 41,42; 2002 c 220 art 15 s
13; 2002 c 277 s 12-14,32; 2002 c 294 s 6; 2002 c 375 art 2 s 13-16; 2002 c 379 art 1 s 113; 2003
c 112 art 2 s 50; 1Sp2003 c 14 art 3 s 25; art 4 s 4-7; art 11 s 11; art 12 s 33-36; 2004 c 288 art 5
s 3; art 6 s 22; 2005 c 10 art 1 s 48; 2005 c 56 s 1; 2005 c 98 art 2 s 3,4; 2005 c 147 art 1 s 67;
2005 c 155 art 3 s 2-6; 1Sp2005 c 4 art 2 s 8-10; art 7 s 13,14; art 8 s 29-40; 2006 c 282 art 16 s 6

256B.0626 ESTIMATION OF 50TH PERCENTILE OF PREVAILING CHARGES.
(a) The 50th percentile of the prevailing charge for the base year identified in statute must
be estimated by the commissioner in the following situations:
(1) there were less than five billings in the calendar year specified in legislation governing
maximum payment rates;
(2) the service was not available in the calendar year specified in legislation governing
maximum payment rates;
(3) the payment amount is the result of a provider appeal;
(4) the procedure code description has changed since the calendar year specified in legislation
governing maximum payment rates, and, therefore, the prevailing charge information reflects the
same code but a different procedure description; or
(5) the 50th percentile reflects a payment which is grossly inequitable when compared with
payment rates for procedures or services which are substantially similar.
(b) When one of the situations identified in paragraph (a) occurs, the commissioner shall
use the following methodology to reconstruct a rate comparable to the 50th percentile of the
prevailing rate:
(1) refer to information which exists for the first four billings in the calendar year specified in
legislation governing maximum payment rates; or
(2) refer to surrounding or comparable procedure codes; or
(3) refer to the 50th percentile of years subsequent to the calendar year specified in legislation
governing maximum payment rates, and reduce that amount by applying an appropriate Consumer
Price Index formula; or
(4) refer to relative value indexes; or
(5) refer to reimbursement information from other third parties, such as Medicare.
History: 1Sp1993 c 1 art 5 s 50; 1997 c 203 art 4 s 27

    Subdivision 1.[Paragraph (a) renumbered 256B.0651, subdivision 1; 256B.0655,
subd 1a ]
[Paragraph (b) renumbered 256B.0651, subdivision 1, para (b); 256B.0654, subdivision 1,
para (a); 256B.0655, subd 1b]
[Paragraph (c) renumbered 256B.0655, subd 1c]
[Paragraph (d) renumbered 256B.0654, subdivision 1, para (b)]
[Paragraph (e) renumbered 256B.0655, subd 1d]
[Paragraph (f) renumbered 256B.0651, subdivision 1, para (c)]
Paragraph (g) renumbered 256B.0655, subd 1e
[Paragraph (h) renumbered 256B.0651, subdivision 1, para (d)]
[Paragraph (i) renumbered 256B.0655, subd 1f]
[Paragraph (j) renumbered 256B.0655, subd 1g]
[Paragraph (k) renumbered 256B.0655, subd 1h]
[Paragraph (l) renumbered 256B.0655, subd 1i]
[Paragraph (m) renumbered 256B.0653, subdivision 1, para (a)]
[Paragraph (n) renumbered 256B.0651, subdivision 1, para (e)]
    Subd. 2.[Renumbered 256B.0651, subd 2]
    Subd. 3.[Repealed, 1991 c 292 art 7 s 26]
    Subd. 4.[Renumbered 256B.0655, subd 2]
    Subd. 5.[Paragraph (a) renumbered 256B.0651, subds 10 and 11]
[Paragraph (b) renumbered 256B.0651, subd 4]
[Paragraph (c) renumbered 256B.0651, subd 5]
[Paragraph (d) renumbered 256B.0655, subd 3]
[Paragraph (e) renumbered 256B.0651, subd 6; 256B.0655, subd 4]
[Paragraph (e)(1) renumbered 256B.0651, subd 6]
[Paragraph (e)(2) renumbered 256B.0655, subd 4]
[Paragraph (e)(3) renumbered 256B.0654, subd 2]
[Paragraph (e)(4) renumbered 256B.0651, subd 6, para (b)]
[Paragraph (f) renumbered 256B.0651, subd 7]
[Paragraph (g) renumbered 256B.0651, subd 12]
[Paragraph (h) renumbered 256B.0651, subd 8]
[Paragraph (i) renumbered 256B.0651, subd 9]
    Subd. 6.[Renumbered 256B.0651, subd 13]
    Subd. 7.[Renumbered 256B.0651, subd 3]
    Subd. 8.[Renumbered 256B.0655, subd 5]
    Subd. 9.[Renumbered 256B.0655, subd 6]
    Subd. 10.[Renumbered 256B.0655, subd 7]
    Subd. 11.[Renumbered 256B.0654, subd 3]
    Subd. 12.[Renumbered 256B.0655, subd 8]
    Subd. 13.[Renumbered 256B.0656]
    Subd. 14.[Renumbered 256B.0653, subdivision 1, para (b)]
    Subd. 15.[Renumbered 256B.0653, subdivision 1, para (c)]
    Subd. 16.[Renumbered 256B.0654, subd 4]
    Subd. 17.[Renumbered 256B.0655, subd 9]
    Subd. 18.[Renumbered 256B.0655, subd 10]

256B.0628 [Renumbered 256B.0652]

    Subdivision 1.[Repealed, 2005 c 98 art 2 s 18]
    Subd. 2.[Repealed, 2005 c 98 art 2 s 18]
    Subd. 3.[Repealed, 1997 c 7 art 2 s 67]
    Subd. 4.[Repealed, 2005 c 98 art 2 s 18]

256B.063 COST SHARING.
Notwithstanding the provisions of section 256B.05, subdivision 2, the commissioner is
authorized to promulgate rules pursuant to the Administrative Procedure Act, and to require a
nominal enrollment fee, premium, or similar charge for recipients of medical assistance, if and to
the extent required by applicable federal regulation.
History: 1973 c 717 s 5

256B.0631 MEDICAL ASSISTANCE CO-PAYMENTS.
    Subdivision 1. Co-payments. (a) Except as provided in subdivision 2, the medical assistance
benefit plan shall include the following co-payments for all recipients, effective for services
provided on or after October 1, 2003:
(1) $3 per nonpreventive visit. For purposes of this subdivision, a visit means an episode of
service which is required because of a recipient's symptoms, diagnosis, or established illness, and
which is delivered in an ambulatory setting by a physician or physician ancillary, chiropractor,
podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;
(2) $3 for eyeglasses;
(3) $6 for nonemergency visits to a hospital-based emergency room; and
(4) $3 per brand-name drug prescription and $1 per generic drug prescription, subject to
a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to
antipsychotic drugs when used for the treatment of mental illness.
(b) Recipients of medical assistance are responsible for all co-payments in this subdivision.
    Subd. 2. Exceptions. Co-payments shall be subject to the following exceptions:
(1) children under the age of 21;
(2) pregnant women for services that relate to the pregnancy or any other medical condition
that may complicate the pregnancy;
(3) recipients expected to reside for at least 30 days in a hospital, nursing home, or
intermediate care facility for the developmentally disabled;
(4) recipients receiving hospice care;
(5) 100 percent federally funded services provided by an Indian health service;
(6) emergency services;
(7) family planning services;
(8) services that are paid by Medicare, resulting in the medical assistance program paying for
the coinsurance and deductible; and
(9) co-payments that exceed one per day per provider for nonpreventive visits, eyeglasses,
and nonemergency visits to a hospital-based emergency room.
    Subd. 3. Collection. The medical assistance reimbursement to the provider shall be reduced
by the amount of the co-payment, except that reimbursement for prescription drugs shall not
be reduced once a recipient has reached the $12 per month maximum for prescription drug
co-payments. The provider collects the co-payment from the recipient. Providers may not deny
services to recipients who are unable to pay the co-payment, except as provided in subdivision 4.
    Subd. 4. Uncollected debt. If it is the routine business practice of a provider to refuse
service to an individual with uncollected debt, the provider may include uncollected co-payments
under this section. A provider must give advance notice to a recipient with uncollected debt
before services can be denied.
History: 1Sp2003 c 14 art 12 s 37; 2005 c 56 s 1; 1Sp2005 c 4 art 8 s 41,42

256B.0635 CONTINUED ELIGIBILITY IN SPECIAL CIRCUMSTANCES.
    Subdivision 1. Increased employment. (a) Until June 30, 2002, medical assistance may
be paid for persons who received MFIP or medical assistance for families and children in at
least three of six months preceding the month in which the person became ineligible for MFIP
or medical assistance, if the ineligibility was due to an increase in hours of employment or
employment income or due to the loss of an earned income disregard. In addition, to receive
continued assistance under this section, persons who received medical assistance for families and
children but did not receive MFIP must have had income less than or equal to the assistance
standard for their family size under the state's AFDC plan in effect as of July 16, 1996, increased
by three percent effective July 1, 2000, at the time medical assistance eligibility began. A person
who is eligible for extended medical assistance is entitled to six months of assistance without
reapplication, unless the assistance unit ceases to include a dependent child. For a person under 21
years of age, medical assistance may not be discontinued within the six-month period of extended
eligibility until it has been determined that the person is not otherwise eligible for medical
assistance. Medical assistance may be continued for an additional six months if the person meets
all requirements for the additional six months, according to title XIX of the Social Security Act,
as amended by section 303 of the Family Support Act of 1988, Public Law 100-485.
(b) Beginning July 1, 2002, contingent upon federal funding, medical assistance for families
and children may be paid for persons who were eligible under section 256B.055, subdivision 3a, in
at least three of six months preceding the month in which the person became ineligible under that
section if the ineligibility was due to an increase in hours of employment or employment income
or due to the loss of an earned income disregard. A person who is eligible for extended medical
assistance is entitled to six months of assistance without reapplication, unless the assistance unit
ceases to include a dependent child, except medical assistance may not be discontinued for that
dependent child under 21 years of age within the six-month period of extended eligibility until
it has been determined that the person is not otherwise eligible for medical assistance. Medical
assistance may be continued for an additional six months if the person meets all requirements
for the additional six months, according to title XIX of the Social Security Act, as amended by
section 303 of the Family Support Act of 1988, Public Law 100-485.
    Subd. 2. Increased child or spousal support. (a) Until June 30, 2002, medical assistance
may be paid for persons who received MFIP or medical assistance for families and children in
at least three of the six months preceding the month in which the person became ineligible for
MFIP or medical assistance, if the ineligibility was the result of the collection of child or spousal
support under part D of title IV of the Social Security Act. In addition, to receive continued
assistance under this section, persons who received medical assistance for families and children
but did not receive MFIP must have had income less than or equal to the assistance standard for
their family size under the state's AFDC plan in effect as of July 16, 1996, increased by three
percent effective July 1, 2000, at the time medical assistance eligibility began. A person who is
eligible for extended medical assistance under this subdivision is entitled to four months of
assistance without reapplication, unless the assistance unit ceases to include a dependent child,
except medical assistance may not be discontinued for that dependent child under 21 years of age
within the four-month period of extended eligibility until it has been determined that the person is
not otherwise eligible for medical assistance.
(b) Beginning July 1, 2002, contingent upon federal funding, medical assistance for families
and children may be paid for persons who were eligible under section 256B.055, subdivision 3a,
in at least three of the six months preceding the month in which the person became ineligible
under that section if the ineligibility was the result of the collection of child or spousal support
under part D of title IV of the Social Security Act. A person who is eligible for extended medical
assistance under this subdivision is entitled to four months of assistance without reapplication,
unless the assistance unit ceases to include a dependent child, except medical assistance may not
be discontinued for that dependent child under 21 years of age within the four-month period of
extended eligibility until it has been determined that the person is not otherwise eligible for
medical assistance.
    Subd. 3.[Repealed, 2002 c 277 s 34]
History: 1997 c 85 art 3 s 22; 1998 c 407 art 6 s 13; 1999 c 245 art 4 s 59; 1Sp2001 c 9 art
2 s 40,41,76; art 10 s 66; 2002 c 277 s 31,33; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 12 s 38,39

256B.0637 PRESUMPTIVE ELIGIBILITY; TREATMENT FOR BREAST OR CERVICAL
CANCER.
Medical assistance is available during a presumptive eligibility period for persons who meet
the criteria in section 256B.057, subdivision 10. For purposes of this section, the presumptive
eligibility period begins on the date on which an entity designated by the commissioner
determines, based on preliminary information, that the person meets the criteria in section
256B.057, subdivision 10. The presumptive eligibility period ends on the day on which a
determination is made as to the person's eligibility, except that if an application is not submitted
by the last day of the month following the month during which the determination based on
preliminary information is made, the presumptive eligibility period ends on that last day of
the month.
History: 1Sp2001 c 9 art 2 s 42; 2002 c 379 art 1 s 113

256B.064 SANCTIONS; MONETARY RECOVERY.
    Subdivision 1. Terminating payments to ineligible vendors. The commissioner may
terminate payments under this chapter to any person or facility that, under applicable federal
law or regulation, has been determined to be ineligible for payments under Title XIX of the
Social Security Act.
    Subd. 1a. Grounds for sanctions against vendors. The commissioner may impose sanctions
against a vendor of medical care for any of the following: (1) fraud, theft, or abuse in connection
with the provision of medical care to recipients of public assistance; (2) a pattern of presentment
of false or duplicate claims or claims for services not medically necessary; (3) a pattern of making
false statements of material facts for the purpose of obtaining greater compensation than that to
which the vendor is legally entitled; (4) suspension or termination as a Medicare vendor; (5)
refusal to grant the state agency access during regular business hours to examine all records
necessary to disclose the extent of services provided to program recipients and appropriateness of
claims for payment; (6) failure to repay an overpayment finally established under this section;
and (7) any reason for which a vendor could be excluded from participation in the Medicare
program under section 1128, 1128A, or 1866(b)(2) of the Social Security Act. The determination
of services not medically necessary may be made by the commissioner in consultation with a
peer advisory task force appointed by the commissioner on the recommendation of appropriate
professional organizations. The task force expires as provided in section 15.059, subdivision 5.
    Subd. 1b. Sanctions available. The commissioner may impose the following sanctions for
the conduct described in subdivision 1a: suspension or withholding of payments to a vendor and
suspending or terminating participation in the program. Regardless of imposition of sanctions, the
commissioner may make a referral to the appropriate state licensing board.
    Subd. 1c. Grounds for and methods of monetary recovery. (a) The commissioner may
obtain monetary recovery from a vendor who has been improperly paid either as a result of
conduct described in subdivision 1a or as a result of a vendor or department error, regardless of
whether the error was intentional. Patterns need not be proven as a precondition to monetary
recovery of erroneous or false claims, duplicate claims, claims for services not medically
necessary, or claims based on false statements.
(b) The commissioner may obtain monetary recovery using methods including but not
limited to the following: assessing and recovering money improperly paid and debiting from
future payments any money improperly paid. The commissioner shall charge interest on money to
be recovered if the recovery is to be made by installment payments or debits, except when the
monetary recovery is of an overpayment that resulted from a department error. The interest
charged shall be the rate established by the commissioner of revenue under section 270C.40.
    Subd. 1d. Investigative costs. The commissioner may seek recovery of investigative costs
from any vendor of medical care or services who willfully submits a claim for reimbursement for
services that the vendor knows, or reasonably should have known, is a false representation and
that results in the payment of public funds for which the vendor is ineligible. Billing errors that
result in unintentional overcharges shall not be grounds for investigative cost recoupment.
    Subd. 2. Imposition of monetary recovery and sanctions. (a) The commissioner shall
determine any monetary amounts to be recovered and sanctions to be imposed upon a vendor
of medical care under this section. Except as provided in paragraphs (b) and (d), neither a
monetary recovery nor a sanction will be imposed by the commissioner without prior notice and
an opportunity for a hearing, according to chapter 14, on the commissioner's proposed action,
provided that the commissioner may suspend or reduce payment to a vendor of medical care,
except a nursing home or convalescent care facility, after notice and prior to the hearing if in the
commissioner's opinion that action is necessary to protect the public welfare and the interests
of the program.
(b) Except for a nursing home or convalescent care facility, the commissioner may withhold
or reduce payments to a vendor of medical care without providing advance notice of such
withholding or reduction if either of the following occurs:
(1) the vendor is convicted of a crime involving the conduct described in subdivision 1a; or
(2) the commissioner receives reliable evidence of fraud or willful misrepresentation by
the vendor.
(c) The commissioner must send notice of the withholding or reduction of payments under
paragraph (b) within five days of taking such action. The notice must:
(1) state that payments are being withheld according to paragraph (b);
(2) except in the case of a conviction for conduct described in subdivision 1a, state that the
withholding is for a temporary period and cite the circumstances under which withholding will
be terminated;
(3) identify the types of claims to which the withholding applies; and
(4) inform the vendor of the right to submit written evidence for consideration by the
commissioner.
The withholding or reduction of payments will not continue after the commissioner
determines there is insufficient evidence of fraud or willful misrepresentation by the vendor, or
after legal proceedings relating to the alleged fraud or willful misrepresentation are completed,
unless the commissioner has sent notice of intention to impose monetary recovery or sanctions
under paragraph (a).
(d) The commissioner may suspend or terminate a vendor's participation in the program
without providing advance notice and an opportunity for a hearing when the suspension or
termination is required because of the vendor's exclusion from participation in Medicare.
Within five days of taking such action, the commissioner must send notice of the suspension or
termination. The notice must:
(1) state that suspension or termination is the result of the vendor's exclusion from Medicare;
(2) identify the effective date of the suspension or termination;
(3) inform the vendor of the need to be reinstated to Medicare before reapplying for
participation in the program; and
(4) inform the vendor of the right to submit written evidence for consideration by the
commissioner.
(e) Upon receipt of a notice under paragraph (a) that a monetary recovery or sanction is to be
imposed, a vendor may request a contested case, as defined in section 14.02, subdivision 3, by
filing with the commissioner a written request of appeal. The appeal request must be received by
the commissioner no later than 30 days after the date the notification of monetary recovery or
sanction was mailed to the vendor. The appeal request must specify:
(1) each disputed item, the reason for the dispute, and an estimate of the dollar amount
involved for each disputed item;
(2) the computation that the vendor believes is correct;
(3) the authority in statute or rule upon which the vendor relies for each disputed item;
(4) the name and address of the person or entity with whom contacts may be made regarding
the appeal; and
(5) other information required by the commissioner.
History: 1973 c 717 s 6; 1976 c 188 s 1; 1980 c 349 s 5,6; 1982 c 424 s 130; 1983 c 312
art 5 s 17; 1987 c 370 art 1 s 4; 1987 c 403 art 2 s 81; 1988 c 629 s 52; 1991 c 292 art 5 s
29; 1992 c 513 art 7 s 51,52; 1997 c 203 art 4 s 30-32; 2000 c 400 s 1; 1Sp2003 c 14 art 2 s
17; 2005 c 151 art 2 s 17

256B.0641 RECOVERY OF OVERPAYMENTS.
    Subdivision 1. Recovery procedures; sources. Notwithstanding section 256B.72 or any
law or rule to the contrary, when the commissioner or the federal government determines that an
overpayment has been made by the state to any medical assistance vendor, the commissioner shall
recover the overpayment as follows:
(1) if the federal share of the overpayment amount is due and owing to the federal
government under federal law and regulations, the commissioner shall recover from the medical
assistance vendor the federal share of the determined overpayment amount paid to that provider
using the schedule of payments required by the federal government;
(2) if the overpayment to a medical assistance vendor is due to a retroactive adjustment
made because the medical assistance vendor's temporary payment rate was higher than the
established desk audit payment rate or because of a department error in calculating a payment
rate, the commissioner shall recover from the medical assistance vendor the total amount of
the overpayment within 120 days after the date on which written notice of the adjustment is
sent to the medical assistance vendor or according to a schedule of payments approved by the
commissioner; and
(3) a medical assistance vendor is liable for the overpayment amount owed by a long-term
care provider if the vendors or their owners are under common control or ownership.
    Subd. 2. Overpayments to prior owners. The current owner of a nursing home, boarding
care home, or intermediate care facility for persons with developmental disabilities is liable for
the overpayment amount owed by a former owner for any facility sold, transferred, or reorganized
after May 15, 1987. Within 12 months of a written request by the current owner, the commissioner
shall conduct a field audit of the facility for the auditable rate years during which the former
owner owned the facility and issue a report of the field audit within 15 months of the written
request. Nothing in this subdivision limits the liability of a former owner.
    Subd. 3. Facility in receivership. Subdivision 2 does not apply to the change of ownership
of a facility to a nonrelated organization while the facility to be sold, transferred or reorganized is
in receivership under section 245A.12 or 245A.13, and the commissioner during the receivership
has not determined the need to place residents of the facility into a newly constructed or newly
established facility. Nothing in this subdivision limits the liability of a former owner.
History: 1Sp1985 c 9 art 2 s 39; 1987 c 133 s 1; 1991 c 292 art 6 s 46; 1995 c 207 art 7
s 22; 2005 c 56 s 1

256B.0642 FEDERAL FINANCIAL PARTICIPATION.
The commissioner may, in the aggregate, prospectively reduce payment rates for medical
assistance providers receiving federal funds to avoid reduced federal financial participation
resulting from rates that are in excess of the Medicare limitations.
History: 1989 c 282 art 3 s 59

256B.0643 VENDOR REQUEST FOR CONTESTED CASE PROCEEDING.
Unless otherwise provided by law, a vendor of medical care, as defined in section 256B.02,
subdivision 7 , must use this procedure to request a contested case, as defined in section 14.02,
subdivision 3 . A request for a contested case must be filed with the commissioner in writing
within 60 days after the date the notification of an action or determination was mailed. The
appeal request must specify:
(1) each disputed action or item;
(2) the reason for the dispute;
(3) an estimate of the dollar amount involved, if any, for each disputed item;
(4) the computation or other disposition that the appealing party believes is correct;
(5) the authority in statute or rule upon which the appealing party relies for each disputed
item;
(6) the name and address of the person or firm with whom contacts may be made regarding
the appeal; and
(7) other information required by the commissioner. Nothing in this section shall be
construed to create a right to an administrative appeal or contested case proceeding.
History: 1990 c 568 art 3 s 53

256B.0644 REIMBURSEMENT UNDER OTHER STATE HEALTH CARE PROGRAMS.
A vendor of medical care, as defined in section 256B.02, subdivision 7, and a health
maintenance organization, as defined in chapter 62D, must participate as a provider or contractor
in the medical assistance program, general assistance medical care program, and MinnesotaCare
as a condition of participating as a provider in health insurance plans and programs or contractor
for state employees established under section 43A.18, the public employees insurance program
under section 43A.316, for health insurance plans offered to local statutory or home rule charter
city, county, and school district employees, the workers' compensation system under section
176.135, and insurance plans provided through the Minnesota Comprehensive Health Association
under sections 62E.01 to 62E.19. The limitations on insurance plans offered to local government
employees shall not be applicable in geographic areas where provider participation is limited by
managed care contracts with the Department of Human Services. For providers other than health
maintenance organizations, participation in the medical assistance program means that (1) the
provider accepts new medical assistance, general assistance medical care, and MinnesotaCare
patients or (2) for providers other than dental service providers, at least 20 percent of the
provider's patients are covered by medical assistance, general assistance medical care, and
MinnesotaCare as their primary source of coverage, or (3) for dental service providers, at least ten
percent of the provider's patients are covered by medical assistance, general assistance medical
care, and MinnesotaCare as their primary source of coverage. Patients seen on a volunteer basis
by the provider at a location other than the provider's usual place of practice may be considered
in meeting this participation requirement. The commissioner shall establish participation
requirements for health maintenance organizations. The commissioner shall provide lists of
participating medical assistance providers on a quarterly basis to the commissioner of employee
relations, the commissioner of labor and industry, and the commissioner of commerce. Each of
the commissioners shall develop and implement procedures to exclude as participating providers
in the program or programs under their jurisdiction those providers who do not participate in the
medical assistance program. The commissioner of employee relations shall implement this section
through contracts with participating health and dental carriers.
History: 1992 c 549 art 4 s 13; 1993 c 13 art 2 s 7; 1993 c 247 art 4 s 9; 1993 c 339 s 14;
1993 c 345 art 9 s 14; 1995 c 248 art 10 s 16; 1997 c 203 art 4 s 33,72; 1999 c 177 s 87; 1Sp2001
c 9 art 2 s 43; 2002 c 275 s 3; 2002 c 379 art 1 s 113

256B.0645 PROVIDER PAYMENTS; RETROACTIVE CHANGES IN ELIGIBILITY.
Payment to a provider for a health care service provided to a general assistance medical care
recipient who is later determined eligible for medical assistance or MinnesotaCare according to
section 256L.03, subdivision 1a, for the period in which the health care service was provided,
may be adjusted due to the change in eligibility. This section does not apply to payments made
to health plans on a prepaid capitated basis.
History: 1995 c 234 art 6 s 39; 1998 c 407 art 4 s 32

256B.065 SOCIAL SECURITY AMENDMENTS.
The commissioner shall comply with requirements of the Social Security amendments of
1972 (Public Law 92-603) necessary in order to avoid loss of federal funds, and shall implement
by rule, pursuant to the Administrative Procedure Act, those provisions required of state agencies
supervising Title XIX of the Social Security Act.
History: 1973 c 717 s 7

256B.0651 HOME CARE SERVICES.
    Subdivision 1. Definitions. (a) "Activities of daily living" includes eating, toileting,
grooming, dressing, bathing, transferring, mobility, and positioning.
(b) "Assessment" means a review and evaluation of a recipient's need for home care services
conducted in person. Assessments for home health agency services shall be conducted by a home
health agency nurse. Assessments for medical assistance home care services for developmental
disability and alternative care services for developmentally disabled home and community-based
waivered recipients may be conducted by the county public health nurse to ensure coordination
and avoid duplication. Assessments must be completed on forms provided by the commissioner
within 30 days of a request for home care services by a recipient or responsible party.
(c) "Home care services" means a health service, determined by the commissioner as
medically necessary, that is ordered by a physician and documented in a service plan that is
reviewed by the physician at least once every 60 days for the provision of home health services,
or private duty nursing, or at least once every 365 days for personal care. Home care services
are provided to the recipient at the recipient's residence that is a place other than a hospital or
long-term care facility or as specified in section 256B.0625.
(d) "Medically necessary" has the meaning given in Minnesota Rules, parts 9505.0170 to
9505.0475.
(e) "Telehomecare" means the use of telecommunications technology by a home health care
professional to deliver home health care services, within the professional's scope of practice, to a
patient located at a site other than the site where the practitioner is located.
    Subd. 2. Services covered. Home care services covered under this section and sections
256B.0653 to 256B.0656 include:
(1) nursing services under section 256B.0625, subdivision 6a;
(2) private duty nursing services under section 256B.0625, subdivision 7;
(3) home health services under section 256B.0625, subdivision 6a;
(4) personal care assistant services under section 256B.0625, subdivision 19a;
(5) supervision of personal care assistant services provided by a qualified professional
under section 256B.0625, subdivision 19a;
(6) qualified professional of personal care assistant services under the fiscal intermediary
option as specified in section 256B.0655, subdivision 7;
(7) face-to-face assessments by county public health nurses for services under section
256B.0625, subdivision 19a; and
(8) service updates and review of temporary increases for personal care assistant services by
the county public health nurse for services under section 256B.0625, subdivision 19a.
    Subd. 3. Noncovered home care services. The following home care services are not eligible
for payment under medical assistance:
(1) skilled nurse visits for the sole purpose of supervision of the home health aide;
(2) a skilled nursing visit:
(i) only for the purpose of monitoring medication compliance with an established medication
program for a recipient; or
(ii) to administer or assist with medication administration, including injections, prefilling
syringes for injections, or oral medication set-up of an adult recipient, when as determined and
documented by the registered nurse, the need can be met by an available pharmacy or the recipient
is physically and mentally able to self-administer or prefill a medication;
(3) home care services to a recipient who is eligible for covered services under the Medicare
program or any other insurance held by the recipient;
(4) services to other members of the recipient's household;
(5) a visit made by a skilled nurse solely to train other home health agency workers;
(6) any home care service included in the daily rate of the community-based residential
facility where the recipient is residing;
(7) nursing and rehabilitation therapy services that are reasonably accessible to a recipient
outside the recipient's place of residence, excluding the assessment, counseling and education,
and personal assistant care;
(8) any home health agency service, excluding personal care assistant services and private
duty nursing services, which are performed in a place other than the recipient's residence; and
(9) Medicare evaluation or administrative nursing visits on dual-eligible recipients that do
not qualify for Medicare visit billing.
    Subd. 4. Prior authorization; exceptions. All home care services above the limits in
subdivision 11 must receive the commissioner's prior authorization, except when:
(1) the home care services were required to treat an emergency medical condition that if not
immediately treated could cause a recipient serious physical or mental disability, continuation
of severe pain, or death. The provider must request retroactive authorization no later than five
working days after giving the initial service. The provider must be able to substantiate the
emergency by documentation such as reports, notes, and admission or discharge histories;
(2) the home care services were provided on or after the date on which the recipient's
eligibility began, but before the date on which the recipient was notified that the case was opened.
Authorization will be considered if the request is submitted by the provider within 20 working
days of the date the recipient was notified that the case was opened;
(3) a third-party payor for home care services has denied or adjusted a payment.
Authorization requests must be submitted by the provider within 20 working days of the notice of
denial or adjustment. A copy of the notice must be included with the request;
(4) the commissioner has determined that a county or state human services agency has
made an error; or
(5) the professional nurse determines an immediate need for up to 40 skilled nursing or home
health aide visits per calendar year and submits a request for authorization within 20 working
days of the initial service date, and medical assistance is determined to be the appropriate payer.
    Subd. 5. Retroactive authorization. A request for retroactive authorization will be evaluated
according to the same criteria applied to prior authorization requests.
    Subd. 6. Prior authorization. The commissioner, or the commissioner's designee, shall
review the assessment, service update, request for temporary services, request for flexible use
option, service plan, and any additional information that is submitted. The commissioner shall,
within 30 days after receiving a complete request, assessment, and service plan, authorize home
care services as follows:
(a) Home health services. All home health services provided by a home health aide must be
prior authorized by the commissioner or the commissioner's designee. Prior authorization must be
based on medical necessity and cost-effectiveness when compared with other care options. When
home health services are used in combination with personal care and private duty nursing, the
cost of all home care services shall be considered for cost-effectiveness. The commissioner shall
limit home health aide visits to no more than one visit each per day. The commissioner, or the
commissioner's designee, may authorize up to two skilled nurse visits per day.
(b) Ventilator-dependent recipients. If the recipient is ventilator-dependent, the monthly
medical assistance authorization for home care services shall not exceed what the commissioner
would pay for care at the highest cost hospital designated as a long-term hospital under the
Medicare program. For purposes of this paragraph, home care services means all services
provided in the home that would be included in the payment for care at the long-term hospital.
"Ventilator-dependent" means an individual who receives mechanical ventilation for life support at
least six hours per day and is expected to be or has been dependent for at least 30 consecutive days.
    Subd. 7. Prior authorization; time limits. The commissioner or the commissioner's
designee shall determine the time period for which a prior authorization shall be effective and,
if flexible use has been requested, whether to allow the flexible use option. If the recipient
continues to require home care services beyond the duration of the prior authorization, the home
care provider must request a new prior authorization. Under no circumstances, other than the
exceptions in subdivision 4, shall a prior authorization be valid prior to the date the commissioner
receives the request or for more than 12 months. A recipient who appeals a reduction in previously
authorized home care services may continue previously authorized services, other than temporary
services under subdivision 8, pending an appeal under section 256.045. The commissioner must
provide a detailed explanation of why the authorized services are reduced in amount from those
requested by the home care provider.
    Subd. 8. Prior authorization requests; temporary services. The agency nurse, the
independently enrolled private duty nurse, or county public health nurse may request a temporary
authorization for home care services by telephone. The commissioner may approve a temporary
level of home care services based on the assessment, and service or care plan information, and
primary payer coverage determination information as required. Authorization for a temporary
level of home care services including nurse supervision is limited to the time specified by
the commissioner, but shall not exceed 45 days, unless extended because the county public
health nurse has not completed the required assessment and service plan, or the commissioner's
determination has not been made. The level of services authorized under this provision shall
have no bearing on a future prior authorization.
    Subd. 9. Prior authorization for foster care setting. Home care services provided in an
adult or child foster care setting must receive prior authorization by the department according to
the limits established in subdivision 11.
The commissioner may not authorize:
(1) home care services that are the responsibility of the foster care provider under the terms
of the foster care placement agreement and administrative rules;
(2) personal care assistant services when the foster care license holder is also the personal
care provider or personal care assistant unless the recipient can direct the recipient's own care, or
case management is provided as required in section 256B.0625, subdivision 19a;
(3) personal care assistant services when the responsible party is an employee of, or under
contract with, or has any direct or indirect financial relationship with the personal care provider or
personal care assistant, unless case management is provided as required in section 256B.0625,
subdivision 19a ; or
(4) personal care assistant and private duty nursing services when the number of foster care
residents is greater than four unless the county responsible for the recipient's foster placement
made the placement prior to April 1, 1992, requests that personal care assistant and private duty
nursing services be provided, and case management is provided as required in section 256B.0625,
subdivision 19a .
    Subd. 10. Limitation on payments. Medical assistance payments for home care services
shall be limited according to subdivisions 4 to 12 and sections 256B.0654, subdivision 2, and
256B.0655, subdivisions 3 and 4.
    Subd. 11. Limits on services without prior authorization. A recipient may receive the
following home care services during a calendar year:
(1) up to two face-to-face assessments to determine a recipient's need for personal care
assistant services;
(2) one service update done to determine a recipient's need for personal care assistant
services; and
(3) up to nine skilled nurse visits.
    Subd. 12. Approval of home care services. The commissioner or the commissioner's
designee shall determine the medical necessity of home care services, the level of caregiver
according to subdivision 2, and the institutional comparison according to subdivisions 4 to 12 and
sections 256B.0654, subdivision 2, and 256B.0655, subdivisions 3 and 4, the cost-effectiveness of
services, and the amount, scope, and duration of home care services reimbursable by medical
assistance, based on the assessment, primary payer coverage determination information as
required, the service plan, the recipient's age, the cost of services, the recipient's medical
condition, and diagnosis or disability. The commissioner may publish additional criteria for
determining medical necessity according to section 256B.04.
    Subd. 13. Recovery of excessive payments. The commissioner shall seek monetary
recovery from providers of payments made for services which exceed the limits established in
this section and sections 256B.0653 to 256B.0656. This subdivision does not apply to services
provided to a recipient at the previously authorized level pending an appeal under section
256.045, subdivision 10.
History: 1986 c 444; 1990 c 568 art 3 s 51; 1991 c 292 art 7 s 12,25; 1992 c 391 s 3-6;
1992 c 464 art 2 s 1; 1992 c 513 art 7 s 50; 1Sp1993 c 1 art 5 s 51-53; 1995 c 207 art 6 s 52-55;
1996 c 451 art 5 s 17-20; 1997 c 203 art 4 s 28,29; 3Sp1997 c 3 s 9; 1998 c 407 art 4 s 29-31;
1999 c 245 art 4 s 50-58; 2000 c 474 s 8-11; 1Sp2001 c 9 art 3 s 29-41; 2002 c 375 art 2 s 17;
2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c 14 art 3 s 26-28; 2005 c 10 art 1 s
49,50; 2005 c 56 s 1; 1Sp2005 c 4 art 7 s 15-19

256B.0652 PRIOR AUTHORIZATION AND REVIEW OF HOME CARE SERVICES.
    Subdivision 1. State coordination. The commissioner shall supervise the coordination of the
prior authorization and review of home care services that are reimbursed by medical assistance.
    Subd. 2. Duties. (a) The commissioner may contract with or employ qualified registered
nurses and necessary support staff, or contract with qualified agencies, to provide home care
prior authorization and review services for medical assistance recipients who are receiving
home care services.
(b) Reimbursement for the prior authorization function shall be made through the medical
assistance administrative authority. The state shall pay the nonfederal share. The functions will
be to:
(1) assess the recipient's individual need for services required to be cared for safely in
the community;
(2) ensure that a service plan that meets the recipient's needs is developed by the appropriate
agency or individual;
(3) ensure cost-effectiveness of medical assistance home care services;
(4) recommend the approval or denial of the use of medical assistance funds to pay for
home care services;
(5) reassess the recipient's need for and level of home care services at a frequency determined
by the commissioner; and
(6) conduct on-site assessments when determined necessary by the commissioner and
recommend changes to care plans that will provide more efficient and appropriate home care.
(c) In addition, the commissioner or the commissioner's designee may:
(1) review service plans and reimbursement data for utilization of services that exceed
community-based standards for home care, inappropriate home care services, medical necessity,
home care services that do not meet quality of care standards, or unauthorized services and make
appropriate referrals within the department or to other appropriate entities based on the findings;
(2) assist the recipient in obtaining services necessary to allow the recipient to remain safely
in or return to the community;
(3) coordinate home care services with other medical assistance services under section
256B.0625;
(4) assist the recipient with problems related to the provision of home care services;
(5) assure the quality of home care services; and
(6) assure that all liable third-party payers including Medicare have been used prior to
medical assistance for home care services, including but not limited to, home health agency,
elected hospice benefit, waivered services, alternative care program services, and personal care
services.
(d) For the purposes of this section, "home care services" means medical assistance services
defined under section 256B.0625, subdivisions 6a, 7, and 19a.
    Subd. 3. Assessment and prior authorization process. Effective January 1, 1996, for
purposes of providing informed choice, coordinating of local planning decisions, and streamlining
administrative requirements, the assessment and prior authorization process for persons
receiving both home care and home and community-based waivered services for persons with
developmental disabilities shall meet the requirements of sections 256B.0651 and 256B.0653
to 256B.0656 with the following exceptions:
(a) Upon request for home care services and subsequent assessment by the public health
nurse under sections 256B.0651 and 256B.0653 to 256B.0656, the public health nurse shall
participate in the screening process, as appropriate, and, if home care services are determined to
be necessary, participate in the development of a service plan coordinating the need for home care
and home and community-based waivered services with the assigned county case manager, the
recipient of services, and the recipient's legal representative, if any.
(b) The public health nurse shall give prior authorization for home care services to the
extent that home care services are:
(1) medically necessary;
(2) chosen by the recipient and their legal representative, if any, from the array of home care
and home and community-based waivered services available;
(3) coordinated with other services to be received by the recipient as described in the service
plan; and
(4) provided within the county's reimbursement limits for home care and home and
community-based waivered services for persons with developmental disabilities.
(c) If the public health agency is or may be the provider of home care services to the
recipient, the public health agency shall provide the commissioner of human services with a
written plan that specifies how the assessment and prior authorization process will be held
separate and distinct from the provision of services.
History: 1991 c 292 art 7 s 13; 1Sp1993 c 1 art 5 s 54; 1995 c 207 art 3 s 18; art 6 s 56;
1996 c 451 art 2 s 21; 2005 c 56 s 1

256B.0653 HOME HEALTH AGENCY SERVICES.
    Subdivision 1. Covered services. (a) Homecare; skilled nurse visits. "Skilled nurse visits"
are provided in a recipient's residence under a plan of care or service plan that specifies a level of
care which the nurse is qualified to provide. These services are:
(1) nursing services according to the written plan of care or service plan and accepted
standards of medical and nursing practice in accordance with chapter 148;
(2) services which due to the recipient's medical condition may only be safely and effectively
provided by a registered nurse or a licensed practical nurse;
(3) assessments performed only by a registered nurse; and
(4) teaching and training the recipient, the recipient's family, or other caregivers requiring the
skills of a registered nurse or licensed practical nurse.
(b) Telehomecare; skilled nurse visits. Medical assistance covers skilled nurse visits
according to section 256B.0625, subdivision 6a, provided via telehomecare, for services which
do not require hands-on care between the home care nurse and recipient. The provision of
telehomecare must be made via live, two-way interactive audiovisual technology and may be
augmented by utilizing store-and-forward technologies. Store-and-forward technology includes
telehomecare services that do not occur in real time via synchronous transmissions, and that do
not require a face-to-face encounter with the recipient for all or any part of any such telehomecare
visit. Individually identifiable patient data obtained through real-time or store-and-forward
technology must be maintained as health records according to section 144.335. If the video is
used for research, training, or other purposes unrelated to the care of the patient, the identity of
the patient must be concealed. A communication between the home care nurse and recipient that
consists solely of a telephone conversation, facsimile, electronic mail, or a consultation between
two health care practitioners, is not to be considered a telehomecare visit. Multiple daily skilled
nurse visits provided via telehomecare are allowed. Coverage of telehomecare is limited to two
visits per day. All skilled nurse visits provided via telehomecare must be prior authorized by the
commissioner or the commissioner's designee and will be covered at the same allowable rate as
skilled nurse visits provided in-person.
(c) Therapies through home health agencies. (1) Physical therapy. Medical assistance
covers physical therapy and related services, including specialized maintenance therapy. Services
provided by a physical therapy assistant shall be reimbursed at the same rate as services
performed by a physical therapist when the services of the physical therapy assistant are provided
under the direction of a physical therapist who is on the premises. Services provided by a physical
therapy assistant that are provided under the direction of a physical therapist who is not on the
premises shall be reimbursed at 65 percent of the physical therapist rate. Direction of the physical
therapy assistant must be provided by the physical therapist as described in Minnesota Rules,
part 9505.0390, subpart 1, item B. The physical therapist and physical therapist assistant may not
both bill for services provided to a recipient on the same day.
(2) Occupational therapy. Medical assistance covers occupational therapy and related
services, including specialized maintenance therapy. Services provided by an occupational
therapy assistant shall be reimbursed at the same rate as services performed by an occupational
therapist when the services of the occupational therapy assistant are provided under the direction
of the occupational therapist who is on the premises. Services provided by an occupational
therapy assistant under the direction of an occupational therapist who is not on the premises shall
be reimbursed at 65 percent of the occupational therapist rate. Direction of the occupational
therapy assistant must be provided by the occupational therapist as described in Minnesota Rules,
part 9505.0390, subpart 1, item B. The occupational therapist and occupational therapist assistant
may not both bill for services provided to a recipient on the same day.
History: 1986 c 444; 1990 c 568 art 3 s 51; 1991 c 292 art 7 s 12,25; 1992 c 391 s 3-6;
1992 c 464 art 2 s 1; 1992 c 513 art 7 s 50; 1Sp1993 c 1 art 5 s 51-53; 1995 c 207 art 6 s 52-55;
1996 c 451 art 5 s 17-20; 1997 c 203 art 4 s 28,29; 3Sp1997 c 3 s 9; 1998 c 407 art 4 s 29-31;
1999 c 245 art 4 s 50-58; 2000 c 474 s 8-11; 1Sp2001 c 9 art 3 s 29-41; 2002 c 375 art 2 s 17;
2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c 14 art 3 s 26-28; 2005 c 10 art 1 s
49,50; 1Sp2005 c 4 art 7 s 15-19

256B.0654 PRIVATE DUTY NURSING.
    Subdivision 1. Definitions. (a) "Assessment" means a review and evaluation of a recipient's
need for home care services conducted in person. Assessments for private duty nursing shall be
conducted by a registered private duty nurse. Assessments for medical assistance home care
services for developmental disabilities and alternative care services for developmentally disabled
home and community-based waivered recipients may be conducted by the county public health
nurse to ensure coordination and avoid duplication.
(b) "Complex and regular private duty nursing care" means:
(1) complex care is private duty nursing provided to recipients who are ventilator dependent
or for whom a physician has certified that were it not for private duty nursing the recipient would
meet the criteria for inpatient hospital intensive care unit (ICU) level of care; and
(2) regular care is private duty nursing provided to all other recipients.
    Subd. 2. Private duty nursing services. All private duty nursing services shall be prior
authorized by the commissioner or the commissioner's designee. Prior authorization for private
duty nursing services shall be based on medical necessity and cost-effectiveness when compared
with alternative care options. The commissioner may authorize medically necessary private duty
nursing services in quarter-hour units when:
(i) the recipient requires more individual and continuous care than can be provided during
a nurse visit; or
(ii) the cares are outside of the scope of services that can be provided by a home health aide
or personal care assistant.
The commissioner may authorize:
(A) up to two times the average amount of direct care hours provided in nursing facilities
statewide for case mix classification "K" as established by the annual cost report submitted to the
department by nursing facilities in May 1992;
(B) private duty nursing in combination with other home care services up to the total cost
allowed under section 256B.0655, subdivision 4;
(C) up to 16 hours per day if the recipient requires more nursing than the maximum number
of direct care hours as established in item (A) and the recipient meets the hospital admission
criteria established under Minnesota Rules, parts 9505.0501 to 9505.0540.
The commissioner may authorize up to 16 hours per day of medically necessary private
duty nursing services or up to 24 hours per day of medically necessary private duty nursing
services until such time as the commissioner is able to make a determination of eligibility for
recipients who are cooperatively applying for home care services under the community alternative
care program developed under section 256B.49, or until it is determined by the appropriate
regulatory agency that a health benefit plan is or is not required to pay for appropriate medically
necessary health care services. Recipients or their representatives must cooperatively assist the
commissioner in obtaining this determination. Recipients who are eligible for the community
alternative care program may not receive more hours of nursing under this section and sections
256B.0651, 256B.0653, 256B.0655, and 256B.0656 than would otherwise be authorized under
section 256B.49.
    Subd. 3. Shared private duty nursing care option. (a) Medical assistance payments for
shared private duty nursing services by a private duty nurse shall be limited according to this
subdivision. For the purposes of this section and sections 256B.0651, 256B.0653, 256B.0655,
and 256B.0656, "private duty nursing agency" means an agency licensed under chapter 144A to
provide private duty nursing services.
(b) Recipients of private duty nursing services may share nursing staff and the commissioner
shall provide a rate methodology for shared private duty nursing. For two persons sharing nursing
care, the rate paid to a provider shall not exceed 1.5 times the regular private duty nursing rates
paid for serving a single individual by a registered nurse or licensed practical nurse. These rates
apply only to situations in which both recipients are present and receive shared private duty
nursing care on the date for which the service is billed. No more than two persons may receive
shared private duty nursing services from a private duty nurse in a single setting.
(c) Shared private duty nursing care is the provision of nursing services by a private duty
nurse to two recipients at the same time and in the same setting. For the purposes of this
subdivision, "setting" means:
(1) the home or foster care home of one of the individual recipients; or
(2) a child care program licensed under chapter 245A or operated by a local school district
or private school; or
(3) an adult day care service licensed under chapter 245A; or
(4) outside the home or foster care home of one of the recipients when normal life activities
take the recipients outside the home.
This subdivision does not apply when a private duty nurse is caring for multiple recipients in
more than one setting.
(d) The recipient or the recipient's legal representative, and the recipient's physician, in
conjunction with the home health care agency, shall determine:
(1) whether shared private duty nursing care is an appropriate option based on the individual
needs and preferences of the recipient; and
(2) the amount of shared private duty nursing services authorized as part of the overall
authorization of nursing services.
(e) The recipient or the recipient's legal representative, in conjunction with the private duty
nursing agency, shall approve the setting, grouping, and arrangement of shared private duty
nursing care based on the individual needs and preferences of the recipients. Decisions on the
selection of recipients to share services must be based on the ages of the recipients, compatibility,
and coordination of their care needs.
(f) The following items must be considered by the recipient or the recipient's legal
representative and the private duty nursing agency, and documented in the recipient's health
service record:
(1) the additional training needed by the private duty nurse to provide care to two recipients
in the same setting and to ensure that the needs of the recipients are met appropriately and safely;
(2) the setting in which the shared private duty nursing care will be provided;
(3) the ongoing monitoring and evaluation of the effectiveness and appropriateness of the
service and process used to make changes in service or setting;
(4) a contingency plan which accounts for absence of the recipient in a shared private duty
nursing setting due to illness or other circumstances;
(5) staffing backup contingencies in the event of employee illness or absence; and
(6) arrangements for additional assistance to respond to urgent or emergency care needs of
the recipients.
(g) The provider must offer the recipient or responsible party the option of shared or
one-on-one private duty nursing services. The recipient or responsible party can withdraw from
participating in a shared service arrangement at any time.
(h) The private duty nursing agency must document the following in the health service record
for each individual recipient sharing private duty nursing care:
(1) permission by the recipient or the recipient's legal representative for the maximum
number of shared nursing care hours per week chosen by the recipient;
(2) permission by the recipient or the recipient's legal representative for shared private duty
nursing services provided outside the recipient's residence;
(3) permission by the recipient or the recipient's legal representative for others to receive
shared private duty nursing services in the recipient's residence;
(4) revocation by the recipient or the recipient's legal representative of the shared private duty
nursing care authorization, or the shared care to be provided to others in the recipient's residence,
or the shared private duty nursing services to be provided outside the recipient's residence; and
(5) daily documentation of the shared private duty nursing services provided by each
identified private duty nurse, including:
(i) the names of each recipient receiving shared private duty nursing services together;
(ii) the setting for the shared services, including the starting and ending times that the
recipient received shared private duty nursing care; and
(iii) notes by the private duty nurse regarding changes in the recipient's condition, problems
that may arise from the sharing of private duty nursing services, and scheduling and care issues.
(i) Unless otherwise provided in this subdivision, all other statutory and regulatory provisions
relating to private duty nursing services apply to shared private duty nursing services.
Nothing in this subdivision shall be construed to reduce the total number of private duty
nursing hours authorized for an individual recipient under subdivision 2.
    Subd. 4. Hardship criteria; private duty nursing. (a) Payment is allowed for extraordinary
services that require specialized nursing skills and are provided by parents of minor children,
spouses, and legal guardians who are providing private duty nursing care under the following
conditions:
(1) the provision of these services is not legally required of the parents, spouses, or legal
guardians;
(2) the services are necessary to prevent hospitalization of the recipient; and
(3) the recipient is eligible for state plan home care or a home and community-based waiver
and one of the following hardship criteria are met:
(i) the parent, spouse, or legal guardian resigns from a part-time or full-time job to provide
nursing care for the recipient; or
(ii) the parent, spouse, or legal guardian goes from a full-time to a part-time job with less
compensation to provide nursing care for the recipient; or
(iii) the parent, spouse, or legal guardian takes a leave of absence without pay to provide
nursing care for the recipient; or
(iv) because of labor conditions, special language needs, or intermittent hours of care needed,
the parent, spouse, or legal guardian is needed in order to provide adequate private duty nursing
services to meet the medical needs of the recipient.
(b) Private duty nursing may be provided by a parent, spouse, or legal guardian who is a
nurse licensed in Minnesota. Private duty nursing services provided by a parent, spouse, or legal
guardian cannot be used in lieu of nursing services covered and available under liable third-party
payors, including Medicare. The private duty nursing provided by a parent, spouse, or legal
guardian must be included in the service plan. Authorized skilled nursing services provided by
the parent, spouse, or legal guardian may not exceed 50 percent of the total approved nursing
hours, or eight hours per day, whichever is less, up to a maximum of 40 hours per week. Nothing
in this subdivision precludes the parent's, spouse's, or legal guardian's obligation of assuming the
nonreimbursed family responsibilities of emergency backup caregiver and primary caregiver.
(c) A parent or a spouse may not be paid to provide private duty nursing care if the parent
or spouse fails to pass a criminal background check according to chapter 245C, or if it has been
determined by the home health agency, the case manager, or the physician that the private duty
nursing care provided by the parent, spouse, or legal guardian is unsafe.
History: 1986 c 444; 1990 c 568 art 3 s 51; 1991 c 292 art 7 s 12,25; 1992 c 391 s 3-6;
1992 c 464 art 2 s 1; 1992 c 513 art 7 s 50; 1Sp1993 c 1 art 5 s 51-53; 1995 c 207 art 6 s 52-55;
1996 c 451 art 5 s 17-20; 1997 c 203 art 4 s 28,29; 3Sp1997 c 3 s 9; 1998 c 407 art 4 s 29-31;
1999 c 245 art 4 s 50-58; 2000 c 474 s 8-11; 1Sp2001 c 9 art 3 s 29-41; 2002 c 375 art 2 s 17;
2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c 14 art 3 s 26-28; 2005 c 10 art 1 s
49,50; 2005 c 56 s 1; 1Sp2005 c 4 art 7 s 15-19

256B.0655 PERSONAL CARE ASSISTANT SERVICES.
    Subdivision 1. Definitions. For purposes of this section and sections 256B.0651, 256B.0653,
256B.0654, and 256B.0656, the terms defined in subdivisions 1a to 1i have the meanings given
them unless otherwise provided or indicated by the context.
    Subd. 1a. Activities of daily living. "Activities of daily living" includes eating, toileting,
grooming, dressing, bathing, transferring, mobility, and positioning.
    Subd. 1b. Assessment. "Assessment" means a review and evaluation of a recipient's need
for home care services conducted in person. Assessments for personal care assistant services
shall be conducted by the county public health nurse or a certified public health nurse under
contract with the county. A face-to-face assessment must include: documentation of health status,
determination of need, evaluation of service effectiveness, identification of appropriate services,
service plan development or modification, coordination of services, referrals and follow-up to
appropriate payers and community resources, completion of required reports, recommendation of
service authorization, and consumer education. Once the need for personal care assistant services
is determined under this section or sections 256B.0651, 256B.0653, 256B.0654, and 256B.0656,
the county public health nurse or certified public health nurse under contract with the county is
responsible for communicating this recommendation to the commissioner and the recipient. A
face-to-face assessment for personal care assistant services is conducted on those recipients who
have never had a county public health nurse assessment. A face-to-face assessment must occur
at least annually or when there is a significant change in the recipient's condition or when there
is a change in the need for personal care assistant services. A service update may substitute for
the annual face-to-face assessment when there is not a significant change in recipient condition
or a change in the need for personal care assistant service. A service update or review for
temporary increase includes a review of initial baseline data, evaluation of service effectiveness,
redetermination of service need, modification of service plan and appropriate referrals, update of
initial forms, obtaining service authorization, and on going consumer education. Assessments
must be completed on forms provided by the commissioner within 30 days of a request for home
care services by a recipient or responsible party.
    Subd. 1c. Care plan. "Care plan" means a written description of personal care assistant
services developed by the qualified professional or the recipient's physician with the recipient or
responsible party to be used by the personal care assistant with a copy provided to the recipient
or responsible party.
    Subd. 1d. Health-related functions. "Health-related functions" means functions that can
be delegated or assigned by a licensed health care professional under state law to be performed
by a personal care assistant.
    Subd. 1e. Instrumental activities of daily living. "Instrumental activities of daily living"
includes meal planning and preparation, managing finances, shopping for food, clothing, and
other essential items, performing essential household chores, communication by telephone and
other media, and getting around and participating in the community.
    Subd. 1f. Personal care assistant. "Personal care assistant" means a person who:
(1) is at least 18 years old, except for persons 16 to 18 years of age who participated in
a related school-based job training program or have completed a certified home health aide
competency evaluation;
(2) is able to effectively communicate with the recipient and personal care provider
organization;
(3) effective July 1, 1996, has completed one of the training requirements as specified in
Minnesota Rules, part 9505.0335, subpart 3, items A to E;
(4) has the ability to, and provides covered personal care assistant services according to
the recipient's care plan, responds appropriately to recipient needs, and reports changes in the
recipient's condition to the supervising qualified professional or physician;
(5) is not a consumer of personal care assistant services;
(6) maintains daily written records detailing:
(i) the actual services provided to the recipient; and
(ii) the amount of time spent providing the services; and
(7) is subject to criminal background checks and procedures specified in chapter 245C.
    Subd. 1g. Personal care provider organization. "Personal care provider organization"
means an organization enrolled to provide personal care assistant services under the medical
assistance program that complies with the following:
(1) owners who have a five percent interest or more, and managerial officials are subject
to a background study as provided in chapter 245C. This applies to currently enrolled personal
care provider organizations and those agencies seeking enrollment as a personal care provider
organization. An organization will be barred from enrollment if an owner or managerial official
of the organization has been convicted of a crime specified in chapter 245C, or a comparable
crime in another jurisdiction, unless the owner or managerial official meets the reconsideration
criteria specified in chapter 245C;
(2) the organization must maintain a surety bond and liability insurance throughout the
duration of enrollment and provides proof thereof. The insurer must notify the Department
of Human Services of the cancellation or lapse of policy and the organization must maintain
documentation of services as specified in Minnesota Rules, part 9505.2175, subpart 7, as well as
evidence of compliance with personal care assistant training requirements;
(3) the organization must maintain documentation and a recipient file and satisfy
communication requirements in section 256B.0655, subdivision 2, paragraph (f); and
(4) the organization must comply with all laws and rules governing the provision of personal
care assistant services.
    Subd. 1h. Responsible party. "Responsible party" means an individual who is capable of
providing the support necessary to assist the recipient to live in the community, is at least 18 years
old, actively participates in planning and directing of personal care assistant services, and is not
the personal care assistant. The responsible party must be accessible to the recipient and the
personal care assistant when personal care services are being provided and monitor the services at
least weekly according to the plan of care. The responsible party must be identified at the time
of assessment and listed on the recipient's service agreement and care plan. Responsible parties
who are parents of minors or guardians of minors or incapacitated persons may delegate the
responsibility to another adult who is not the personal care assistant during a temporary absence of
at least 24 hours but not more than six months. The person delegated as a responsible party must
be able to meet the definition of responsible party, except that the delegated responsible party is
required to reside with the recipient only while serving as the responsible party. The delegated
responsible party is not required to reside with the recipient while serving as the responsible party
if competent supervision to ensure the health and safety of the recipient and monitoring of services
provided are stated as part of the person's individual service plan under a home care service or
home and community-based waiver program or in conjunction with a home care targeted case
management service provider or other case manager. The responsible party must assure that the
delegate performs the functions of the responsible party, is identified at the time of the assessment,
and is listed on the service agreement and the care plan. Foster care license holders may be
designated the responsible party for residents of the foster care home if case management is
provided as required in section 256B.0625, subdivision 19a. For persons who, as of April 1, 1992,
are sharing personal care assistant services in order to obtain the availability of 24-hour coverage,
an employee of the personal care provider organization may be designated as the responsible party
if case management is provided as required in section 256B.0625, subdivision 19a.
    Subd. 1i. Service plan. "Service plan" means a written description of the services needed
based on the assessment developed by the nurse who conducts the assessment together with
the recipient or responsible party. The service plan shall include a description of the covered
home care services, frequency and duration of services, and expected outcomes and goals. The
recipient and the provider chosen by the recipient or responsible party must be given a copy of
the completed service plan within 30 calendar days of the request for home care services by
the recipient or responsible party.
    Subd. 2. Personal care assistant services. (a) The personal care assistant services that are
eligible for payment are services and supports furnished to an individual, as needed, to assist in
accomplishing activities of daily living; instrumental activities of daily living; health-related
functions through hands-on assistance, supervision, and cuing; and redirection and intervention
for behavior including observation and monitoring.
(b) Payment for services will be made within the limits approved using the prior authorized
process established in subdivisions 3 and 4, and sections 256B.0651, subdivisions 4 to 12, and
256B.0654, subdivision 2.
(c) The amount and type of services authorized shall be based on an assessment of the
recipient's needs in these areas:
(1) bowel and bladder care;
(2) skin care to maintain the health of the skin;
(3) repetitive maintenance range of motion, muscle strengthening exercises, and other tasks
specific to maintaining a recipient's optimal level of function;
(4) respiratory assistance;
(5) transfers and ambulation;
(6) bathing, grooming, and hairwashing necessary for personal hygiene;
(7) turning and positioning;
(8) assistance with furnishing medication that is self-administered;
(9) application and maintenance of prosthetics and orthotics;
(10) cleaning medical equipment;
(11) dressing or undressing;
(12) assistance with eating and meal preparation and necessary grocery shopping;
(13) accompanying a recipient to obtain medical diagnosis or treatment;
(14) assisting, monitoring, or prompting the recipient to complete the services in clauses
(1) to (13);
(15) redirection, monitoring, and observation that are medically necessary and an integral
part of completing the personal care assistant services described in clauses (1) to (14);
(16) redirection and intervention for behavior, including observation and monitoring;
(17) interventions for seizure disorders, including monitoring and observation if the recipient
has had a seizure that requires intervention within the past three months;
(18) tracheostomy suctioning using a clean procedure if the procedure is properly delegated
by a registered nurse. Before this procedure can be delegated to a personal care assistant, a
registered nurse must determine that the tracheostomy suctioning can be accomplished utilizing a
clean rather than a sterile procedure and must ensure that the personal care assistant has been
taught the proper procedure; and
(19) incidental household services that are an integral part of a personal care service
described in clauses (1) to (18).
For purposes of this subdivision, monitoring and observation means watching for outward
visible signs that are likely to occur and for which there is a covered personal care service or
an appropriate personal care intervention. For purposes of this subdivision, a clean procedure
refers to a procedure that reduces the numbers of microorganisms or prevents or reduces the
transmission of microorganisms from one person or place to another. A clean procedure may be
used beginning 14 days after insertion.
(d) The personal care assistant services that are not eligible for payment are the following:
(1) services provided without a physician's statement of need as required by section
256B.0625, subdivision 19c, and included in the personal care provider agency's file for the
recipient;
(2) assessments by personal care assistant provider organizations or by independently
enrolled registered nurses;
(3) services that are not in the service plan;
(4) services provided by the recipient's spouse, legal guardian for an adult or child recipient,
or parent of a recipient under age 18;
(5) services provided by a foster care provider of a recipient who cannot direct the recipient's
own care, unless monitored by a county or state case manager under section 256B.0625,
subdivision 19a ;
(6) services provided by the residential or program license holder in a residence for more
than four persons;
(7) services that are the responsibility of a residential or program license holder under the
terms of a service agreement and administrative rules;
(8) sterile procedures;
(9) injections of fluids into veins, muscles, or skin;
(10) homemaker services that are not an integral part of a personal care assistant services;
(11) home maintenance or chore services;
(12) services not specified under paragraph (a); and
(13) services not authorized by the commissioner or the commissioner's designee.
(e) The recipient or responsible party may choose to supervise the personal care assistant
or to have a qualified professional, as defined in section 256B.0625, subdivision 19c, provide
the supervision. As required under section 256B.0625, subdivision 19c, the county public health
nurse, as a part of the assessment, will assist the recipient or responsible party to identify the
most appropriate person to provide supervision of the personal care assistant. Health-related
delegated tasks performed by the personal care assistant will be under the supervision of a
qualified professional or the direction of the recipient's physician. If the recipient has a qualified
professional, Minnesota Rules, part 9505.0335, subpart 4, applies.
(f) In order to be paid for personal care assistant services, personal care provider
organizations, and personal care assistant choice providers are required:
(1) to maintain a recipient file for each recipient for whom services are being billed that
contains:
(i) the current physician's statement of need as required by section 256B.0625, subdivision
19c ;
(ii) the service plan, including the monthly authorized hours, or flexible use plan;
(iii) the care plan, signed by the recipient and the qualified professional, if required or
designated, detailing the personal care assistant services to be provided;
(iv) documentation, on a form approved by the commissioner and signed by the personal care
assistant, specifying the day, month, year, arrival, and departure times, with AM and PM notation,
for all services provided to the recipient. The form must include a notice that it is a federal crime
to provide false information on personal care service billings for medical assistance payment; and
(v) all notices to the recipient regarding personal care service use exceeding authorized
hours; and
(2) to communicate, by telephone if available, and in writing, with the recipient or the
responsible party about the schedule for use of authorized hours and to notify the recipient and
the county public health nurse in advance and as soon as possible, on a form approved by the
commissioner, if the monthly number of hours authorized is likely to be exceeded for the month.
(g) The commissioner shall establish an ongoing audit process for potential fraud and abuse
for personal care assistant services. The audit process must include, at a minimum, a requirement
that the documentation of hours of care provided be on a form approved by the commissioner and
include the personal care assistant's signature attesting that the hours shown on each bill were
provided by the personal care assistant on the dates and the times specified.
    Subd. 3. Assessment and service plan. Assessments under subdivision 1b and sections
256B.0651, subdivision 1, paragraph (b), and 256B.0654, subdivision 1, paragraph (a), shall be
conducted initially, and at least annually thereafter, in person with the recipient and result in a
completed service plan using forms specified by the commissioner. Within 30 days of recipient
or responsible party request for home care services, the assessment, the service plan, and other
information necessary to determine medical necessity such as diagnostic or testing information,
social or medical histories, and hospital or facility discharge summaries shall be submitted to
the commissioner. Notwithstanding the provisions of subdivision 8, the commissioner shall
maximize federal financial participation to pay for public health nurse assessments for personal
care services. For personal care assistant services:
(1) The amount and type of service authorized based upon the assessment and service plan
will follow the recipient if the recipient chooses to change providers.
(2) If the recipient's need changes, the recipient's provider may assess the need for a change
in service authorization and request the change from the county public health nurse. Within 30
days of the request, the public health nurse will determine whether to request the change in
services based upon the provider assessment, or conduct a home visit to assess the need and
determine whether the change is appropriate. If the change in service need is due to a change
in medical condition, a new physician's statement of need required by section 256B.0625,
subdivision 19c , must be obtained.
(3) To continue to receive personal care assistant services after the first year, the recipient or
the responsible party, in conjunction with the public health nurse, may complete a service update
on forms developed by the commissioner according to criteria and procedures in subdivisions
1a to 1i and sections 256B.0651, subdivision 1; 256B.0653, subdivision 1; and 256B.0654,
subdivision 1 .
    Subd. 4. Prior authorization. The commissioner, or the commissioner's designee, shall
review the assessment, service update, request for temporary services, request for flexible use
option, service plan, and any additional information that is submitted. The commissioner shall,
within 30 days after receiving a complete request, assessment, and service plan, authorize home
care services as follows:
(1) All personal care assistant services and supervision by a qualified professional, if
requested by the recipient, must be prior authorized by the commissioner or the commissioner's
designee except for the assessments established in section 256B.0651, subdivision 11. The amount
of personal care assistant services authorized must be based on the recipient's home care rating. A
child may not be found to be dependent in an activity of daily living if because of the child's age
an adult would either perform the activity for the child or assist the child with the activity and the
amount of assistance needed is similar to the assistance appropriate for a typical child of the same
age. Based on medical necessity, the commissioner may authorize:
(A) up to two times the average number of direct care hours provided in nursing facilities for
the recipient's comparable case mix level; or
(B) up to three times the average number of direct care hours provided in nursing facilities
for recipients who have complex medical needs or are dependent in at least seven activities of
daily living and need physical assistance with eating or have a neurological diagnosis; or
(C) up to 60 percent of the average reimbursement rate, as of July 1, 1991, for care provided
in a regional treatment center for recipients who have Level I behavior, plus any inflation
adjustment as provided by the legislature for personal care service; or
(D) up to the amount the commissioner would pay, as of July 1, 1991, plus any inflation
adjustment provided for home care services, for care provided in a regional treatment center for
recipients referred to the commissioner by a regional treatment center preadmission evaluation
team. For purposes of this clause, home care services means all services provided in the home or
community that would be included in the payment to a regional treatment center; or
(E) up to the amount medical assistance would reimburse for facility care for recipients
referred to the commissioner by a preadmission screening team established under section
256B.0911 or 256B.092; and
(F) a reasonable amount of time for the provision of supervision by a qualified professional
of personal care assistant services, if a qualified professional is requested by the recipient or
responsible party.
(2) The number of direct care hours shall be determined according to the annual cost report
submitted to the department by nursing facilities. The average number of direct care hours, as
established by May 1, 1992, shall be calculated and incorporated into the home care limits on July
1, 1992. These limits shall be calculated to the nearest quarter hour.
(3) The home care rating shall be determined by the commissioner or the commissioner's
designee based on information submitted to the commissioner by the county public health nurse
on forms specified by the commissioner. The home care rating shall be a combination of current
assessment tools developed under sections 256B.0911 and 256B.501 with an addition for seizure
activity that will assess the frequency and severity of seizure activity and with adjustments,
additions, and clarifications that are necessary to reflect the needs and conditions of recipients
who need home care including children and adults under 65 years of age. The commissioner
shall establish these forms and protocols under this section and sections 256B.0651, 256B.0653,
256B.0654, and 256B.0656 and shall use an advisory group, including representatives of
recipients, providers, and counties, for consultation in establishing and revising the forms and
protocols.
(4) A recipient shall qualify as having complex medical needs if the care required is difficult
to perform and because of recipient's medical condition requires more time than community-based
standards allow or requires more skill than would ordinarily be required and the recipient needs or
has one or more of the following:
(A) daily tube feedings;
(B) daily parenteral therapy;
(C) wound or decubiti care;
(D) postural drainage, percussion, nebulizer treatments, suctioning, tracheotomy care,
oxygen, mechanical ventilation;
(E) catheterization;
(F) ostomy care;
(G) quadriplegia; or
(H) other comparable medical conditions or treatments the commissioner determines would
otherwise require institutional care.
(5) A recipient shall qualify as having Level I behavior if there is reasonable supporting
evidence that the recipient exhibits, or that without supervision, observation, or redirection would
exhibit, one or more of the following behaviors that cause, or have the potential to cause:
(A) injury to the recipient's own body;
(B) physical injury to other people; or
(C) destruction of property.
(6) Time authorized for personal care relating to Level I behavior in paragraph (5), clauses
(A) to (C), shall be based on the predictability, frequency, and amount of intervention required.
(7) A recipient shall qualify as having Level II behavior if the recipient exhibits on a daily
basis one or more of the following behaviors that interfere with the completion of personal care
assistant services under subdivision 2, paragraph (a):
(A) unusual or repetitive habits;
(B) withdrawn behavior; or
(C) offensive behavior.
(8) A recipient with a home care rating of Level II behavior in paragraph (7), clauses (A) to
(C), shall be rated as comparable to a recipient with complex medical needs under paragraph (4).
If a recipient has both complex medical needs and Level II behavior, the home care rating shall be
the next complex category up to the maximum rating under paragraph (1), clause (B).
    Subd. 5. Shared personal care assistant services. (a) Medical assistance payments for
shared personal care assistance services shall be limited according to this subdivision.
(b) Recipients of personal care assistant services may share staff and the commissioner shall
provide a rate system for shared personal care assistant services. For two persons sharing services,
the rate paid to a provider shall not exceed 1-1/2 times the rate paid for serving a single individual,
and for three persons sharing services, the rate paid to a provider shall not exceed twice the rate
paid for serving a single individual. These rates apply only to situations in which all recipients
were present and received shared services on the date for which the service is billed. No more
than three persons may receive shared services from a personal care assistant in a single setting.
(c) Shared service is the provision of personal care assistant services by a personal care
assistant to two or three recipients at the same time and in the same setting. For the purposes of
this subdivision, "setting" means:
(1) the home or foster care home of one of the individual recipients; or
(2) a child care program in which all recipients served by one personal care assistant are
participating, which is licensed under chapter 245A or operated by a local school district or
private school; or
(3) outside the home or foster care home of one of the recipients when normal life activities
take the recipients outside the home.
The provisions of this subdivision do not apply when a personal care assistant is caring for
multiple recipients in more than one setting.
(d) The recipient or the recipient's responsible party, in conjunction with the county public
health nurse, shall determine:
(1) whether shared personal care assistant services is an appropriate option based on the
individual needs and preferences of the recipient; and
(2) the amount of shared services allocated as part of the overall authorization of personal
care assistant services.
The recipient or the responsible party, in conjunction with the supervising qualified
professional, if a qualified professional is requested by any one of the recipients or responsible
parties, shall arrange the setting and grouping of shared services based on the individual needs
and preferences of the recipients. Decisions on the selection of recipients to share services must
be based on the ages of the recipients, compatibility, and coordination of their care needs.
(e) The following items must be considered by the recipient or the responsible party and the
supervising qualified professional, if a qualified professional has been requested by any one of the
recipients or responsible parties, and documented in the recipient's health service record:
(1) the additional qualifications needed by the personal care assistant to provide care to
several recipients in the same setting;
(2) the additional training and supervision needed by the personal care assistant to ensure
that the needs of the recipient are met appropriately and safely. The provider must provide on-site
supervision by a qualified professional within the first 14 days of shared services, and monthly
thereafter, if supervision by a qualified provider has been requested by any one of the recipients or
responsible parties;
(3) the setting in which the shared services will be provided;
(4) the ongoing monitoring and evaluation of the effectiveness and appropriateness of the
service and process used to make changes in service or setting; and
(5) a contingency plan which accounts for absence of the recipient in a shared services
setting due to illness or other circumstances and staffing contingencies.
(f) The provider must offer the recipient or the responsible party the option of shared or
one-on-one personal care assistant services. The recipient or the responsible party can withdraw
from participating in a shared services arrangement at any time.
(g) In addition to documentation requirements under Minnesota Rules, part 9505.2175, a
personal care provider must meet documentation requirements for shared personal care assistant
services and must document the following in the health service record for each individual
recipient sharing services:
(1) permission by the recipient or the recipient's responsible party, if any, for the maximum
number of shared services hours per week chosen by the recipient;
(2) permission by the recipient or the recipient's responsible party, if any, for personal care
assistant services provided outside the recipient's residence;
(3) permission by the recipient or the recipient's responsible party, if any, for others to
receive shared services in the recipient's residence;
(4) revocation by the recipient or the recipient's responsible party, if any, of the shared
service authorization, or the shared service to be provided to others in the recipient's residence, or
the shared service to be provided outside the recipient's residence;
(5) supervision of the shared personal care assistant services by the qualified professional, if
a qualified professional is requested by one of the recipients or responsible parties, including the
date, time of day, number of hours spent supervising the provision of shared services, whether
the supervision was face-to-face or another method of supervision, changes in the recipient's
condition, shared services scheduling issues and recommendations;
(6) documentation by the qualified professional, if a qualified professional is requested
by one of the recipients or responsible parties, of telephone calls or other discussions with the
personal care assistant regarding services being provided to the recipient who has requested
the supervision; and
(7) daily documentation of the shared services provided by each identified personal care
assistant including:
(i) the names of each recipient receiving shared services together;
(ii) the setting for the shared services, including the starting and ending times that the
recipient received shared services; and
(iii) notes by the personal care assistant regarding changes in the recipient's condition,
problems that may arise from the sharing of services, scheduling issues, care issues, and other
notes as required by the qualified professional, if a qualified professional is requested by one of
the recipients or responsible parties.
(h) Unless otherwise provided in this subdivision, all other statutory and regulatory
provisions relating to personal care assistant services apply to shared services.
(i) In the event that supervision by a qualified professional has been requested by one or
more recipients, but not by all of the recipients, the supervision duties of the qualified professional
shall be limited to only those recipients who have requested the supervision.
Nothing in this subdivision shall be construed to reduce the total number of hours authorized
for an individual recipient.
    Subd. 6. Flexible use option. (a) "Flexible use option" means the scheduled use of authorized
hours of personal care assistant services, which vary within a service authorization period
covering no more than six months, in order to more effectively meet the needs and schedule of
the recipient. Authorized hours not used within the six-month period may not be carried over to
another time period. The flexible use of personal care assistant hours for a six-month period must
be prior authorized by the commissioner, based on a request submitted on a form approved by
the commissioner. The request must include the assessment and the annual service plan prepared
by the county public health nurse.
(b) The recipient or responsible party, together with the case manager, if the recipient has
case management services, and the county public health nurse, shall determine whether flexible
use is an appropriate option based on the needs, abilities, preferences, and history of service use
of the recipient or responsible party, and if appropriate, must ensure that the allocation of hours
covers the ongoing needs of the recipient over an entire year divided into two six-month periods
of flexible use. A recipient who has terminated personal care assistant services before the end of
the 12-month authorization period shall not receive additional hours upon reapplying during the
same 12-month authorization period, except if a change in condition is documented. Services shall
be prorated for the remainder of the 12-month authorization period based on earlier assessment.
(c) If prior authorized, recipients may use their approved hours flexibly within the service
authorization period for medically necessary covered services specified in the assessment required
in subdivision 1b and section 256B.0651, subdivision 1, paragraph (b). The flexible use of
authorized hours does not increase the total amount of authorized hours available to a recipient as
determined under subdivision 4. The commissioner shall not authorize additional personal care
assistant services to supplement a service authorization that is exhausted before the end date under
a flexible service use plan, unless the county public health nurse determines a change in condition
and a need for increased services is established.
(d) The personal care provider organization and the recipient or responsible party or the
personal care assistance choice provider must develop a written month-to-month plan of the
projected use of personal care assistant services that is part of the care plan and ensures:
(1) that the health and safety needs of the recipient will be met;
(2) that the total annual authorization will not be used before the end of the authorization
period; and
(3) monthly monitoring will be conducted of hours used as a percentage of the authorized
amount.
(e) The provider shall notify the recipient or responsible party, any case manager for the
recipient, and the county public health nurse in advance and as soon as possible, on a form
approved by the commissioner, if the monthly amount of hours authorized is likely to be exceeded
for the month.
(f) The commissioner shall provide written notice to the provider, the recipient or responsible
party, any case manager for the recipient, and the county public health nurse, when a flexible use
recipient exceeds the personal care assistant service authorization for the month by an amount
determined by the commissioner. If the use of hours exceeds the monthly service authorization by
the amount determined by the commissioner for two months during any three-month period, the
commissioner shall notify the recipient and the county public health nurse that the flexible use
authorization will be revoked beginning the following month. The revocation will not become
effective if, within ten working days of the commissioner's notice of flexible use revocation, the
county public health nurse requests prior authorization for an increase in the service authorization
or continuation of the flexible use option, or the recipient appeals and assistance pending appeal
is ordered. The commissioner shall determine whether to approve the increase and continued
flexible use.
(g) The recipient or responsible party may stop the flexible use of hours by notifying the
personal care provider organization or the personal care assistance choice provider and county
public health nurse in writing.
(h) The recipient or responsible party may appeal the commissioner's action according to
section 256.045. The denial or revocation of the flexible use option shall not affect the recipient's
authorized level of personal care assistant services as determined under subdivision 4.
    Subd. 7. Fiscal intermediary option. (a) The commissioner may allow a recipient of
personal care assistant services to use a fiscal intermediary to assist the recipient in paying
and accounting for medically necessary covered personal care assistant services authorized in
subdivision 2 and within the payment parameters of subdivision 4. Unless otherwise provided in
this subdivision, all other statutory and regulatory provisions relating to personal care assistant
services apply to a recipient using the fiscal intermediary option.
(b) The recipient or responsible party shall:
(1) recruit, hire, and terminate a qualified professional, if a qualified professional is requested
by the recipient or responsible party;
(2) verify and document the credentials of the qualified professional, if a qualified
professional is requested by the recipient or responsible party;
(3) develop a service plan based on physician orders and public health nurse assessment with
the assistance of a qualified professional, if a qualified professional is requested by the recipient
or responsible party, that addresses the health and safety of the recipient;
(4) recruit, hire, and terminate the personal care assistant;
(5) orient and train the personal care assistant with assistance as needed from the qualified
professional;
(6) supervise and evaluate the personal care assistant with assistance as needed from the
recipient's physician or the qualified professional;
(7) monitor and verify in writing and report to the fiscal intermediary the number of hours
worked by the personal care assistant and the qualified professional; and
(8) enter into a written agreement, as specified in paragraph (f).
(c) The duties of the fiscal intermediary shall be to:
(1) bill the medical assistance program for personal care assistant and qualified professional
services;
(2) request and secure background checks on personal care assistants and qualified
professionals according to chapter 245C;
(3) pay the personal care assistant and qualified professional based on actual hours of
services provided;
(4) withhold and pay all applicable federal and state taxes;
(5) verify and keep records of hours worked by the personal care assistant and qualified
professional;
(6) make the arrangements and pay unemployment insurance, taxes, workers' compensation,
liability insurance, and other benefits, if any;
(7) enroll in the medical assistance program as a fiscal intermediary; and
(8) enter into a written agreement as specified in paragraph (f) before services are provided.
(d) The fiscal intermediary:
(1) may not be related to the recipient, qualified professional, or the personal care assistant;
(2) must ensure arm's-length transactions with the recipient and personal care assistant; and
(3) shall be considered a joint employer of the personal care assistant and qualified
professional to the extent specified in this section and sections 256B.0651, 256B.0653,
256B.0654, and 256B.0656.
The fiscal intermediary or owners of the entity that provides fiscal intermediary services
under this subdivision must pass a criminal background check.
(e) If the recipient or responsible party requests a qualified professional, the qualified
professional providing assistance to the recipient shall meet the qualifications specified in section
256B.0625, subdivision 19c. The qualified professional shall assist the recipient in developing and
revising a plan to meet the recipient's needs, as assessed by the public health nurse. In performing
this function, the qualified professional must visit the recipient in the recipient's home at least
once annually. The qualified professional must report any suspected abuse, neglect, or financial
exploitation of the recipient to the appropriate authorities.
(f) The fiscal intermediary, recipient or responsible party, personal care assistant, and
qualified professional shall enter into a written agreement before services are started. The
agreement shall include:
(1) the duties of the recipient, qualified professional, personal care assistant, and fiscal
agent based on paragraphs (a) to (e);
(2) the salary and benefits for the personal care assistant and the qualified professional;
(3) the administrative fee of the fiscal intermediary and services paid for with that fee,
including background check fees;
(4) procedures to respond to billing or payment complaints; and
(5) procedures for hiring and terminating the personal care assistant and the qualified
professional.
(g) The rates paid for personal care assistant services, shared care services, qualified
professional services, and fiscal intermediary services under this subdivision shall be the same
rates paid for personal care assistant services and qualified professional services under section
256B.0651, subdivision 2, respectively. Except for the administrative fee of the fiscal intermediary
specified in paragraph (f), the remainder of the rates paid to the fiscal intermediary must be used
to pay for the salary and benefits for the personal care assistant or the qualified professional.
(h) As part of the assessment defined in subdivision 1b, the following conditions must be met
to use or continue use of a fiscal intermediary:
(1) the recipient must be able to direct the recipient's own care, or the responsible party for
the recipient must be readily available to direct the care of the personal care assistant;
(2) the recipient or responsible party must be knowledgeable of the health care needs of the
recipient and be able to effectively communicate those needs;
(3) a face-to-face assessment must be conducted by the local county public health nurse at
least annually, or when there is a significant change in the recipient's condition or change in
the need for personal care assistant services;
(4) recipients who choose to use the shared care option as specified in subdivision 5 must
utilize the same fiscal intermediary; and
(5) parties must be in compliance with the written agreement specified in paragraph (f).
(i) The commissioner shall deny, revoke, or suspend the authorization to use the fiscal
intermediary option if:
(1) it has been determined by the qualified professional or local county public health nurse
that the use of this option jeopardizes the recipient's health and safety;
(2) the parties have failed to comply with the written agreement specified in paragraph (f); or
(3) the use of the option has led to abusive or fraudulent billing for personal care assistant
services.
The recipient or responsible party may appeal the commissioner's action according to section
256.045. The denial, revocation, or suspension to use the fiscal intermediary option shall not affect
the recipient's authorized level of personal care assistant services as determined in subdivision 4.
    Subd. 8. Public health nurse assessment rate. (a) The reimbursement rates for public
health nurse visits that relate to the provision of personal care services under this section and
section 256B.0625, subdivision 19a, are:
(i) $210.50 for a face-to-face assessment visit;
(ii) $105.25 for each service update; and
(iii) $105.25 for each request for a temporary service increase.
(b) The rates specified in paragraph (a) must be adjusted to reflect provider rate increases for
personal care assistant services that are approved by the legislature for the fiscal year ending June
30, 2000, and subsequent fiscal years. Any requirements applied by the legislature to provider rate
increases for personal care assistant services also apply to adjustments under this paragraph.
    Subd. 9. Quality assurance plan. The commissioner shall establish a quality assurance plan
for personal care assistant services that includes:
(1) performance-based provider agreements;
(2) meaningful consumer input, which may include consumer surveys, that measure the
extent to which participants receive the services and supports described in the individual plan
and participant satisfaction with such services and supports;
(3) ongoing monitoring of the health and well-being of consumers; and
(4) an ongoing public process for development, implementation, and review of the quality
assurance plan.
    Subd. 10. Oversight of enrolled providers. The commissioner may request from providers
documentation of compliance with laws, rules, and policies governing the provision of personal
care assistant services. A personal care assistant service provider must provide the requested
documentation to the commissioner within ten business days of the request. Failure to provide
information to demonstrate substantial compliance with laws, rules, or policies may result in
suspension, denial, or termination of the provider agreement.
History: 1986 c 444; 1990 c 568 art 3 s 51; 1991 c 292 art 7 s 12,25; 1992 c 391 s 3-6;
1992 c 464 art 2 s 1; 1992 c 513 art 7 s 50; 1Sp1993 c 1 art 5 s 51-53; 1995 c 207 art 6 s 52-55;
1996 c 451 art 5 s 17-20; 1997 c 203 art 4 s 28,29; 3Sp1997 c 3 s 9; 1998 c 407 art 4 s 29-31;
1999 c 245 art 4 s 50-58; 2000 c 474 s 8-11; 1Sp2001 c 9 art 3 s 29-41; 2002 c 375 art 2 s 17;
2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c 14 art 3 s 26-28; 2005 c 10 art 1 s
49,50; 1Sp2005 c 4 art 7 s 15-19

256B.0656 CONSUMER DIRECTED HOME CARE PROJECT.
(a) Upon the receipt of federal waiver authority, the commissioner shall implement
a consumer-directed home care demonstration project. The consumer-directed home care
demonstration project must demonstrate and evaluate the outcomes of a consumer-directed
service delivery alternative to improve access, increase consumer control and accountability over
available resources, and enable the use of supports that are more individualized and cost-effective
for eligible medical assistance recipients receiving certain medical assistance home care services.
The consumer-directed home care demonstration project will be administered locally by county
agencies, tribal governments, or administrative entities under contract with the state in regions
where counties choose not to provide this service.
(b) Grant awards for persons who have been receiving medical assistance covered personal
care, home health aide, or private duty nursing services for a period of 12 consecutive months
or more prior to enrollment in the consumer-directed home care demonstration project will be
established on a case-by-case basis using historical service expenditure data. An average monthly
expenditure for each continuing enrollee will be calculated based on historical expenditures made
on behalf of the enrollee for personal care, home health aide, or private duty nursing services
during the 12 month period directly prior to enrollment in the project. The grant award will equal
90 percent of the average monthly expenditure.
(c) Grant awards for project enrollees who have been receiving medical assistance covered
personal care, home health aide, or private duty nursing services for a period of less than 12
consecutive months prior to project enrollment will be calculated on a case-by-case basis using
the service authorization in place at the time of enrollment. The total number of units of personal
care, home health aide, or private duty nursing services the enrollee has been authorized to
receive will be converted to the total cost of the authorized services in a given month using the
statewide average service payment rates. To determine an estimated monthly expenditure, the
total authorized monthly personal care, home health aide or private duty nursing service costs
will be reduced by a percentage rate equivalent to the difference between the statewide average
service authorization and the statewide average utilization rate for each of the services by medical
assistance eligibles during the most recent fiscal year for which 12 months of data is available.
The grant award will equal 90 percent of the estimated monthly expenditure.
(d) The state of Minnesota, county agencies, tribal governments, or administrative entities
under contract with the state that participate in the implementation and administration of the
consumer-directed home care demonstration project, shall not be liable for damages, injuries, or
liabilities sustained through the purchase of support by the individual, the individual's family,
legal representative, or the authorized representative under this section with funds received
through the consumer-directed home care demonstration project. Liabilities include but are not
limited to: workers' compensation liability, the Federal Insurance Contributions Act (FICA), or
the Federal Unemployment Tax Act (FUTA).
(e) With federal approval, the commissioner may adjust methodologies in paragraphs (b) and
(c) to simplify program administration, improve consistency between state and federal programs,
and maximize federal financial participation.
History: 1986 c 444; 1990 c 568 art 3 s 51; 1991 c 292 art 7 s 12,25; 1992 c 391 s 3-6;
1992 c 464 art 2 s 1; 1992 c 513 art 7 s 50; 1Sp1993 c 1 art 5 s 51-53; 1995 c 207 art 6 s 52-55;
1996 c 451 art 5 s 17-20; 1997 c 203 art 4 s 28,29; 3Sp1997 c 3 s 9; 1998 c 407 art 4 s 29-31;
1999 c 245 art 4 s 50-58; 2000 c 474 s 8-11; 1Sp2001 c 9 art 3 s 29-41; 2002 c 375 art 2 s 17;
2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c 14 art 3 s 26-28; 2005 c 10 art 1 s
49,50; 1Sp2005 c 4 art 7 s 15-19

256B.07 [Repealed, 1987 c 403 art 2 s 164]

256B.071 MEDICARE MAXIMIZATION PROGRAM.
    Subdivision 1. Definition. (a) "Dual entitlees" means recipients eligible for either the
medical assistance program or the alternative care program who are also eligible for the federal
Medicare program.
(b) For purposes of this section, "home care services" means home health agency services,
private duty nursing services, personal care assistant services, waivered services, alternative care
program services, hospice services, rehabilitation therapy services, and suppliers of medical
supplies and equipment.
    Subd. 2. Technical assistance to providers. (a) The commissioner shall establish a technical
assistance program to require providers of services and equipment under this section to maximize
collections from the federal Medicare program. The technical assistance may include the
provision of materials to help providers determine those services and equipment likely to be
reimbursed by Medicare.
(b) Any provider of home care services enrolled in the medical assistance program, or
county public health nursing agency responsible for personal care assessments, or county case
managers for alternative care or medical assistance waiver programs, is required to use the
method developed and supplied by the Department of Human Services for determining Medicare
coverage for home care equipment and services provided to dual entitlees to ensure appropriate
billing of Medicare.
    Subd. 3. Referrals to Medicare providers required. Non-Medicare certified home care
providers and medical suppliers that do not participate or accept Medicare assignment must refer
and document the referral of dual eligible recipients to Medicare providers when Medicare is
determined to be the appropriate payer for services and supplies and equipment. Providers will be
terminated from participation in the medical assistance program for failure to make such referrals.
    Subd. 4. Medicare certification requirement. Medicare certification is required of all
medical assistance enrolled home care service providers as required under Title XIX of the
Social Security Act.
    Subd. 5.[Repealed, 2001 c 161 s 58; 2001 c 203 s 19]
History: 1996 c 451 art 2 s 22; 1997 c 195 s 2-4; 2001 c 203 s 10

256B.072 PERFORMANCE REPORTING AND QUALITY IMPROVEMENT SYSTEM.
(a) The commissioner of human services shall establish a performance reporting system for
health care providers who provide health care services to public program recipients covered
under chapters 256B, 256D, and 256L, reporting separately for managed care and fee-for-service
recipients.
(b) The measures used for the performance reporting system for medical groups shall
include measures of care for asthma, diabetes, hypertension, and coronary artery disease and
measures of preventive care services. The measures used for the performance reporting system
for inpatient hospitals shall include measures of care for acute myocardial infarction, heart
failure, and pneumonia, and measures of care and prevention of surgical infections. In the
case of a medical group, the measures used shall be consistent with measures published by
nonprofit Minnesota or national organizations that produce and disseminate health care quality
measures or evidence-based health care guidelines. In the case of inpatient hospital measures,
the commissioner shall appoint the Minnesota Hospital Association and Stratis Health to advise
on the development of the performance measures to be used for hospital reporting. To enable
a consistent measurement process across the community, the commissioner may use measures
of care provided for patients in addition to those identified in paragraph (a). The commissioner
shall ensure collaboration with other health care reporting organizations so that the measures
described in this section are consistent with those reported by those organizations and used
by other purchasers in Minnesota.
(c) The commissioner may require providers to submit information in a required format to
a health care reporting organization or to cooperate with the information collection procedures
of that organization. The commissioner may collaborate with a reporting organization to collect
information reported and to prevent duplication of reporting.
(d) By October 1, 2007, and annually thereafter, the commissioner shall report through a
public Web site the results by medical groups and hospitals, where possible, of the measures
under this section, and shall compare the results by medical groups and hospitals for patients
enrolled in public programs to patients enrolled in private health plans. To achieve this reporting,
the commissioner may collaborate with a health care reporting organization that operates a Web
site suitable for this purpose.
History: 1Sp2005 c 4 art 8 s 43

256B.075 DISEASE MANAGEMENT PROGRAMS.
    Subdivision 1. General. The commissioner shall implement disease management initiatives
that seek to improve patient care and health outcomes and reduce health care costs by managing
the care provided to recipients with chronic conditions.
    Subd. 2. Fee-for-service. (a) The commissioner shall develop and implement a disease
management program for medical assistance and general assistance medical care recipients who
are not enrolled in the prepaid medical assistance or prepaid general assistance medical care
programs and who are receiving services on a fee-for-service basis. The commissioner may
contract with an outside organization to provide these services.
(b) The commissioner shall seek any federal approval necessary to implement this section
and to obtain federal matching funds.
(c) The commissioner shall develop and implement a pilot intensive care management
program for medical assistance children with complex and chronic medical issues who are not
able to participate in the metro-based U Special Kids program due to geographic distance.
    Subd. 3. Prepaid managed care programs. For the prepaid medical assistance, prepaid
general assistance medical care, and MinnesotaCare programs, the commissioner shall ensure
that contracting health plans implement disease management programs that are appropriate for
Minnesota health care program recipients and have been designed by the health plan to improve
patient care and health outcomes and reduce health care costs by managing the care provided to
recipients with chronic conditions.
    Subd. 4. Report. The commissioner of human services shall report to the legislature
by January 15, 2005, on the status of disease management initiatives, and shall present
recommendations to the legislature on any statutory changes needed to increase the effectiveness
of these initiatives.
    Subd. 5.[Repealed, 1Sp2005 c 4 art 8 s 88]
History: 2004 c 288 art 7 s 6; 1Sp2005 c 4 art 8 s 44

256B.08 APPLICATION.
    Subdivision 1. Application process. An applicant for medical assistance, or a person acting
in the applicant's behalf, shall file an application with a local agency in the manner and form
prescribed by the state agency. When a married applicant resides in a nursing home or applies
for medical assistance for nursing home services, the local agency shall consider an application
on behalf of the applicant's spouse only upon specific request of the applicant or upon specific
request of the spouse and separate filing of an application.
    Subd. 2. Expedited review for pregnant women. A pregnant woman who may be eligible
for assistance under section 256B.055, subdivision 1, must receive an appointment for eligibility
determination no later than five working days from the date of her request for assistance from
the local agency. The local agency shall expedite processing her application for assistance and
shall make a determination of eligibility on a completed application no later than ten working
days following the applicant's initial appointment. The local agency shall assist the applicant to
provide all necessary information and documentation in order to process the application within
the time period required under this subdivision. The state agency shall provide for the placement
of applications for medical assistance in eligible provider offices, community health offices, and
Women, Infants and Children (WIC) program sites.
    Subd. 3. Outreach locations. The local agency must establish locations, other than those
used to process applications for cash assistance, to receive and perform initial processing of
applications for pregnant women and children who want medical assistance only. At a minimum,
these locations must be in federally qualified health centers and in hospitals that receive
disproportionate share adjustments under section 256.969, subdivision 8, except that hospitals
located outside of this state that receive the disproportionate share adjustment are not included.
Initial processing of the application need not include a final determination of eligibility. Local
agencies shall designate a person or persons within the agency who will receive the applications
taken at an outreach location and the local agency will be responsible for timely determination of
eligibility.
History: Ex1967 c 16 s 8; 1Sp1981 c 2 s 15; 1986 c 444; 1988 c 689 art 2 s 146,268;
1991 c 292 art 4 s 50

256B.09 INVESTIGATIONS.
When an application for medical assistance hereunder is filed with a county agency,
such county agency shall promptly make or cause to be made such investigation as it may
deem necessary. The object of such investigation shall be to ascertain the facts supporting the
application made hereunder and such other information as may be required by the rules of the
state agency. Upon the completion of such investigation the county agency shall promptly
determine eligibility. No approval by the county agency shall be required prior to payment for
medical care provided to recipients determined to be eligible pursuant to this section.
History: Ex1967 c 16 s 9; 1973 c 717 s 19

256B.091 [Repealed, 1991 c 292 art 7 s 26]

256B.0911 LONG-TERM CARE CONSULTATION SERVICES.
    Subdivision 1. Purpose and goal. (a) The purpose of long-term care consultation services is
to assist persons with long-term or chronic care needs in making long-term care decisions and
selecting options that meet their needs and reflect their preferences. The availability of, and access
to, information and other types of assistance is also intended to prevent or delay certified nursing
facility placements and to provide transition assistance after admission. Further, the goal of these
services is to contain costs associated with unnecessary certified nursing facility admissions. The
commissioners of human services and health shall seek to maximize use of available federal and
state funds and establish the broadest program possible within the funding available.
(b) These services must be coordinated with services provided under section 256.975,
subdivision 7 , and with services provided by other public and private agencies in the community
to offer a variety of cost-effective alternatives to persons with disabilities and elderly persons.
The county agency providing long-term care consultation services shall encourage the use of
volunteers from families, religious organizations, social clubs, and similar civic and service
organizations to provide community-based services.
    Subd. 1a. Definitions. For purposes of this section, the following definitions apply:
(a) "Long-term care consultation services" means:
(1) providing information and education to the general public regarding availability of the
services authorized under this section;
(2) an intake process that provides access to the services described in this section;
(3) assessment of the health, psychological, and social needs of referred individuals;
(4) assistance in identifying services needed to maintain an individual in the least restrictive
environment;
(5) providing recommendations on cost-effective community services that are available to
the individual;
(6) development of an individual's community support plan;
(7) providing information regarding eligibility for Minnesota health care programs;
(8) preadmission screening to determine the need for a nursing facility level of care;
(9) preliminary determination of Minnesota health care programs eligibility for individuals
who need a nursing facility level of care, with appropriate referrals for final determination;
(10) providing recommendations for nursing facility placement when there are no
cost-effective community services available; and
(11) assistance to transition people back to community settings after facility admission.
(b) "Minnesota health care programs" means the medical assistance program under chapter
256B and the alternative care program under section 256B.0913.
    Subd. 2.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 2a.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 3. Long-term care consultation team. (a) A long-term care consultation team
shall be established by the county board of commissioners. Each local consultation team shall
consist of at least one social worker and at least one public health nurse from their respective
county agencies. The board may designate public health or social services as the lead agency for
long-term care consultation services. If a county does not have a public health nurse available, it
may request approval from the commissioner to assign a county registered nurse with at least one
year experience in home care to participate on the team. Two or more counties may collaborate to
establish a joint local consultation team or teams.
(b) The team is responsible for providing long-term care consultation services to all persons
located in the county who request the services, regardless of eligibility for Minnesota health
care programs.
    Subd. 3a. Assessment and support planning. (a) Persons requesting assessment, services
planning, or other assistance intended to support community-based living must be visited by a
long-term care consultation team within ten working days after the date on which an assessment
was requested or recommended. Assessments must be conducted according to paragraphs (b)
to (g).
(b) The county may utilize a team of either the social worker or public health nurse, or both,
to conduct the assessment in a face-to-face interview. The consultation team members must confer
regarding the most appropriate care for each individual screened or assessed.
(c) The long-term care consultation team must assess the health and social needs of the
person, using an assessment form provided by the commissioner.
(d) The team must conduct the assessment in a face-to-face interview with the person being
assessed and the person's legal representative, if applicable.
(e) The team must provide the person, or the person's legal representative, with written
recommendations for facility- or community-based services. The team must document that the
most cost-effective alternatives available were offered to the individual. For purposes of this
requirement, "cost-effective alternatives" means community services and living arrangements that
cost the same as or less than nursing facility care.
(f) If the person chooses to use community-based services, the team must provide the person
or the person's legal representative with a written community support plan, regardless of whether
the individual is eligible for Minnesota health care programs. The person may request assistance
in developing a community support plan without participating in a complete assessment.
(g) The team must give the person receiving assessment or support planning, or the person's
legal representative, materials supplied by the commissioner containing the following information:
(1) the purpose of preadmission screening and assessment;
(2) information about Minnesota health care programs;
(3) the person's freedom to accept or reject the recommendations of the team;
(4) the person's right to confidentiality under the Minnesota Government Data Practices
Act, chapter 13; and
(5) the person's right to appeal the decision regarding the need for nursing facility level of
care or the county's final decisions regarding public programs eligibility according to section
256.045, subdivision 3.
    Subd. 3b. Transition assistance. (a) A long-term care consultation team shall provide
assistance to persons residing in a nursing facility, hospital, regional treatment center, or
intermediate care facility for persons with developmental disabilities who request or are
referred for assistance. Transition assistance must include assessment, community support plan
development, referrals to Minnesota health care programs, and referrals to programs that provide
assistance with housing.
(b) The county shall develop transition processes with institutional social workers and
discharge planners to ensure that:
(1) persons admitted to facilities receive information about transition assistance that is
available;
(2) the assessment is completed for persons within ten working days of the date of request or
recommendation for assessment; and
(3) there is a plan for transition and follow-up for the individual's return to the community.
The plan must require notification of other local agencies when a person who may require
assistance is screened by one county for admission to a facility located in another county.
(c) If a person who is eligible for a Minnesota health care program is admitted to a nursing
facility, the nursing facility must include a consultation team member or the case manager in the
discharge planning process.
    Subd. 4.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 4a. Preadmission screening activities related to nursing facility admissions. (a)
All applicants to Medicaid certified nursing facilities, including certified boarding care facilities,
must be screened prior to admission regardless of income, assets, or funding sources for nursing
facility care, except as described in subdivision 4b. The purpose of the screening is to determine
the need for nursing facility level of care as described in paragraph (d) and to complete activities
required under federal law related to mental illness and developmental disability as outlined in
paragraph (b).
(b) A person who has a diagnosis or possible diagnosis of mental illness or developmental
disability must receive a preadmission screening before admission regardless of the exemptions
outlined in subdivision 4b, paragraph (b), to identify the need for further evaluation and
specialized services, unless the admission prior to screening is authorized by the local mental
health authority or the local developmental disabilities case manager, or unless authorized by the
county agency according to Public Law 101-508.
The following criteria apply to the preadmission screening:
(1) the county must use forms and criteria developed by the commissioner to identify
persons who require referral for further evaluation and determination of the need for specialized
services; and
(2) the evaluation and determination of the need for specialized services must be done by:
(i) a qualified independent mental health professional, for persons with a primary or
secondary diagnosis of a serious mental illness; or
(ii) a qualified developmental disability professional, for persons with a primary or
secondary diagnosis of developmental disability. For purposes of this requirement, a qualified
developmental disability professional must meet the standards for a qualified developmental
disability professional under Code of Federal Regulations, title 42, section 483.430.
(c) The local county mental health authority or the state developmental disability authority
under Public Law Numbers 100-203 and 101-508 may prohibit admission to a nursing facility
if the individual does not meet the nursing facility level of care criteria or needs specialized
services as defined in Public Law Numbers 100-203 and 101-508. For purposes of this section,
"specialized services" for a person with developmental disability means active treatment as that
term is defined under Code of Federal Regulations, title 42, section 483.440 (a)(1).
(d) The determination of the need for nursing facility level of care must be made according
to criteria developed by the commissioner. In assessing a person's needs, consultation team
members shall have a physician available for consultation and shall consider the assessment
of the individual's attending physician, if any. The individual's physician must be included if
the physician chooses to participate. Other personnel may be included on the team as deemed
appropriate by the county.
    Subd. 4b. Exemptions and emergency admissions. (a) Exemptions from the federal
screening requirements outlined in subdivision 4a, paragraphs (b) and (c), are limited to:
(1) a person who, having entered an acute care facility from a certified nursing facility, is
returning to a certified nursing facility;
(2) a person transferring from one certified nursing facility in Minnesota to another certified
nursing facility in Minnesota; and
(3) a person, 21 years of age or older, who satisfies the following criteria, as specified in
Code of Federal Regulations, title 42, section 483.106(b)(2):
(i) the person is admitted to a nursing facility directly from a hospital after receiving acute
inpatient care at the hospital;
(ii) the person requires nursing facility services for the same condition for which care was
provided in the hospital; and
(iii) the attending physician has certified before the nursing facility admission that the person
is likely to receive less than 30 days of nursing facility services.
(b) Persons who are exempt from preadmission screening for purposes of level of care
determination include:
(1) persons described in paragraph (a);
(2) an individual who has a contractual right to have nursing facility care paid for indefinitely
by the veterans' administration;
(3) an individual enrolled in a demonstration project under section 256B.69, subdivision 8, at
the time of application to a nursing facility;
(4) an individual currently being served under the alternative care program or under a home
and community-based services waiver authorized under section 1915(c) of the federal Social
Security Act; and
(5) individuals admitted to a certified nursing facility for a short-term stay, which is expected
to be 14 days or less in duration based upon a physician's certification, and who have been
assessed and approved for nursing facility admission within the previous six months. This
exemption applies only if the consultation team member determines at the time of the initial
assessment of the six-month period that it is appropriate to use the nursing facility for short-term
stays and that there is an adequate plan of care for return to the home or community-based setting.
If a stay exceeds 14 days, the individual must be referred no later than the first county working
day following the 14th resident day for a screening, which must be completed within five working
days of the referral. The payment limitations in subdivision 7 apply to an individual found at
screening to not meet the level of care criteria for admission to a certified nursing facility.
(c) Persons admitted to a Medicaid-certified nursing facility from the community on an
emergency basis as described in paragraph (d) or from an acute care facility on a nonworking day
must be screened the first working day after admission.
(d) Emergency admission to a nursing facility prior to screening is permitted when all of
the following conditions are met:
(1) a person is admitted from the community to a certified nursing or certified boarding
care facility during county nonworking hours;
(2) a physician has determined that delaying admission until preadmission screening is
completed would adversely affect the person's health and safety;
(3) there is a recent precipitating event that precludes the client from living safely in the
community, such as sustaining an injury, sudden onset of acute illness, or a caregiver's inability to
continue to provide care;
(4) the attending physician has authorized the emergency placement and has documented
the reason that the emergency placement is recommended; and
(5) the county is contacted on the first working day following the emergency admission.
Transfer of a patient from an acute care hospital to a nursing facility is not considered an
emergency except for a person who has received hospital services in the following situations:
hospital admission for observation, care in an emergency room without hospital admission, or
following hospital 24-hour bed care.
(e) A nursing facility must provide a written notice to persons who satisfy the criteria in
paragraph (a), clause (3), regarding the person's right to request and receive long-term care
consultation services as defined in subdivision 1a. The notice must be provided prior to the
person's discharge from the facility and in a format specified by the commissioner.
    Subd. 4c. Screening requirements. (a) A person may be screened for nursing facility
admission by telephone or in a face-to-face screening interview. Consultation team members shall
identify each individual's needs using the following categories:
(1) the person needs no face-to-face screening interview to determine the need for nursing
facility level of care based on information obtained from other health care professionals;
(2) the person needs an immediate face-to-face screening interview to determine the need for
nursing facility level of care and complete activities required under subdivision 4a; or
(3) the person may be exempt from screening requirements as outlined in subdivision 4b, but
will need transitional assistance after admission or in-person follow-along after a return home.
(b) Persons admitted on a nonemergency basis to a Medicaid-certified nursing facility must
be screened prior to admission.
(c) The long-term care consultation team shall recommend a case mix classification for
persons admitted to a certified nursing facility when sufficient information is received to make
that classification. The nursing facility is authorized to conduct all case mix assessments for
persons who have been screened prior to admission for whom the county did not recommend a
case mix classification. The nursing facility is authorized to conduct all case mix assessments
for persons admitted to the facility prior to a preadmission screening. The county retains the
responsibility of distributing appropriate case mix forms to the nursing facility.
(d) The county screening or intake activity must include processes to identify persons who
may require transition assistance as described in subdivision 3b.
    Subd. 4d. Preadmission screening of individuals under 65 years of age. (a) It is the policy
of the state of Minnesota to ensure that individuals with disabilities or chronic illness are served
in the most integrated setting appropriate to their needs and have the necessary information to
make informed choices about home and community-based service options.
(b) Individuals under 65 years of age who are admitted to a nursing facility from a hospital
must be screened prior to admission as outlined in subdivisions 4a through 4c.
(c) Individuals under 65 years of age who are admitted to nursing facilities with only a
telephone screening must receive a face-to-face assessment from the long-term care consultation
team member of the county in which the facility is located or from the recipient's county case
manager within 40 calendar days of admission.
(d) Individuals under 65 years of age who are admitted to a nursing facility without
preadmission screening according to the exemption described in subdivision 4b, paragraph
(a), clause (3), and who remain in the facility longer than 30 days must receive a face-to-face
assessment within 40 days of admission.
(e) At the face-to-face assessment, the long-term care consultation team member or county
case manager must perform the activities required under subdivision 3b.
(f) For individuals under 21 years of age, a screening interview which recommends nursing
facility admission must be face-to-face and approved by the commissioner before the individual
is admitted to the nursing facility.
(g) In the event that an individual under 65 years of age is admitted to a nursing facility on
an emergency basis, the county must be notified of the admission on the next working day, and
a face-to-face assessment as described in paragraph (c) must be conducted within 40 calendar
days of admission.
(h) At the face-to-face assessment, the long-term care consultation team member or the case
manager must present information about home and community-based options so the individual
can make informed choices. If the individual chooses home and community-based services, the
long-term care consultation team member or case manager must complete a written relocation
plan within 20 working days of the visit. The plan shall describe the services needed to move out
of the facility and a time line for the move which is designed to ensure a smooth transition to the
individual's home and community.
(i) An individual under 65 years of age residing in a nursing facility shall receive a
face-to-face assessment at least every 12 months to review the person's service choices and
available alternatives unless the individual indicates, in writing, that annual visits are not desired.
In this case, the individual must receive a face-to-face assessment at least once every 36 months
for the same purposes.
(j) Notwithstanding the provisions of subdivision 6, the commissioner may pay county
agencies directly for face-to-face assessments for individuals under 65 years of age who are being
considered for placement or residing in a nursing facility.
    Subd. 5. Administrative activity. The commissioner shall minimize the number of forms
required in the provision of long-term care consultation services and shall limit the screening
document to items necessary for community support plan approval, reimbursement, program
planning, evaluation, and policy development.
    Subd. 6. Payment for long-term care consultation services. (a) The total payment for each
county must be paid monthly by certified nursing facilities in the county. The monthly amount to
be paid by each nursing facility for each fiscal year must be determined by dividing the county's
annual allocation for long-term care consultation services by 12 to determine the monthly payment
and allocating the monthly payment to each nursing facility based on the number of licensed beds
in the nursing facility. Payments to counties in which there is no certified nursing facility must be
made by increasing the payment rate of the two facilities located nearest to the county seat.
(b) The commissioner shall include the total annual payment determined under paragraph (a)
for each nursing facility reimbursed under section 256B.431 or 256B.434 according to section
256B.431, subdivision 2b, paragraph (g), or 256B.435.
(c) In the event of the layaway, delicensure and decertification, or removal from layaway of
25 percent or more of the beds in a facility, the commissioner may adjust the per diem payment
amount in paragraph (b) and may adjust the monthly payment amount in paragraph (a). The
effective date of an adjustment made under this paragraph shall be on or after the first day of the
month following the effective date of the layaway, delicensure and decertification, or removal
from layaway.
(d) Payments for long-term care consultation services are available to the county or counties
to cover staff salaries and expenses to provide the services described in subdivision 1a. The
county shall employ, or contract with other agencies to employ, within the limits of available
funding, sufficient personnel to provide long-term care consultation services while meeting the
state's long-term care outcomes and objectives as defined in section 256B.0917, subdivision 1.
The county shall be accountable for meeting local objectives as approved by the commissioner
in the biennial home and community-based services quality assurance plan on a form provided
by the commissioner.
(e) Notwithstanding section 256B.0641, overpayments attributable to payment of the
screening costs under the medical assistance program may not be recovered from a facility.
(f) The commissioner of human services shall amend the Minnesota medical assistance plan
to include reimbursement for the local consultation teams.
(g) The county may bill, as case management services, assessments, support planning, and
follow-along provided to persons determined to be eligible for case management under Minnesota
health care programs. No individual or family member shall be charged for an initial assessment
or initial support plan development provided under subdivision 3a or 3b.
    Subd. 7. Reimbursement for certified nursing facilities. (a) Medical assistance
reimbursement for nursing facilities shall be authorized for a medical assistance recipient only if a
preadmission screening has been conducted prior to admission or the county has authorized an
exemption. Medical assistance reimbursement for nursing facilities shall not be provided for any
recipient who the local screener has determined does not meet the level of care criteria for nursing
facility placement or, if indicated, has not had a level II OBRA evaluation as required under the
federal Omnibus Budget Reconciliation Act of 1987 completed unless an admission for a recipient
with mental illness is approved by the local mental health authority or an admission for a recipient
with developmental disability is approved by the state developmental disability authority.
(b) The nursing facility must not bill a person who is not a medical assistance recipient
for resident days that preceded the date of completion of screening activities as required under
subdivisions 4a, 4b, and 4c. The nursing facility must include unreimbursed resident days in the
nursing facility resident day totals reported to the commissioner.
(c) The commissioner shall make a request to the Centers for Medicare and Medicaid
Services for a waiver allowing team approval of Medicaid payments for certified nursing facility
care. An individual has a choice and makes the final decision between nursing facility placement
and community placement after the screening team's recommendation, except as provided in
subdivision 4a, paragraph (c).
    Subd. 8.[Repealed, 2001 c 161 s 58]
    Subd. 9.[Repealed, 1Sp2001 c 9 art 4 s 34]
History: 1991 c 292 art 7 s 14; 1992 c 513 art 7 s 53-55; 1Sp1993 c 1 art 5 s 56-61,135;
1995 c 207 art 6 s 57-61; 1997 c 203 art 4 s 34; art 9 s 10; 1997 c 225 art 8 s 6; 1998 c 407 art 4
s 33-35; 1999 c 245 art 3 s 12; 1Sp2001 c 9 art 3 s 42; art 4 s 4-14; 2002 c 277 s 32; 2002 c
375 art 2 s 18,19; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 2 s 56; art 3 s 29; 2004 c 288 art 5 s
4; 2005 c 56 s 1; 2005 c 98 art 2 s 5; 1Sp2005 c 4 art 8 s 45

256B.0912 [Repealed, 1Sp2001 c 9 art 3 s 76]

256B.0913 ALTERNATIVE CARE PROGRAM.
    Subdivision 1. Purpose and goals. The purpose of the alternative care program is to provide
funding for home and community-based services for elderly persons, in order to limit nursing
facility placements. The program is designed to support elderly persons in their desire to remain
in the community as independently and as long as possible and to support informal caregivers in
their efforts to provide care for elderly people. Further, the goals of the program are:
(1) to contain medical assistance expenditures by funding care in the community; and
(2) to maintain the moratorium on new construction of nursing home beds.
    Subd. 2. Eligibility for services. Alternative care services are available to Minnesotans age
65 or older who would be eligible for medical assistance within 135 days of admission to a
nursing facility and subject to subdivisions 4 to 13.
    Subd. 3.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 4. Eligibility for funding for services for nonmedical assistance recipients. (a)
Funding for services under the alternative care program is available to persons who meet the
following criteria:
(1) the person has been determined by a community assessment under section 256B.0911 to
be a person who would require the level of care provided in a nursing facility, but for the provision
of services under the alternative care program;
(2) the person is age 65 or older;
(3) the person would be eligible for medical assistance within 135 days of admission to a
nursing facility;
(4) the person is not ineligible for the medical assistance program due to an asset transfer
penalty;
(5) the person needs services that are not funded through other state or federal funding;
(6) the monthly cost of the alternative care services funded by the program for this person
does not exceed 75 percent of the monthly limit described under section 256B.0915, subdivision
3a . This monthly limit does not prohibit the alternative care client from payment for additional
services, but in no case may the cost of additional services purchased under this section exceed
the difference between the client's monthly service limit defined under section 256B.0915,
subdivision 3 , and the alternative care program monthly service limit defined in this paragraph.
If medical supplies and equipment or environmental modifications are or will be purchased for
an alternative care services recipient, the costs may be prorated on a monthly basis for up to 12
consecutive months beginning with the month of purchase. If the monthly cost of a recipient's
other alternative care services exceeds the monthly limit established in this paragraph, the annual
cost of the alternative care services shall be determined. In this event, the annual cost of alternative
care services shall not exceed 12 times the monthly limit described in this paragraph; and
(7) the person is making timely payments of the assessed monthly fee.
A person is ineligible if payment of the fee is over 60 days past due, unless the person agrees to:
(i) the appointment of a representative payee;
(ii) automatic payment from a financial account;
(iii) the establishment of greater family involvement in the financial management of
payments; or
(iv) another method acceptable to the county to ensure prompt fee payments.
The county shall extend the client's eligibility as necessary while making arrangements to
facilitate payment of past-due amounts and future premium payments. Following disenrollment
due to nonpayment of a monthly fee, eligibility shall not be reinstated for a period of 30 days.
(b) Alternative care funding under this subdivision is not available for a person who is a
medical assistance recipient or who would be eligible for medical assistance without a spenddown
or waiver obligation. A person whose initial application for medical assistance and the elderly
waiver program is being processed may be served under the alternative care program for a
period up to 60 days. If the individual is found to be eligible for medical assistance, medical
assistance must be billed for services payable under the federally approved elderly waiver plan
and delivered from the date the individual was found eligible for the federally approved elderly
waiver plan. Notwithstanding this provision, alternative care funds may not be used to pay for
any service the cost of which: (i) is payable by medical assistance; (ii) is used by a recipient to
meet a waiver obligation; or (iii) is used to pay a medical assistance income spenddown for a
person who is eligible to participate in the federally approved elderly waiver program under the
special income standard provision.
(c) Alternative care funding is not available for a person who resides in a licensed nursing
home, certified boarding care home, hospital, or intermediate care facility, except for case
management services which are provided in support of the discharge planning process for a
nursing home resident or certified boarding care home resident to assist with a relocation process
to a community-based setting.
(d) Alternative care funding is not available for a person whose income is greater than the
maintenance needs allowance under section 256B.0915, subdivision 1d, but equal to or less than
120 percent of the federal poverty guideline effective July 1 in the year for which alternative care
eligibility is determined, who would be eligible for the elderly waiver with a waiver obligation.
    Subd. 5. Services covered under alternative care. Alternative care funding may be used for
payment of costs of:
(1) adult day care;
(2) home health aide;
(3) homemaker services;
(4) personal care;
(5) case management;
(6) respite care;
(7) care-related supplies and equipment;
(8) meals delivered to the home;
(9) transportation;
(10) nursing services;
(11) chore services;
(12) companion services;
(13) nutrition services;
(14) training for direct informal caregivers;
(15) telehome care to provide services in their own homes in conjunction with in-home visits;
(16) discretionary services, for which counties may make payment from their alternative
care program allocation or services not otherwise defined in this section or section 256B.0625,
following approval by the commissioner;
(17) environmental modifications; and
(18) direct cash payments for which counties may make payment from their alternative care
program allocation to clients for the purpose of purchasing services, following approval by the
commissioner, and subject to the provisions of subdivision 5h, until approval and implementation
of consumer-directed services through the federally approved elderly waiver plan. Upon
implementation, consumer-directed services under the alternative care program are available
statewide and limited to the average monthly expenditures representative of all alternative care
program participants for the same case mix resident class assigned in the most recent fiscal year
for which complete expenditure data is available.
Total annual payments for discretionary services and direct cash payments, until the
federally approved consumer-directed service option is implemented statewide, for all clients
within a county may not exceed 25 percent of that county's annual alternative care program base
allocation. Thereafter, discretionary services are limited to 25 percent of the county's annual
alternative care program base allocation.
    Subd. 5a. Services; service definitions; service standards. (a) Unless specified in statute,
the services, service definitions, and standards for alternative care services shall be the same as
the services, service definitions, and standards specified in the federally approved elderly waiver
plan, except for transitional support services, assisted living services, adult foster care services,
and residential care services.
(b) The county agency must ensure that the funds are not used to supplant services available
through other public assistance or services programs. For a provider of supplies and equipment
when the monthly cost of the supplies and equipment is less than $250, persons or agencies must
be employed by or under a contract with the county agency or the public health nursing agency of
the local board of health in order to receive funding under the alternative care program. Supplies
and equipment may be purchased from a vendor not certified to participate in the Medicaid
program if the cost for the item is less than that of a Medicaid vendor.
(c) Personal care services must meet the service standards defined in the federally approved
elderly waiver plan, except that a county agency may contract with a client's relative who meets
the relative hardship waiver requirements or a relative who meets the criteria and is also the
responsible party under an individual service plan that ensures the client's health and safety
and supervision of the personal care services by a qualified professional as defined in section
256B.0625, subdivision 19c. Relative hardship is established by the county when the client's care
causes a relative caregiver to do any of the following: resign from a paying job, reduce work
hours resulting in lost wages, obtain a leave of absence resulting in lost wages, incur substantial
client-related expenses, provide services to address authorized, unstaffed direct care time, or meet
special needs of the client unmet in the formal service plan.
    Subd. 5b. Adult foster care rate. The adult foster care rate shall be considered a difficulty of
care payment and shall not include room and board. The adult foster care rate shall be negotiated
between the county agency and the foster care provider. The alternative care payment for the
foster care service in combination with the payment for other alternative care services, including
case management, must not exceed the limit specified in subdivision 4, paragraph (a), clause (6).
    Subd. 5c. Residential care services; supportive services; health-related services. For
purposes of this section, residential care services are services which are provided to individuals
living in residential care homes. Residential care homes are currently licensed as board and
lodging establishments under section 157.16, and are registered with the Department of Health as
providing special services under section 157.17 except settings that are currently registered under
chapter 144D. Residential care services are defined as "supportive services" and "health-related
services." "Supportive services" means services as defined in section 157.17, subdivision 1,
paragraph (a). "Health-related services" means services covered in section 157.17, subdivision
1 , paragraph (b). Individuals receiving residential care services cannot receive homemaking
services funded under this section.
    Subd. 5d. Assisted living services. For the purposes of this section, "assisted living" refers
to supportive services provided by a single vendor to clients who reside in the same apartment
building of three or more units which are not subject to registration under chapter 144D and
are licensed by the Department of Health as a class A home care provider or a class E home
care provider. Assisted living services are defined as up to 24-hour supervision, oversight, and
supportive services as defined in section 157.17, subdivision 1, paragraph (a), individualized
home care aide tasks as defined in Minnesota Rules, part 4668.0110, and individualized home
management tasks as defined in Minnesota Rules, part 4668.0120, provided to residents of a
residential center living in their units or apartments with a full kitchen and bathroom. A full
kitchen includes a stove, oven, refrigerator, food preparation counter space, and a kitchen utensil
storage compartment. Assisted living services must be provided by the management of the
residential center or by providers under contract with the management or with the county.
    Subd. 5e. Further assisted living requirements. (a) Individuals receiving assisted living
services shall not receive both assisted living services and homemaking services. Individualized
means services are chosen and designed specifically for each resident's needs, rather than
provided or offered to all residents regardless of their illnesses, disabilities, or physical conditions.
Assisted living services as defined in this section shall not be authorized in boarding and lodging
establishments licensed according to sections 157.011 and 157.15 to 157.22.
(b) For establishments registered under chapter 144D, assisted living services under this
section means either the services described in subdivision 5d and delivered by a class E home care
provider licensed by the Department of Health or the services described under section 144A.4605
and delivered by an assisted living home care provider or a class A home care provider licensed
by the commissioner of health.
    Subd. 5f. Payment rates for assisted living services and residential care. (a) Payment
for assisted living services and residential care services shall be a monthly rate negotiated and
authorized by the county agency based on an individualized service plan for each resident and
may not cover direct rent or food costs.
(b) The individualized monthly negotiated payment for assisted living services as described
in subdivision 5d or 5e, paragraph (b), and residential care services as described in subdivision 5c,
shall not exceed the nonfederal share in effect on July 1 of the state fiscal year for which the rate
limit is being calculated of the greater of either the statewide or any of the geographic groups
according to subdivision 4, paragraph (a), clause (6).
(c) The individualized monthly negotiated payment for assisted living services described
under section 144A.4605 and delivered by a provider licensed by the Department of Health as a
class A home care provider or an assisted living home care provider and provided in a building
that is registered as a housing with services establishment under chapter 144D and that provides
24-hour supervision in combination with the payment for other alternative care services, including
case management, must not exceed the limit specified in subdivision 4, paragraph (a), clause (6).
    Subd. 5g. Provisions governing direct cash payments. A county agency may make payment
from their alternative care program allocation for direct cash payments to the client for the purpose
of purchasing the services. The following provisions apply to payments under this subdivision:
(1) a cash payment to a client under this provision cannot exceed the monthly payment limit
for that client as specified in subdivision 4, paragraph (a), clause (6); and
(2) a county may not approve any cash payment for a client who meets either of the following:
(i) has been assessed as having a dependency in orientation, unless the client has an
authorized representative. An "authorized representative" means an individual who is at least 18
years of age and is designated by the person or the person's legal representative to act on the
person's behalf. This individual may be a family member, guardian, representative payee, or
other individual designated by the person or the person's legal representative, if any, to assist
in purchasing and arranging for supports; or
(ii) is concurrently receiving adult foster care, residential care, or assisted living services.
    Subd. 5h. Cash payments to persons. (a) Cash payments to a person or a person's family
will be provided through a monthly payment and be in the form of cash, voucher, or direct county
payment to a vendor. Fees or premiums assessed to the person for eligibility for health and human
services are not reimbursable through this service option. Services and goods purchased through
cash payments must be identified in the person's individualized care plan and must meet all of
the following criteria:
(1) they must be over and above the normal cost of caring for the person if the person
did not have functional limitations;
(2) they must be directly attributable to the person's functional limitations;
(3) they must have the potential to be effective at meeting the goals of the program; and
(4) they must be consistent with the needs identified in the individualized service plan. The
service plan shall specify the needs of the person and family, the form and amount of payment, the
items and services to be reimbursed, and the arrangements for management of the individual grant.
(b) The person, the person's family, or the legal representative shall be provided sufficient
information to ensure an informed choice of alternatives. The local agency shall document
this information in the person's care plan, including the type and level of expenditures to be
reimbursed.
(c) Persons receiving grants under this section shall have the following responsibilities:
(1) spend the grant money in a manner consistent with their individualized service plan
with the local agency;
(2) notify the local agency of any necessary changes in the grant expenditures;
(3) arrange and pay for supports; and
(4) inform the local agency of areas where they have experienced difficulty securing or
maintaining supports.
(d) The county shall report client outcomes, services, and costs under this paragraph in a
manner prescribed by the commissioner.
    Subd. 5i. Immunity. The state of Minnesota, county, lead agency under contract, or tribal
government under contract to administer the alternative care program shall not be liable for
damages, injuries, or liabilities sustained through the purchase of direct supports or goods by the
person, the person's family, or the authorized representative with funds received through the cash
payments under this section. Liabilities include, but are not limited to, workers' compensation, the
Federal Insurance Contributions Act (FICA), or the Federal Unemployment Tax Act (FUTA).
    Subd. 6. Alternative care program administration. (a) The alternative care program is
administered by the county agency. This agency is the lead agency responsible for the local
administration of the alternative care program as described in this section. However, it may
contract with the public health nursing service to be the lead agency. The commissioner may
contract with federally recognized Indian tribes with a reservation in Minnesota to serve as the
lead agency responsible for the local administration of the alternative care program as described
in the contract.
(b) Alternative care pilot projects operate according to this section and the provisions of
Laws 1993, First Special Session chapter 1, article 5, section 133, under agreement with the
commissioner. Each pilot project agreement period shall begin no later than the first payment
cycle of the state fiscal year and continue through the last payment cycle of the state fiscal year.
    Subd. 7. Case management. The case manager must not approve alternative care funding
for a client in any setting in which the case manager cannot reasonably ensure the client's health
and safety. The case manager is responsible for the cost-effectiveness of the alternative care
individual care plan and must not approve any care plan in which the cost of services funded
by alternative care and client contributions exceeds the limit specified in section 256B.0915,
subdivision 3 , paragraph (b).
    Subd. 8. Requirements for individual care plan. (a) The case manager shall implement the
plan of care for each alternative care client and ensure that a client's service needs and eligibility
are reassessed at least every 12 months. The plan shall include any services prescribed by the
individual's attending physician as necessary to allow the individual to remain in a community
setting. In developing the individual's care plan, the case manager should include the use of
volunteers from families and neighbors, religious organizations, social clubs, and civic and
service organizations to support the formal home care services. The county shall be held harmless
for damages or injuries sustained through the use of volunteers under this subdivision including
workers' compensation liability. The county of service shall provide documentation in each
individual's plan of care and, if requested, to the commissioner that the most cost-effective
alternatives available have been offered to the individual and that the individual was free to
choose among available qualified providers, both public and private, including qualified case
management or service coordination providers other than those employed by any county;
however, the county or tribe maintains responsibility for prior authorizing services in accordance
with statutory and administrative requirements. The case manager must give the individual a
ten-day written notice of any denial, termination, or reduction of alternative care services.
(b) The county of service must provide access to and arrange for case management services,
including assuring implementation of the plan. The county of service must notify the county of
financial responsibility of the approved care plan and the amount of encumbered funds.
    Subd. 9. Contracting provisions for providers. Alternative care funds paid to service
providers are subject to audit by the commissioner for fiscal and utilization control.
The lead agency must select providers for contracts or agreements using the following
criteria and other criteria established by the county:
(1) the need for the particular services offered by the provider;
(2) the population to be served, including the number of clients, the length of time services
will be provided, and the medical condition of clients;
(3) the geographic area to be served;
(4) quality assurance methods, including appropriate licensure, certification, or standards,
and supervision of employees when needed;
(5) rates for each service and unit of service exclusive of county administrative costs;
(6) evaluation of services previously delivered by the provider; and
(7) contract or agreement conditions, including billing requirements, cancellation, and
indemnification.
The county must evaluate its own agency services under the criteria established for other
providers.
    Subd. 10. Allocation formula. (a) The alternative care appropriation for fiscal years
1992 and beyond shall cover only alternative care eligible clients. By July 1 of each year, the
commissioner shall allocate to county agencies the state funds available for alternative care for
persons eligible under subdivision 2.
(b) The adjusted base for each county is the county's current fiscal year base allocation plus
any targeted funds approved during the current fiscal year. Calculations for paragraphs (c) and
(d) are to be made as follows: for each county, the determination of alternative care program
expenditures shall be based on payments for services rendered from April 1 through March 31 in
the base year, to the extent that claims have been submitted and paid by June 1 of that year.
(c) If the alternative care program expenditures as defined in paragraph (b) are 95 percent or
more of the county's adjusted base allocation, the allocation for the next fiscal year is 100 percent
of the adjusted base, plus inflation to the extent that inflation is included in the state budget.
(d) If the alternative care program expenditures as defined in paragraph (b) are less than 95
percent of the county's adjusted base allocation, the allocation for the next fiscal year is the
adjusted base allocation less the amount of unspent funds below the 95 percent level.
(e) If the annual legislative appropriation for the alternative care program is inadequate
to fund the combined county allocations for a biennium, the commissioner shall distribute to
each county the entire annual appropriation as that county's percentage of the computed base as
calculated in paragraphs (c) and (d).
(f) On agreement between the commissioner and the lead agency, the commissioner may
have discretion to reallocate alternative care base allocations distributed to lead agencies in which
the base amount exceeds program expenditures.
    Subd. 11. Targeted funding. (a) The purpose of targeted funding is to make additional
money available to counties with the greatest need. Targeted funds are not intended to be
distributed equitably among all counties, but rather, allocated to those with long-term care
strategies that meet state goals.
(b) The funds available for targeted funding shall be the total appropriation for each fiscal
year minus county allocations determined under subdivision 10 as adjusted for any inflation
increases provided in appropriations for the biennium.
(c) The commissioner shall allocate targeted funds to counties that demonstrate to the
satisfaction of the commissioner that they have developed feasible plans to increase alternative
care spending. In making targeted funding allocations, the commissioner shall use the following
priorities:
(1) counties that received a lower allocation in fiscal year 1991 than in fiscal year 1990.
Counties remain in this priority until they have been restored to their fiscal year 1990 level plus
inflation;
(2) counties that sustain a base allocation reduction for failure to spend 95 percent of the
allocation if they demonstrate that the base reduction should be restored;
(3) counties that propose projects to divert community residents from nursing home
placement or convert nursing home residents to community living; and
(4) counties that can otherwise justify program growth by demonstrating the existence of
waiting lists, demographically justified needs, or other unmet needs.
(d) Counties that would receive targeted funds according to paragraph (c) must demonstrate
to the commissioner's satisfaction that the funds would be appropriately spent by showing how
the funds would be used to further the state's alternative care goals as described in subdivision 1,
and that the county has the administrative and service delivery capability to use them.
(e) The commissioner shall request applications for targeted funds by November 1 of each
year. The counties selected for targeted funds shall be notified of the amount of their additional
funding. Targeted funds allocated to a county agency in one year shall be treated as part of
the county's base allocation for that year in determining allocations for subsequent years. No
reallocations between counties shall be made.
    Subd. 12. Client fees. (a) A fee is required for all alternative care eligible clients to help
pay for the cost of participating in the program. The amount of the fee for the alternative care
client shall be determined as follows:
(1) when the alternative care client's income less recurring and predictable medical expenses
is less than 100 percent of the federal poverty guideline effective on July 1 of the state fiscal year
in which the fee is being computed, and total assets are less than $10,000, the fee is zero;
(2) when the alternative care client's income less recurring and predictable medical expenses
is equal to or greater than 100 percent but less than 150 percent of the federal poverty guideline
effective on July 1 of the state fiscal year in which the fee is being computed, and total assets are
less than $10,000, the fee is five percent of the cost of alternative care services;
(3) when the alternative care client's income less recurring and predictable medical expenses
is equal to or greater than 150 percent but less than 200 percent of the federal poverty guidelines
effective on July 1 of the state fiscal year in which the fee is being computed and assets are less
than $10,000, the fee is 15 percent of the cost of alternative care services;
(4) when the alternative care client's income less recurring and predictable medical expenses
is equal to or greater than 200 percent of the federal poverty guidelines effective on July 1 of the
state fiscal year in which the fee is being computed and assets are less than $10,000, the fee is 30
percent of the cost of alternative care services; and
(5) when the alternative care client's assets are equal to or greater than $10,000, the fee is 30
percent of the cost of alternative care services.
For married persons, total assets are defined as the total marital assets less the estimated
community spouse asset allowance, under section 256B.059, if applicable. For married persons,
total income is defined as the client's income less the monthly spousal allotment, under section
256B.058.
All alternative care services shall be included in the estimated costs for the purpose of
determining the fee.
Fees are due and payable each month alternative care services are received unless the actual
cost of the services is less than the fee, in which case the fee is the lesser amount.
(b) The fee shall be waived by the commissioner when:
(1) a person who is residing in a nursing facility is receiving case management only;
(2) a married couple is requesting an asset assessment under the spousal impoverishment
provisions;
(3) a person is found eligible for alternative care, but is not yet receiving alternative care
services; or
(4) a person has chosen to participate in a consumer-directed service plan for which the cost
is no greater than the total cost of the person's alternative care service plan less the monthly
fee amount that would otherwise be assessed.
(c) The county agency must record in the state's receivable system the client's assessed fee
amount or the reason the fee has been waived. The commissioner will bill and collect the fee from
the client. Money collected must be deposited in the general fund and is appropriated to the
commissioner for the alternative care program. The client must supply the county with the client's
Social Security number at the time of application. The county shall supply the commissioner with
the client's Social Security number and other information the commissioner requires to collect the
fee from the client. The commissioner shall collect unpaid fees using the Revenue Recapture Act
in chapter 270A and other methods available to the commissioner. The commissioner may require
counties to inform clients of the collection procedures that may be used by the state if a fee is not
paid. This paragraph does not apply to alternative care pilot projects authorized in Laws 1993,
First Special Session chapter 1, article 5, section 133, if a county operating under the pilot project
reports the following dollar amounts to the commissioner quarterly:
(1) total fees billed to clients;
(2) total collections of fees billed; and
(3) balance of fees owed by clients.
If a county does not adhere to these reporting requirements, the commissioner may terminate the
billing, collecting, and remitting portions of the pilot project and require the county involved to
operate under the procedures set forth in this paragraph.
    Subd. 13. County biennial plan. The county biennial plan for long-term care consultation
services under section 256B.0911, the alternative care program under this section, and waivers
for the elderly under section 256B.0915, shall be submitted by the lead agency as the home and
community-based services quality assurance plan on a form provided by the commissioner.
    Subd. 14. Provider requirements, payment, and rate adjustments. (a) Unless otherwise
specified in statute, providers must be enrolled as Minnesota health care program providers
and abide by the requirements for provider participation according to Minnesota Rules, part
9505.0195.
(b) Payment for provided alternative care services as approved by the client's case manager
shall occur through the invoice processing procedures of the department's Medicaid Management
Information System (MMIS). To receive payment, the county or vendor must submit invoices
within 12 months following the date of service. The county agency and its vendors under contract
shall not be reimbursed for services which exceed the county allocation.
(c) The county shall negotiate individual rates with vendors and may authorize service
payment for actual costs up to the county's current approved rate. Notwithstanding any other
rule or statutory provision to the contrary, the commissioner shall not be authorized to increase
rates by an annual inflation factor, unless so authorized by the legislature. To improve access to
community services and eliminate payment disparities between the alternative care program and
the elderly waiver program, the commissioner shall establish statewide maximum service rate
limits and eliminate county-specific service rate limits.
(1) Effective July 1, 2001, for service rate limits, except those in subdivision 5, paragraphs
(d) and (i), the rate limit for each service shall be the greater of the alternative care statewide
maximum rate or the elderly waiver statewide maximum rate.
(2) Counties may negotiate individual service rates with vendors for actual costs up to the
statewide maximum service rate limit.
    Subd. 15.[Repealed, 1998 c 407 art 4 s 69]
    Subd. 15a.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 15b.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 15c.[Repealed, 1Sp2001 c 9 art 4 s 34]
    Subd. 16.[Repealed, 1Sp2001 c 9 art 4 s 34]
History: 1991 c 292 art 7 s 15; 1992 c 464 art 2 s 1; 1992 c 513 art 7 s 56-61; 1Sp1993 c 1
art 5 s 62-67; 1Sp1993 c 6 s 12; 1995 c 207 art 6 s 63-69; art 9 s 60; 1995 c 263 s 8; 1996 c 451
art 2 s 23-25; art 4 s 70; art 5 s 21,22; 1997 c 113 s 17; 1997 c 203 art 4 s 36-39; art 11 s 6; 1997
c 225 art 8 s 3; 1998 c 407 art 4 s 36; 1999 c 245 art 3 s 13-16; 2000 c 449 s 1; 1Sp2001 c 9 art
4 s 15-27; 2002 c 375 art 2 s 20-25; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 2 s 18-25; 2005
c 68 art 2 s 1; 2005 c 98 art 2 s 6; 1Sp2005 c 4 art 7 s 20-23

256B.0914 CONFLICTS OF INTEREST RELATED TO MEDICAID EXPENDITURES.
    Subdivision 1. Definitions. (a) "Contract" means a written, fully executed agreement for
the purchase of goods and services involving a substantial expenditure of Medicaid funding. A
contract under a renewal period shall be considered a separate contract.
(b) "Contractor bid or proposal information" means cost or pricing data, indirect costs, and
proprietary information marked as such by the bidder in accordance with applicable law.
(c) "Particular expenditure" means a substantial expenditure as defined below, for a specified
term, involving specific parties. The renewal of an existing contract for the substantial expenditure
of Medicaid funds is considered a separate, particular expenditure from the original contract.
(d) "Source selection information" means any of the following information prepared for use
by the state, county, or independent contractor for the purpose of evaluating a bid or proposal to
enter into a Medicaid procurement contract, if that information has not been previously made
available to the public or disclosed publicly:
(1) bid prices submitted in response to a solicitation for sealed bids, or lists of the bid prices
before bid opening;
(2) proposed costs or prices submitted in response to a solicitation, or lists of those proposed
costs or prices;
(3) source selection plans;
(4) technical evaluations plans;
(5) technical evaluations of proposals;
(6) cost or price evaluation of proposals;
(7) competitive range determinations that identify proposals that have a reasonable chance of
being selected for award of a contract;
(8) rankings of bids, proposals, or competitors;
(9) the reports and evaluations of source selection panels, boards, or advisory councils; and
(10) other information marked as "source selection information" based on a case-by-case
determination by the head of the agency, contractor, designees, or the contracting officer that
disclosure of the information would jeopardize the integrity or successful completion of the
Medicaid procurement to which the information relates.
(e) "Substantial expenditure" and "substantial amounts" mean a purchase of goods or
services in excess of $10,000,000 in Medicaid funding under this chapter or chapter 256L.
    Subd. 2. Applicability. (a) Unless provided otherwise, this section applies to:
(1) any state or local officer, employee, or independent contractor who is responsible for the
substantial expenditures of medical assistance or MinnesotaCare funding under this chapter or
chapter 256L for which federal Medicaid matching funds are available;
(2) any individual who formerly was such an officer, employee, or independent contractor;
and
(3) any partner of such a state or local officer, employee, or independent contractor.
(b) This section is intended to meet the requirements of state participation in the Medicaid
program at United States Code, title 42, sections 1396a(a)(4) and 1396u-2(d)(3), which require
that states have in place restrictions against conflicts of interest in the Medicaid procurement
process, that are at least as stringent as those in effect under United States Code, title 41, section
423, and title 18, sections 207 and 208, as they apply to federal employees.
    Subd. 3. Disclosure of procurement information. A person described in subdivision 2 may
not knowingly disclose contractor bid or proposal information, or source selection information
before the award by the state, county, or independent contractor of a Medicaid procurement
contract to which the information relates unless the disclosure is otherwise authorized by law.
No person, other than as provided by law, shall knowingly obtain contractor bid or proposal
information or source selection information before the award of a Medicaid procurement contract
to which the information relates.
    Subd. 4. Offers of employment. When a person described in subdivision 2, paragraph (a), is
participating personally and substantially in a Medicaid procurement for a contract contacts or
is contacted by a person who is a bidder or offeror in the same procurement regarding possible
employment outside of the entity by which the person is currently employed, the person must:
(1) report the contact in writing to the person's supervisor and employer's ethics officer; and
(2) either:
(i) reject the possibility of employment with the bidder or offeror; or
(ii) be disqualified from further participation in the procurement until the bidder or offeror is
no longer involved in that procurement, or all discussions with the bidder or offeror regarding
possible employment have terminated without an arrangement for employment. A bidder or
offeror may not engage in employment discussions with an official who is subject to this
subdivision, until the bidder or offeror is no longer involved in that procurement.
    Subd. 5. Acceptance of compensation by a former official. (a) A former official of the
state or county, or a former independent contractor, described in subdivision 2 may not accept
compensation from a Medicaid contractor of a substantial expenditure as an employee, officer,
director, or consultant of the contractor within one year after the former official or independent
contractor:
(1) served as the procuring contracting officer, the source selection authority, a member of
the source selection evaluation board, or the chief of a financial or technical evaluation team in a
procurement in which the contractor was selected for award;
(2) served as the program manager, deputy program manager, or administrative contracting
officer for a contract awarded to the contractor; or
(3) personally made decisions for the state, county, or independent contractor to:
(i) award a contract, subcontract, modification of a contract or subcontract, or a task order
or delivery order to the contractor;
(ii) establish overhead or other rates applicable to a contract or contracts with the contractor;
(iii) approve issuance of a contract payment or payments to the contractor; or
(iv) pay or settle a claim with the contractor.
(b) Paragraph (a) does not prohibit a former official of the state, county, or independent
contractor from accepting compensation from any division or affiliate of a contractor not involved
in the same or similar products or services as the division or affiliate of the contractor that is
responsible for the contract referred to in paragraph (a), clause (1), (2), or (3).
(c) A contractor shall not provide compensation to a former official knowing that the former
official is accepting that compensation in violation of this subdivision.
    Subd. 6. Permanent restrictions on representation and communication. (a) A person
described in subdivision 2, after termination of service with the state, county, or independent
contractor, is permanently restricted from knowingly making, with the intent to influence, any
communication to or appearance before an officer or employee of a department, agency, or court
of the United States, the state of Minnesota and its counties in connection with a particular
expenditure:
(1) in which the United States, the state of Minnesota, or a Minnesota county is a party or
has a direct and substantial interest;
(2) in which the person participated personally and substantially as an officer, employee, or
independent contractor; and
(3) which involved a specific party or parties at the time of participation.
(b) For purposes of this subdivision and subdivisions 7 and 9, "participated" means an
action taken through decision, approval, disapproval, recommendation, the rendering of advice,
investigation, or other such action.
    Subd. 7. Two-year restrictions on representation and communication. No person
described in subdivision 2, within two years after termination of service with the state, county, or
independent contractor, shall knowingly make, with the intent to influence, any communication to
or appearance before any officer or employee of any government department, agency, or court
in connection with a particular expenditure:
(1) in which the United States, the state of Minnesota, or a Minnesota county is a party or
has a direct and substantial interest;
(2) which the person knows or reasonably should know was actually pending under the
official's responsibility as an officer, employee, or independent contractor within one year before
the termination of the official's service with the state, county, or independent contractor; and
(3) which involved a specific party or parties at the time the expenditure was pending.
    Subd. 8. Exceptions to restrictions on representation and communication. Subdivisions 6
and 7 do not apply to:
(1) communications or representations made in carrying out official duties on behalf of the
United States, the state of Minnesota or local government, or as an elected official of the state
or local government;
(2) communications made solely for the purpose of furnishing scientific or technological
information; or
(3) giving testimony under oath. A person subject to subdivisions 6 and 7 may serve as an
expert witness in that matter, without restriction, for the state, county, or independent contractor.
Under court order, a person subject to subdivisions 6 and 7 may serve as an expert witness for
others. Otherwise, the person may not serve as an expert witness in that matter.
    Subd. 9. Waiver. The commissioner of human services, or the governor in the case of the
commissioner, may grant a waiver of a restriction in subdivisions 6 and 7 upon determining that a
waiver is in the public interest and that the services of the officer or employee are critically needed
for the benefit of the state or county government.
    Subd. 10. Acts affecting a personal financial interest. A person described in subdivision 2,
paragraph (a), clause (1), who participates in a particular expenditure in which the person has
knowledge or has a financial interest, is subject to the penalties in subdivision 12. For purposes of
this subdivision, "financial interest" also includes the financial interest of a spouse, minor child,
general partner, organization in which the officer or employee is serving as an officer, director,
trustee, general partner, or employee, or any person or organization with whom the individual is
negotiating or has any arrangement concerning prospective employment.
    Subd. 11. Exceptions to prohibitions regarding financial interest. Subdivision 10 does
not apply if:
(1) the person first advises the person's supervisor and the employer's ethics officer regarding
the nature and circumstances of the particular expenditure and makes full disclosure of the
financial interest and receives in advance a written determination made by the commissioner
of human services, or the governor in the case of the commissioner, that the interest is not so
substantial as to likely affect the integrity of the services which the government may expect from
the officer, employee, or independent contractor;
(2) the financial interest is listed as an exemption at Code of Federal Regulations, title 5,
sections 2640.201 to 2640.203, as too remote or inconsequential to affect the integrity of the
services of the office, employee, or independent contractor to which the requirement applies.
    Subd. 12. Criminal penalties. (a) A person who violates subdivisions 3 to 5 for the purpose
of either exchanging the information covered by this section for anything of value, or for
obtaining or giving anyone a competitive advantage in the award of a Medicaid contract, may be
sentenced to imprisonment for not more than five years or payment of a fine of not more than
$50,000 for each violation, or the amount of compensation which the person received or offered
for the prohibited conduct, whichever is greater, or both.
(b) A person who violates a provision of subdivisions 6 to 11 may be sentenced to
imprisonment for not more than one year or payment of a fine of not more than $50,000 for
each violation or the amount of compensation which the person received or offered for the
prohibited conduct, whichever amount is greater, or both. A person who willfully engages in
conduct in violation of subdivisions 6 to 11 may be sentenced to imprisonment for not more than
five years or to payment of a fine of not more than $50,000 for each violation or the amount
of compensation which the person received or offered for the prohibited conduct, whichever
amount is greater, or both.
(c) Nothing in this section precludes prosecution under other laws such as section 609.43.
    Subd. 13. Civil penalties and injunctive relief. (a) The Minnesota attorney general may
bring a civil action in Ramsey county district court against a person who violates this section.
Upon proof of such conduct by a preponderance of evidence, the person is subject to a civil
penalty. An individual who violates this section is subject to a civil penalty of not more than
$50,000 for each violation plus twice the amount of compensation which the individual received
or offered for the prohibited conduct. An organization that violates this section is subject to a
civil penalty of not more than $500,000 for each violation plus twice the amount of compensation
which the organization received or offered for the prohibited conduct.
(b) If the Minnesota attorney general has reason to believe that a person is engaging in
conduct in violation of this section, the attorney general may petition the Ramsey county district
court for an order prohibiting that person from engaging in such conduct. The court may issue an
order prohibiting that person from engaging in such conduct if the court finds that the conduct
constitutes such a violation. The filing of a petition under this subdivision does not preclude
any other remedy which is available by law.
    Subd. 14. Administrative actions. (a) If a state agency, local agency, or independent
contractor receives information that a contractor or a person has violated this section, the state
agency, local agency, or independent contractor may:
(1) cancel the procurement if a contract has not already been awarded;
(2) rescind the contract; or
(3) initiate suspension or debarment proceedings according to applicable state or federal law.
(b) If the contract is rescinded, the state agency, local agency, or independent contractor is
entitled to recover, in addition to any penalty prescribed by law, the amount expended under
the contract.
(c) This section does not:
(1) restrict the disclosure of information to or from any person or class of persons authorized
to receive that information;
(2) restrict a contractor from disclosing the contractor's bid or proposal information or
the recipient from receiving that information;
(3) restrict the disclosure or receipt of information relating to a Medicaid procurement after it
has been canceled by the state agency, county agency, or independent contractor before the
contract award unless the agency or independent contractor plans to resume the procurement; or
(4) limit the applicability of any requirements, sanctions, contract penalties, and remedies
established under any other law or regulation.
(d) No person may file a protest against the award or proposed award of a Medicaid contract
alleging a violation of this section unless that person reported the information the person believes
constitutes evidence of the offense to the applicable state agency, local agency, or independent
contractor responsible for the procurement. The report must be made no later than 14 days after
the person first discovered the possible violation.
History: 1986 c 444; 1999 c 245 art 4 s 60

256B.0915 MEDICAID WAIVER FOR ELDERLY SERVICES.
    Subdivision 1. Authority. The commissioner is authorized to apply for a home and
community-based services waiver for the elderly, authorized under section 1915(c) of the Social
Security Act, in order to obtain federal financial participation to expand the availability of
services for persons who are eligible for medical assistance. The commissioner may apply for
additional waivers or pursue other federal financial participation which is advantageous to the
state for funding home care services for the frail elderly who are eligible for medical assistance.
The provision of waivered services to elderly and disabled medical assistance recipients must
comply with the criteria approved in the waiver.
    Subd. 1a. Elderly waiver case management services. (a) Elderly case management services
under the home and community-based services waiver for elderly individuals are available from
providers meeting qualification requirements and the standards specified in subdivision 1b.
Eligible recipients may choose any qualified provider of elderly case management services.
(b) The county of service or tribe must provide access to and arrange for case management
services.
    Subd. 1b. Provider qualifications and standards. The commissioner must enroll qualified
providers of elderly case management services under the home and community-based waiver for
the elderly under section 1915(c) of the Social Security Act. The enrollment process shall ensure
the provider's ability to meet the qualification requirements and standards in this subdivision and
other federal and state requirements of this service. An elderly case management provider is an
enrolled medical assistance provider who is determined by the commissioner to have all of the
following characteristics:
(1) the demonstrated capacity and experience to provide the components of case management
to coordinate and link community resources needed by the eligible population;
(2) administrative capacity and experience in serving the target population for whom it will
provide services and in ensuring quality of services under state and federal requirements;
(3) a financial management system that provides accurate documentation of services and
costs under state and federal requirements;
(4) the capacity to document and maintain individual case records under state and federal
requirements; and
(5) the county may allow a case manager employed by the county to delegate certain
aspects of the case management activity to another individual employed by the county provided
there is oversight of the individual by the case manager. The case manager may not delegate
those aspects which require professional judgment including assessments, reassessments, and
care plan development.
    Subd. 1c. Case management activities under the state plan. The commissioner shall seek
an amendment to the home and community-based services waiver for the elderly to implement
the provisions of subdivisions 1a and 1b. If the commissioner is unable to secure the approval of
the secretary of health and human services for the requested waiver amendment by December
31, 1993, the commissioner shall amend the medical assistance state plan to provide that case
management provided under the home and community-based services waiver for the elderly is
performed by counties as an administrative function for the proper and effective administration
of the state medical assistance plan. The state shall reimburse counties for the nonfederal share
of costs for case management performed as an administrative function under the home and
community-based services waiver for the elderly.
    Subd. 1d. Posteligibility treatment of income and resources for elderly waiver.
Notwithstanding the provisions of section 256B.056, the commissioner shall make the following
amendment to the medical assistance elderly waiver program effective July 1, 1999, or upon
federal approval, whichever is later.
A recipient's maintenance needs will be an amount equal to the Minnesota supplemental aid
equivalent rate as defined in section 256I.03, subdivision 5, plus the medical assistance personal
needs allowance as defined in section 256B.35, subdivision 1, paragraph (a), when applying
posteligibility treatment of income rules to the gross income of elderly waiver recipients, except
for individuals whose income is in excess of the special income standard according to Code of
Federal Regulations, title 42, section 435.236. Recipient maintenance needs shall be adjusted
under this provision each July 1.
    Subd. 2. Spousal impoverishment policies. The commissioner shall seek to amend the
federal waiver and the medical assistance state plan to allow spousal impoverishment criteria as
authorized under United States Code, title 42, section 1396r-5, and as implemented in sections
256B.0575, 256B.058, and 256B.059, except that the amendment shall seek to add to the personal
needs allowance permitted in section 256B.0575, an amount equivalent to the group residential
housing rate as set by section 256I.03, subdivision 5.
    Subd. 3. Limits of cases. The number of medical assistance waiver recipients that a county
may serve must be allocated according to the number of medical assistance waiver cases open
on July 1 of each fiscal year. Additional recipients may be served with the approval of the
commissioner.
    Subd. 3a.[Repealed, 1Sp2001 c 9 art 3 s 76; art 4 s 34]
    Subd. 3a. Elderly waiver cost limits. (a) The monthly limit for the cost of waivered services
to an individual elderly waiver client shall be the weighted average monthly nursing facility
rate of the case mix resident class to which the elderly waiver client would be assigned under
Minnesota Rules, parts 9549.0050 to 9549.0059, less the recipient's maintenance needs allowance
as described in subdivision 1d, paragraph (a), until the first day of the state fiscal year in which the
resident assessment system as described in section 256B.437 for nursing home rate determination
is implemented. Effective on the first day of the state fiscal year in which the resident assessment
system as described in section 256B.437 for nursing home rate determination is implemented
and the first day of each subsequent state fiscal year, the monthly limit for the cost of waivered
services to an individual elderly waiver client shall be the rate of the case mix resident class to
which the waiver client would be assigned under Minnesota Rules, parts 9549.0050 to 9549.0059,
in effect on the last day of the previous state fiscal year, adjusted by the greater of any legislatively
adopted home and community-based services percentage rate increase or the average statewide
percentage increase in nursing facility payment rates.
(b) If extended medical supplies and equipment or environmental modifications are or will be
purchased for an elderly waiver client, the costs may be prorated for up to 12 consecutive months
beginning with the month of purchase. If the monthly cost of a recipient's waivered services
exceeds the monthly limit established in paragraph (a), the annual cost of all waivered services
shall be determined. In this event, the annual cost of all waivered services shall not exceed 12
times the monthly limit of waivered services as described in paragraph (a).
    Subd. 3b.[Repealed, 1Sp2001 c 9 art 3 s 76; art 4 s 34]
    Subd. 3b. Cost limits for elderly waiver applicants who reside in a nursing facility.
(a) For a person who is a nursing facility resident at the time of requesting a determination of
eligibility for elderly waivered services, a monthly conversion limit for the cost of elderly
waivered services may be requested. The monthly conversion limit for the cost of elderly
waiver services shall be the resident class assigned under Minnesota Rules, parts 9549.0050 to
9549.0059, for that resident in the nursing facility where the resident currently resides until July 1
of the state fiscal year in which the resident assessment system as described in section 256B.437
for nursing home rate determination is implemented. Effective on July 1 of the state fiscal year in
which the resident assessment system as described in section 256B.437 for nursing home rate
determination is implemented, the monthly conversion limit for the cost of elderly waiver services
shall be the per diem nursing facility rate as determined by the resident assessment system as
described in section 256B.437 for that resident in the nursing facility where the resident currently
resides multiplied by 365 and divided by 12, less the recipient's maintenance needs allowance as
described in subdivision 1d. The initially approved conversion rate may be adjusted by the greater
of any subsequent legislatively adopted home and community-based services percentage rate
increase or the average statewide percentage increase in nursing facility payment rates. The limit
under this subdivision only applies to persons discharged from a nursing facility after a minimum
30-day stay and found eligible for waivered services on or after July 1, 1997.
(b) The following costs must be included in determining the total monthly costs for the
waiver client:
(1) cost of all waivered services, including extended medical supplies and equipment and
environmental modifications; and
(2) cost of skilled nursing, home health aide, and personal care services reimbursable by
medical assistance.
    Subd. 3c.[Repealed, 1Sp2001 c 9 art 3 s 76; art 4 s 34]
    Subd. 3c. Service approval and contracting provisions. (a) Medical assistance funding for
skilled nursing services, private duty nursing, home health aide, and personal care services for
waiver recipients must be approved by the case manager and included in the individual care plan.
(b) A county is not required to contract with a provider of supplies and equipment if the
monthly cost of the supplies and equipment is less than $250.
    Subd. 3d. Adult foster care rate. The adult foster care rate shall be considered a difficulty of
care payment and shall not include room and board. The adult foster care service rate shall be
negotiated between the county agency and the foster care provider. The elderly waiver payment
for the foster care service in combination with the payment for all other elderly waiver services,
including case management, must not exceed the limit specified in subdivision 3a, paragraph (a).
    Subd. 3e. Assisted living service rate. (a) Payment for assisted living service shall be a
monthly rate negotiated and authorized by the county agency based on an individualized service
plan for each resident and may not cover direct rent or food costs.
(b) The individualized monthly negotiated payment for assisted living services as described
in section 256B.0913, subdivisions 5d to 5f, and residential care services as described in section
256B.0913, subdivision 5c, shall not exceed the nonfederal share, in effect on July 1 of the state
fiscal year for which the rate limit is being calculated, of the greater of either the statewide or any
of the geographic groups' weighted average monthly nursing facility rate of the case mix resident
class to which the elderly waiver eligible client would be assigned under Minnesota Rules, parts
9549.0050 to 9549.0059, less the maintenance needs allowance as described in subdivision 1d,
paragraph (a), until the July 1 of the state fiscal year in which the resident assessment system as
described in section 256B.437 for nursing home rate determination is implemented. Effective
on July 1 of the state fiscal year in which the resident assessment system as described in section
256B.437 for nursing home rate determination is implemented and July 1 of each subsequent
state fiscal year, the individualized monthly negotiated payment for the services described in this
clause shall not exceed the limit described in this clause which was in effect on June 30 of the
previous state fiscal year and which has been adjusted by the greater of any legislatively adopted
home and community-based services cost-of-living percentage increase or any legislatively
adopted statewide percent rate increase for nursing facilities.
(c) The individualized monthly negotiated payment for assisted living services described in
section 144A.4605 and delivered by a provider licensed by the Department of Health as a class A
home care provider or an assisted living home care provider and provided in a building that is
registered as a housing with services establishment under chapter 144D and that provides 24-hour
supervision in combination with the payment for other elderly waiver services, including case
management, must not exceed the limit specified in subdivision 3a.
    Subd. 3f. Individual service rates; expenditure forecasts. (a) The county shall negotiate
individual service rates with vendors and may authorize payment for actual costs up to the
county's current approved rate. Persons or agencies must be employed by or under a contract with
the county agency or the public health nursing agency of the local board of health in order to
receive funding under the elderly waiver program, except as a provider of supplies and equipment
when the monthly cost of the supplies and equipment is less than $250.
(b) Reimbursement for the medical assistance recipients under the approved waiver shall
be made from the medical assistance account through the invoice processing procedures of the
department's Medicaid Management Information System (MMIS), only with the approval of
the client's case manager. The budget for the state share of the Medicaid expenditures shall be
forecasted with the medical assistance budget, and shall be consistent with the approved waiver.
    Subd. 3g. Service rate limits; state assumption of costs. (a) To improve access to
community services and eliminate payment disparities between the alternative care program and
the elderly waiver, the commissioner shall establish statewide maximum service rate limits and
eliminate county-specific service rate limits.
(b) Effective July 1, 2001, for service rate limits, except those described or defined in
subdivisions 3d and 3e, the rate limit for each service shall be the greater of the alternative care
statewide maximum rate or the elderly waiver statewide maximum rate.
(c) Counties may negotiate individual service rates with vendors for actual costs up to the
statewide maximum service rate limit.
    Subd. 4. Termination notice. The case manager must give the individual a ten-day written
notice of any denial, reduction, or termination of waivered services.
    Subd. 5. Assessments and reassessments for waiver clients. Each client shall receive
an initial assessment of strengths, informal supports, and need for services in accordance with
section 256B.0911, subdivisions 3, 3a, and 3b. A reassessment of a client served under the elderly
waiver must be conducted at least every 12 months and at other times when the case manager
determines that there has been significant change in the client's functioning. This may include
instances where the client is discharged from the hospital.
    Subd. 6. Implementation of care plan. Each elderly waiver client shall be provided a copy
of a written care plan that meets the requirements outlined in section 256B.0913, subdivision 8.
The care plan must be implemented by the county administering waivered services when it is
different than the county of financial responsibility. The county administering waivered services
must notify the county of financial responsibility of the approved care plan.
    Subd. 7. Prepaid elderly waiver services. An individual for whom a prepaid health plan
is liable for nursing home services or elderly waiver services according to section 256B.69,
subdivision 6a , is not eligible to receive county-administered elderly waiver services under
this section.
    Subd. 8. Services and supports. (a) Services and supports shall meet the requirements set
out in United States Code, title 42, section 1396n.
(b) Services and supports shall promote consumer choice and be arranged and provided
consistent with individualized, written care plans.
(c) The state of Minnesota, county, or tribal government under contract to administer the
elderly waiver shall not be liable for damages, injuries, or liabilities sustained through the purchase
of direct supports or goods by the person, the person's family, or the authorized representatives
with funds received through consumer-directed community support services under the federally
approved waiver plan. Liabilities include, but are not limited to, workers' compensation liability,
the Federal Insurance Contributions Act (FICA), or the Federal Unemployment Tax Act (FUTA).
    Subd. 9. Tribal management of elderly waiver. Notwithstanding contrary provisions of this
section, or those in other state laws or rules, the commissioner may develop a model for tribal
management of the elderly waiver program and implement this model through a contract between
the state and any of the state's federally recognized tribal governments. The model shall include
the provision of tribal waiver case management, assessment for personal care assistance, and
administrative requirements otherwise carried out by counties but shall not include tribal financial
eligibility determination for medical assistance.
History: 1991 c 292 art 7 s 16; 1992 c 513 art 7 s 62-64; 1Sp1993 c 1 art 5 s 68-72;
1Sp1993 c 6 s 13; 1995 c 207 art 6 s 70-74; 1995 c 263 s 9; 1996 c 451 art 2 s 26-28; art 5 s
23,24; 1997 c 113 s 18; 1997 c 203 art 4 s 40-43; 1998 c 407 art 4 s 37,38; 1Sp2001 c 9 art 4 s
28-30; 2002 c 277 s 16,17; 2002 c 375 art 2 s 26-30; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 2 s
26; art 3 s 30; 2004 c 288 art 5 s 5,6; 2005 c 68 art 2 s 2-4

256B.0916 EXPANSION OF HOME AND COMMUNITY-BASED SERVICES.
    Subdivision 1.[Repealed, 2002 c 220 art 14 s 20]
    Subd. 2. Distribution of funds; partnerships. (a) Beginning with fiscal year 2000, the
commissioner shall distribute all funding available for home and community-based waiver
services for persons with developmental disabilities to individual counties or to groups of counties
that form partnerships to jointly plan, administer, and authorize funding for eligible individuals.
The commissioner shall encourage counties to form partnerships that have a sufficient number of
recipients and funding to adequately manage the risk and maximize use of available resources.
(b) Counties must submit a request for funds and a plan for administering the program as
required by the commissioner. The plan must identify the number of clients to be served, their
ages, and their priority listing based on:
(1) requirements in Minnesota Rules, part 9525.1880;
(2) unstable living situations due to the age or incapacity of the primary caregiver;
(3) the need for services to avoid out-of-home placement of children;
(4) the need to serve persons affected by private sector ICF/MR closures; and
(5) the need to serve persons whose consumer support grant exception amount was
eliminated in 2004.
The plan must also identify changes made to improve services to eligible persons and to improve
program management.
(c) In allocating resources to counties, priority must be given to groups of counties that
form partnerships to jointly plan, administer, and authorize funding for eligible individuals and
to counties determined by the commissioner to have sufficient waiver capacity to maximize
resource use.
(d) Within 30 days after receiving the county request for funds and plans, the commissioner
shall provide a written response to the plan that includes the level of resources available to serve
additional persons.
(e) Counties are eligible to receive medical assistance administrative reimbursement for
administrative costs under criteria established by the commissioner.
    Subd. 3. Failure to develop partnerships or submit a plan. (a) By October 1 of each year
the commissioner shall notify the county board if any county determined by the commissioner to
have insufficient capacity to maximize use of available resources fails to develop a partnership
with other counties or fails to submit a plan as required in subdivision 2. The commissioner
shall provide needed technical assistance to a county or group of counties that fails to form a
partnership or submit a plan. If a county has not joined a county partnership or submitted a plan
within 30 days following the notice by the commissioner of its failure, the commissioner shall
require and assist that county to develop a plan or contract with another county or group of
counties to plan and administer the waiver services program in that county.
(b) Counties may request technical assistance, management information, and administrative
support from the commissioner at any time. The commissioner shall respond to county requests
within 30 days. Priority shall be given to activities that support the administrative needs of newly
formed county partnerships.
    Subd. 4. Allowed reserve. Counties or groups of counties participating in partnerships that
have submitted a plan under this section may develop an allowed reserve amount to meet crises
and other unmet needs of current home and community-based waiver recipients. The amount of
the allowed reserve shall be a county specific amount based upon documented past experience and
projected need for the coming year described in an allowed reserve plan submitted for approval to
the commissioner with the allocation request for the fiscal year.
    Subd. 5. Allocation of new diversions and priorities for reassignment of resources for
developmental disabilities. (a) The commissioner shall monitor county utilization of allocated
resources and, as appropriate, reassign resources not utilized.
(b) Effective July 1, 2002, the commissioner shall authorize the spending of new diversion
resources beginning January 1 of each year.
(c) Effective July 1, 2002, the commissioner shall manage the reassignment of waiver
resources that occur from persons who have left the waiver in a manner that results in the cost
reduction equivalent to delaying the reuse of those waiver resources by 180 days.
(d) Priority consideration for reassignment of resources shall be given to counties that
form partnerships. In addition to the priorities listed in Minnesota Rules, part 9525.1880, the
commissioner shall also give priority consideration to persons whose living situations are unstable
due to the age or incapacity of the primary caregiver and to children to avoid out-of-home
placement.
    Subd. 6. Waiver request. (a) The commissioner shall submit to the federal Health Care
Financing Administration by September 1, 1999, a request for a waiver to include an option that
would allow waiver service recipients to directly receive 95 percent of the funds that would
be allocated to individuals based on written county criteria and procedures approved by the
commissioner for the purchase of services to meet their long-term care needs. The waiver
request must include a provision requiring recipients who receive funds directly to provide to the
commissioner annually, a description of the type of services used, the amount paid for the services
purchased, and the amount of unspent funds.
(b) The commissioner, in cooperation with county representatives, waiver service providers,
recipients, recipients' families, legal guardians, and advocacy groups, shall develop criteria for:
(1) eligibility to receive funding directly;
(2) determination of the amount of funds made available to each eligible person based on
need; and
(3) the accountability required of persons directly receiving funds.
(c) If this waiver is approved and implemented, any unspent money from the waiver services
allocation, including the five percent not directly allocated to recipients and any unspent portion
of the money that is directly allocated, shall be used to meet the needs of other eligible persons
waiting for services funded through the waiver.
(d) The commissioner, in consultation with county social services agencies, waiver services
providers, recipients, recipients' families, legal guardians, and advocacy groups shall evaluate the
effectiveness of this option within two years of its implementation.
    Subd. 6a. Statewide availability of consumer-directed community support services. (a)
The commissioner shall submit to the federal Health Care Financing Administration by August 1,
2001, an amendment to the home and community-based waiver for persons with developmental
disabilities to make consumer-directed community support services available in every county of
the state by January 1, 2002.
(b) If a county declines to meet the requirements for provision of consumer-directed
community supports, the commissioner shall contract with another county, a group of counties, or
a private agency to plan for and administer consumer-directed community supports in that county.
(c) The state of Minnesota, county agencies, tribal governments, or administrative entities
under contract to participate in the implementation and administration of the home and
community-based waiver for persons with developmental disabilities, shall not be liable for
damages, injuries, or liabilities sustained through the purchase of support by the individual, the
individual's family, legal representative, or the authorized representative with funds received
through the consumer-directed community support service under this section. Liabilities include
but are not limited to: workers' compensation liability, the Federal Insurance Contributions Act
(FICA), or the Federal Unemployment Tax Act (FUTA).
    Subd. 7. Annual report by commissioner. Beginning November 1, 2001, and each
November 1 thereafter, the commissioner shall issue an annual report on county and state use of
available resources for the home and community-based waiver for persons with developmental
disabilities. For each county or county partnership, the report shall include:
(1) the amount of funds allocated but not used;
(2) the county specific allowed reserve amount approved and used;
(3) the number, ages, and living situations of individuals screened and waiting for services;
(4) the urgency of need for services to begin within one, two, or more than two years for
each individual;
(5) the services needed;
(6) the number of additional persons served by approval of increased capacity within
existing allocations;
(7) results of action by the commissioner to streamline administrative requirements and
improve county resource management; and
(8) additional action that would decrease the number of those eligible and waiting for
waivered services.
The commissioner shall specify intended outcomes for the program and the degree to which
these specified outcomes are attained.
    Subd. 8. Financial information by county. The commissioner shall make available to
interested parties, upon request, financial information by county including the amount of resources
allocated for the home and community-based waiver for persons with developmental disabilities,
the resources committed, the number of persons screened and waiting for services, the type of
services requested by those waiting, and the amount of allocated resources not committed.
    Subd. 9. Legal representative participation exception. The commissioner, in cooperation
with representatives of counties, service providers, service recipients, family members, legal
representatives and advocates, shall develop criteria to allow legal representatives to be
reimbursed for providing specific support services to meet the person's needs when a plan which
assures health and safety has been agreed upon and carried out by the legal representative,
the person, and the county. Legal representatives providing support under the home and
community-based waiver for persons with developmental disabilities or the consumer support
grant program pursuant to section 256.476, shall not be considered to have a direct or indirect
service provider interest under section 256B.092, subdivision 7, if a health and safety plan which
meets the criteria established has been agreed upon and implemented. By August 1, 2001, the
commissioner shall submit, for federal approval, amendments to allow legal representatives to
provide support and receive reimbursement under the home and community-based waiver plan.
    Subd. 10. Transitional supports allowance. A transitional supports allowance shall be
available to all persons under a home and community-based waiver who are moving from a
licensed setting to a community setting. "Transitional supports allowance" means a onetime
payment of up to $3,000, to cover the costs, not covered by other sources, associated with moving
from a licensed setting to a community setting. Covered costs include:
(1) lease or rent deposits;
(2) security deposits;
(3) utilities set-up costs, including telephone;
(4) essential furnishings and supplies; and
(5) personal supports and transports needed to locate and transition to community settings.
History: 1Sp1993 c 1 art 4 s 8; 1998 c 407 art 4 s 39; 1999 c 245 art 4 s 61; 2000 c 488 art
11 s 7; 1Sp2001 c 9 art 3 s 43-45; 2002 c 220 art 14 s 6; 2002 c 379 art 1 s 113; 2004 c 288 art 3
s 24; 2005 c 56 s 1; 1Sp2005 c 4 art 8 s 46

256B.0917 SENIORS' AGENDA FOR INDEPENDENT LIVING (SAIL) PROJECTS.
    Subdivision 1. Purpose, mission, goals, and objectives. (a) The purpose of implementing
seniors' agenda for independent living (SAIL) projects under this section is to demonstrate a new
cooperative strategy for the long-term care system in the state of Minnesota.
The projects are part of the initial plan for a 20-year strategy. The mission of the 20-year
strategy is to create a new community-based care paradigm for long-term care in Minnesota in
order to maximize independence of the older adult population, and to ensure cost-effective use of
financial and human resources. The goals for the 20-year strategy are to:
(1) achieve a broad awareness and use of low-cost home care and other residential
alternatives to nursing homes;
(2) develop a statewide system of information and assistance to enable easy access to
long-term care services;
(3) develop sufficient alternatives to nursing homes to serve the increased number of people
needing long-term care;
(4) maintain the moratorium on new construction of nursing home beds and to lower the
percentage of elderly persons served in institutional settings; and
(5) build a community-based approach and community commitment to delivering long-term
care services for elderly persons in their homes.
(b) The objective for the fiscal years 1994 and 1995 biennial plan is to continue at least
four but not more than six projects in anticipation of a statewide program. These projects will
continue the process of implementing:
(1) a coordinated planning and administrative process;
(2) a refocused function of the preadmission screening program;
(3) the development of additional home, community, and residential alternatives to nursing
homes;
(4) a program to support the informal caregivers for elderly persons;
(5) programs to strengthen the use of volunteers; and
(6) programs to support the building of community commitment to provide long-term care
for elderly persons.
The services offered through these projects are available to those who have their own funds
to pay for services, as well as to persons who are eligible for medical assistance and to persons
who are 180-day eligible clients to the extent authorized in this section.
    Subd. 2. Design of SAIL projects; local long-term care coordinating team. (a) The
commissioner of human services shall contract with SAIL projects in four to six counties or
groups of counties to demonstrate the feasibility and cost-effectiveness of a local long-term care
strategy that is consistent with the state's long-term care goals identified in subdivision 1. The
commissioner shall publish a notice in the State Register announcing the availability of project
funding and giving instructions for making an application. The instructions for the application
shall identify the amount of funding available for project components.
(b) To be selected for the project, a county board or boards must establish a long-term care
coordinating team consisting of county social service agencies, public health nursing service
agencies, local boards of health, a representative of local nursing home providers, a representative
of local home care providers, and the area agencies on aging in a geographic area which is
responsible for:
(1) developing a local long-term care strategy consistent with state goals and objectives;
(2) submitting an application to be selected as a project;
(3) coordinating planning for funds to provide services to elderly persons, including funds
received under Title III of the Older Americans Act, Title XX of the Social Security Act and the
Local Public Health Act; and
(4) ensuring efficient services provision and nonduplication of funding.
(c) The board or boards shall designate a public agency to serve as the lead agency. The
lead agency receives and manages the project funds from the state and is responsible for the
implementation of the local strategy. If selected as a project, the local long-term care coordinating
team must semiannually evaluate the progress of the local long-term care strategy in meeting state
measures of performance and results as established in the contract.
(d) Each member of the local coordinating team must indicate its endorsement of the local
strategy. The local long-term care coordinating team may include in its membership other units of
government which provide funding for services to the frail elderly. The team must cooperate with
consumers and other public and private agencies, including nursing homes, in the geographic area
in order to develop and offer a variety of cost-effective services to the elderly and their caregivers.
(e) The board or boards shall apply to be selected as a project. If the project is selected, the
commissioner of human services shall contract with the lead agency for the project and shall
provide additional administrative funds for implementing the provisions of the contract, within
the appropriation available for this purpose.
(f) Projects shall be selected according to the following conditions.
No project may be selected unless it demonstrates that:
(i) the objectives of the local project will help to achieve the state's long-term care goals
as defined in subdivision 1;
(ii) in the case of a project submitted jointly by several counties, all of the participating
counties are contiguous;
(iii) there is a designated local lead agency that is empowered to make contracts with the
state and local vendors on behalf of all participants;
(iv) the project proposal demonstrates that the local cooperating agencies have the ability
to perform the project as described and that the implementation of the project has a reasonable
chance of achieving its objectives;
(v) the project will serve an area that covers at least four counties or contains at least 2,500
persons who are 85 years of age or older, according to the projections of the state demographer
or the census if the data is more recent; and
(vi) the local coordinating team documents efforts of cooperation with consumers and other
agencies and organizations, both public and private, in planning for service delivery.
    Subd. 3. Local long-term care strategy. The local long-term care strategy must list
performance outcomes and indicators which meet the state's objectives. The local strategy must
provide for:
(1) accessible information, assessment, and preadmission screening activities as described in
subdivision 4;
(2) an increase in numbers of alternative care clients served under section 256B.0913,
including those who are relocated from nursing homes, which results in a reduction of the medical
assistance nursing home caseload; and
(3) the development of additional services such as adult family foster care homes; family
adult day care; assisted living projects and congregate housing service projects in apartment
buildings; expanded home care services for evenings and weekends; expanded volunteer services;
and caregiver support and respite care projects.
The county or groups of counties selected for the projects shall be required to comply with
federal regulations, alternative care funding policies in section 256B.0913, and the federal waiver
programs' policies in section 256B.0915. The requirements for preadmission screening are
defined in section 256B.0911, subdivisions 1 to 6. Requirements for an access, screening, and
assessment function are defined in subdivision 4. Requirements for the service development and
service provision are defined in subdivision 5.
    Subd. 4. Information, screening, and assessment function. (a) The projects selected by and
under contract with the commissioner shall establish an accessible information, screening, and
assessment function for persons who need assistance and information regarding long-term care.
This accessible information, screening, and assessment activity shall include information and
referral, early intervention, follow-up contacts, telephone screening, home visits, assessments,
preadmission screening, and relocation case management for the frail elderly and their caregivers
in the area served by the county or counties. The purpose is to ensure that information and help
is provided to elderly persons and their families in a timely fashion, when they are making
decisions about long-term care. These functions may be split among various agencies, but must
be coordinated by the local long-term care coordinating team.
(b) Accessible information, screening, and assessment functions shall be reimbursed as
follows:
(1) The screenings of all persons entering nursing homes shall be reimbursed as defined in
section 256B.0911, subdivision 6; and
(2) Additional state administrative funds shall be available for the access, screening, and
assessment activities that are not reimbursed under clause (1). This amount shall not exceed the
amount authorized in the guidelines and in instructions for the application and must be within the
amount appropriated for this activity.
(c) Any information and referral functions funded by other sources, such as Title III of the
Older Americans Act and Title XX of the Social Security Act, shall be considered by the local
long-term care coordinating team in establishing this function to avoid duplication and to ensure
access to information for persons needing help and information regarding long-term care.
(d) The lead agency or the agencies under contract with the lead agency which are
responsible for the accessible information, screening, and assessment function must complete the
forms and reports required by the commissioner as specified in the contract.
    Subd. 5. Service development and delivery. (a) In addition to the access, screening, and
assessment activity, each local strategy may include provisions for the following:
(1) the addition of a full-time staff person who is responsible to develop the following
services and recruit providers as established in the contract:
(i) additional adult family foster care homes;
(ii) family adult day care providers as defined in section 256B.0919, subdivision 2;
(iii) an assisted living program in an apartment;
(iv) a congregate housing service project in a subsidized housing project; and
(v) the expansion of evening and weekend coverage of home care services as deemed
necessary by the local strategic plan;
(2) small incentive grants to new adult family care providers for renovations needed to
meet licensure requirements;
(3) a plan to divert new applicants to nursing homes and to relocate a targeted population
from nursing homes, using the individual's own resources or the funding available for services;
(4) one or more caregiver support and respite care projects, as described in subdivision 6; and
(5) one or more living-at-home/block nurse projects, as described in subdivisions 7 to 10.
(b) The expansion of alternative care clients under paragraph (a) shall be accomplished
with the funds provided under section 256B.0913, and includes the allocation of targeted funds.
The funding for all participating counties must be coordinated by the local long-term care
coordinating team and must be part of the local long-term care strategy. Alternative care funds
may be transferred from one SAIL county to another within a designated SAIL project area
during a fiscal year as authorized by the local long-term care coordinating team and approved by
the commissioner. The base allocation used for a future year shall reflect the final transfer. Each
county retains responsibility for reimbursement as defined in section 256B.0913, subdivision
12 . All other requirements for the alternative care program must be met unless an exception is
provided in this section. The commissioner may establish by contract a reimbursement mechanism
for alternative care that does not require invoice processing through the Medical Assistance
Management Information System (MMIS). The commissioner and local agencies must assure that
the same client and reimbursement data is obtained as is available under MMIS.
(c) The administration of these components is the responsibility of the agencies selected
by the local coordinating team and under contract with the local lead agency. However,
administrative funds for paragraph (a), clauses (2) to (4), and grant funds for paragraph (a), clause
(5), shall be granted to the local lead agency. The funding available for each component is based
on the plan submitted and the amount negotiated in the contract.
    Subd. 6. Caregiver support and respite care projects. (a) The commissioner shall establish
up to 36 projects to expand the respite care network in the state and to support caregivers in their
responsibilities for care. The purpose of each project shall be to:
(1) establish a local coordinated network of volunteer and paid respite workers;
(2) coordinate assignment of respite workers to clients and care receivers and assure the
health and safety of the client; and
(3) provide training for caregivers and ensure that support groups are available in the
community.
(b) The caregiver support and respite care funds shall be available to the four to six local
long-term care strategy projects designated in subdivisions 1 to 5.
(c) The commissioner shall publish a notice in the State Register to solicit proposals from
public or private nonprofit agencies for the projects not included in the four to six local long-term
care strategy projects defined in subdivision 2. A county agency may, alone or in combination
with other county agencies, apply for caregiver support and respite care project funds. A public or
nonprofit agency within a designated SAIL project area may apply for project funds if the agency
has a letter of agreement with the county or counties in which services will be developed, stating
the intention of the county or counties to coordinate their activities with the agency requesting a
grant.
(d) The commissioner shall select grantees based on the following criteria:
(1) the ability of the proposal to demonstrate need in the area served, as evidenced by a
community needs assessment or other demographic data;
(2) the ability of the proposal to clearly describe how the project will achieve the purpose
defined in paragraph (b);
(3) the ability of the proposal to reach underserved populations;
(4) the ability of the proposal to demonstrate community commitment to the project, as
evidenced by letters of support and cooperation as well as formation of a community task force;
(5) the ability of the proposal to clearly describe the process for recruiting, training, and
retraining volunteers; and
(6) the inclusion in the proposal of the plan to promote the project in the community,
including outreach to persons needing the services.
(e) Funds for all projects under this subdivision may be used to:
(1) hire a coordinator to develop a coordinated network of volunteer and paid respite care
services and assign workers to clients;
(2) recruit and train volunteer providers;
(3) train caregivers;
(4) ensure the development of support groups for caregivers;
(5) advertise the availability of the caregiver support and respite care project; and
(6) purchase equipment to maintain a system of assigning workers to clients.
(f) Project funds may not be used to supplant existing funding sources.
    Subd. 7. Contract. (a) The commissioner of human services shall execute a contract with
Living at Home/Block Nurse Program, Inc. (LAH/BN, Inc.). The contract shall require LAH/BN,
Inc. to:
(1) develop criteria for and award grants to establish community-based organizations that
will implement living-at-home/block nurse programs throughout the state;
(2) award grants to enable living-at-home/block nurse programs to continue to implement
the combined living-at-home/block nurse program model;
(3) serve as a state technical assistance center to assist and coordinate the
living-at-home/block nurse programs established; and
(4) manage contracts with individual living-at-home/block nurse programs.
(b) The contract shall be effective July 1, 1997, and section 16B.17 shall not apply.
    Subd. 8. Living-at-home/block nurse program grant. (a) The organization awarded the
contract under subdivision 7, shall develop and administer a grant program to establish or
expand up to 33 community-based organizations that will implement living-at-home/block nurse
programs that are designed to enable senior citizens to live as independently as possible in their
homes and in their communities. At least one-half of the programs must be in counties outside
the seven-county metropolitan area. Nonprofit organizations and units of local government
are eligible to apply for grants to establish the community organizations that will implement
living-at-home/block nurse programs. In awarding grants, the organization awarded the contract
under subdivision 7 shall give preference to nonprofit organizations and units of local government
from communities that:
(1) have high nursing home occupancy rates;
(2) have a shortage of health care professionals;
(3) are located in counties adjacent to, or are located in, counties with existing
living-at-home/block nurse programs; and
(4) meet other criteria established by LAH/BN, Inc., in consultation with the commissioner.
(b) Grant applicants must also meet the following criteria:
(1) the local community demonstrates a readiness to establish a community model of care,
including the formation of a board of directors, advisory committee, or similar group, of which
at least two-thirds is comprised of community citizens interested in community-based care for
older persons;
(2) the program has sponsorship by a credible, representative organization within the
community;
(3) the program has defined specific geographic boundaries and defined its organization,
staffing and coordination/delivery of services;
(4) the program demonstrates a team approach to coordination and care, ensuring that the
older adult participants, their families, the formal and informal providers are all part of the effort
to plan and provide services; and
(5) the program provides assurances that all community resources and funding will be
coordinated and that other funding sources will be maximized, including a person's own resources.
(c) Grant applicants must provide a minimum of five percent of total estimated development
costs from local community funding. Grants shall be awarded for four-year periods, and the base
amount shall not exceed $80,000 per applicant for the grant period. The organization under
contract may increase the grant amount for applicants from communities that have socioeconomic
characteristics that indicate a higher level of need for assistance. Subject to the availability of
funding, grants and grant renewals awarded or entered into on or after July 1, 1997, shall be
renewed by LAH/BN, Inc. every four years, unless LAH/BN, Inc. determines that the grant
recipient has not satisfactorily operated the living-at-home/block nurse program in compliance
with the requirements of paragraphs (b) and (d). Grants provided to living-at-home/block nurse
programs under this paragraph may be used for both program development and the delivery
of services.
(d) Each living-at-home/block nurse program shall be designed by representatives of
the communities being served to ensure that the program addresses the specific needs of the
community residents. The programs must be designed to:
(1) incorporate the basic community, organizational, and service delivery principles of the
living-at-home/block nurse program model;
(2) provide senior citizens with registered nurse directed assessment, provision and
coordination of health and personal care services on a sliding fee basis as an alternative to
expensive nursing home care;
(3) provide information, support services, homemaking services, counseling, and training
for the client and family caregivers;
(4) encourage the development and use of respite care, caregiver support, and in-home
support programs, such as adult foster care and in-home adult day care;
(5) encourage neighborhood residents and local organizations to collaborate in meeting the
needs of senior citizens in their communities;
(6) recruit, train, and direct the use of volunteers to provide informal services and other
appropriate support to senior citizens and their caregivers; and
(7) provide coordination and management of formal and informal services to senior citizens
and their families using less expensive alternatives.
    Subd. 9. State technical assistance center. The organization under contract shall be the state
technical assistance center to provide orientation and technical assistance, and to coordinate the
living-at-home/block nurse programs established. The state resource center shall:
(1) provide communities with criteria in planning and designing their living-at-home/block
nurse programs;
(2) provide general orientation and technical assistance to communities who desire to
establish living-at-home/block nurse programs;
(3) provide ongoing analysis and data collection of existing and newly established
living-at-home/block nurse programs and provide data to the organization performing the
independent assessment; and
(4) serve as the living-at-home/block nurse programs' liaison to the legislature and other
state agencies.
    Subd. 10. Implementation plan. The organization under contract shall develop a plan
that specifies a strategy for implementing living-at-home/block nurse programs statewide. The
plan must also analyze the data collected by the state technical assistance center and describe
the effectiveness of services provided by living-at-home/block nurse programs, including the
program's impact on acute care costs. The organization shall report to the commissioner of human
services and to the legislature by January 1, 1993.
    Subd. 11. SAIL evaluation and expansion. The commissioner shall evaluate the success of
the SAIL projects against the objective stated in subdivision 1, paragraph (b), and recommend to
the legislature the continuation or expansion of the long-term care strategy by February 15, 1995.
    Subd. 12. Public awareness campaign. The commissioner, with assistance from the
commissioner of health and with the advice of the long-term care planning committee, shall
contract for a public awareness campaign to educate the general public, seniors, consumers,
caregivers, and professionals about the aging process, the long-term care system, and alternatives
available including alternative care and residential alternatives. Particular emphasis will be given
to informing consumers on how to access the alternatives and obtain information on the long-term
care system. The commissioner shall pursue the development of new names for preadmission
screening, alternative care, foster care, and other services as deemed necessary for the public
awareness campaign.
    Subd. 13. Community service grants. The commissioner shall award contracts for grants to
public and private nonprofit agencies to establish services that strengthen a community's ability to
provide a system of home and community-based services for elderly persons. The commissioner
shall use a request for proposal process. The commissioner shall give preference when awarding
grants under this section to areas where nursing facility closures have occurred or are occurring.
The commissioner shall consider grants for:
(1) caregiver support and respite care projects under subdivision 6;
(2) the living-at-home/block nurse grant under subdivisions 7 to 10; and
(3) services identified as needed for community transition.
History: 1991 c 292 art 7 s 17; 1992 c 513 art 7 s 65-72; 1Sp1993 c 1 art 5 s 73-79; 1994 c
625 art 8 s 63; 1997 c 203 art 4 s 44,45; 1999 c 245 art 4 s 62; 2000 c 488 art 9 s 36; 2001 c
161 s 46,47; 1Sp2001 c 9 art 4 s 31,32; 2002 c 379 art 1 s 113; 2005 c 10 art 1 s 51,52; 2005 c
98 art 3 s 24; 2006 c 212 art 3 s 19

256B.0918 EMPLOYEE SCHOLARSHIP COSTS.
    Subdivision 1. Program criteria. Beginning on or after October 1, 2005, within the limits of
appropriations specifically available for this purpose, the commissioner shall provide funding to
qualified provider applicants for employee scholarships for education in nursing and other health
care fields. Employee scholarships must be for a course of study that is expected to lead to career
advancement with the provider or in the field of long-term care, including home care or care of
persons with disabilities, or nursing. Providers that secure this funding must use it to award
scholarships to employees who work an average of at least 20 hours per week for the provider.
Executive management staff without direct care duties, registered nurses, and therapists are not
eligible to receive scholarships under this section.
    Subd. 2. Participating providers. The commissioner shall publish a request for proposals
in the State Register by August 15, 2005, specifying provider eligibility requirements, provider
selection criteria, program specifics, funding mechanism, and methods of evaluation. The
commissioner may publish additional requests for proposals in subsequent years. Providers
who provide services funded through the following programs are eligible to apply to participate
in the scholarship program: home and community-based waivered services for persons with
developmental disabilities under section 256B.501; home and community-based waivered
services for the elderly under section 256B.0915; waivered services under community alternatives
for disabled individuals under section 256B.49; community alternative care waivered services
under section 256B.49; traumatic brain injury waivered services under section 256B.49; nursing
services and home health services under section 256B.0625, subdivision 6a; personal care services
and nursing supervision of personal care services under section 256B.0625, subdivision 19a;
private duty nursing services under section 256B.0625, subdivision 7; day training and habilitation
services for adults with developmental disabilities under sections 252.40 to 252.46; and
intermediate care facilities for persons with developmental disabilities under section 256B.5012.
    Subd. 3. Provider selection criteria. To be considered for scholarship funding, the provider
shall submit a completed application within the time frame specified by the commissioner. In
awarding funding, the commissioner shall consider the following:
(1) the size of the provider as measured in annual billing to the medical assistance program.
To be eligible, a provider must receive at least $300,000 annually in medical assistance payments;
(2) the percentage of employees meeting the scholarship program recipient requirements;
(3) staff retention rates for paraprofessionals; and
(4) other criteria determined by the commissioner.
    Subd. 4. Funding specifics. Within the limits of appropriations specifically available for this
purpose, for the rate period beginning on or after October 1, 2005, to September 30, 2007, the
commissioner shall provide to each provider listed in subdivision 2 and awarded funds under
subdivision 3 a medical assistance rate increase to fund scholarships up to three-tenths percent of
the medical assistance reimbursement rate. The commissioner shall require providers to repay any
portion of funds awarded under subdivision 3 that is not used to fund scholarships. If applications
exceed available funding, funding shall be targeted to providers that employ a higher percentage
of paraprofessional staff or have lower rates of turnover of paraprofessional staff. During the
subsequent years of the program, the rate adjustment may be recalculated, at the discretion of the
commissioner. In making a recalculation the commissioner may consider the provider's success at
granting scholarships based on the amount spent during the previous year and the availability of
appropriations to continue the program.
    Subd. 5. Reporting requirements. Participating providers shall report to the commissioner
on a schedule determined by the commissioner and on a form supplied by the commissioner for a
scholarship rate for rate periods beginning October 1, 2007. The report shall include the amount
spent during the reporting period on eligible scholarships, and, for each scholarship recipient,
the name of the recipient, the amount awarded, the educational institution attended, the nature of
the educational program, the expected or actual program completion date, and a determination
of the amount spent as a percentage of the provider's reimbursement. The commissioner shall
require providers to repay all of the funds awarded under subdivision 3 if the report required in
this subdivision is not filled according to the schedule determined by the commissioner.
    Subd. 6. Evaluation. The commissioner shall report to the legislature annually, beginning
March 15, 2007, on the use of these funds.
History: 2005 c 56 s 1; 1Sp2005 c 4 art 8 s 47; 2006 c 282 art 20 s 17-19

256B.0919 ADULT FOSTER CARE AND FAMILY ADULT DAY CARE.
    Subdivision 1. Adult foster care licensure capacity. Notwithstanding contrary provisions
of the Human Services Licensing Act and rules adopted under it, an adult foster care license
holder may care for five adults age 60 years or older who do not have serious and persistent
mental illness or a developmental disability.
    Subd. 2. Adult foster care; family adult day care. An adult foster care license holder who
is not providing care to persons with serious and persistent mental illness or developmental
disabilities may also provide family adult day care for adults age 60 years or older who do not
have serious and persistent mental illness or a developmental disability. The maximum combined
license capacity for adult foster care and family adult day care is five adults. A separate license is
not required to provide family adult day care under this subdivision. Foster care homes providing
services to five adults shall not be subject to licensure by the commissioner of health under
the provisions of chapter 144, 144A, 157, or any other law requiring facility licensure by the
commissioner of health.
    Subd. 3. County certification of persons providing adult foster care to related persons.
A person exempt from licensure under section 245A.03, subdivision 2, who provides adult foster
care to a related individual age 65 and older, and who meets the requirements in Minnesota
Rules, parts 9555.5105 to 9555.6265, may be certified by the county to provide adult foster care.
A person certified by the county to provide adult foster care may be reimbursed for services
provided and eligible for funding under sections 256B.0913 and 256B.0915, if the relative
would suffer a financial hardship as a result of providing care. For purposes of this subdivision,
financial hardship refers to a situation in which a relative incurs a substantial reduction in income
as a result of resigning from a full-time job or taking a leave of absence without pay from a
full-time job to care for the client.
History: 1986 c 444; 1991 c 292 art 7 s 18; 1992 c 513 art 7 s 73

256B.092 SERVICES FOR PERSONS WITH DEVELOPMENTAL DISABILITIES.
    Subdivision 1. County of financial responsibility; duties. Before any services shall be
rendered to persons with developmental disabilities who are in need of social service and medical
assistance, the county of financial responsibility shall conduct or arrange for a diagnostic
evaluation in order to determine whether the person has or may have a developmental disability
or has or may have a related condition. If the county of financial responsibility determines
that the person has a developmental disability, the county shall inform the person of case
management services available under this section. Except as provided in subdivision 1g or 4b, if a
person is diagnosed as having a developmental disability, the county of financial responsibility
shall conduct or arrange for a needs assessment, develop or arrange for an individual service
plan, provide or arrange for ongoing case management services at the level identified in the
individual service plan, provide or arrange for case management administration, and authorize
services identified in the person's individual service plan developed according to subdivision 1b.
Diagnostic information, obtained by other providers or agencies, may be used by the county
agency in determining eligibility for case management. Nothing in this section shall be construed
as requiring: (1) assessment in areas agreed to as unnecessary by the case manager and the
person, or the person's legal guardian or conservator, or the parent if the person is a minor, or
(2) assessments in areas where there has been a functional assessment completed in the previous
12 months for which the case manager and the person or person's guardian or conservator, or
the parent if the person is a minor, agree that further assessment is not necessary. For persons
under state guardianship, the case manager shall seek authorization from the public guardianship
office for waiving any assessment requirements. Assessments related to health, safety, and
protection of the person for the purpose of identifying service type, amount, and frequency or
assessments required to authorize services may not be waived. To the extent possible, for wards
of the commissioner the county shall consider the opinions of the parent of the person with a
developmental disability when developing the person's individual service plan.
    Subd. 1a. Case management administration and services. (a) The administrative functions
of case management provided to or arranged for a person include:
(1) review of eligibility for services;
(2) screening;
(3) intake;
(4) diagnosis;
(5) the review and authorization of services based upon an individualized service plan; and
(6) responding to requests for conciliation conferences and appeals according to section
256.045 made by the person, the person's legal guardian or conservator, or the parent if the
person is a minor.
(b) Case management service activities provided to or arranged for a person include:
(1) development of the individual service plan;
(2) informing the individual or the individual's legal guardian or conservator, or parent
if the person is a minor, of service options;
(3) consulting with relevant medical experts or service providers;
(4) assisting the person in the identification of potential providers;
(5) assisting the person to access services;
(6) coordination of services, if coordination is not provided by another service provider;
(7) evaluation and monitoring of the services identified in the plan; and
(8) annual reviews of service plans and services provided.
(c) Case management administration and service activities that are provided to the person
with a developmental disability shall be provided directly by county agencies or under contract.
(d) Case managers are responsible for the administrative duties and service provisions
listed in paragraphs (a) and (b). Case managers shall collaborate with consumers, families, legal
representatives, and relevant medical experts and service providers in the development and annual
review of the individualized service and habilitation plans.
(e) The Department of Human Services shall offer ongoing education in case management to
case managers. Case managers shall receive no less than ten hours of case management education
and disability-related training each year.
    Subd. 1b. Individual service plan. The individual service plan must:
(1) include the results of the assessment information on the person's need for service,
including identification of service needs that will be or that are met by the person's relatives,
friends, and others, as well as community services used by the general public;
(2) identify the person's preferences for services as stated by the person, the person's legal
guardian or conservator, or the parent if the person is a minor;
(3) identify long- and short-range goals for the person;
(4) identify specific services and the amount and frequency of the services to be provided to
the person based on assessed needs, preferences, and available resources. The individual service
plan shall also specify other services the person needs that are not available;
(5) identify the need for an individual program plan to be developed by the provider
according to the respective state and federal licensing and certification standards, and additional
assessments to be completed or arranged by the provider after service initiation;
(6) identify provider responsibilities to implement and make recommendations for
modification to the individual service plan;
(7) include notice of the right to request a conciliation conference or a hearing under
section 256.045;
(8) be agreed upon and signed by the person, the person's legal guardian or conservator, or
the parent if the person is a minor, and the authorized county representative; and
(9) be reviewed by a health professional if the person has overriding medical needs that
impact the delivery of services.
Service planning formats developed for interagency planning such as transition, vocational,
and individual family service plans may be substituted for service planning formats developed
by county agencies.
    Subd. 1c.[Repealed, 1991 c 94 s 25; c 292 art 6 s 47]
    Subd. 1d.[Repealed, 1991 c 94 s 25; c 292 art 6 s 47]
    Subd. 1e.[Renumbered subd 1f]
    Subd. 1e. Coordination, evaluation, and monitoring of services. (a) If the individual
service plan identifies the need for individual program plans for authorized services, the case
manager shall assure that individual program plans are developed by the providers according to
clauses (2) to (5). The providers shall assure that the individual program plans:
(1) are developed according to the respective state and federal licensing and certification
requirements;
(2) are designed to achieve the goals of the individual service plan;
(3) are consistent with other aspects of the individual service plan;
(4) assure the health and safety of the person; and
(5) are developed with consistent and coordinated approaches to services among the various
service providers.
(b) The case manager shall monitor the provision of services:
(1) to assure that the individual service plan is being followed according to paragraph (a);
(2) to identify any changes or modifications that might be needed in the individual service
plan, including changes resulting from recommendations of current service providers;
(3) to determine if the person's legal rights are protected, and if not, notify the person's legal
guardian or conservator, or the parent if the person is a minor, protection services, or licensing
agencies as appropriate; and
(4) to determine if the person, the person's legal guardian or conservator, or the parent if
the person is a minor, is satisfied with the services provided.
(c) If the provider fails to develop or carry out the individual program plan according to
paragraph (a), the case manager shall notify the person's legal guardian or conservator, or the
parent if the person is a minor, the provider, the respective licensing and certification agencies,
and the county board where the services are being provided. In addition, the case manager shall
identify other steps needed to assure the person receives the services identified in the individual
service plan.
    Subd. 1f. County waiting list. The county agency shall maintain a waiting list of persons
with developmental disabilities specifying the services needed but not provided. This waiting list
shall be used by county agencies to assist them in developing needed services or amending their
children and community service agreements.
    Subd. 1g. Conditions not requiring development of individual service plan. Unless
otherwise required by federal law, the county agency is not required to complete an individual
service plan as defined in subdivision 1b for:
(1) persons whose families are requesting respite care for their family member who resides
with them, or whose families are requesting a family support grant and are not requesting purchase
or arrangement of habilitative services; and
(2) persons with developmental disabilities, living independently without authorized services
or receiving funding for services at a rehabilitation facility as defined in section 268A.01,
subdivision 6 , and not in need of or requesting additional services.
    Subd. 2. Medical assistance. To assure quality case management to those persons who are
eligible for medical assistance, the commissioner shall, upon request:
(a) provide consultation on the case management process;
(b) assist county agencies in the screening and annual reviews of clients review process to
assure that appropriate levels of service are provided to persons;
(c) provide consultation on service planning and development of services with appropriate
options;
(d) provide training and technical assistance to county case managers; and
(e) authorize payment for medical assistance services according to this chapter and rules
implementing it.
    Subd. 2a. Medical assistance for case management activities under the state plan
Medicaid option. Upon receipt of federal approval, the commissioner shall make payments to
approved vendors of case management services participating in the medical assistance program to
reimburse costs for providing case management service activities to medical assistance eligible
persons with developmental disabilities, in accordance with the state Medicaid plan and federal
requirements and limitations.
    Subd. 3. Authorization and termination of services. County agency case managers,
under rules of the commissioner, shall authorize and terminate services of community and
regional treatment center providers according to individual service plans. Services provided to
persons with developmental disabilities may only be authorized and terminated by case managers
according to (1) rules of the commissioner and (2) the individual service plan as defined in
subdivision 1b. Medical assistance services not needed shall not be authorized by county agencies
or funded by the commissioner. When purchasing or arranging for unlicensed respite care services
for persons with overriding health needs, the county agency shall seek the advice of a health care
professional in assessing provider staff training needs and skills necessary to meet the medical
needs of the person.
    Subd. 4. Home and community-based services for developmental disabilities. (a)
The commissioner shall make payments to approved vendors participating in the medical
assistance program to pay costs of providing home and community-based services, including case
management service activities provided as an approved home and community-based service, to
medical assistance eligible persons with developmental disabilities who have been screened under
subdivision 7 and according to federal requirements. Federal requirements include those services
and limitations included in the federally approved application for home and community-based
services for persons with developmental disabilities and subsequent amendments.
(b) Effective July 1, 1995, contingent upon federal approval and state appropriations made
available for this purpose, and in conjunction with Laws 1995, chapter 207, article 8, section 40,
the commissioner of human services shall allocate resources to county agencies for home and
community-based waivered services for persons with developmental disabilities authorized but
not receiving those services as of June 30, 1995, based upon the average resource need of persons
with similar functional characteristics. To ensure service continuity for service recipients receiving
home and community-based waivered services for persons with developmental disabilities prior to
July 1, 1995, the commissioner shall make available to the county of financial responsibility home
and community-based waivered services resources based upon fiscal year 1995 authorized levels.
(c) Home and community-based resources for all recipients shall be managed by the county
of financial responsibility within an allowable reimbursement average established for each county.
Payments for home and community-based services provided to individual recipients shall not
exceed amounts authorized by the county of financial responsibility. For specifically identified
former residents of nursing facilities, the commissioner shall be responsible for authorizing
payments and payment limits under the appropriate home and community-based service program.
Payment is available under this subdivision only for persons who, if not provided these services,
would require the level of care provided in an intermediate care facility for persons with
developmental disabilities.
    Subd. 4a. Demonstration projects. The commissioner may waive state rules governing
home and community-based services in order to demonstrate other methods of administering
these services and to improve efficiency and responsiveness to individual needs of persons with
developmental disabilities, notwithstanding section 14.05, subdivision 4. All demonstration
projects approved by the commissioner must comply with state laws and federal regulations,
must remain within the fiscal limitations of the home and community-based services program
for persons with developmental disabilities, and must assure the health and safety of the persons
receiving services.
    Subd. 4b. Case management for persons receiving home and community-based services.
Persons authorized for and receiving home and community-based services may select from
vendors of case management which have provider agreements with the state to provide home and
community-based case management service activities. This subdivision becomes effective July
1, 1992, only if the state agency is unable to secure federal approval for limiting choice of case
management vendors to the county of financial responsibility.
    Subd. 4c. Living arrangements based on a 24-hour plan of care. (a) Notwithstanding the
requirements for licensure under Minnesota Rules, part 9525.1860, subpart 6, item D, and upon
federal approval of an amendment to the home and community-based services waiver for persons
with developmental disabilities, a person receiving home and community-based services may
choose to live in their own home without requiring that the living arrangement be licensed under
Minnesota Rules, parts 9555.5050 to 9555.6265, provided the following conditions are met:
(1) the person receiving home and community-based services has chosen to live in their
own home;
(2) home and community-based services are provided by a qualified vendor who meets the
provider standards as approved in the Minnesota home and community-based services waiver
plan for persons with developmental disabilities;
(3) the person, or their legal representative, individually or with others has purchased or rents
the home and the person's service provider has no financial interest in the home; and
(4) the service planning team, as defined in Minnesota Rules, part 9525.0004, subpart 24, has
determined that the planned services, the 24-hour plan of care, and the housing arrangement are
appropriate to address the health, safety, and welfare of the person.
(b) The county agency may require safety inspections of the selected housing as part of their
determination of the adequacy of the living arrangement.
    Subd. 5. Federal waivers. (a) The commissioner shall apply for any federal waivers
necessary to secure, to the extent allowed by law, federal financial participation under United
States Code, title 42, sections 1396 et seq., as amended, for the provision of services to persons
who, in the absence of the services, would need the level of care provided in a regional treatment
center or a community intermediate care facility for persons with developmental disabilities. The
commissioner may seek amendments to the waivers or apply for additional waivers under United
States Code, title 42, sections 1396 et seq., as amended, to contain costs. The commissioner shall
ensure that payment for the cost of providing home and community-based alternative services
under the federal waiver plan shall not exceed the cost of intermediate care services including day
training and habilitation services that would have been provided without the waivered services.
The commissioner shall seek an amendment to the 1915c home and community-based
waiver to allow properly licensed adult foster care homes to provide residential services to up
to five individuals with developmental disabilities. If the amendment to the waiver is approved,
adult foster care providers that can accommodate five individuals shall increase their capacity to
five beds, provided the providers continue to meet all applicable licensing requirements.
(b) The commissioner, in administering home and community-based waivers for persons
with developmental disabilities, shall ensure that day services for eligible persons are not provided
by the person's residential service provider, unless the person or the person's legal representative is
offered a choice of providers and agrees in writing to provision of day services by the residential
service provider. The individual service plan for individuals who choose to have their residential
service provider provide their day services must describe how health, safety, protection, and
habilitation needs will be met, including how frequent and regular contact with persons other
than the residential service provider will occur. The individualized service plan must address the
provision of services during the day outside the residence on weekdays.
(c) When a county is evaluating denials, reductions, or terminations of home and
community-based services under section 256B.0916 for an individual, the case manager shall
offer to meet with the individual or the individual's guardian in order to discuss the prioritization
of service needs within the individualized service plan. The reduction in the authorized services
for an individual due to changes in funding for waivered services may not exceed the amount
needed to ensure medically necessary services to meet the individual's health, safety, and welfare.
    Subd. 5a. Increasing adult foster care capacity to serve five persons. (a) When an adult
foster care provider increases the capacity of an existing home licensed to serve four persons to
serve a fifth person under this section, the county agency shall reduce the contracted per diem cost
for room and board and the developmental disability waiver services of the existing foster care
home by an average of 14 percent for all individuals living in that home. A county agency may
average the required per diem rate reductions across several adult foster care homes that expand
capacity under this section to achieve the necessary overall per diem reduction.
(b) Following the contract changes in paragraph (a), the commissioner shall adjust:
(1) individual county allocations for developmental disability waivered services by the
amount of savings that results from the changes made for developmental disability waiver
recipients for whom the county is financially responsible; and
(2) group residential housing rate payments to the adult foster care home by the amount of
savings that results from the changes made.
(c) Effective July 1, 2003, when a new five-person adult foster care home is licensed under
this section, county agencies shall not establish group residential housing room and board rates
and developmental disability waiver service rates for the new home that exceed 86 percent of
the average per diem room and board and developmental disability waiver services costs of
four-person homes serving persons with comparable needs and in the same geographic area. A
county agency developing more than one new five-person adult foster care home may average the
required per diem rates across the homes to achieve the necessary overall per diem reductions.
(d) The commissioner shall reduce the individual county allocations for developmental
disability waivered services by the savings resulting from the per diem limits on adult foster care
recipients for whom the county is financially responsible, and shall limit the group residential
housing rate for a new five-person adult foster care home.
    Subd. 6. Rules. The commissioner shall adopt rules to establish required controls,
documentation, and reporting of services provided in order to assure proper administration of the
approved waiver plan, and to establish policy and procedures to reduce duplicative efforts and
unnecessary paperwork on the part of case managers.
    Subd. 7. Screening teams. For persons with developmental disabilities, screening
teams shall be established which shall evaluate the need for the level of care provided by
residential-based habilitation services, residential services, training and habilitation services, and
nursing facility services. The evaluation shall address whether home and community-based
services are appropriate for persons who are at risk of placement in an intermediate care facility
for persons with developmental disabilities, or for whom there is reasonable indication that they
might require this level of care. The screening team shall make an evaluation of need within 60
working days of a request for service by a person with a developmental disability, and within
five working days of an emergency admission of a person to an intermediate care facility for
persons with developmental disabilities. The screening team shall consist of the case manager for
persons with developmental disabilities, the person, the person's legal guardian or conservator,
or the parent if the person is a minor, and a qualified developmental disability professional, as
defined in the Code of Federal Regulations, title 42, section 483.430, as amended through June 3,
1988. The case manager may also act as the qualified developmental disability professional if the
case manager meets the federal definition. County social service agencies may contract with a
public or private agency or individual who is not a service provider for the person for the public
guardianship representation required by the screening or individual service planning process. The
contract shall be limited to public guardianship representation for the screening and individual
service planning activities. The contract shall require compliance with the commissioner's
instructions and may be for paid or voluntary services. For persons determined to have overriding
health care needs and are seeking admission to a nursing facility or an ICF/MR, or seeking
access to home and community-based waivered services, a registered nurse must be designated
as either the case manager or the qualified developmental disability professional. For persons
under the jurisdiction of a correctional agency, the case manager must consult with the corrections
administrator regarding additional health, safety, and supervision needs. The case manager,
with the concurrence of the person, the person's legal guardian or conservator, or the parent if
the person is a minor, may invite other individuals to attend meetings of the screening team. No
member of the screening team shall have any direct or indirect service provider interest in the
case. Nothing in this section shall be construed as requiring the screening team meeting to be
separate from the service planning meeting.
    Subd. 8. Screening team duties. The screening team shall:
(a) review diagnostic data;
(b) review health, social, and developmental assessment data using a uniform screening
tool specified by the commissioner;
(c) identify the level of services appropriate to maintain the person in the most normal and
least restrictive setting that is consistent with the person's treatment needs;
(d) identify other noninstitutional public assistance or social service that may prevent or
delay long-term residential placement;
(e) assess whether a person is in need of long-term residential care;
(f) make recommendations regarding placement and payment for: (1) social service or
public assistance support, or both, to maintain a person in the person's own home or other place
of residence; (2) training and habilitation service, vocational rehabilitation, and employment
training activities; (3) community residential placement; (4) regional treatment center placement;
or (5) a home and community-based service alternative to community residential placement or
regional treatment center placement;
(g) evaluate the availability, location, and quality of the services listed in paragraph (f),
including the impact of placement alternatives on the person's ability to maintain or improve
existing patterns of contact and involvement with parents and other family members;
(h) identify the cost implications of recommendations in paragraph (f);
(i) make recommendations to a court as may be needed to assist the court in making decisions
regarding commitment of persons with developmental disabilities; and
(j) inform the person and the person's legal guardian or conservator, or the parent if the
person is a minor, that appeal may be made to the commissioner pursuant to section 256.045.
    Subd. 8a. County concurrence. (a) If the county of financial responsibility wishes to
place a person in another county for services, the county of financial responsibility shall seek
concurrence from the proposed county of service and the placement shall be made cooperatively
between the two counties. Arrangements shall be made between the two counties for ongoing
social service, including annual reviews of the person's individual service plan. The county where
services are provided may not make changes in the person's service plan without approval by the
county of financial responsibility.
(b) When a person has been screened and authorized for services in an intermediate care
facility for persons with developmental disabilities or for home and community-based services for
persons with developmental disabilities, the case manager shall assist that person in identifying a
service provider who is able to meet the needs of the person according to the person's individual
service plan. If the identified service is to be provided in a county other than the county of
financial responsibility, the county of financial responsibility shall request concurrence of the
county where the person is requesting to receive the identified services. The county of service
may refuse to concur if:
(1) it can demonstrate that the provider is unable to provide the services identified in the
person's individual service plan as services that are needed and are to be provided;
(2) in the case of an intermediate care facility for persons with developmental disabilities,
there has been no authorization for admission by the admission review team as required in section
256B.0926; or
(3) in the case of home and community-based services for persons with developmental
disabilities, the county of service can demonstrate that the prospective provider has failed to
substantially comply with the terms of a past contract or has had a prior contract terminated
within the last 12 months for failure to provide adequate services, or has received a notice
of intent to terminate the contract.
(c) The county of service shall notify the county of financial responsibility of concurrence or
refusal to concur no later than 20 working days following receipt of the written request. Unless
other mutually acceptable arrangements are made by the involved county agencies, the county of
financial responsibility is responsible for costs of social services and the costs associated with
the development and maintenance of the placement. The county of service may request that the
county of financial responsibility purchase case management services from the county of service
or from a contracted provider of case management when the county of financial responsibility is
not providing case management as defined in this section and rules adopted under this section,
unless other mutually acceptable arrangements are made by the involved county agencies.
Standards for payment limits under this section may be established by the commissioner. Financial
disputes between counties shall be resolved as provided in section 256G.09.
    Subd. 9. Reimbursement. Payment for services shall not be provided to a service provider
for any person placed in an intermediate care facility for persons with developmental disabilities
prior to the person being screened by the screening team. The commissioner shall not deny
reimbursement for: (a) a person admitted to an intermediate care facility for persons with
developmental disabilities who is assessed to need long-term supportive services, if long-term
supportive services other than intermediate care are not available in that community; (b) any
person admitted to an intermediate care facility for persons with developmental disabilities under
emergency circumstances; (c) any eligible person placed in the intermediate care facility for
persons with developmental disabilities pending an appeal of the screening team's decision; or
(d) any medical assistance recipient when, after full discussion of all appropriate alternatives
including those that are expected to be less costly than intermediate care for persons with
developmental disabilities, the person or the person's legal guardian or conservator, or the parent
if the person is a minor, insists on intermediate care placement. The screening team shall provide
documentation that the most cost-effective alternatives available were offered to this individual or
the individual's legal guardian or conservator.
    Subd. 10. Admission of persons to and discharge of persons from regional treatment
centers. (a) Prior to the admission of a person to a regional treatment center program for persons
with developmental disabilities, the case manager shall make efforts to secure community-based
alternatives. If these alternatives are rejected by the person, the person's legal guardian or
conservator, or the county agency in favor of a regional treatment center placement, the case
manager shall document the reasons why the alternatives were rejected.
(b) When discharge of a person from a regional treatment center to a community-based
service is proposed, the case manager shall convene the screening team and in addition to
members of the team identified in subdivision 7, the case manager shall invite to the meeting the
person's parents and near relatives, and the ombudsman established under section 245.92 if the
person is under public guardianship. The meeting shall be convened at a time and place that
allows for participation of all team members and invited individuals who choose to attend. The
notice of the meeting shall inform the person's parents and near relatives about the screening team
process, and their right to request a review if they object to the discharge, and shall provide the
names and functions of advocacy organizations, and information relating to assistance available
to individuals interested in establishing private guardianships under the provisions of section
252A.03. The screening team meeting shall be conducted according to subdivisions 7 and 8.
Discharge of the person shall not go forward without consensus of the screening team.
(c) The results of the screening team meeting and individual service plan developed
according to subdivision 1b shall be used by the interdisciplinary team assembled in accordance
with Code of Federal Regulations, title 42, section 483.440, to evaluate and make recommended
modifications to the individual service plan as proposed. The individual service plan shall
specify postplacement monitoring to be done by the case manager according to section 253B.15,
subdivision 1a .
(d) Notice of the meeting of the interdisciplinary team assembled in accordance with Code of
Federal Regulations, title 42, section 483.440, shall be sent to all team members 15 days prior to
the meeting, along with a copy of the proposed individual service plan. The case manager shall
request that proposed providers visit the person and observe the person's program at the regional
treatment center prior to the discharge. Whenever possible, preplacement visits by the person
to proposed service sites should also be scheduled in advance of the meeting. Members of the
interdisciplinary team assembled for the purpose of discharge planning shall include but not be
limited to the case manager, the person, the person's legal guardian or conservator, parents and
near relatives, the person's advocate, representatives of proposed community service providers,
representatives of the regional treatment center residential and training and habilitation services, a
registered nurse if the person has overriding medical needs that impact the delivery of services,
and a qualified developmental disability professional specializing in behavior management if the
person to be discharged has behaviors that may result in injury to self or others. The case manager
may also invite other service providers who have expertise in an area related to specific service
needs of the person to be discharged.
(e) The interdisciplinary team shall review the proposed plan to assure that it identifies
service needs, availability of services, including support services, and the proposed providers'
abilities to meet the service needs identified in the person's individual service plan. The
interdisciplinary team shall review the most recent licensing reports of the proposed providers and
corrective action taken by the proposed provider, if required. The interdisciplinary team shall
review the current individual program plans for the person and agree to an interim individual
program plan to be followed for the first 30 days in the person's new living arrangement. The
interdisciplinary team may suggest revisions to the service plan, and all team suggestions shall
be documented. If the person is to be discharged to a community intermediate care facility for
persons with developmental disabilities, the team shall give preference to facilities with a licensed
capacity of 15 or fewer beds. Thirty days prior to the date of discharge, the case manager shall
send a final copy of the service plan to all invited members of the team, the ombudsman, if the
person is under public guardianship, and the advocacy system established under United States
Code, title 42, section 6042.
(f) No discharge shall take place until disputes are resolved under section 256.045,
subdivision 4a , or until a review by the commissioner is completed upon request of the chief
executive officer or program director of the regional treatment center, or the county agency. For
persons under public guardianship, the ombudsman may request a review or hearing under section
256.045. Notification schedules required under this subdivision may be waived by members of
the team when judged urgent and with agreement of the parents or near relatives participating as
members of the interdisciplinary team.
History: 1983 c 312 art 9 s 5; 1984 c 640 s 32; 1985 c 21 s 55; 1Sp1985 c 9 art 2 s 40-45;
1987 c 305 s 2; 1988 c 689 art 2 s 148,149; 1989 c 282 art 3 s 61; art 6 s 29,30; 1990 c 568 art 3
s 57-61; 1990 c 599 s 1; 1991 c 292 art 6 s 47; 1992 c 513 art 7 s 74; art 9 s 26,27; 1993 c 339 s
15-19; 1995 c 207 art 3 s 19; art 8 s 34; 1997 c 7 art 5 s 30; 1Sp2001 c 9 art 3 s 46; 2002 c 379 art
1 s 113; 1Sp2003 c 14 art 3 s 31,32; art 6 s 50,51; art 11 s 11; 2005 c 56 s 1; 2005 c 98 art 2 s 7

256B.0924 TARGETED CASE MANAGEMENT SERVICES.
    Subdivision 1. Purpose. The state recognizes that targeted case management services
can decrease the need for more costly services such as multiple emergency room visits
or hospitalizations by linking eligible individuals with less costly services available in the
community.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given:
(a) "Targeted case management" means services which will assist medical assistance eligible
persons to gain access to needed medical, social, educational, and other services. Targeted case
management does not include therapy, treatment, legal, or outreach services.
(b) "Targeted case management for adults" means activities that coordinate and link social
and other services designed to help eligible persons gain access to needed protective services,
social, health care, mental health, habilitative, educational, vocational, recreational, advocacy,
legal, chemical, health, and other related services.
    Subd. 3. Eligibility. Persons are eligible to receive targeted case management services under
this section if the requirements in paragraphs (a) and (b) are met.
(a) The person must be assessed and determined by the local county agency to:
(1) be age 18 or older;
(2) be receiving medical assistance;
(3) have significant functional limitations; and
(4) be in need of service coordination to attain or maintain living in an integrated community
setting.
(b) The person must be a vulnerable adult in need of adult protection as defined in section
626.5572, or is an adult with a developmental disability as defined in section 252A.02, subdivision
2 , or a related condition as defined in section 252.27, subdivision 1a, and is not receiving home
and community-based waiver services, or is an adult who lacks a permanent residence and who
has been without a permanent residence for at least one year or on at least four occasions in
the last three years.
    Subd. 4. Targeted case management service activities. (a) For persons with developmental
disabilities, targeted case management services must meet the provisions of section 256B.092.
(b) For persons not eligible as a person with a developmental disability, targeted case
management service activities include:
(1) an assessment of the person's need for targeted case management services;
(2) the development of a written personal service plan;
(3) a regular review and revision of the written personal service plan with the recipient and
the recipient's legal representative, and others as identified by the recipient, to ensure access to
necessary services and supports identified in the plan;
(4) effective communication with the recipient and the recipient's legal representative and
others identified by the recipient;
(5) coordination of referrals for needed services with qualified providers;
(6) coordination and monitoring of the overall service delivery to ensure the quality and
effectiveness of services;
(7) assistance to the recipient and the recipient's legal representative to help make an
informed choice of services;
(8) advocating on behalf of the recipient when service barriers are encountered or referring
the recipient and the recipient's legal representative to an independent advocate;
(9) monitoring and evaluating services identified in the personal service plan to ensure
personal outcomes are met and to ensure satisfaction with services and service delivery;
(10) conducting face-to-face monitoring with the recipient at least twice a year;
(11) completing and maintaining necessary documentation that supports and verifies the
activities in this section;
(12) coordinating with the medical assistance facility discharge planner in the 180-day
period prior to the recipient's discharge into the community; and
(13) a personal service plan developed and reviewed at least annually with the recipient and
the recipient's legal representative. The personal service plan must be revised when there is a
change in the recipient's status. The personal service plan must identify:
(i) the desired personal short and long-term outcomes;
(ii) the recipient's preferences for services and supports, including development of a
person-centered plan if requested; and
(iii) formal and informal services and supports based on areas of assessment, such as:
social, health, mental health, residence, family, educational and vocational, safety, legal,
self-determination, financial, and chemical health as determined by the recipient and the
recipient's legal representative and the recipient's support network.
    Subd. 5. Provider standards. County boards or providers who contract with the county are
eligible to receive medical assistance reimbursement for adult targeted case management services.
To qualify as a provider of targeted case management services the vendor must:
(1) have demonstrated the capacity and experience to provide the activities of case
management services defined in subdivision 4;
(2) be able to coordinate and link community resources needed by the recipient;
(3) have the administrative capacity and experience to serve the eligible population in
providing services and to ensure quality of services under state and federal requirements;
(4) have a financial management system that provides accurate documentation of services
and costs under state and federal requirements;
(5) have the capacity to document and maintain individual case records complying with state
and federal requirements;
(6) coordinate with county social service agencies responsible for planning for community
social services under chapters 256E and 256F; conducting adult protective investigations under
section 626.557, and conducting prepetition screenings for commitments under section 253B.07;
(7) coordinate with health care providers to ensure access to necessary health care services;
(8) have a procedure in place that notifies the recipient and the recipient's legal representative
of any conflict of interest if the contracted targeted case management service provider also
provides the recipient's services and supports and provides information on all potential conflicts of
interest and obtains the recipient's informed consent and provides the recipient with alternatives;
and
(9) have demonstrated the capacity to achieve the following performance outcomes: access,
quality, and consumer satisfaction.
    Subd. 6. Payment for targeted case management. (a) Medical assistance and
MinnesotaCare payment for targeted case management shall be made on a monthly basis. In order
to receive payment for an eligible adult, the provider must document at least one contact per
month and not more than two consecutive months without a face-to-face contact with the adult or
the adult's legal representative, family, primary caregiver, or other relevant persons identified as
necessary to the development or implementation of the goals of the personal service plan.
(b) Payment for targeted case management provided by county staff under this subdivision
shall be based on the monthly rate methodology under section 256B.094, subdivision 6, paragraph
(b), calculated as one combined average rate together with adult mental health case management
under section 256B.0625, subdivision 20, except for calendar year 2002. In calendar year 2002,
the rate for case management under this section shall be the same as the rate for adult mental
health case management in effect as of December 31, 2001. Billing and payment must identify the
recipient's primary population group to allow tracking of revenues.
(c) Payment for targeted case management provided by county-contracted vendors shall be
based on a monthly rate negotiated by the host county. The negotiated rate must not exceed
the rate charged by the vendor for the same service to other payers. If the service is provided
by a team of contracted vendors, the county may negotiate a team rate with a vendor who is a
member of the team. The team shall determine how to distribute the rate among its members.
No reimbursement received by contracted vendors shall be returned to the county, except to
reimburse the county for advance funding provided by the county to the vendor.
(d) If the service is provided by a team that includes contracted vendors and county staff, the
costs for county staff participation on the team shall be included in the rate for county-provided
services. In this case, the contracted vendor and the county may each receive separate payment for
services provided by each entity in the same month. In order to prevent duplication of services,
the county must document, in the recipient's file, the need for team targeted case management
and a description of the different roles of the team members.
(e) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of costs for
targeted case management shall be provided by the recipient's county of responsibility, as defined
in sections 256G.01 to 256G.12, from sources other than federal funds or funds used to match
other federal funds.
(f) The commissioner may suspend, reduce, or terminate reimbursement to a provider that
does not meet the reporting or other requirements of this section. The county of responsibility, as
defined in sections 256G.01 to 256G.12, is responsible for any federal disallowances. The county
may share this responsibility with its contracted vendors.
(g) The commissioner shall set aside five percent of the federal funds received under this
section for use in reimbursing the state for costs of developing and implementing this section.
(h) Payments to counties for targeted case management expenditures under this section shall
only be made from federal earnings from services provided under this section. Payments to
contracted vendors shall include both the federal earnings and the county share.
(i) Notwithstanding section 256B.041, county payments for the cost of case management
services provided by county staff shall not be made to the commissioner of finance. For the
purposes of targeted case management services provided by county staff under this section, the
centralized disbursement of payments to counties under section 256B.041 consists only of federal
earnings from services provided under this section.
(j) If the recipient is a resident of a nursing facility, intermediate care facility, or hospital,
and the recipient's institutional care is paid by medical assistance, payment for targeted case
management services under this subdivision is limited to the last 180 days of the recipient's
residency in that facility and may not exceed more than six months in a calendar year.
(k) Payment for targeted case management services under this subdivision shall not duplicate
payments made under other program authorities for the same purpose.
(l) Any growth in targeted case management services and cost increases under this section
shall be the responsibility of the counties.
    Subd. 7. Implementation and evaluation. The commissioner of human services in
consultation with county boards shall establish a program to accomplish the provisions of
subdivisions 1 to 6. The commissioner in consultation with county boards shall establish
performance measures to evaluate the effectiveness of the targeted case management services.
If a county fails to meet agreed upon performance measures, the commissioner may authorize
contracted providers other than the county. Providers contracted by the commissioner shall also
be subject to the standards in subdivision 6.
History: 1Sp2001 c 9 art 2 s 44; 2002 c 277 s 18; 2002 c 375 art 2 s 31; 2002 c 379 art 1 s
113; 2003 c 112 art 2 s 50; 2005 c 56 s 1; 1Sp2005 c 4 art 3 s 9

256B.0925 [Repealed, 1995 c 186 s 51]

256B.0926 ADMISSION REVIEW TEAM; INTERMEDIATE CARE FACILITIES.
    Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the
meanings given them in this subdivision.
(b) "Provider" means a provider of community-based intermediate care facility services
for persons with developmental disabilities.
(c) "Facility" means a community-based intermediate care facility for persons with
developmental disabilities.
(d) "Person" means a person with a developmental disability who is applying for admission
to an intermediate care facility for persons with developmental disabilities.
    Subd. 2. Admission review team; responsibilities; composition. (a) Before a person is
admitted to a facility, an admission review team must assure that the provider can meet the
needs of the person as identified in the person's individual service plan required under section
256B.092, subdivision 1.
(b) The admission review team must be assembled pursuant to Code of Federal Regulations,
title 42, section 483.440(b)(2). The composition of the admission review team must meet the
definition of an interdisciplinary team in Code of Federal Regulations, title 42, section 483.440.
In addition, the admission review team must meet any conditions agreed to by the provider and
the county where services are to be provided.
(c) The county in which the facility is located may establish an admission review team
which includes at least the following:
(1) a qualified developmental disability professional, as defined in Code of Federal
Regulations, title 42, section 483.440;
(2) a representative of the county in which the provider is located;
(3) at least one professional representing one of the following professions: nursing,
psychology, physical therapy, or occupational therapy; and
(4) a representative of the provider.
If the county in which the facility is located does not establish an admission review team, the
provider shall establish a team whose composition meets the definition of an interdisciplinary team
in Code of Federal Regulations, title 42, section 483.440. The provider shall invite a representative
of the county agency where the facility is located to be a member of the admission review team.
    Subd. 3. Factors to be considered for admission. (a) The determination of the team to
admit a person to the facility must include, but is not limited to, consideration of the following:
(1) the preferences of the person and the person's guardian or family for services of an
intermediate care facility for persons with developmental disabilities;
(2) the ability of the provider to meet the needs of the person according to the person's
individual service plan and the admission criteria established by the provider;
(3) the availability of a bed in the facility and of nonresidential services required by the
person as specified in the person's individual service plan; and
(4) the need of the person for the services in the facility to prevent placement of the person in
a more restrictive setting.
(b) When there is more than one qualified person applying for admission to the facility, the
admission review team shall determine which applicant shall be offered services first, using the
criteria established in this subdivision. The admission review team shall document the factors
that resulted in the decision to offer services to one qualified person over another. In cases
of emergency, a review of the admission by the admission review team must occur within the
first 14 days of placement.
    Subd. 4. Information from provider. The provider must establish admission criteria based
on the level of service that can be provided to persons seeking admission to that facility and must
provide the admission review team with the following information:
(1) a copy of the admission and level of care criteria adopted by the provider; and
(2) a written description of the services that are available to the person seeking admission,
including day services, professional support services, emergency services, available direct
care staffing, supervisory and administrative supports, quality assurance systems, and criteria
established by the provider for discharging persons from the facility.
    Subd. 5. Establishment of admission review team; notice to provider. When a county
agency decides to establish admission review teams for the intermediate care facilities for persons
with developmental disabilities located in the county, the county agency shall notify the providers
of the county agency's intent at least 60 days prior to establishing the teams.
History: 1991 c 292 art 6 s 48; 2005 c 56 s 1

256B.0928 STATEWIDE CAREGIVER SUPPORT AND RESPITE CARE PROJECT.
The commissioner shall establish and maintain a statewide caregiver support and respite care
project. The project shall:
(1) provide information, technical assistance, and training statewide to county agencies and
organizations on direct service models of caregiver support and respite care services;
(2) identify and address issues, concerns, and gaps in the statewide network for caregiver
support and respite care;
(3) maintain a statewide caregiver support and respite care resource center;
(4) educate caregivers on the availability and use of caregiver and respite care services;
(5) promote and expand caregiver training and support groups using existing networks
when possible; and
(6) apply for and manage grants related to caregiver support and respite care.
History: 1992 c 513 art 7 s 75; 1999 c 86 art 2 s 5

256B.093 SERVICES FOR PERSONS WITH TRAUMATIC BRAIN INJURIES.
    Subdivision 1. State traumatic brain injury program. The commissioner of human
services shall:
(1) maintain a statewide traumatic brain injury program;
(2) supervise and coordinate services and policies for persons with traumatic brain injuries;
(3) contract with qualified agencies or employ staff to provide statewide administrative
case management and consultation;
(4) maintain an advisory committee to provide recommendations in reports to the
commissioner regarding program and service needs of persons with traumatic brain injuries;
(5) investigate the need for the development of rules or statutes for the traumatic brain injury
home and community-based services waiver;
(6) investigate present and potential models of service coordination which can be delivered
at the local level; and
(7) the advisory committee required by clause (4) must consist of no fewer than ten members
and no more than 30 members. The commissioner shall appoint all advisory committee members
to one- or two-year terms and appoint one member as chair. Notwithstanding section 15.059,
subdivision 5 , the advisory committee does not terminate until June 30, 2008.
    Subd. 2. Eligibility. Persons eligible for traumatic brain injury administrative case
management and consultation must be eligible medical assistance recipients who have traumatic
or certain acquired brain injury and are at risk of institutionalization.
    Subd. 3. Traumatic brain injury program duties. The department shall fund administrative
case management under this subdivision using medical assistance administrative funds. The
traumatic brain injury program duties include:
(1) recommending to the commissioner in consultation with the medical review agent
according to Minnesota Rules, parts 9505.0500 to 9505.0540, the approval or denial of medical
assistance funds to pay for out-of-state placements for traumatic brain injury services and in-state
traumatic brain injury services provided by designated Medicare long-term care hospitals;
(2) coordinating the traumatic brain injury home and community-based waiver;
(3) providing ongoing technical assistance and consultation to county and facility case
managers to facilitate care plan development for appropriate, accessible, and cost-effective
medical assistance services;
(4) providing technical assistance to promote statewide development of appropriate,
accessible, and cost-effective medical assistance services and related policy;
(5) providing training and outreach to facilitate access to appropriate home and
community-based services to prevent institutionalization;
(6) facilitating appropriate admissions, continued stay review, discharges, and utilization
review for neurobehavioral hospitals and other specialized institutions;
(7) providing technical assistance on the use of prior authorization of home care services and
coordination of these services with other medical assistance services;
(8) developing a system for identification of nursing facility and hospital residents with
traumatic brain injury to assist in long-term planning for medical assistance services. Factors will
include, but are not limited to, number of individuals served, length of stay, services received, and
barriers to community placement; and
(9) providing information, referral, and case consultation to access medical assistance
services for recipients without a county or facility case manager. Direct access to this assistance
may be limited due to the structure of the program.
    Subd. 3a. Traumatic brain injury case management services. The annual appropriation
established under section 171.29, subdivision 2, paragraph (c), shall be used for traumatic brain
injury program services that include, but are not limited to:
(1) collaborating with counties, providers, and other public and private organizations to
expand and strengthen local capacity for delivering needed services and supports, including
efforts to increase access to supportive residential housing options;
(2) participating in planning and accessing services not otherwise covered in subdivision 3 to
allow individuals to attain and maintain community-based services;
(3) providing information, referral, and case consultation to access health and human services
for persons with traumatic brain injury not eligible for medical assistance, though direct access to
this assistance may be limited due to the structure of the program; and
(4) collaborating on injury prevention efforts.
    Subd. 4. Definitions. For purposes of this section, the following definitions apply:
(a) "Traumatic brain injury" means a sudden insult or damage to the brain or its coverings,
not of a degenerative or congenital nature. The insult or damage may produce an altered state
of consciousness and may result in a decrease in cognitive, behavioral, emotional, or physical
functioning resulting in partial or total disability.
(b) "Home care services" means medical assistance home care services defined under section
256B.0625, subdivisions 6a, 7, and 19a.
History: 1989 c 282 art 3 s 62; 1991 c 292 art 7 s 19; 1992 c 513 art 7 s 76-78; 1Sp1993 c 1
art 5 s 80,81; 1995 c 207 art 6 s 75-78; 1996 c 451 art 5 s 25; 2001 c 161 s 48; 1Sp2001 c 9 art 3
s 47; 2002 c 379 art 1 s 113; 1Sp2005 c 4 art 3 s 10; 2006 c 212 art 3 s 20

256B.094 CHILD WELFARE TARGETED CASE MANAGEMENT SERVICES.
    Subdivision 1. Definition. "Child welfare targeted case management services" means
activities that coordinate social and other services designed to help the child under age 21 and the
child's family gain access to needed social services, mental health services, habilitative services,
educational services, health services, vocational services, recreational services, and related
services including, but not limited to, the areas of volunteer services, advocacy, transportation,
and legal services. Case management services include developing an individual service plan
and assisting the child and the child's family in obtaining needed services through coordination
with other agencies and assuring continuity of care. Case managers must assess the delivery,
appropriateness, and effectiveness of services on a regular basis.
    Subd. 2. Eligible services. Services eligible for medical assistance reimbursement include:
(1) assessment of the recipient's need for case management services to gain access to
medical, social, educational, and other related services;
(2) development, completion, and regular review of a written individual service plan based
on the assessment of need for case management services to ensure access to medical, social,
educational, and other related services;
(3) routine contact or other communication with the client, the client's family, primary
caregiver, legal representative, substitute care provider, service providers, or other relevant
persons identified as necessary to the development or implementation of the goals of the
individual service plan, regarding the status of the client, the individual service plan, or the goals
for the client, exclusive of transportation of the child;
(4) coordinating referrals for, and the provision of, case management services for the client
with appropriate service providers, consistent with section 1902(a)(23) of the Social Security Act;
(5) coordinating and monitoring the overall service delivery to ensure quality of services;
(6) monitoring and evaluating services on a regular basis to ensure appropriateness and
continued need;
(7) completing and maintaining necessary documentation that supports and verifies the
activities in this subdivision;
(8) traveling to conduct a visit with the client or other relevant person necessary to the
development or implementation of the goals of the individual service plan; and
(9) coordinating with the medical assistance facility discharge planner in the 30-day period
before the client's discharge into the community. This case management service provided to
patients or residents in a medical assistance facility is limited to a maximum of two 30-day
periods per calendar year.
    Subd. 3. Coordination and provision of services. (a) In a county or reservation where a
prepaid medical assistance provider has contracted under section 256B.031 or 256B.69 to provide
mental health services, the case management provider shall coordinate with the prepaid provider
to ensure that all necessary mental health services required under the contract are provided to
recipients of case management services.
(b) When the case management provider determines that a prepaid provider is not providing
mental health services as required under the contract, the case management provider shall assist
the recipient to appeal the prepaid provider's denial pursuant to section 256.045, and may make
other arrangements for provision of the covered services.
(c) The case management provider may bill the provider of prepaid health care services for
any mental health services provided to a recipient of case management services which the county
or tribal social services arranges for or provides and which are included in the prepaid provider's
contract, and which were determined to be medically necessary as a result of an appeal pursuant to
section 256.045. The prepaid provider must reimburse the mental health provider, at the prepaid
provider's standard rate for that service, for any services delivered under this subdivision.
(d) If the county or tribal social services has not obtained prior authorization for this service,
or an appeal results in a determination that the services were not medically necessary, the county
or tribal social services may not seek reimbursement from the prepaid provider.
    Subd. 4. Case management provider. To be eligible to receive medical assistance
reimbursement, the case management provider must meet all provider qualification and
certification standards under section 256F.10.
    Subd. 5. Case manager. To provide case management services, a case manager must be
employed or contracted by and authorized by the case management provider to provide case
management services and meet all requirements under section 256F.10.
    Subd. 6. Medical assistance reimbursement of case management services. (a) Medical
assistance reimbursement for services under this section shall be made on a monthly basis.
Payment is based on face-to-face or telephone contacts between the case manager and the
client, client's family, primary caregiver, legal representative, or other relevant person identified
as necessary to the development or implementation of the goals of the individual service plan
regarding the status of the client, the individual service plan, or the goals for the client. These
contacts must meet the minimum standards in clauses (1) and (2):
(1) there must be a face-to-face contact at least once a month except as provided in clause
(2); and
(2) for a client placed outside of the county of financial responsibility, or a client served by
tribal social services placed outside the reservation, in an excluded time facility under section
256G.02, subdivision 6, or through the Interstate Compact on the Placement of Children, section
260.851, and the placement in either case is more than 60 miles beyond the county or reservation
boundaries, there must be at least one contact per month and not more than two consecutive
months without a face-to-face contact.
(b) Except as provided under paragraph (c), the payment rate is established using time
study data on activities of provider service staff and reports required under sections 245.482 and
256.01, subdivision 2, paragraph (17).
(c) Payments for tribes may be made according to section 256B.0625 or other relevant
federally approved rate setting methodology for child welfare targeted case management provided
by Indian health services and facilities operated by a tribe or tribal organization.
(d) Payment for case management provided by county or tribal social services contracted
vendors shall be based on a monthly rate negotiated by the host county or tribal social services.
The negotiated rate must not exceed the rate charged by the vendor for the same service to
other payers. If the service is provided by a team of contracted vendors, the county or tribal
social services may negotiate a team rate with a vendor who is a member of the team. The team
shall determine how to distribute the rate among its members. No reimbursement received by
contracted vendors shall be returned to the county or tribal social services, except to reimburse
the county or tribal social services for advance funding provided by the county or tribal social
services to the vendor.
(e) If the service is provided by a team that includes contracted vendors and county or tribal
social services staff, the costs for county or tribal social services staff participation in the team
shall be included in the rate for county or tribal social services provided services. In this case, the
contracted vendor and the county or tribal social services may each receive separate payment
for services provided by each entity in the same month. To prevent duplication of services, each
entity must document, in the recipient's file, the need for team case management and a description
of the roles and services of the team members.
Separate payment rates may be established for different groups of providers to maximize
reimbursement as determined by the commissioner. The payment rate will be reviewed annually
and revised periodically to be consistent with the most recent time study and other data.
Payment for services will be made upon submission of a valid claim and verification of proper
documentation described in subdivision 7. Federal administrative revenue earned through the
time study, or under paragraph (c), shall be distributed according to earnings, to counties,
reservations, or groups of counties or reservations which have the same payment rate under this
subdivision, and to the group of counties or reservations which are not certified providers under
section 256F.10. The commissioner shall modify the requirements set out in Minnesota Rules,
parts 9550.0300 to 9550.0370, as necessary to accomplish this.
    Subd. 7. Documentation for case record and claim. (a) The assessment, case finding,
and individual service plan shall be maintained in the individual case record under the Data
Practices Act, chapter 13. The individual service plan must be reviewed at least annually and
updated as necessary. Each individual case record must maintain documentation of routine,
ongoing, contacts and services. Each claim must be supported by written documentation in the
individual case record.
(b) Each claim must include:
(1) the name of the recipient;
(2) the date of the service;
(3) the name of the provider agency and the person providing service;
(4) the nature and extent of services; and
(5) the place of the services.
    Subd. 8. Payment limitation. Services that are not eligible for payment as a child welfare
targeted case management service include, but are not limited to:
(1) assessments prior to opening a case;
(2) therapy and treatment services;
(3) legal services, including legal advocacy, for the client;
(4) information and referral services that are not provided to an eligible recipient;
(5) outreach services including outreach services provided through the community support
services program;
(6) services that are not documented as required under subdivision 7 and Minnesota Rules,
parts 9505.2165 and 9505.2175;
(7) services that are otherwise eligible for payment on a separate schedule under rules of
the Department of Human Services;
(8) services to a client that duplicate the same case management service from another case
manager;
(9) case management services provided to patients or residents in a medical assistance
facility except as described under subdivision 2, clause (9); and
(10) for children in foster care, group homes, or residential care, payment for case
management services is limited to case management services that focus on permanency planning
or return to the family home and that do not duplicate the facility's discharge planning services.
History: 1Sp1993 c 1 art 3 s 24; 1999 c 139 art 4 s 2; 1999 c 245 art 8 s 6-8; 2000 c 488 art
9 s 17; 2001 c 203 s 11,12; 1Sp2003 c 14 art 11 s 11; 2005 c 98 art 2 s 8

256B.0943 CHILDREN'S THERAPEUTIC SERVICES AND SUPPORTS.
    Subdivision 1. Definitions. For purposes of this section, the following terms have the
meanings given them.
(a) "Children's therapeutic services and supports" means the flexible package of mental
health services for children who require varying therapeutic and rehabilitative levels of
intervention. The services are time-limited interventions that are delivered using various treatment
modalities and combinations of services designed to reach treatment outcomes identified in the
individual treatment plan.
(b) "Clinical supervision" means the overall responsibility of the mental health professional
for the control and direction of individualized treatment planning, service delivery, and treatment
review for each client. A mental health professional who is an enrolled Minnesota health care
program provider accepts full professional responsibility for a supervisee's actions and decisions,
instructs the supervisee in the supervisee's work, and oversees or directs the supervisee's work.
(c) "County board" means the county board of commissioners or board established under
sections 402.01 to 402.10 or 471.59.
(d) "Crisis assistance" has the meaning given in section 245.4871, subdivision 9a.
(e) "Culturally competent provider" means a provider who understands and can utilize to a
client's benefit the client's culture when providing services to the client. A provider may be
culturally competent because the provider is of the same cultural or ethnic group as the client or
the provider has developed the knowledge and skills through training and experience to provide
services to culturally diverse clients.
(f) "Day treatment program" for children means a site-based structured program consisting
of group psychotherapy for more than three individuals and other intensive therapeutic
services provided by a multidisciplinary team, under the clinical supervision of a mental health
professional.
(g) "Diagnostic assessment" has the meaning given in section 245.4871, subdivision 11.
(h) "Direct service time" means the time that a mental health professional, mental health
practitioner, or mental health behavioral aide spends face-to-face with a client and the client's
family. Direct service time includes time in which the provider obtains a client's history or
provides service components of children's therapeutic services and supports. Direct service time
does not include time doing work before and after providing direct services, including scheduling,
maintaining clinical records, consulting with others about the client's mental health status,
preparing reports, receiving clinical supervision directly related to the client's psychotherapy
session, and revising the client's individual treatment plan.
(i) "Direction of mental health behavioral aide" means the activities of a mental health
professional or mental health practitioner in guiding the mental health behavioral aide in
providing services to a client. The direction of a mental health behavioral aide must be based on
the client's individualized treatment plan and meet the requirements in subdivision 6, paragraph
(b), clause (5).
(j) "Emotional disturbance" has the meaning given in section 245.4871, subdivision 15. For
persons at least age 18 but under age 21, mental illness has the meaning given in section 245.462,
subdivision 20 , paragraph (a).
(k) "Individual behavioral plan" means a plan of intervention, treatment, and services for
a child written by a mental health professional or mental health practitioner, under the clinical
supervision of a mental health professional, to guide the work of the mental health behavioral aide.
(l) "Individual treatment plan" has the meaning given in section 245.4871, subdivision 21.
(m) "Mental health professional" means an individual as defined in section 245.4871,
subdivision 27 , clauses (1) to (5), or tribal vendor as defined in section 256B.02, subdivision 7,
paragraph (b).
(n) "Preschool program" means a day program licensed under Minnesota Rules, parts
9503.0005 to 9503.0175, and enrolled as a children's therapeutic services and supports provider
to provide a structured treatment program to a child who is at least 33 months old but who has
not yet attended the first day of kindergarten.
(o) "Skills training" means individual, family, or group training designed to improve the
basic functioning of the child with emotional disturbance and the child's family in the activities
of daily living and community living, and to improve the social functioning of the child and the
child's family in areas important to the child's maintaining or reestablishing residency in the
community. Individual, family, and group skills training must:
(1) consist of activities designed to promote skill development of the child and the child's
family in the use of age-appropriate daily living skills, interpersonal and family relationships,
and leisure and recreational services;
(2) consist of activities that will assist the family's understanding of normal child
development and to use parenting skills that will help the child with emotional disturbance
achieve the goals outlined in the child's individual treatment plan; and
(3) promote family preservation and unification, promote the family's integration with the
community, and reduce the use of unnecessary out-of-home placement or institutionalization of
children with emotional disturbance.
    Subd. 2. Covered service components of children's therapeutic services and supports. (a)
Subject to federal approval, medical assistance covers medically necessary children's therapeutic
services and supports as defined in this section that an eligible provider entity under subdivisions
4 and 5 provides to a client eligible under subdivision 3.
(b) The service components of children's therapeutic services and supports are:
(1) individual, family, and group psychotherapy;
(2) individual, family, or group skills training provided by a mental health professional or
mental health practitioner;
(3) crisis assistance;
(4) mental health behavioral aide services; and
(5) direction of a mental health behavioral aide.
(c) Service components may be combined to constitute therapeutic programs, including day
treatment programs and preschool programs. Although day treatment and preschool programs
have specific client and provider eligibility requirements, medical assistance only pays for the
service components listed in paragraph (b).
    Subd. 3. Determination of client eligibility. A client's eligibility to receive children's
therapeutic services and supports under this section shall be determined based on a diagnostic
assessment by a mental health professional that is performed within 180 days of the initial start
of service. The diagnostic assessment must:
(1) include current diagnoses on all five axes of the client's current mental health status;
(2) determine whether a child under age 18 has a diagnosis of emotional disturbance or, if the
person is between the ages of 18 and 21, whether the person has a mental illness;
(3) document children's therapeutic services and supports as medically necessary to address
an identified disability, functional impairment, and the individual client's needs and goals;
(4) be used in the development of the individualized treatment plan; and
(5) be completed annually until age 18. A client with autism spectrum disorder or pervasive
developmental disorder may receive a diagnostic assessment once every three years, at the request
of the parent or guardian, if a mental health professional agrees there has been little change in
the condition and that an annual assessment is not needed. For individuals between age 18 and
21, unless a client's mental health condition has changed markedly since the client's most recent
diagnostic assessment, annual updating is necessary. For the purpose of this section, "updating"
means a written summary, including current diagnoses on all five axes, by a mental health
professional of the client's current mental health status and service needs.
    Subd. 4. Provider entity certification. (a) Effective July 1, 2003, the commissioner shall
establish an initial provider entity application and certification process and recertification process
to determine whether a provider entity has an administrative and clinical infrastructure that meets
the requirements in subdivisions 5 and 6. The commissioner shall recertify a provider entity
at least every three years. The commissioner shall establish a process for decertification of a
provider entity that no longer meets the requirements in this section. The county, tribe, and the
commissioner shall be mutually responsible and accountable for the county's, tribe's, and state's
part of the certification, recertification, and decertification processes.
(b) For purposes of this section, a provider entity must be:
(1) an Indian health services facility or a facility owned and operated by a tribe or tribal
organization operating as a 638 facility under Public Law 93-638 certified by the state;
(2) a county-operated entity certified by the state; or
(3) a noncounty entity recommended for certification by the provider's host county and
certified by the state.
    Subd. 5. Provider entity administrative infrastructure requirements. (a) To be an eligible
provider entity under this section, a provider entity must have an administrative infrastructure that
establishes authority and accountability for decision making and oversight of functions, including
finance, personnel, system management, clinical practice, and performance measurement. The
provider must have written policies and procedures that it reviews and updates every three years
and distributes to staff initially and upon each subsequent update.
(b) The administrative infrastructure written policies and procedures must include:
(1) personnel procedures, including a process for: (i) recruiting, hiring, training, and retention
of culturally and linguistically competent providers; (ii) conducting a criminal background
check on all direct service providers and volunteers; (iii) investigating, reporting, and acting on
violations of ethical conduct standards; (iv) investigating, reporting, and acting on violations of
data privacy policies that are compliant with federal and state laws; (v) utilizing volunteers,
including screening applicants, training and supervising volunteers, and providing liability
coverage for volunteers; and (vi) documenting that each mental health professional, mental health
practitioner, or mental health behavioral aide meets the applicable provider qualification criteria,
training criteria under subdivision 8, and clinical supervision or direction of a mental health
behavioral aide requirements under subdivision 6;
(2) fiscal procedures, including internal fiscal control practices and a process for collecting
revenue that is compliant with federal and state laws;
(3) if a client is receiving services from a case manager or other provider entity, a service
coordination process that ensures services are provided in the most appropriate manner to achieve
maximum benefit to the client. The provider entity must ensure coordination and nonduplication
of services consistent with county board coordination procedures established under section
245.4881, subdivision 5;
(4) a performance measurement system, including monitoring to determine cultural
appropriateness of services identified in the individual treatment plan, as determined by the
client's culture, beliefs, values, and language, and family-driven services; and
(5) a process to establish and maintain individual client records. The client's records must
include:
(i) the client's personal information;
(ii) forms applicable to data privacy;
(iii) the client's diagnostic assessment, updates, results of tests, individual treatment plan,
and individual behavior plan, if necessary;
(iv) documentation of service delivery as specified under subdivision 6;
(v) telephone contacts;
(vi) discharge plan; and
(vii) if applicable, insurance information.
    Subd. 6. Provider entity clinical infrastructure requirements. (a) To be an eligible
provider entity under this section, a provider entity must have a clinical infrastructure that
utilizes diagnostic assessment, an individualized treatment plan, service delivery, and individual
treatment plan review that are culturally competent, child-centered, and family-driven to achieve
maximum benefit for the client. The provider entity must review and update the clinical policies
and procedures every three years and must distribute the policies and procedures to staff initially
and upon each subsequent update.
(b) The clinical infrastructure written policies and procedures must include policies and
procedures for:
(1) providing or obtaining a client's diagnostic assessment that identifies acute and chronic
clinical disorders, co-occurring medical conditions, sources of psychological and environmental
problems, and a functional assessment. The functional assessment must clearly summarize the
client's individual strengths and needs;
(2) developing an individual treatment plan that is:
(i) based on the information in the client's diagnostic assessment;
(ii) developed no later than the end of the first psychotherapy session after the completion
of the client's diagnostic assessment by the mental health professional who provides the client's
psychotherapy;
(iii) developed through a child-centered, family-driven planning process that identifies
service needs and individualized, planned, and culturally appropriate interventions that contain
specific treatment goals and objectives for the client and the client's family or foster family;
(iv) reviewed at least once every 90 days and revised, if necessary; and
(v) signed by the client or, if appropriate, by the client's parent or other person authorized
by statute to consent to mental health services for the client;
(3) developing an individual behavior plan that documents services to be provided by the
mental health behavioral aide. The individual behavior plan must include:
(i) detailed instructions on the service to be provided;
(ii) time allocated to each service;
(iii) methods of documenting the child's behavior;
(iv) methods of monitoring the child's progress in reaching objectives; and
(v) goals to increase or decrease targeted behavior as identified in the individual treatment
plan;
(4) clinical supervision of the mental health practitioner and mental health behavioral aide.
A mental health professional must document the clinical supervision the professional provides
by cosigning individual treatment plans and making entries in the client's record on supervisory
activities. Clinical supervision does not include the authority to make or terminate court-ordered
placements of the child. A clinical supervisor must be available for urgent consultation as required
by the individual client's needs or the situation. Clinical supervision may occur individually or
in a small group to discuss treatment and review progress toward goals. The focus of clinical
supervision must be the client's treatment needs and progress and the mental health practitioner's
or behavioral aide's ability to provide services;
(4a) CTSS certified provider entities providing day treatment programs must meet the
conditions in items (i) to (iii):
(i) the provider must be present and available on the premises more than 50 percent of the
time in a five-working-day period during which the supervisee is providing a mental health
service;
(ii) the diagnosis and the client's individual treatment plan or a change in the diagnosis or
individual treatment plan must be made by or reviewed, approved, and signed by the provider; and
(iii) every 30 days, the supervisor must review and sign the record of the client's care for
all activities in the preceding 30-day period;
(4b) for all other services provided under CTSS, clinical supervision standards provided in
items (i) to (iii) must be used:
(i) medical assistance shall reimburse a mental health practitioner who maintains a consulting
relationship with a mental health professional who accepts full professional responsibility and
is present on site for at least one observation during the first 12 hours in which the mental
health practitioner provides the individual, family, or group skills training to the child or the
child's family;
(ii) thereafter, the mental health professional is required to be present on site for observation
as clinically appropriate when the mental health practitioner is providing individual, family, or
group skills training to the child or the child's family; and
(iii) the observation must be a minimum of one clinical unit. The on-site presence of the
mental health professional must be documented in the child's record and signed by the mental
health professional who accepts full professional responsibility;
(5) providing direction to a mental health behavioral aide. For entities that employ mental
health behavioral aides, the clinical supervisor must be employed by the provider entity or
other certified children's therapeutic supports and services provider entity to ensure necessary
and appropriate oversight for the client's treatment and continuity of care. The mental health
professional or mental health practitioner giving direction must begin with the goals on the
individualized treatment plan, and instruct the mental health behavioral aide on how to construct
therapeutic activities and interventions that will lead to goal attainment. The professional or
practitioner giving direction must also instruct the mental health behavioral aide about the client's
diagnosis, functional status, and other characteristics that are likely to affect service delivery.
Direction must also include determining that the mental health behavioral aide has the skills to
interact with the client and the client's family in ways that convey personal and cultural respect
and that the aide actively solicits information relevant to treatment from the family. The aide
must be able to clearly explain the activities the aide is doing with the client and the activities'
relationship to treatment goals. Direction is more didactic than is supervision and requires the
professional or practitioner providing it to continuously evaluate the mental health behavioral
aide's ability to carry out the activities of the individualized treatment plan and the individualized
behavior plan. When providing direction, the professional or practitioner must:
(i) review progress notes prepared by the mental health behavioral aide for accuracy and
consistency with diagnostic assessment, treatment plan, and behavior goals and the professional
or practitioner must approve and sign the progress notes;
(ii) identify changes in treatment strategies, revise the individual behavior plan, and
communicate treatment instructions and methodologies as appropriate to ensure that treatment
is implemented correctly;
(iii) demonstrate family-friendly behaviors that support healthy collaboration among the
child, the child's family, and providers as treatment is planned and implemented;
(iv) ensure that the mental health behavioral aide is able to effectively communicate with the
child, the child's family, and the provider; and
(v) record the results of any evaluation and corrective actions taken to modify the work of
the mental health behavioral aide;
(6) providing service delivery that implements the individual treatment plan and meets the
requirements under subdivision 9; and
(7) individual treatment plan review. The review must determine the extent to which the
services have met the goals and objectives in the previous treatment plan. The review must
assess the client's progress and ensure that services and treatment goals continue to be necessary
and appropriate to the client and the client's family or foster family. Revision of the individual
treatment plan does not require a new diagnostic assessment unless the client's mental health
status has changed markedly. The updated treatment plan must be signed by the client, if
appropriate, and by the client's parent or other person authorized by statute to give consent to the
mental health services for the child.
    Subd. 7. Qualifications of individual and team providers. (a) An individual or team
provider working within the scope of the provider's practice or qualifications may provide service
components of children's therapeutic services and supports that are identified as medically
necessary in a client's individual treatment plan.
(b) An individual provider must be qualified as:
(1) a mental health professional as defined in subdivision 1, paragraph (m); or
(2) a mental health practitioner as defined in section 245.4871, subdivision 26. The mental
health practitioner must work under the clinical supervision of a mental health professional; or
(3) a mental health behavioral aide working under the direction of a mental health
professional to implement the rehabilitative mental health services identified in the client's
individual treatment plan.
(A) A level I mental health behavioral aide must:
(i) be at least 18 years old;
(ii) have a high school diploma or general equivalency diploma (GED) or two years of
experience as a primary caregiver to a child with severe emotional disturbance within the previous
ten years; and
(iii) meet preservice and continuing education requirements under subdivision 8.
(B) A level II mental health behavioral aide must:
(i) be at least 18 years old;
(ii) have an associate or bachelor's degree or 4,000 hours of experience in delivering clinical
services in the treatment of mental illness concerning children or adolescents; and
(iii) meet preservice and continuing education requirements in subdivision 8.
(c) A preschool program multidisciplinary team must include at least one mental health
professional and one or more of the following individuals under the clinical supervision of a
mental health professional:
(i) a mental health practitioner; or
(ii) a program person, including a teacher, assistant teacher, or aide, who meets the
qualifications and training standards of a level I mental health behavioral aide.
(d) A day treatment multidisciplinary team must include at least one mental health
professional and one mental health practitioner.
    Subd. 8. Required preservice and continuing education. (a) A provider entity shall
establish a plan to provide preservice and continuing education for staff. The plan must clearly
describe the type of training necessary to maintain current skills and obtain new skills and that
relates to the provider entity's goals and objectives for services offered.
(b) A provider that employs a mental health behavioral aide under this section must require
the mental health behavioral aide to complete 30 hours of preservice training. The preservice
training must include topics specified in Minnesota Rules, part 9535.4068, subparts 1 and 2, and
parent team training. The preservice training must include 15 hours of in-person training of a
mental health behavioral aide in mental health services delivery and eight hours of parent team
training. Components of parent team training include:
(1) partnering with parents;
(2) fundamentals of family support;
(3) fundamentals of policy and decision making;
(4) defining equal partnership;
(5) complexities of the parent and service provider partnership in multiple service delivery
systems due to system strengths and weaknesses;
(6) sibling impacts;
(7) support networks; and
(8) community resources.
(c) A provider entity that employs a mental health practitioner and a mental health behavioral
aide to provide children's therapeutic services and supports under this section must require the
mental health practitioner and mental health behavioral aide to complete 20 hours of continuing
education every two calendar years. The continuing education must be related to serving the needs
of a child with emotional disturbance in the child's home environment and the child's family. The
topics covered in orientation and training must conform to Minnesota Rules, part 9535.4068.
(d) The provider entity must document the mental health practitioner's or mental health
behavioral aide's annual completion of the required continuing education. The documentation
must include the date, subject, and number of hours of the continuing education, and attendance
records, as verified by the staff member's signature, job title, and the instructor's name. The
provider entity must keep documentation for each employee, including records of attendance at
professional workshops and conferences, at a central location and in the employee's personnel file.
    Subd. 9. Service delivery criteria. (a) In delivering services under this section, a certified
provider entity must ensure that:
(1) each individual provider's caseload size permits the provider to deliver services to both
clients with severe, complex needs and clients with less intensive needs. The provider's caseload
size should reasonably enable the provider to play an active role in service planning, monitoring,
and delivering services to meet the client's and client's family's needs, as specified in each client's
individual treatment plan;
(2) site-based programs, including day treatment and preschool programs, provide staffing
and facilities to ensure the client's health, safety, and protection of rights, and that the programs
are able to implement each client's individual treatment plan;
(3) a day treatment program is provided to a group of clients by a multidisciplinary team
under the clinical supervision of a mental health professional. The day treatment program must be
provided in and by: (i) an outpatient hospital accredited by the Joint Commission on Accreditation
of Health Organizations and licensed under sections 144.50 to 144.55; (ii) a community mental
health center under section 245.62; and (iii) an entity that is under contract with the county
board to operate a program that meets the requirements of sections 245.4712, subdivision 2, and
245.4884, subdivision 2, and Minnesota Rules, parts 9505.0170 to 9505.0475. The day treatment
program must stabilize the client's mental health status while developing and improving the
client's independent living and socialization skills. The goal of the day treatment program must
be to reduce or relieve the effects of mental illness and provide training to enable the client to
live in the community. The program must be available at least one day a week for a minimum
three-hour time block. The three-hour time block must include at least one hour, but no more
than two hours, of individual or group psychotherapy. The remainder of the three-hour time block
may include recreation therapy, socialization therapy, or independent living skills therapy, but
only if the therapies are included in the client's individual treatment plan. Day treatment programs
are not part of inpatient or residential treatment services; and
(4) a preschool program is a structured treatment program offered to a child who is at
least 33 months old, but who has not yet reached the first day of kindergarten, by a preschool
multidisciplinary team in a day program licensed under Minnesota Rules, parts 9503.0005 to
9503.0175. The program must be available at least one day a week for a minimum two-hour time
block. The structured treatment program may include individual or group psychotherapy and
recreation therapy, socialization therapy, or independent living skills therapy, if included in the
client's individual treatment plan.
(b) A provider entity must deliver the service components of children's therapeutic services
and supports in compliance with the following requirements:
(1) individual, family, and group psychotherapy must be delivered as specified in Minnesota
Rules, part 9505.0323;
(2) individual, family, or group skills training must be provided by a mental health
professional or a mental health practitioner who has a consulting relationship with a mental health
professional who accepts full professional responsibility for the training;
(3) crisis assistance must be time-limited and designed to resolve or stabilize crisis through
arrangements for direct intervention and support services to the child and the child's family.
Crisis assistance must utilize resources designed to address abrupt or substantial changes in the
functioning of the child or the child's family as evidenced by a sudden change in behavior with
negative consequences for well being, a loss of usual coping mechanisms, or the presentation
of danger to self or others;
(4) medically necessary services that are provided by a mental health behavioral aide must
be designed to improve the functioning of the child and support the family in activities of daily
and community living. A mental health behavioral aide must document the delivery of services in
written progress notes. The mental health behavioral aide must implement goals in the treatment
plan for the child's emotional disturbance that allow the child to acquire developmentally and
therapeutically appropriate daily living skills, social skills, and leisure and recreational skills
through targeted activities. These activities may include:
(i) assisting a child as needed with skills development in dressing, eating, and toileting;
(ii) assisting, monitoring, and guiding the child to complete tasks, including facilitating the
child's participation in medical appointments;
(iii) observing the child and intervening to redirect the child's inappropriate behavior;
(iv) assisting the child in using age-appropriate self-management skills as related to the
child's emotional disorder or mental illness, including problem solving, decision making,
communication, conflict resolution, anger management, social skills, and recreational skills;
(v) implementing deescalation techniques as recommended by the mental health professional;
(vi) implementing any other mental health service that the mental health professional has
approved as being within the scope of the behavioral aide's duties; or
(vii) assisting the parents to develop and use parenting skills that help the child achieve the
goals outlined in the child's individual treatment plan or individual behavioral plan. Parenting
skills must be directed exclusively to the child's treatment; and
(5) direction of a mental health behavioral aide must include the following:
(i) a total of one hour of on-site observation by a mental health professional during the
first 12 hours of service provided to a child;
(ii) ongoing on-site observation by a mental health professional or mental health practitioner
for at least a total of one hour during every 40 hours of service provided to a child; and
(iii) immediate accessibility of the mental health professional or mental health practitioner
to the mental health behavioral aide during service provision.
    Subd. 10. Service authorization. The commissioner shall publish in the State Register a list
of health services that require prior authorization, as well as the criteria and standards used to
select health services on the list. The list and the criteria and standards used to formulate the list
are not subject to the requirements of sections 14.001 to 14.69. The commissioner's decision on
whether prior authorization is required for a health service is not subject to administrative appeal.
    Subd. 11. Documentation and billing. (a) A provider entity must document the services
it provides under this section. The provider entity must ensure that the entity's documentation
standards meet the requirements of federal and state laws. Services billed under this section that
are not documented according to this subdivision shall be subject to monetary recovery by the
commissioner.
(b) An individual mental health provider must promptly document the following in a client's
record after providing services to the client:
(1) each occurrence of the client's mental health service, including the date, type, length, and
scope of the service;
(2) the name of the person who gave the service;
(3) contact made with other persons interested in the client, including representatives of
the courts, corrections systems, or schools. The provider must document the name and date
of each contact;
(4) any contact made with the client's other mental health providers, case manager, family
members, primary caregiver, legal representative, or the reason the provider did not contact the
client's family members, primary caregiver, or legal representative, if applicable; and
(5) required clinical supervision, as appropriate.
    Subd. 12. Excluded services. The following services are not eligible for medical assistance
payment as children's therapeutic services and supports:
(1) service components of children's therapeutic services and supports simultaneously
provided by more than one provider entity unless prior authorization is obtained;
(2) children's therapeutic services and supports provided in violation of medical assistance
policy in Minnesota Rules, part 9505.0220;
(3) mental health behavioral aide services provided by a personal care assistant who is not
qualified as a mental health behavioral aide and employed by a certified children's therapeutic
services and supports provider entity;
(4) service components of CTSS that are the responsibility of a residential or program license
holder, including foster care providers under the terms of a service agreement or administrative
rules governing licensure; and
(5) adjunctive activities that may be offered by a provider entity but are not otherwise
covered by medical assistance, including:
(i) a service that is primarily recreation oriented or that is provided in a setting that is not
medically supervised. This includes sports activities, exercise groups, activities such as craft
hours, leisure time, social hours, meal or snack time, trips to community activities, and tours;
(ii) a social or educational service that does not have or cannot reasonably be expected to
have a therapeutic outcome related to the client's emotional disturbance;
(iii) consultation with other providers or service agency staff about the care or progress
of a client;
(iv) prevention or education programs provided to the community; and
(v) treatment for clients with primary diagnoses of alcohol or other drug abuse.
    Subd. 13. Exception to excluded services. Notwithstanding subdivision 12, up to 15 hours
of children's therapeutic services and supports provided within a six-month period to a child with
severe emotional disturbance who is residing in a hospital; a group home as defined in Minnesota
Rules, parts 2960.0130 to 2960.0220; a residential treatment facility licensed under Minnesota
Rules, parts 2960.0580 to 2960.0690; a regional treatment center; or other institutional group
setting or who is participating in a program of partial hospitalization are eligible for medical
assistance payment if part of the discharge plan.
History: 1Sp2003 c 14 art 4 s 8; 2004 c 228 art 1 s 38-42; 2005 c 98 art 2 s 9-11; 1Sp2005 c
4 art 2 s 11

256B.0944 CHILDREN'S MENTAL HEALTH CRISIS RESPONSE SERVICES.
    Subdivision 1. Definitions. For purposes of this section, the following terms have the
meanings given them.
(a) "Mental health crisis" means a child's behavioral, emotional, or psychiatric situation that,
but for the provision of crisis response services to the child, would likely result in significantly
reduced levels of functioning in primary activities of daily living, an emergency situation,
or the child's placement in a more restrictive setting, including, but not limited to, inpatient
hospitalization.
(b) "Mental health emergency" means a child's behavioral, emotional, or psychiatric situation
that causes an immediate need for mental health services and is consistent with section 62Q.55. A
physician, mental health professional, or crisis mental health practitioner determines a mental
health crisis or emergency for medical assistance reimbursement with input from the client and
the client's family, if possible.
(c) "Mental health crisis assessment" means an immediate face-to-face assessment by a
physician, mental health professional, or mental health practitioner under the clinical supervision
of a mental health professional, following a screening that suggests the child may be experiencing
a mental health crisis or mental health emergency situation.
(d) "Mental health mobile crisis intervention services" means face-to-face, short-term
intensive mental health services initiated during a mental health crisis or mental health emergency.
Mental health mobile crisis services must help the recipient cope with immediate stressors,
identify and utilize available resources and strengths, and begin to return to the recipient's baseline
level of functioning. Mental health mobile services must be provided on-site by a mobile crisis
intervention team outside of an emergency room, urgent care, or an inpatient hospital setting.
(e) "Mental health crisis stabilization services" means individualized mental health services
provided to a recipient following crisis intervention services that are designed to restore the
recipient to the recipient's prior functional level. The individual treatment plan recommending
mental health crisis stabilization must be completed by the intervention team or by staff after
an inpatient or urgent care visit. Mental health crisis stabilization services may be provided in
the recipient's home, the home of a family member or friend of the recipient, schools, another
community setting, or a short-term supervised, licensed residential program if the service is
not included in the facility's cost pool or per diem. Mental health crisis stabilization is not
reimbursable when provided as part of a partial hospitalization or day treatment program.
    Subd. 2. Medical assistance coverage. Medical assistance covers medically necessary
children's mental health crisis response services, subject to federal approval, if provided to an
eligible recipient under subdivision 3, by a qualified provider entity under subdivision 4 or a
qualified individual provider working within the provider's scope of practice, and identified in the
recipient's individual crisis treatment plan under subdivision 8.
    Subd. 3. Eligibility. An eligible recipient is an individual who:
(1) is eligible for medical assistance;
(2) is under age 18 or between the ages of 18 and 21;
(3) is screened as possibly experiencing a mental health crisis or mental health emergency
where a mental health crisis assessment is needed;
(4) is assessed as experiencing a mental health crisis or mental health emergency, and mental
health mobile crisis intervention or mental health crisis stabilization services are determined to be
medically necessary; and
(5) meets the criteria for emotional disturbance or mental illness.
    Subd. 4. Provider entity standards. (a) A crisis intervention and crisis stabilization provider
entity must meet the administrative and clinical standards specified in section 256B.0943,
subdivisions 5 and 6 , meet the standards listed in paragraph (b), and be:
(1) an Indian health service facility or facility owned and operated by a tribe or a tribal
organization operating under Public Law 93-638 as a 638 facility;
(2) a county board-operated entity; or
(3) a provider entity that is under contract with the county board in the county where the
potential crisis or emergency is occurring.
(b) The children's mental health crisis response services provider entity must:
(1) ensure that mental health crisis assessment and mobile crisis intervention services are
available 24 hours a day, seven days a week;
(2) directly provide the services or, if services are subcontracted, the provider entity must
maintain clinical responsibility for services and billing;
(3) ensure that crisis intervention services are provided in a manner consistent with sections
245.487 to 245.4887; and
(4) develop and maintain written policies and procedures regarding service provision that
include safety of staff and recipients in high-risk situations.
    Subd. 5. Mobile crisis intervention staff qualifications. (a) To provide children's mental
health mobile crisis intervention services, a mobile crisis intervention team must include:
(1) at least two mental health professionals as defined in section 256B.0943, subdivision
1 , paragraph (m); or
(2) a combination of at least one mental health professional and one mental health
practitioner as defined in section 245.4871, subdivision 26, with the required mental health crisis
training and under the clinical supervision of a mental health professional on the team.
(b) The team must have at least two people with at least one member providing on-site
crisis intervention services when needed. Team members must be experienced in mental health
assessment, crisis intervention techniques, and clinical decision making under emergency
conditions and have knowledge of local services and resources. The team must recommend
and coordinate the team's services with appropriate local resources, including the county social
services agency, mental health service providers, and local law enforcement, if necessary.
    Subd. 6. Initial screening and crisis assessment planning. (a) Before initiating mobile
crisis intervention services, a screening of the potential crisis situation must be conducted.
The screening may use the resources of crisis assistance and emergency services as defined in
sections 245.4871, subdivision 14, and 245.4879, subdivisions 1 and 2. The screening must
gather information, determine whether a crisis situation exists, identify the parties involved, and
determine an appropriate response.
(b) If a crisis exists, a crisis assessment must be completed. A crisis assessment must
evaluate any immediate needs for which emergency services are needed and, as time permits,
the recipient's current life situation, sources of stress, mental health problems and symptoms,
strengths, cultural considerations, support network, vulnerabilities, and current functioning.
(c) If the crisis assessment determines mobile crisis intervention services are needed, the
intervention services must be provided promptly. As the opportunity presents itself during the
intervention, at least two members of the mobile crisis intervention team must confer directly or
by telephone about the assessment, treatment plan, and actions taken and needed. At least one
of the team members must be on site providing crisis intervention services. If providing on-site
crisis intervention services, a mental health practitioner must seek clinical supervision as required
under subdivision 9.
(d) The mobile crisis intervention team must develop an initial, brief crisis treatment plan
as soon as appropriate but no later than 24 hours after the initial face-to-face intervention. The
plan must address the needs and problems noted in the crisis assessment and include measurable
short-term goals, cultural considerations, and frequency and type of services to be provided to
achieve the goals and reduce or eliminate the crisis. The crisis treatment plan must be updated
as needed to reflect current goals and services. The team must involve the client and the client's
family in developing and implementing the plan.
(e) The team must document in progress notes which short-term goals have been met and
when no further crisis intervention services are required.
(f) If the client's crisis is stabilized, but the client needs a referral for mental health crisis
stabilization services or to other services, the team must provide a referral to these services. If
the recipient has a case manager, planning for other services must be coordinated with the case
manager.
    Subd. 7. Crisis stabilization services. (a) Crisis stabilization services must be provided
by a mental health professional or a mental health practitioner who works under the clinical
supervision of a mental health professional and for a crisis stabilization services provider entity
and must meet the following standards:
(1) a crisis stabilization treatment plan must be developed which meets the criteria in
subdivision 8;
(2) services must be delivered according to the treatment plan and include face-to-face
contact with the recipient by qualified staff for further assessment, help with referrals, updating
the crisis stabilization treatment plan, supportive counseling, skills training, and collaboration
with other service providers in the community; and
(3) mental health practitioners must have completed at least 30 hours of training in crisis
intervention and stabilization during the past two years.
    Subd. 8. Treatment plan. (a) The individual crisis stabilization treatment plan must include,
at a minimum:
(1) a list of problems identified in the assessment;
(2) a list of the recipient's strengths and resources;
(3) concrete, measurable short-term goals and tasks to be achieved, including time frames for
achievement of the goals;
(4) specific objectives directed toward the achievement of each goal;
(5) documentation of the participants involved in the service planning;
(6) planned frequency and type of services initiated;
(7) a crisis response action plan if a crisis should occur; and
(8) clear progress notes on the outcome of goals.
(b) The client, if clinically appropriate, must be a participant in the development of the crisis
stabilization treatment plan. The client or the client's legal guardian must sign the service plan or
documentation must be provided why this was not possible. A copy of the plan must be given to
the client and the client's legal guardian. The plan should include services arranged, including
specific providers where applicable.
(c) A treatment plan must be developed by a mental health professional or mental health
practitioner under the clinical supervision of a mental health professional. A written plan must be
completed within 24 hours of beginning services with the client.
    Subd. 9. Supervision. (a) A mental health practitioner may provide crisis assessment and
mobile crisis intervention services if the following clinical supervision requirements are met:
(1) the mental health provider entity must accept full responsibility for the services provided;
(2) the mental health professional of the provider entity, who is an employee or under
contract with the provider entity, must be immediately available by telephone or in person for
clinical supervision;
(3) the mental health professional is consulted, in person or by telephone, during the first
three hours when a mental health practitioner provides on-site service; and
(4) the mental health professional must review and approve the tentative crisis assessment
and crisis treatment plan, document the consultation, and sign the crisis assessment and treatment
plan within the next business day.
(b) If the mobile crisis intervention services continue into a second calendar day, a mental
health professional must contact the client face-to-face on the second day to provide services and
update the crisis treatment plan. The on-site observation must be documented in the client's record
and signed by the mental health professional.
    Subd. 10. Client record. The provider must maintain a file for each client that complies
with the requirements under section 256B.0943, subdivision 11, and contains the following
information:
(1) individual crisis treatment plans signed by the recipient, mental health professional, and
mental health practitioner who developed the crisis treatment plan, or if the recipient refused to
sign the plan, the date and reason stated by the recipient for not signing the plan;
(2) signed release of information forms;
(3) recipient health information and current medications;
(4) emergency contacts for the recipient;
(5) case records that document the date of service, place of service delivery, signature of
the person providing the service, and the nature, extent, and units of service. Direct or telephone
contact with the recipient's family or others should be documented;
(6) required clinical supervision by mental health professionals;
(7) summary of the recipient's case reviews by staff; and
(8) any written information by the recipient that the recipient wants in the file.
    Subd. 11. Excluded services. The following services are excluded from reimbursement
under this section:
(1) room and board services;
(2) services delivered to a recipient while admitted to an inpatient hospital;
(3) transportation services under children's mental health crisis response service;
(4) services provided and billed by a provider who is not enrolled under medical assistance
to provide children's mental health crisis response services;
(5) crisis response services provided by a residential treatment center to clients in their
facility;
(6) services performed by volunteers;
(7) direct billing of time spent "on call" when not delivering services to a recipient;
(8) provider service time included in case management reimbursement;
(9) outreach services to potential recipients; and
(10) a mental health service that is not medically necessary.
History: 1Sp2003 c 14 art 4 s 9; art 11 s 11

256B.0945 SERVICES FOR CHILDREN WITH SEVERE EMOTIONAL DISTURBANCE.
    Subdivision 1. Residential services; provider qualifications. Counties must arrange to
provide residential services for children with severe emotional disturbance according to sections
245.4882, 245.4885, and this section. Services must be provided by a facility that is licensed
according to section 245.4882 and administrative rules promulgated thereunder, and under
contract with the county.
    Subd. 2. Covered services. All services must be included in a child's individualized
treatment or multiagency plan of care as defined in chapter 245.
For facilities that are not institutions for mental diseases according to federal statute and
regulation, medical assistance covers mental health related services that are required to be
provided by a residential facility under section 245.4882 and administrative rules promulgated
thereunder, except for room and board.
    Subd. 3. Centralized disbursement of medical assistance payments. Notwithstanding
section 256B.041, county payments for the cost of residential services provided under this section
shall not be made to the commissioner of finance.
    Subd. 4. Payment rates. (a) Notwithstanding sections 256B.19 and 256B.041, payments to
counties for residential services provided by a residential facility shall only be made of federal
earnings for services provided under this section, and the nonfederal share of costs for services
provided under this section shall be paid by the county from sources other than federal funds or
funds used to match other federal funds. Payment to counties for services provided according
to this section shall be a proportion of the per day contract rate that relates to rehabilitative
mental health services and shall not include payment for costs or services that are billed to the
IV-E program as room and board.
(b) The commissioner shall set aside a portion not to exceed five percent of the federal funds
earned under this section to cover the state costs of administering this section. Any unexpended
funds from the set-aside shall be distributed to the counties in proportion to their earnings under
this section.
    Subd. 5.[Repealed, 2006 c 282 art 16 s 17]
    Subd. 6.[Repealed, 2006 c 282 art 16 s 17]
    Subd. 7.[Repealed, 2006 c 282 art 16 s 17]
    Subd. 8.[Repealed, 2006 c 282 art 16 s 17]
    Subd. 9.[Repealed, 2006 c 282 art 16 s 17]
    Subd. 10.[Repealed, 1Sp2003 c 14 art 4 s 24]
History: 1999 c 245 art 8 s 9; 2000 c 340 s 4-11; 2002 c 277 s 19; 2003 c 112 art 2 s 50;
1Sp2003 c 14 art 4 s 10,11; art 11 s 11; 2006 c 282 art 16 s 7

256B.0946 TREATMENT FOSTER CARE.
    Subdivision 1. Covered service. (a) Effective July 1, 2006, and subject to federal approval,
medical assistance covers medically necessary services described under paragraph (b) that are
provided by a provider entity eligible under subdivision 3 to a client eligible under subdivision 2
who is placed in a treatment foster home licensed under Minnesota Rules, parts 2960.3000 to
2960.3340.
(b) Services to children with severe emotional disturbance residing in treatment foster care
settings must meet the relevant standards for mental health services under sections 245.487 to
245.4887. In addition, specific service components reimbursed by medical assistance must meet
the following standards:
(1) case management service component must meet the standards in Minnesota Rules, parts
9520.0900 to 9520.0926 and 9505.0322, excluding subparts 6 and 10;
(2) psychotherapy, crisis assistance, and skills training components must meet the standards
for children's therapeutic services and supports in section 256B.0943; and
(3) family psychoeducation services under supervision of a mental health professional.
    Subd. 2. Determination of client eligibility. A client's eligibility to receive treatment foster
care under this section shall be determined by a diagnostic assessment, an evaluation of level of
care needed, and development of an individual treatment plan, as defined in paragraphs (a) to (c).
(a) The diagnostic assessment must:
(1) be conducted by a psychiatrist, licensed psychologist, or licensed independent clinical
social worker that is performed within 180 days prior to the start of service;
(2) include current diagnoses on all five axes of the client's current mental health status;
(3) determine whether or not a child meets the criteria for severe emotional disturbance in
section 245.4871, subdivision 6, or for serious and persistent mental illness in section 245.462,
subdivision 20 ; and
(4) be completed annually until age 18. For individuals between age 18 and 21, unless a
client's mental health condition has changed markedly since the client's most recent diagnostic
assessment, annual updating is necessary. For the purpose of this section, "updating" means a
written summary, including current diagnoses on all five axes, by a mental health professional of
the client's current mental status and service needs.
(b) The evaluation of level of care must be conducted by the placing county with an
instrument approved by the commissioner of human services. The commissioner shall update the
list of approved level of care instruments annually.
(c) The individual treatment plan must be:
(1) based on the information in the client's diagnostic assessment;
(2) developed through a child-centered, family driven planning process that identifies service
needs and individualized, planned, and culturally appropriate interventions that contain specific
measurable treatment goals and objectives for the client and treatment strategies for the client's
family and foster family;
(3) reviewed at least once every 90 days and revised; and
(4) signed by the client or, if appropriate, by the client's parent or other person authorized
by statute to consent to mental health services for the client.
    Subd. 3. Eligible providers. For purposes of this section, a provider agency must have an
individual placement agreement for each recipient and must be a licensed child placing agency,
under Minnesota Rules, parts 9543.0010 to 9543.0150, and either:
(1) a county;
(2) an Indian Health Services facility operated by a tribe or tribal organization under
funding authorized by United States Code, title 25, sections 450f to 450n, or title 3 of the Indian
Self-Determination Act, Public Law 93-638, section 638 (facilities or providers); or
(3) a noncounty entity under contract with a county board.
    Subd. 4. Eligible provider responsibilities. (a) To be an eligible provider under this section,
a provider must develop written policies and procedures for treatment foster care services
consistent with subdivision 1, paragraph (b), clauses (1), (2), and (3).
(b) In delivering services under this section, a treatment foster care provider must ensure
that staff caseload size reasonably enables the provider to play an active role in service planning,
monitoring, delivering, and reviewing for discharge planning to meet the needs of the client, the
client's foster family, and the birth family, as specified in each client's individual treatment plan.
    Subd. 5. Service authorization. The commissioner will administer authorizations for
services under this section in compliance with section 256B.0625, subdivision 25.
    Subd. 6. Excluded services. (a) Services in clauses (1) to (4) are not eligible as components
of treatment foster care services:
(1) treatment foster care services provided in violation of medical assistance policy in
Minnesota Rules, part 9505.0220;
(2) service components of children's therapeutic services and supports simultaneously
provided by more than one treatment foster care provider;
(3) home and community-based waiver services; and
(4) treatment foster care services provided to a child without a level of care determination
according to section 245.4885, subdivision 1.
(b) Children receiving treatment foster care services are not eligible for medical assistance
reimbursement for the following services while receiving treatment foster care:
(1) mental health case management services under section 256B.0625, subdivision 20; and
(2) psychotherapy and skill training components of children's therapeutic services and
supports under section 256B.0625, subdivision 35b.
History: 1Sp2005 c 4 art 2 s 12; 2006 c 282 art 16 s 8

256B.0947 INTENSIVE REHABILITATIVE MENTAL HEALTH SERVICES.
    Subdivision 1. Scope. Subject to federal approval, medical assistance covers medically
necessary, intensive nonresidential rehabilitative mental health services as defined in subdivision
2, for recipients as defined in subdivision 3, when the services are provided by an entity meeting
the standards in this section.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given them.
(a) "Intensive nonresidential rehabilitative mental health services" means child rehabilitative
mental health services as defined in section 256B.0943, except that these services are provided
by a multidisciplinary staff using a total team approach consistent with assertive community
treatment, or other evidence-based practices, and directed to recipients with a serious mental
illness who require intensive services.
(b) "Evidence-based practices" are nationally recognized mental health services that are
proven by substantial research to be effective in helping individuals with serious mental illness
obtain specific treatment goals.
(c) "Treatment team" means all staff who provide services to recipients under this section.
At a minimum, this includes the clinical supervisor, mental health professionals, mental health
practitioners, mental health behavioral aides, and a school representative familiar with the
recipient's individual education plan (IEP) if applicable.
    Subd. 3. Eligibility. An eligible recipient under the age of 18 is an individual who:
(1) is age 16 or 17;
(2) is diagnosed with a medical condition, such as an emotional disturbance or traumatic
brain injury, for which intensive nonresidential rehabilitative mental health services are needed;
(3) has substantial disability and functional impairment in three or more of the areas listed
in section 245.462, subdivision 11a, so that self-sufficiency upon adulthood or emancipation
is unlikely; and
(4) has had a recent diagnostic assessment by a qualified professional that documents that
intensive nonresidential rehabilitative mental health services are medically necessary to address
identified disability and functional impairments and individual recipient goals.
    Subd. 4. Provider certification and contract requirements. (a) The intensive nonresidential
rehabilitative mental health services provider must:
(1) have a contract with the host county to provide intensive transition youth rehabilitative
mental health services; and
(2) be certified by the commissioner as being in compliance with this section and section
256B.0943.
(b) The commissioner shall develop procedures for counties and providers to submit
contracts and other documentation as needed to allow the commissioner to determine whether
the standards in this section are met.
    Subd. 5. Standards for nonresidential providers. (a) Services must be provided by
a certified provider entity as defined in section 256B.0943, subdivision 4 that meets the
requirements in section 245B.0943, subdivisions 5 and 6.
(b) The clinical supervisor must be an active member of the treatment team. The treatment
team must meet with the clinical supervisor at least weekly to discuss recipients' progress and make
rapid adjustments to meet recipients' needs. The team meeting shall include recipient-specific case
reviews and general treatment discussions among team members. Recipient-specific case reviews
and planning must be documented in the individual recipient's treatment record.
(c) Treatment staff must have prompt access in person or by telephone to a mental health
practitioner or mental health professional. The provider must have the capacity to promptly and
appropriately respond to emergent needs and make any necessary staffing adjustments to assure
the health and safety of recipients.
(d) The initial functional assessment must be completed within ten days of intake and
updated at least every three months or prior to discharge from the service, whichever comes first.
(e) The initial individual treatment plan must be completed within ten days of intake and
reviewed and updated at least monthly with the recipient.
    Subd. 6. Additional standards. The standards in this subdivision apply to intensive
nonresidential rehabilitative mental health services.
(1) The treatment team must use team treatment, not an individual treatment model.
(2) The clinical supervisor must function as a practicing clinician at least on a part-time basis.
(3) The staffing ratio must not exceed ten recipients to one full-time equivalent treatment
team position.
(4) Services must be available at times that meet client needs.
(5) The treatment team must actively and assertively engage and reach out to the recipient's
family members and significant others, after obtaining the recipient's permission.
(6) The treatment team must establish ongoing communication and collaboration between
the team, family, and significant others and educate the family and significant others about mental
illness, symptom management, and the family's role in treatment.
(7) The treatment team must provide interventions to promote positive interpersonal
relationships.
    Subd. 7. Medical assistance payment. (a) Payment for nonresidential services in this section
shall be based on one daily rate per provider inclusive of the following services received by an
eligible recipient in a given calendar day: all rehabilitative services under this section, staff travel
time to provide rehabilitative services under this section, and nonresidential crisis stabilization
services under section 256B.0944.
(b) Except as indicated in paragraph (c), payment will not be made to more than one entity
for each recipient for services provided under this section on a given day. If services under this
section are provided by a team that includes staff from more than one entity, the team must
determine how to distribute the payment among the members.
(c) The host county shall recommend to the commissioner one rate for each entity that
will bill medical assistance for nonresidential intensive rehabilitative mental health services. In
developing these rates, the host county shall consider and document:
(1) the cost for similar services in the local trade area;
(2) actual costs incurred by entities providing the services;
(3) the intensity and frequency of services to be provided to each recipient;
(4) the degree to which recipients will receive services other than services under this section;
and
(5) the costs of other services that will be separately reimbursed.
(d) The rate for intensive rehabilitative mental health services must exclude medical
assistance room and board rate, as defined in section 256I.03, subdivision 6, and services not
covered under this section, such as partial hospitalization and inpatient services. Physician
services are not a component of the treatment team and may be billed separately. The county's
recommendation shall specify the period for which the rate will be applicable, not to exceed
two years.
(e) When services under this section are provided by an assertive community team, case
management functions must be an integral part of the team.
(f) The rate for a provider must not exceed the rate charged by that provider for the same
service to other payors.
(g) The commissioner shall approve or reject the county's rate recommendation, based on the
commissioner's own analysis of the criteria in paragraph (c).
    Subd. 8. Enrollment and rate setting. Counties that employ their own staff to provide
services under this section shall apply directly to the commissioner for enrollment and rate setting.
In this case, a county contract is not required and the commissioner shall perform the program
review and rate setting duties which would otherwise be required of counties under this section.
History: 1Sp2005 c 4 art 2 s 13

QUALITY ASSURANCE

256B.095 QUALITY ASSURANCE SYSTEM ESTABLISHED.
(a) Effective July 1, 1998, a quality assurance system for persons with developmental
disabilities, which includes an alternative quality assurance licensing system for programs, is
established in Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Steele,
Wabasha, and Winona Counties for the purpose of improving the quality of services provided to
persons with developmental disabilities. A county, at its option, may choose to have all programs
for persons with developmental disabilities located within the county licensed under chapter
245A using standards determined under the alternative quality assurance licensing system or may
continue regulation of these programs under the licensing system operated by the commissioner.
The project expires on June 30, 2009.
(b) Effective July 1, 2003, a county not listed in paragraph (a) may apply to participate in
the quality assurance system established under paragraph (a). The commission established under
section 256B.0951 may, at its option, allow additional counties to participate in the system.
(c) Effective July 1, 2003, any county or group of counties not listed in paragraph (a) may
establish a quality assurance system under this section. A new system established under this
section shall have the same rights and duties as the system established under paragraph (a). A new
system shall be governed by a commission under section 256B.0951. The commissioner shall
appoint the initial commission members based on recommendations from advocates, families,
service providers, and counties in the geographic area included in the new system. Counties that
choose to participate in a new system shall have the duties assigned under section 256B.0952.
The new system shall establish a quality assurance process under section 256B.0953. The
provisions of section 256B.0954 shall apply to a new system established under this paragraph.
The commissioner shall delegate authority to a new system established under this paragraph
according to section 256B.0955.
History: 1997 c 203 art 7 s 18; 1Sp2001 c 9 art 3 s 48; 2002 c 379 art 1 s 113; 1Sp2003 c 14
art 3 s 33; 1Sp2005 c 4 art 7 s 24

256B.0951 QUALITY ASSURANCE COMMISSION.
    Subdivision 1. Membership. The Quality Assurance Commission is established. The
commission consists of at least 14 but not more than 21 members as follows: at least three but not
more than five members representing advocacy organizations; at least three but not more than
five members representing consumers, families, and their legal representatives; at least three but
not more than five members representing service providers; at least three but not more than five
members representing counties; and the commissioner of human services or the commissioner's
designee. The first commission shall establish membership guidelines for the transition and
recruitment of membership for the commission's ongoing existence. Members of the commission
who do not receive a salary or wages from an employer for time spent on commission duties may
receive a per diem payment when performing commission duties and functions. All members may
be reimbursed for expenses related to commission activities. Notwithstanding the provisions of
section 15.059, subdivision 5, the commission expires on June 30, 2009.
    Subd. 2. Authority to hire staff; charge fees; provide technical assistance. (a) The
commission may hire staff to perform the duties assigned in this section.
(b) The commission may charge fees for its services.
(c) The commission may provide technical assistance to other counties, families, providers,
and advocates interested in participating in a quality assurance system under section 256B.095,
paragraph (b ) or (c).
    Subd. 3. Commission duties. (a) By October 1, 1997, the commission, in cooperation
with the commissioners of human services and health, shall do the following: (1) approve an
alternative quality assurance licensing system based on the evaluation of outcomes; (2) approve
measurable outcomes in the areas of health and safety, consumer evaluation, education and
training, providers, and systems that shall be evaluated during the alternative licensing process;
and (3) establish variable licensure periods not to exceed three years based on outcomes achieved.
For purposes of this subdivision, "outcome" means the behavior, action, or status of a person that
can be observed or measured and can be reliably and validly determined.
(b) By January 15, 1998, the commission shall approve, in cooperation with the
commissioner of human services, a training program for members of the quality assurance teams
established under section 256B.0952, subdivision 4.
(c) The commission and the commissioner shall establish an ongoing review process for
the alternative quality assurance licensing system. The review shall take into account the
comprehensive nature of the alternative system, which is designed to evaluate the broad spectrum
of licensed and unlicensed entities that provide services to clients.
(d) The commission, in consultation with the commissioner, shall work cooperatively with
other populations to expand the system to those populations and identify barriers to expansion. The
commissioner shall report findings and recommendations to the legislature by December 15, 2004.
    Subd. 4. Commission's authority to recommend variances of licensing standards. The
commission may recommend to the commissioners of human services and health variances
from the standards governing licensure of programs for persons with developmental disabilities
in order to improve the quality of services by implementing an alternative developmental
disabilities licensing system if the commission determines that the alternative licensing system
does not adversely affect the health or safety of persons being served by the licensed program
nor compromise the qualifications of staff to provide services.
    Subd. 5. Variance of certain standards prohibited. The safety standards, rights, or
procedural protections under chapter 245C and sections 245.825; 245.91 to 245.97; 245A.09,
subdivision 2 , paragraph (c), clauses (2) and (5); 245A.12; 245A.13; 252.41, subdivision
9 ; 256B.092, subdivisions 1b, clause (7), and 10; 626.556; 626.557, and procedures for the
monitoring of psychotropic medications shall not be varied under the alternative quality assurance
licensing system. The commission may make recommendations to the commissioners of human
services and health or to the legislature regarding alternatives to or modifications of the rules
and procedures referenced in this subdivision.
    Subd. 6.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 7. Waiver of rules. If a federal waiver is approved under subdivision 8, the
commissioner of health may exempt residents of intermediate care facilities for persons with
developmental disabilities (ICF's/MR) who participate in the alternative quality assurance system
established in section 256B.095 from the requirements of Minnesota Rules, chapter 4665.
    Subd. 8. Federal waiver. The commissioner of human services shall seek a federal waiver to
allow intermediate care facilities for persons with developmental disabilities (ICF's/MR) in region
10 of Minnesota to participate in the alternative licensing system. If it is necessary for purposes
of participation in this alternative licensing system for a facility to be decertified as an ICF/MR
facility according to the terms of the federal waiver, when the facility seeks recertification under
the provisions of ICF/MR regulations at the end of the demonstration project, it will not be
considered a new ICF/MR as defined under section 252.291 provided the licensed capacity of the
facility did not increase during its participation in the alternative licensing system. The provisions
of sections 252.28, 252.292, and 256B.5011 to 256B.5015 will remain applicable for counties
in region 10 of Minnesota and the ICF's/MR located within those counties notwithstanding a
county's participation in the alternative licensing system.
    Subd. 9. Evaluation. The commission, in consultation with the commissioner of human
services, shall conduct an evaluation of the quality assurance system, and present a report to
the commissioner by June 30, 2004.
History: 1997 c 203 art 7 s 19; 1998 c 407 art 4 s 40; 1999 c 245 art 4 s 63,64; 1Sp2001 c 9
art 3 s 49-55; 2002 c 375 art 2 s 32,33; 2002 c 379 art 1 s 113; 2003 c 15 art 1 s 33; 1Sp2003 c
14 art 3 s 34-39; 2005 c 10 art 1 s 53; 2005 c 56 s 1; 1Sp2005 c 4 art 7 s 25

256B.0952 COUNTY DUTIES; QUALITY ASSURANCE TEAMS.
    Subdivision 1. Notification. Counties shall give notice to the commission and commissioners
of human services and health of intent to join the alternative quality assurance licensing system. A
county choosing to participate in the alternative quality assurance licensing system commits to
participate for three years.
    Subd. 2. Appointment of review council; duties of council. A county or group of counties
that chooses to participate in the alternative licensing system shall appoint a quality assurance
review council comprised of advocates; consumers, families, and their legal representatives;
providers; and county staff. The council shall:
(1) review summary reports from quality assurance team reviews and make recommendations
to counties regarding program licensure;
(2) make recommendations to the commission regarding the alternative licensing system
and quality assurance process; and
(3) resolve complaints between the quality assurance teams, counties, providers, and
consumers, families, and their legal representatives.
    Subd. 3. Notice to commissioners. The county, based on reports from quality assurance
managers and recommendations from the quality assurance review council regarding the findings
of quality assurance teams, shall notify the commissioners of human services and health regarding
whether facilities, programs, or services have met the outcome standards for licensure and are
eligible for payment.
    Subd. 4. Appointment of quality assurance manager. (a) A county or group of counties
that chooses to participate in the alternative licensing system shall designate a quality assurance
manager and shall establish quality assurance teams in accordance with subdivision 5. The
manager shall recruit, train, and assign duties to the quality assurance team members. In assigning
team members to conduct the quality assurance process at a facility, program, or service, the
manager shall take into account the size of the service provider, the number of services to be
reviewed, the skills necessary for team members to complete the process, and other relevant
factors. The manager shall ensure that no team member has a financial, personal, or family
relationship with the facility, program, or service being reviewed or with any clients of the
facility, program, or service.
(b) Quality assurance teams shall report the findings of their quality assurance reviews to
the quality assurance manager. The quality assurance manager shall provide the report from the
quality assurance team to the county and, upon request, to the commissioners of human services
and health, and shall provide a summary of the report to the Quality Assurance Review Council.
    Subd. 5. Quality assurance teams. Quality assurance teams shall be comprised of
county staff; providers; consumers, families, and their legal representatives; members of
advocacy organizations; and other involved community members. Team members must
satisfactorily complete the training program approved by the commission and must demonstrate
performance-based competency. Team members are not considered to be county employees for
purposes of workers' compensation, unemployment insurance, or state retirement laws solely on
the basis of participation on a quality assurance team. The county may pay a per diem to team
members for time spent on alternative quality assurance process matters. All team members may
be reimbursed for expenses related to their participation in the alternative process.
    Subd. 6. Licensing functions. Participating counties shall perform licensing functions
and activities as delegated by the commissioner of human services in accordance with section
245A.16.
History: 1997 c 203 art 7 s 20; 1Sp2001 c 9 art 3 s 56,57; 2002 c 379 art 1 s 113; 1Sp2003 c
14 art 3 s 40; 2004 c 206 s 52; 1Sp2005 c 4 art 7 s 26

256B.0953 QUALITY ASSURANCE PROCESS.
    Subdivision 1. Process components. (a) The quality assurance licensing process consists
of an evaluation by a quality assurance team of the facility, program, or service according to
outcome-based measurements. The process must include an evaluation of a random sample of
program consumers. The sample must be representative of each service provided. The sample size
must be at least five percent of consumers but not less than two consumers.
(b) All consumers must be given the opportunity to be included in the quality assurance
process in addition to those chosen for the random sample.
    Subd. 2. Licensure periods. (a) In order to be licensed under the alternative quality
assurance licensing system, a facility, program, or service must satisfy the health and safety
outcomes approved for the alternative quality assurance licensing system.
(b) Licensure shall be approved for periods of one to three years for a facility, program, or
service that satisfies the requirements of paragraph (a) and achieves the outcome measurements in
the categories of consumer evaluation, education and training, providers, and systems.
    Subd. 3. Appeals process. A facility, program, or service may contest a licensing decision of
the quality assurance team as permitted under chapter 245A.
History: 1997 c 203 art 7 s 21; 1Sp2003 c 14 art 3 s 41; 1Sp2005 c 4 art 7 s 27

256B.0954 CERTAIN PERSONS DEFINED AS MANDATED REPORTERS.
Members of the Quality Assurance Commission established under section 256B.0951,
members of quality assurance review councils established under section 256B.0952, quality
assurance managers appointed under section 256B.0952, and members of quality assurance teams
established under section 256B.0952 are mandated reporters as that term is defined in sections
626.556, subdivision 3, and 626.5572, subdivision 16.
History: 1997 c 203 art 7 s 22

256B.0955 DUTIES OF THE COMMISSIONER OF HUMAN SERVICES.
(a) Effective July 1, 1998, the commissioner of human services shall delegate authority
to perform licensing functions and activities, in accordance with section 245A.16, to counties
participating in the alternative quality assurance licensing system. The commissioner shall not
license or reimburse a facility, program, or service for persons with developmental disabilities in a
county that participates in the alternative quality assurance licensing system if the commissioner
has received from the appropriate county notification that the facility, program, or service has
been reviewed by a quality assurance team and has failed to qualify for licensure.
(b) The commissioner may conduct random licensing inspections based on outcomes
adopted under section 256B.0951 at facilities, programs, and services governed by the alternative
quality assurance licensing system. The role of such random inspections shall be to verify that the
alternative quality assurance licensing system protects the safety and well-being of consumers
and maintains the availability of high-quality services for persons with developmental disabilities.
History: 1997 c 203 art 7 s 23; 1999 c 245 art 4 s 65; 1Sp2003 c 14 art 3 s 42

256B.10 [Repealed, 1976 c 131 s 2]

256B.11 [Repealed, 1976 c 131 s 2]

256B.12 LEGAL REPRESENTATION.
The attorney general or the appropriate county attorney appearing at the direction of
the attorney general shall be the attorney for the state agency, and the county attorney of the
appropriate county shall be the attorney for the local agency in all matters pertaining hereto. To
prosecute under this chapter or sections 609.466 and 609.52, subdivision 2, or to recover payments
wrongfully made under this chapter, the attorney general or the appropriate county attorney, acting
independently or at the direction of the attorney general may institute a criminal or civil action.
History: Ex1967 c 16 s 12; 1975 c 437 art 2 s 6; 1976 c 188 s 2

256B.121 TREBLE DAMAGES.
Any vendor of medical care who willfully submits a cost report, rate application or claim
for reimbursement for medical care which the vendor knows is a false representation and which
results in the payment of public funds for which the vendor is ineligible shall, in addition to
other provisions of Minnesota law, be subject to an action by the state of Minnesota or any of
its subdivisions or agencies for civil damages. The damages awarded shall include three times
the payments which result from the false representation, together with costs and disbursements,
including reasonable attorneys' fees or their equivalent.
History: 1976 c 188 s 4

256B.13 SUBPOENAS.
Each county agency and the state agency shall have the power to issue subpoenas for
witnesses and compel their attendance and the production of papers and writing; and officers
and employees designated by any county agency or the state agency may administer oaths and
examine witnesses under oath in connection with any application or proceedings hereunder.
History: Ex1967 c 16 s 13

256B.14 RELATIVE'S RESPONSIBILITY.
    Subdivision 1. In general. Subject to the provisions of sections 256B.055, 256B.056, and
256B.06, responsible relative means the parent of a minor recipient of medical assistance or
the spouse of a medical assistance recipient.
    Subd. 2. Actions to obtain payment. The state agency shall promulgate rules to determine
the ability of responsible relatives to contribute partial or complete payment or repayment of
medical assistance furnished to recipients for whom they are responsible. All medical assistance
exclusions shall be allowed, and a resource limit of $10,000 for nonexcluded resources shall
be implemented. Above these limits, a contribution of one-third of the excess resources shall
be required. These rules shall not require payment or repayment when payment would cause
undue hardship to the responsible relative or that relative's immediate family. These rules shall
be consistent with the requirements of section 252.27 for parents of children whose eligibility
for medical assistance was determined without deeming of the parents' resources and income.
The county agency shall give the responsible relative notice of the amount of the payment or
repayment. If the state agency or county agency finds that notice of the payment obligation was
given to the responsible relative, but that the relative failed or refused to pay, a cause of action
exists against the responsible relative for that portion of medical assistance granted after notice
was given to the responsible relative, which the relative was determined to be able to pay.
The action may be brought by the state agency or the county agency in the county where
assistance was granted, for the assistance, together with the costs of disbursements incurred
due to the action.
In addition to granting the county or state agency a money judgment, the court may, upon a
motion or order to show cause, order continuing contributions by a responsible relative found able
to repay the county or state agency. The order shall be effective only for the period of time during
which the recipient receives medical assistance from the county or state agency.
    Subd. 3. Community spouse contribution. The community spouse of an institutionalized
person who receives medical assistance under section 256B.059, subdivision 5, paragraph (b), has
an obligation to pay for the cost of care equal to the dollar value of assets considered available
under section 256B.059, subdivision 5.
    Subd. 4. Appeals. A responsible relative may appeal the determination of an obligation to
make a contribution under this section according to section 256.045.
History: Ex1967 c 16 s 14; 1973 c 725 s 46; 1977 c 448 s 7; 1982 c 640 s 6; 1983 c 312
art 5 s 19; 1984 c 530 s 4; 1986 c 444; 1988 c 689 art 2 s 150,268,270; 1989 c 282 art 3 s 63;
1990 c 568 art 3 s 62; 1992 c 513 art 7 s 79

256B.15 CLAIMS AGAINST ESTATES.
    Subdivision 1. Policy and applicability. (a) It is the policy of this state that individuals or
couples, either or both of whom participate in the medical assistance program, use their own assets
to pay their share of the total cost of their care during or after their enrollment in the program
according to applicable federal law and the laws of this state. The following provisions apply:
(1) subdivisions 1c to 1k shall not apply to claims arising under this section which are
presented under section 525.313;
(2) the provisions of subdivisions 1c to 1k expanding the interests included in an estate for
purposes of recovery under this section give effect to the provisions of United States Code, title
42, section 1396p, governing recoveries, but do not give rise to any express or implied liens in
favor of any other parties not named in these provisions;
(3) the continuation of a recipient's life estate or joint tenancy interest in real property after
the recipient's death for the purpose of recovering medical assistance under this section modifies
common law principles holding that these interests terminate on the death of the holder;
(4) all laws, rules, and regulations governing or involved with a recovery of medical
assistance shall be liberally construed to accomplish their intended purposes;
(5) a deceased recipient's life estate and joint tenancy interests continued under this section
shall be owned by the remaindermen or surviving joint tenants as their interests may appear on the
date of the recipient's death. They shall not be merged into the remainder interest or the interests
of the surviving joint tenants by reason of ownership. They shall be subject to the provisions of
this section. Any conveyance, transfer, sale, assignment, or encumbrance by a remainderman,
a surviving joint tenant, or their heirs, successors, and assigns shall be deemed to include all
of their interest in the deceased recipient's life estate or joint tenancy interest continued under
this section; and
(6) the provisions of subdivisions 1c to 1k continuing a recipient's joint tenancy interests
in real property after the recipient's death do not apply to a homestead owned of record, on the
date the recipient dies, by the recipient and the recipient's spouse as joint tenants with a right of
survivorship. Homestead means the real property occupied by the surviving joint tenant spouse as
their sole residence on the date the recipient dies and classified and taxed to the recipient and
surviving joint tenant spouse as homestead property for property tax purposes in the calendar
year in which the recipient dies. For purposes of this exemption, real property the recipient and
their surviving joint tenant spouse purchase solely with the proceeds from the sale of their prior
homestead, own of record as joint tenants, and qualify as homestead property under section
273.124 in the calendar year in which the recipient dies and prior to the recipient's death shall be
deemed to be real property classified and taxed to the recipient and their surviving joint tenant
spouse as homestead property in the calendar year in which the recipient dies. The surviving
spouse, or any person with personal knowledge of the facts, may provide an affidavit describing
the homestead property affected by this clause and stating facts showing compliance with this
clause. The affidavit shall be prima facie evidence of the facts it states.
(b) For purposes of this section, "medical assistance" includes the medical assistance
program under this chapter and the general assistance medical care program under chapter 256D
and alternative care for nonmedical assistance recipients under section 256B.0913.
(c) All provisions in this subdivision, and subdivisions 1d, 1f, 1g, 1h, 1i, and 1j, related to
the continuation of a recipient's life estate or joint tenancy interests in real property after the
recipient's death for the purpose of recovering medical assistance, are effective only for life
estates and joint tenancy interests established on or after August 1, 2003. For purposes of this
paragraph, medical assistance does not include alternative care.
    Subd. 1a. Estates subject to claims. If a person receives any medical assistance hereunder,
on the person's death, if single, or on the death of the survivor of a married couple, either or both
of whom received medical assistance, or as otherwise provided for in this section, the total amount
paid for medical assistance rendered for the person and spouse shall be filed as a claim against the
estate of the person or the estate of the surviving spouse in the court having jurisdiction to probate
the estate or to issue a decree of descent according to sections 525.31 to 525.313.
A claim shall be filed if medical assistance was rendered for either or both persons under
one of the following circumstances:
(a) the person was over 55 years of age, and received services under this chapter;
(b) the person resided in a medical institution for six months or longer, received services
under this chapter, and, at the time of institutionalization or application for medical assistance,
whichever is later, the person could not have reasonably been expected to be discharged and
returned home, as certified in writing by the person's treating physician. For purposes of this
section only, a "medical institution" means a skilled nursing facility, intermediate care facility,
intermediate care facility for persons with developmental disabilities, nursing facility, or inpatient
hospital; or
(c) the person received general assistance medical care services under chapter 256D.
The claim shall be considered an expense of the last illness of the decedent for the purpose of
section 524.3-805. Any statute of limitations that purports to limit any county agency or the state
agency, or both, to recover for medical assistance granted hereunder shall not apply to any claim
made hereunder for reimbursement for any medical assistance granted hereunder. Notice of the
claim shall be given to all heirs and devisees of the decedent whose identity can be ascertained
with reasonable diligence. The notice must include procedures and instructions for making an
application for a hardship waiver under subdivision 5; time frames for submitting an application
and determination; and information regarding appeal rights and procedures. Counties are entitled
to one-half of the nonfederal share of medical assistance collections from estates that are directly
attributable to county effort. Counties are entitled to ten percent of the collections for alternative
care directly attributable to county effort.
    Subd. 1b.[Repealed, 2001 c 203 s 19]
    Subd. 1c. Notice of potential claim. (a) A state agency with a claim or potential claim under
this section may file a notice of potential claim under this subdivision anytime before or within
one year after a medical assistance recipient dies. The claimant shall be the state agency. A notice
filed prior to the recipient's death shall not take effect and shall not be effective as notice until the
recipient dies. A notice filed after a recipient dies shall be effective from the time of filing.
(b) The notice of claim shall be filed or recorded in the real estate records in the office of
the county recorder or registrar of titles for each county in which any part of the property is
located. The recorder shall accept the notice for recording or filing. The registrar of titles shall
accept the notice for filing if the recipient has a recorded interest in the property. The registrar
of titles shall not carry forward to a new certificate of title any notice filed more than one year
from the date of the recipient's death.
(c) The notice must be dated, state the name of the claimant, the medical assistance recipient's
name and Social Security number if filed before their death and their date of death if filed after
they die, the name and date of death of any predeceased spouse of the medical assistance recipient
for whom a claim may exist, a statement that the claimant may have a claim arising under this
section, generally identify the recipient's interest in the property, contain a legal description for
the property and whether it is abstract or registered property, a statement of when the notice
becomes effective and the effect of the notice, be signed by an authorized representative of the
state agency, and may include such other contents as the state agency may deem appropriate.
    Subd. 1d. Effect of notice. From the time it takes effect, the notice shall be notice to
remaindermen, joint tenants, or to anyone else owning or acquiring an interest in or encumbrance
against the property described in the notice that the medical assistance recipient's life estate, joint
tenancy, or other interests in the real estate described in the notice:
(1) shall, in the case of life estate and joint tenancy interests, continue to exist for purposes of
this section, and be subject to liens and claims as provided in this section;
(2) shall be subject to a lien in favor of the claimant effective upon the death of the recipient
and dealt with as provided in this section;
(3) may be included in the recipient's estate, as defined in this section; and
(4) may be subject to administration and all other provisions of chapter 524 and may be sold,
assigned, transferred, or encumbered free and clear of their interest or encumbrance to satisfy
claims under this section.
    Subd. 1e. Full or partial release of notice. (a) The claimant may fully or partially release
the notice and the lien arising out of the notice of record in the real estate records where the notice
is filed or recorded at any time. The claimant may give a full or partial release to extinguish any
life estates or joint tenancy interests which are or may be continued under this section or whose
existence or nonexistence may create a cloud on the title to real property at any time whether or
not a notice has been filed. The recorder or registrar of titles shall accept the release for recording
or filing. If the release is a partial release, it must include a legal description of the property
being released.
(b) At any time, the claimant may, at the claimant's discretion, wholly or partially release,
subordinate, modify, or amend the recorded notice and the lien arising out of the notice.
    Subd. 1f. Agency lien. (a) The notice shall constitute a lien in favor of the Department
of Human Services against the recipient's interests in the real estate it describes for a period
of 20 years from the date of filing or the date of the recipient's death, whichever is later.
Notwithstanding any law or rule to the contrary, a recipient's life estate and joint tenancy interests
shall not end upon the recipient's death but shall continue according to subdivisions 1h, 1i, and 1j.
The amount of the lien shall be equal to the total amount of the claims that could be presented in
the recipient's estate under this section.
(b) If no estate has been opened for the deceased recipient, any holder of an interest in the
property may apply to the lien holder for a statement of the amount of the lien or for a full or
partial release of the lien. The application shall include the applicant's name, current mailing
address, current home and work telephone numbers, and a description of their interest in the
property, a legal description of the recipient's interest in the property, and the deceased recipient's
name, date of birth, and Social Security number. The lien holder shall send the applicant by
certified mail, return receipt requested, a written statement showing the amount of the lien,
whether the lien holder is willing to release the lien and under what conditions, and inform
them of the right to a hearing under section 256.045. The lien holder shall have the discretion to
compromise and settle the lien upon any terms and conditions the lien holder deems appropriate.
(c) Any holder of an interest in property subject to the lien has a right to request a hearing
under section 256.045 to determine the validity, extent, or amount of the lien. The request must
be in writing, and must include the names, current addresses, and home and business telephone
numbers for all other parties holding an interest in the property. A request for a hearing by any
holder of an interest in the property shall be deemed to be a request for a hearing by all parties
owning interests in the property. Notice of the hearing shall be given to the lien holder, the party
filing the appeal, and all of the other holders of interests in the property at the addresses listed
in the appeal by certified mail, return receipt requested, or by ordinary mail. Any owner of an
interest in the property to whom notice of the hearing is mailed shall be deemed to have waived
any and all claims or defenses in respect to the lien unless they appear and assert any claims
or defenses at the hearing.
(d) If the claim the lien secures could be filed under subdivision 1h, the lien holder may
collect, compromise, settle, or release the lien upon any terms and conditions it deems appropriate.
If the claim the lien secures could be filed under subdivision 1i or 1j, the lien may be adjusted
or enforced to the same extent had it been filed under subdivisions 1i and 1j, and the provisions
of subdivisions 1i, clause (f), and 1j, clause (d), shall apply to voluntary payment, settlement,
or satisfaction of the lien.
(e) If no probate proceedings have been commenced for the recipient as of the date the lien
holder executes a release of the lien on a recipient's life estate or joint tenancy interest, created for
purposes of this section, the release shall terminate the life estate or joint tenancy interest created
under this section as of the date it is recorded or filed to the extent of the release. If the claimant
executes a release for purposes of extinguishing a life estate or a joint tenancy interest created
under this section to remove a cloud on title to real property, the release shall have the effect of
extinguishing any life estate or joint tenancy interests in the property it describes which may have
been continued by reason of this section retroactive to the date of death of the deceased life tenant
or joint tenant except as provided for in section 514.981, subdivision 6.
(f) If the deceased recipient's estate is probated, a claim shall be filed under this section. The
amount of the lien shall be limited to the amount of the claim as finally allowed. If the claim the
lien secures is filed under subdivision 1h, the lien may be released in full after any allowance of
the claim becomes final or according to any agreement to settle and satisfy the claim. The release
shall release the lien but shall not extinguish or terminate the interest being released. If the claim
the lien secures is filed under subdivision 1i or 1j, the lien shall be released after the lien under
subdivision 1i or 1j is filed or recorded, or settled according to any agreement to settle and satisfy
the claim. The release shall not extinguish or terminate the interest being released. If the claim is
finally disallowed in full, the claimant shall release the claimant's lien at the claimant's expense.
    Subd. 1g. Estate property. Notwithstanding any law or rule to the contrary, if a claim is
presented under this section, interests or the proceeds of interests in real property a decedent
owned as a life tenant or a joint tenant with a right of survivorship shall be part of the decedent's
estate, subject to administration, and shall be dealt with as provided in this section.
    Subd. 1h. Estates of specific persons receiving medical assistance. (a) For purposes of
this section, paragraphs (b) to (k) apply if a person received medical assistance for which a claim
may be filed under this section and died single, or the surviving spouse of the couple and was not
survived by any of the persons described in subdivisions 3 and 4.
(b) For purposes of this section, the person's estate consists of: (1) their probate estate; (2)
all of the person's interests or proceeds of those interests in real property the person owned as
a life tenant or as a joint tenant with a right of survivorship at the time of the person's death;
(3) all of the person's interests or proceeds of those interests in securities the person owned in
beneficiary form as provided under sections 524.6-301 to 524.6-311 at the time of the person's
death, to the extent they become part of the probate estate under section 524.6-307; and (4) all of
the person's interests in joint accounts, multiple party accounts, and pay on death accounts, or
the proceeds of those accounts, as provided under sections 524.6-201 to 524.6-214 at the time of
the person's death to the extent they become part of the probate estate under section 524.6-207.
Notwithstanding any law or rule to the contrary, a state or county agency with a claim under this
section shall be a creditor under section 524.6-307.
(c) Notwithstanding any law or rule to the contrary, the person's life estate or joint tenancy
interest in real property not subject to a medical assistance lien under sections 514.980 to 514.985
on the date of the person's death shall not end upon the person's death and shall continue as
provided in this subdivision. The life estate in the person's estate shall be that portion of the
interest in the real property subject to the life estate that is equal to the life estate percentage factor
for the life estate as listed in the Life Estate Mortality Table of the health care program's manual
for a person who was the age of the medical assistance recipient on the date of the person's death.
The joint tenancy interest in real property in the estate shall be equal to the fractional interest
the person would have owned in the jointly held interest in the property had they and the other
owners held title to the property as tenants in common on the date the person died.
(d) The court upon its own motion, or upon motion by the personal representative or any
interested party, may enter an order directing the remaindermen or surviving joint tenants and
their spouses, if any, to sign all documents, take all actions, and otherwise fully cooperate with
the personal representative and the court to liquidate the decedent's life estate or joint tenancy
interests in the estate and deliver the cash or the proceeds of those interests to the personal
representative and provide for any legal and equitable sanctions as the court deems appropriate to
enforce and carry out the order, including an award of reasonable attorney fees.
(e) The personal representative may make, execute, and deliver any conveyances or other
documents necessary to convey the decedent's life estate or joint tenancy interest in the estate that
are necessary to liquidate and reduce to cash the decedent's interest or for any other purposes.
(f) Subject to administration, all costs, including reasonable attorney fees, directly and
immediately related to liquidating the decedent's life estate or joint tenancy interest in the
decedent's estate, shall be paid from the gross proceeds of the liquidation allocable to the
decedent's interest and the net proceeds shall be turned over to the personal representative and
applied to payment of the claim presented under this section.
(g) The personal representative shall bring a motion in the district court in which the
estate is being probated to compel the remaindermen or surviving joint tenants to account for
and deliver to the personal representative all or any part of the proceeds of any sale, mortgage,
transfer, conveyance, or any disposition of real property allocable to the decedent's life estate
or joint tenancy interest in the decedent's estate, and do everything necessary to liquidate and
reduce to cash the decedent's interest and turn the proceeds of the sale or other disposition over
to the personal representative. The court may grant any legal or equitable relief including, but
not limited to, ordering a partition of real estate under chapter 558 necessary to make the value
of the decedent's life estate or joint tenancy interest available to the estate for payment of a
claim under this section.
(h) Subject to administration, the personal representative shall use all of the cash or proceeds
of interests to pay an allowable claim under this section. The remaindermen or surviving
joint tenants and their spouses, if any, may enter into a written agreement with the personal
representative or the claimant to settle and satisfy obligations imposed at any time before or
after a claim is filed.
(i) The personal representative may, at their discretion, provide any or all of the other
owners, remaindermen, or surviving joint tenants with an affidavit terminating the decedent's
estate's interest in real property the decedent owned as a life tenant or as a joint tenant with others,
if the personal representative determines in good faith that neither the decedent nor any of the
decedent's predeceased spouses received any medical assistance for which a claim could be filed
under this section, or if the personal representative has filed an affidavit with the court that the
estate has other assets sufficient to pay a claim, as presented, or if there is a written agreement
under paragraph (h), or if the claim, as allowed, has been paid in full or to the full extent of the
assets the estate has available to pay it. The affidavit may be recorded in the office of the county
recorder or filed in the Office of the Registrar of Titles for the county in which the real property
is located. Except as provided in section 514.981, subdivision 6, when recorded or filed, the
affidavit shall terminate the decedent's interest in real estate the decedent owned as a life tenant or
a joint tenant with others. The affidavit shall: (1) be signed by the personal representative; (2)
identify the decedent and the interest being terminated; (3) give recording information sufficient
to identify the instrument that created the interest in real property being terminated; (4) legally
describe the affected real property; (5) state that the personal representative has determined
that neither the decedent nor any of the decedent's predeceased spouses received any medical
assistance for which a claim could be filed under this section; (6) state that the decedent's estate
has other assets sufficient to pay the claim, as presented, or that there is a written agreement
between the personal representative and the claimant and the other owners or remaindermen or
other joint tenants to satisfy the obligations imposed under this subdivision; and (7) state that
the affidavit is being given to terminate the estate's interest under this subdivision, and any other
contents as may be appropriate.
The recorder or registrar of titles shall accept the affidavit for recording or filing. The affidavit
shall be effective as provided in this section and shall constitute notice even if it does not include
recording information sufficient to identify the instrument creating the interest it terminates. The
affidavit shall be conclusive evidence of the stated facts.
(j) The holder of a lien arising under subdivision 1c shall release the lien at the holder's
expense against an interest terminated under paragraph (h) to the extent of the termination.
(k) If a lien arising under subdivision 1c is not released under paragraph (j), prior to closing
the estate, the personal representative shall deed the interest subject to the lien to the remaindermen
or surviving joint tenants as their interests may appear. Upon recording or filing, the deed shall
work a merger of the recipient's life estate or joint tenancy interest, subject to the lien, into the
remainder interest or interest the decedent and others owned jointly. The lien shall attach to and
run with the property to the extent of the decedent's interest at the time of the decedent's death.
    Subd. 1i. Estates of persons receiving medical assistance and survived by others. (a)
For purposes of this subdivision, the person's estate consists of the person's probate estate and all
of the person's interests in real property the person owned as a life tenant or a joint tenant at the
time of the person's death.
(b) Notwithstanding any law or rule to the contrary, this subdivision applies if a person
received medical assistance for which a claim could be filed under this section but for the fact
the person was survived by a spouse or by a person listed in subdivision 3, or if subdivision 4
applies to a claim arising under this section.
(c) The person's life estate or joint tenancy interests in real property not subject to a medical
assistance lien under sections 514.980 to 514.985 on the date of the person's death shall not
end upon death and shall continue as provided in this subdivision. The life estate in the estate
shall be the portion of the interest in the property subject to the life estate that is equal to the
life estate percentage factor for the life estate as listed in the Life Estate Mortality Table of the
health care program's manual for a person who was the age of the medical assistance recipient
on the date of the person's death. The joint tenancy interest in the estate shall be equal to the
fractional interest the medical assistance recipient would have owned in the jointly held interest in
the property had they and the other owners held title to the property as tenants in common on
the date the medical assistance recipient died.
(d) The county agency shall file a claim in the estate under this section on behalf of the
claimant who shall be the commissioner of human services, notwithstanding that the decedent is
survived by a spouse or a person listed in subdivision 3. The claim, as allowed, shall not be paid
by the estate and shall be disposed of as provided in this paragraph. The personal representative
or the court shall make, execute, and deliver a lien in favor of the claimant on the decedent's
interest in real property in the estate in the amount of the allowed claim on forms provided by
the commissioner to the county agency filing the lien. The lien shall bear interest as provided
under section 524.3-806, shall attach to the property it describes upon filing or recording, and
shall remain a lien on the real property it describes for a period of 20 years from the date it is filed
or recorded. The lien shall be a disposition of the claim sufficient to permit the estate to close.
(e) The state or county agency shall file or record the lien in the office of the county recorder
or registrar of titles for each county in which any of the real property is located. The recorder
or registrar of titles shall accept the lien for filing or recording. All recording or filing fees shall
be paid by the Department of Human Services. The recorder or registrar of titles shall mail the
recorded lien to the Department of Human Services. The lien need not be attested, certified, or
acknowledged as a condition of recording or filing. Upon recording or filing of a lien against a life
estate or a joint tenancy interest, the interest subject to the lien shall merge into the remainder
interest or the interest the recipient and others owned jointly. The lien shall attach to and run with
the property to the extent of the decedent's interest in the property at the time of the decedent's
death as determined under this section.
(f) The department shall make no adjustment or recovery under the lien until after the
decedent's spouse, if any, has died, and only at a time when the decedent has no surviving child
described in subdivision 3. The estate, any owner of an interest in the property which is or may
be subject to the lien, or any other interested party, may voluntarily pay off, settle, or otherwise
satisfy the claim secured or to be secured by the lien at any time before or after the lien is filed or
recorded. Such payoffs, settlements, and satisfactions shall be deemed to be voluntary repayments
of past medical assistance payments for the benefit of the deceased recipient, and neither the
process of settling the claim, the payment of the claim, or the acceptance of a payment shall
constitute an adjustment or recovery that is prohibited under this subdivision.
(g) The lien under this subdivision may be enforced or foreclosed in the manner provided by
law for the enforcement of judgment liens against real estate or by a foreclosure by action under
chapter 581. When the lien is paid, satisfied, or otherwise discharged, the state or county agency
shall prepare and file a release of lien at its own expense. No action to foreclose the lien shall
be commenced unless the lien holder has first given 30 days' prior written notice to pay the lien
to the owners and parties in possession of the property subject to the lien. The notice shall: (1)
include the name, address, and telephone number of the lien holder; (2) describe the lien; (3) give
the amount of the lien; (4) inform the owner or party in possession that payment of the lien in
full must be made to the lien holder within 30 days after service of the notice or the lien holder
may begin proceedings to foreclose the lien; and (5) be served by personal service, certified mail,
return receipt requested, ordinary first class mail, or by publishing it once in a newspaper of
general circulation in the county in which any part of the property is located. Service of the notice
shall be complete upon mailing or publication.
    Subd. 1j. Claims in estates of decedents survived by other survivors. For purposes of this
subdivision, the provisions in subdivision 1i, paragraphs (a) to (c) apply.
(a) If payment of a claim filed under this section is limited as provided in subdivision 4, and
if the estate does not have other assets sufficient to pay the claim in full, as allowed, the personal
representative or the court shall make, execute, and deliver a lien on the property in the estate that
is exempt from the claim under subdivision 4 in favor of the commissioner of human services on
forms provided by the commissioner to the county agency filing the claim. If the estate pays a
claim filed under this section in full from other assets of the estate, no lien shall be filed against
the property described in subdivision 4.
(b) The lien shall be in an amount equal to the unpaid balance of the allowed claim under
this section remaining after the estate has applied all other available assets of the estate to pay
the claim. The property exempt under subdivision 4 shall not be sold, assigned, transferred,
conveyed, encumbered, or distributed until after the personal representative has determined the
estate has other assets sufficient to pay the allowed claim in full, or until after the lien has been
filed or recorded. The lien shall bear interest as provided under section 524.3-806, shall attach
to the property it describes upon filing or recording, and shall remain a lien on the real property
it describes for a period of 20 years from the date it is filed or recorded. The lien shall be a
disposition of the claim sufficient to permit the estate to close.
(c) The state or county agency shall file or record the lien in the office of the county recorder
or registrar of titles in each county in which any of the real property is located. The department
shall pay the filing fees. The lien need not be attested, certified, or acknowledged as a condition of
recording or filing. The recorder or registrar of titles shall accept the lien for filing or recording.
(d) The commissioner shall make no adjustment or recovery under the lien until none of
the persons listed in subdivision 4 are residing on the property or until the property is sold or
transferred. The estate or any owner of an interest in the property that is or may be subject to the
lien, or any other interested party, may voluntarily pay off, settle, or otherwise satisfy the claim
secured or to be secured by the lien at any time before or after the lien is filed or recorded. The
payoffs, settlements, and satisfactions shall be deemed to be voluntary repayments of past medical
assistance payments for the benefit of the deceased recipient and neither the process of settling the
claim, the payment of the claim, or acceptance of a payment shall constitute an adjustment or
recovery that is prohibited under this subdivision.
(e) A lien under this subdivision may be enforced or foreclosed in the manner provided for
by law for the enforcement of judgment liens against real estate or by a foreclosure by action
under chapter 581. When the lien has been paid, satisfied, or otherwise discharged, the claimant
shall prepare and file a release of lien at the claimant's expense. No action to foreclose the lien
shall be commenced unless the lien holder has first given 30 days prior written notice to pay the
lien to the record owners of the property and the parties in possession of the property subject to
the lien. The notice shall: (1) include the name, address, and telephone number of the lien holder;
(2) describe the lien; (3) give the amount of the lien; (4) inform the owner or party in possession
that payment of the lien in full must be made to the lien holder within 30 days after service of
the notice or the lien holder may begin proceedings to foreclose the lien; and (5) be served by
personal service, certified mail, return receipt requested, ordinary first class mail, or by publishing
it once in a newspaper of general circulation in the county in which any part of the property is
located. Service shall be complete upon mailing or publication.
(f) Upon filing or recording of a lien against a life estate or joint tenancy interest under this
subdivision, the interest subject to the lien shall merge into the remainder interest or the interest
the decedent and others owned jointly, effective on the date of recording and filing. The lien shall
attach to and run with the property to the extent of the decedent's interest in the property at the
time of the decedent's death as determined under this section.
(g)(1) An affidavit may be provided by a personal representative, at their discretion, stating
the personal representative has determined in good faith that a decedent survived by a spouse
or a person listed in subdivision 3, or by a person listed in subdivision 4, or the decedent's
predeceased spouse did not receive any medical assistance giving rise to a claim under this
section, or that the real property described in subdivision 4 is not needed to pay in full a claim
arising under this section.
(2) The affidavit shall:
(i) describe the property and the interest being extinguished;
(ii) name the decedent and give the date of death;
(iii) state the facts listed in clause (1);
(iv) state that the affidavit is being filed to terminate the life estate or joint tenancy interest
created under this subdivision;
(v) be signed by the personal representative; and
(vi) contain any other information that the affiant deems appropriate.
(3) Except as provided in section 514.981, subdivision 6, when the affidavit is filed or
recorded, the life estate or joint tenancy interest in real property that the affidavit describes shall
be terminated effective as of the date of filing or recording. The termination shall be final and
may not be set aside for any reason.
    Subd. 1k. Filing. Any notice, lien, release, or other document filed under subdivisions 1c to
1l, and any lien, release of lien, or other documents relating to a lien filed under subdivisions 1h,
1i, and 1j must be filed or recorded in the office of the county recorder or registrar of titles, as
appropriate, in the county where the affected real property is located. Notwithstanding section
386.77, the state or county agency shall pay any applicable filing fee. An attestation, certification,
or acknowledgment is not required as a condition of filing. If the property described in the filing is
registered property, the registrar of titles shall record the filing on the certificate of title for each
parcel of property described in the filing. If the property described in the filing is abstract property,
the recorder shall file and index the property in the county's grantor-grantee indexes and any tract
indexes the county maintains for each parcel of property described in the filing. The recorder or
registrar of titles shall return the filed document to the party filing it at no cost. If the party making
the filing provides a duplicate copy of the filing, the recorder or registrar of titles shall show the
recording or filing data on the copy and return it to the party at no extra cost.
    Subd. 2. Limitations on claims. The claim shall include only the total amount of medical
assistance rendered after age 55 or during a period of institutionalization described in subdivision
1a, clause (b), and the total amount of general assistance medical care rendered, and shall not
include interest. Claims that have been allowed but not paid shall bear interest according to
section 524.3-806, paragraph (d). A claim against the estate of a surviving spouse who did not
receive medical assistance, for medical assistance rendered for the predeceased spouse, is limited
to the value of the assets of the estate that were marital property or jointly owned property at any
time during the marriage. Claims for alternative care shall be net of all premiums paid under
section 256B.0913, subdivision 12, on or after July 1, 2003, and shall be limited to services
provided on or after July 1, 2003.
    Subd. 2a.[Repealed, 2001 c 203 s 19]
    Subd. 3. Surviving spouse, minor, blind, or disabled children. If a decedent is survived by
a spouse, or was single or the surviving spouse of a married couple and is survived by a child
who is under age 21 or blind or permanently and totally disabled according to the supplemental
security income program criteria, a claim shall be filed against the estate according to this section.
    Subd. 4. Other survivors. If the decedent who was single or the surviving spouse of a
married couple is survived by one of the following persons, a claim exists against the estate
payable first from the value of the nonhomestead property included in the estate and the personal
representative shall make, execute, and deliver to the county agency a lien against the homestead
property in the estate for any unpaid balance of the claim to the claimant as provided under
this section:
(a) a sibling who resided in the decedent medical assistance recipient's home at least one year
before the decedent's institutionalization and continuously since the date of institutionalization; or
(b) a son or daughter or a grandchild who resided in the decedent medical assistance
recipient's home for at least two years immediately before the parent's or grandparent's
institutionalization and continuously since the date of institutionalization, and who establishes by
a preponderance of the evidence having provided care to the parent or grandparent who received
medical assistance, that the care was provided before institutionalization, and that the care
permitted the parent or grandparent to reside at home rather than in an institution.
    Subd. 5. Undue hardship. Any person entitled to notice in subdivision 1a has a right to
apply for waiver of the claim based upon undue hardship. Any claim pursuant to this section may
be fully or partially waived because of undue hardship. Undue hardship does not include action
taken by the decedent which divested or diverted assets in order to avoid estate recovery. Any
waiver of a claim must benefit the person claiming undue hardship. The commissioner shall
have authority to hear claimant appeals, pursuant to section 256.045, when an application for a
hardship waiver is denied in whole or part.
    Subd. 6. Life estate or joint tenancy interest. For purposes of subdivision 1 and section
514.981, subdivision 6, a life estate or joint tenancy interest is established upon the earlier of:
(1) the date the instrument creating the interest is recorded or filed in the office of the county
recorder or registrar of titles where the real estate interest it describes is located;
(2) the date of delivery by the grantor to the grantee of the signed instrument as stated in an
affidavit made by a person with knowledge of the facts;
(3) the date on which the judicial order creating the interest was issued by the court; or
(4) the date upon which the interest devolves under section 524.3-101.
    Subd. 7. Lien notices. Medical assistance liens and liens under notices of potential claims
that are of record against life estate or joint tenancy interests established prior to August 1, 2003,
shall end, become unenforceable, and cease to be liens on those interests upon the death of the
person named in the lien or notice of potential claim, shall be disregarded by examiners of title
after the death of the life tenant or joint tenant, and shall not be carried forward to a subsequent
certificate of title. This subdivision shall not apply to life estates that continue to exist after the
death of the person named in the lien or notice of potential claim under the terms of the instrument
creating or reserving the life estate until the life estate ends as provided for in the instrument.
    Subd. 8. Immunity. The commissioner of human services, county agencies, and elected
officials and their employees are immune from all liability for any action taken implementing
Laws 2003, First Special Session chapter 14, article 12, sections 40 to 52 and 90, as those laws
existed at the time the action was taken, and section 514.981, subdivision 6.
History: Ex1967 c 16 s 15; 1981 c 360 art 1 s 22; 1Sp1981 c 4 art 1 s 126; 1986 c 444;
1987 c 403 art 2 s 82; 1988 c 719 art 8 s 15; 1990 c 568 art 3 s 63; 1992 c 513 art 7 s 80,81;
1Sp1993 c 1 art 5 s 82,83; 1995 c 207 art 6 s 79-81; 1996 c 451 art 2 s 29,30,61,62; art 5 s 26;
2000 c 400 s 2,3; 2001 c 203 s 17; 1Sp2003 c 14 art 2 s 27-29; art 12 s 40-52; 2005 c 56 s 1;
1Sp2005 c 4 art 7 s 28-32

NOTE: The amendments to subdivisions 1a and 2 by Laws 1995, chapter 207, article 6,
sections 79 and 80, relating only to the age of a medical assistance recipient for purposes of
estate claims, are effective for persons who are between the ages of 55 and 64 on or after July 1,
1995, for the total amount of assistance on or after July 1, 1995. See Laws 1995, chapter 207,
article 6, section 125, subdivision 1.

256B.16 [Repealed, 1971 c 550 s 2]

256B.17 TRANSFERS OF PROPERTY.
    Subdivision 1.[Repealed, 1997 c 107 s 19]
    Subd. 2.[Repealed, 1997 c 107 s 19]
    Subd. 3.[Repealed, 1997 c 107 s 19]
    Subd. 4.[Repealed, 1997 c 107 s 19]
    Subd. 5.[Repealed, 1997 c 107 s 19]
    Subd. 6.[Repealed, 1997 c 107 s 19]
    Subd. 7. Exception for asset transfers. An institutionalized spouse, institutionalized
before October 1, 1989, for a continuous period, who applies for medical assistance on or after
July 1, 1983, may transfer liquid assets to a noninstitutionalized spouse if all of the following
conditions apply:
(a) The noninstitutionalized spouse is not applying for or receiving assistance;
(b) Either (1) the noninstitutionalized spouse has less than $10,000 in liquid assets, including
assets singly owned and 50 percent of assets owned jointly with the institutionalized spouse; or
(2) the noninstitutionalized spouse has less than 50 percent of the total value of nonexempt assets
owned by both parties, jointly or individually;
(c) The amount transferred, together with the noninstitutionalized spouse's own assets, totals
no more than one-half of the total value of the liquid assets of the parties or $10,000 in liquid
assets, whichever is greater; and
(d) The transfer may be effected only once, at the time of initial medical assistance
application.
    Subd. 8.[Repealed, 1997 c 107 s 19]
History: Ex1967 c 16 s 17; 1981 c 360 art 2 s 30; 1983 c 312 art 5 s 20-24; 1984 c 534 s 23;
1985 c 252 s 23; 1986 c 444; 1987 c 403 art 2 s 83,84; 1988 c 689 art 2 s 151,268; 1989 c 282 art
3 s 98; 1990 c 568 art 3 s 95,96; 1997 c 107 s 7

256B.18 METHODS OF ADMINISTRATION.
The state agency shall prescribe such methods of administration as are necessary for
compliance with requirements of the Social Security Act, as amended, and for the proper and
efficient operation of the program of assistance hereunder. The state agency shall establish and
maintain a system of personnel standards on a merit basis for all such employees of the county
agencies and the examination thereof, and the administration thereof shall be directed and
controlled exclusively by the state agency except in those counties in which such employees
are covered by a merit system that meets the requirements of the state agency and the Social
Security Act, as amended.
History: Ex1967 c 16 s 18

256B.19 DIVISION OF COST.
    Subdivision 1. Division of cost. The state and county share of medical assistance costs
not paid by federal funds shall be as follows:
(1) beginning January 1, 1992, 50 percent state funds and 50 percent county funds for the
cost of placement of severely emotionally disturbed children in regional treatment centers;
(2) beginning January 1, 2003, 80 percent state funds and 20 percent county funds for the
costs of nursing facility placements of persons with disabilities under the age of 65 that have
exceeded 90 days. This clause shall be subject to chapter 256G and shall not apply to placements
in facilities not certified to participate in medical assistance;
(3) beginning July 1, 2004, 90 percent state funds and ten percent county funds for the
costs of placements that have exceeded 90 days in intermediate care facilities for persons with
developmental disabilities that have seven or more beds. This provision includes pass-through
payments made under section 256B.5015; and
(4) beginning July 1, 2004, when state funds are used to pay for a nursing facility placement
due to the facility's status as an institution for mental diseases (IMD), the county shall pay 20
percent of the nonfederal share of costs that have exceeded 90 days. This clause is subject to
chapter 256G.
For counties that participate in a Medicaid demonstration project under sections 256B.69 and
256B.71, the division of the nonfederal share of medical assistance expenses for payments made
to prepaid health plans or for payments made to health maintenance organizations in the form of
prepaid capitation payments, this division of medical assistance expenses shall be 95 percent by
the state and five percent by the county of financial responsibility.
In counties where prepaid health plans are under contract to the commissioner to provide
services to medical assistance recipients, the cost of court ordered treatment ordered without
consulting the prepaid health plan that does not include diagnostic evaluation, recommendation,
and referral for treatment by the prepaid health plan is the responsibility of the county of financial
responsibility.
    Subd. 1a.[Repealed, 2002 c 277 s 34]
    Subd. 1b.[Repealed, 1Sp2001 c 9 art 2 s 76]
    Subd. 1c. Additional portion of nonfederal share. (a) Hennepin County shall be responsible
for a monthly transfer payment of $1,500,000, due before noon on the 15th of each month and the
University of Minnesota shall be responsible for a monthly transfer payment of $500,000 due
before noon on the 15th of each month, beginning July 15, 1995. These sums shall be part of the
designated governmental unit's portion of the nonfederal share of medical assistance costs.
(b) Beginning July 1, 2001, Hennepin County's payment under paragraph (a) shall be
$2,066,000 each month.
(c) Beginning July 1, 2001, the commissioner shall increase annual capitation payments to
the metropolitan health plan under section 256B.69 for the prepaid medical assistance program
by approximately $3,400,000, plus any available federal matching funds, to recognize higher
than average medical education costs.
(d) Effective August 1, 2005, Hennepin County's payment under paragraphs (a) and (b) shall
be reduced to $566,000, and the University of Minnesota's payment under paragraph (a) shall
be reduced to zero.
    Subd. 1d. Portion of nonfederal share to be paid by certain counties. (a) In addition to the
percentage contribution paid by a county under subdivision 1, the governmental units designated
in this subdivision shall be responsible for an additional portion of the nonfederal share of
medical assistance cost. For purposes of this subdivision, "designated governmental unit" means
the counties of Becker, Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, Pennington,
Pipestone, Ramsey, St. Louis, Steele, Todd, Traverse, and Wadena.
(b) Beginning in 1994, each of the governmental units designated in this subdivision shall
transfer before noon on May 31 to the state Medicaid agency an amount equal to the number of
licensed beds in any nursing home owned and operated by the county on that date, with the county
named as licensee, multiplied by $5,723. If two or more counties own and operate a nursing
home, the payment shall be prorated. These sums shall be part of the designated governmental
unit's portion of the nonfederal share of medical assistance costs.
(c) Beginning in 2002, in addition to any transfer under paragraph (b), each of the
governmental units designated in this subdivision shall transfer before noon on May 31 to the
state Medicaid agency an amount equal to the number of licensed beds in any nursing home
owned and operated by the county on that date, with the county named as licensee, multiplied by
$10,784. The provisions of paragraph (b) apply to transfers under this paragraph.
(d) Beginning in 2003, in addition to any transfer under paragraphs (b) and (c), each of the
governmental units designated in this subdivision shall transfer before noon on May 31 to the
state Medicaid agency an amount equal to the number of licensed beds in any nursing home
owned and operated by the county on that date, with the county named as licensee, multiplied by
$2,230. The provisions of paragraph (b) apply to transfers under this paragraph.
(e) The commissioner may reduce the intergovernmental transfers under paragraphs (c)
and (d) based on the commissioner's determination of the payment rate in section 256B.431,
subdivision 23 , paragraphs (c), (d), and (e). Any adjustments must be made on a per-bed basis
and must result in an amount equivalent to the total amount resulting from the rate adjustment in
section 256B.431, subdivision 23, paragraphs (c), (d), and (e).
    Subd. 2. Distribution of federal funds. Federal funds available for administrative purposes
shall be distributed between the state and the county in the same proportion that expenditures
were made, except as provided for in section 256.017.
    Subd. 2a. Division of costs. The county shall ensure that only the least costly, most
appropriate transportation and travel expenses are used. The state may enter into volume purchase
contracts, or use a competitive bidding process, whenever feasible, to minimize the costs of
transportation services. If the state has entered into a volume purchase contract or used the
competitive bidding procedures of chapter 16C to arrange for transportation services, the county
may be required to use such arrangements.
    Subd. 2b. Pilot project reimbursement. In counties where a pilot or demonstration
project is operated under the medical assistance program, the state may pay 100 percent of the
administrative costs for the pilot or demonstration project after June 30, 1990.
    Subd. 2c. Obligation of local agency to investigate eligibility for medical assistance. (a)
When the commissioner receives information that indicates that a general assistance medical
care recipient or MinnesotaCare program enrollee may be eligible for medical assistance,
the commissioner may notify the appropriate local agency of that fact. The local agency
must investigate eligibility for medical assistance and take appropriate action and notify the
commissioner of that action within 90 days from the date notice is issued. If the person is eligible
for medical assistance, the local agency must find eligibility retroactively to the date on which the
person met all eligibility requirements.
(b) When a prepaid health plan under a contract with the state to provide medical assistance
services notifies the commissioner that an infant has been or will be born to an enrollee under
the contract, the commissioner may notify the appropriate local agency of that fact. The local
agency must investigate eligibility for medical assistance for the infant, take appropriate action,
and notify the commissioner of that action within 90 days from the date notice is issued. If the
infant would have been eligible on the date of birth, the local agency must establish eligibility
retroactively to that month.
(c) For general assistance medical care recipients and MinnesotaCare program enrollees, if
the local agency fails to comply with paragraph (a), the local agency is responsible for the entire
cost of general assistance medical care or MinnesotaCare program services provided from the
date the commissioner issues the notice until the date the local agency takes appropriate action
on the case and notifies the commissioner of the action. For infants, if the local agency fails to
comply with paragraph (b), the commissioner may determine eligibility for medical assistance for
the infant for a period of two months, and the local agency shall be responsible for the entire cost
of medical assistance services provided for that infant, in addition to a fee of $100 for processing
the case. The commissioner shall deduct any obligation incurred under this paragraph from the
amount due to the local agency under subdivision 1.
    Subd. 3. Study of medical assistance financial participation. The commissioner shall
study the feasibility and outcomes of implementing a variable medical assistance county
financial participation rate for long-term care services to developmentally disabled persons in
order to encourage the utilization of alternative services to long-term intermediate care for the
developmentally disabled. The commissioner shall submit findings and recommendations to
the legislature by January 20, 1984.
History: Ex1967 c 16 s 19; 1971 c 547 s 1; 1975 c 437 art 2 s 7; 1982 c 640 s 7; 1983 c 312
art 9 s 6; 1984 c 534 s 24; 1Sp1985 c 9 art 2 s 46; 1986 c 444; 1987 c 403 art 2 s 85; 1988 c 719
art 8 s 16,17; 1Sp1989 c 1 art 16 s 8,9; 1990 c 568 art 3 s 64; 1991 c 292 art 4 s 51-53; 1992 c
513 art 7 s 82; 1993 c 13 art 1 s 32; 1Sp1993 c 1 art 5 s 84-86; 1995 c 207 art 6 s 82-84; 1995 c
234 art 8 s 56; 1997 c 203 art 11 s 7; 1998 c 386 art 2 s 80; 1Sp2001 c 9 art 2 s 45; 2002 c 220
art 14 s 7,8; 2002 c 277 s 20-23; 2002 c 375 art 2 s 34; 2002 c 379 art 1 s 113; 2003 c 9 s 1;
1Sp2003 c 14 art 3 s 43; 2005 c 56 s 1; 1Sp2005 c 4 art 2 s 14; art 8 s 48

256B.195 INTERGOVERNMENTAL TRANSFERS; HOSPITAL PAYMENTS.
    Subdivision 1. Federal approval required. Sections 145.9268, 256.969, subdivision 26, and
this section are contingent on federal approval of the intergovernmental transfers and payments to
safety net hospitals and community clinics authorized under this section. These sections are also
contingent on current payment, by the government entities, of intergovernmental transfers under
section 256B.19 and this section.
    Subd. 2. Payments from governmental entities. (a) In addition to any payment required
under section 256B.19, effective July 15, 2001, the following government entities shall make
the payments indicated before noon on the 15th of each month:
(1) Hennepin County, $2,000,000; and
(2) Ramsey County, $1,000,000.
(b) These sums shall be part of the designated governmental unit's portion of the nonfederal
share of medical assistance costs. Of these payments, Hennepin County shall pay 71 percent
directly to Hennepin County Medical Center, and Ramsey County shall pay 71 percent directly
to Regions Hospital. The counties must provide certification to the commissioner of payments
to hospitals under this subdivision.
    Subd. 3. Payments to certain safety net providers. (a) Effective July 15, 2001, the
commissioner shall make the following payments to the hospitals indicated after noon on the
15th of each month:
(1) to Hennepin County Medical Center, any federal matching funds available to match the
payments received by the medical center under subdivision 2, to increase payments for medical
assistance admissions and to recognize higher medical assistance costs in institutions that provide
high levels of charity care; and
(2) to Regions Hospital, any federal matching funds available to match the payments received
by the hospital under subdivision 2, to increase payments for medical assistance admissions and
to recognize higher medical assistance costs in institutions that provide high levels of charity care.
(b) Effective July 15, 2001, the following percentages of the transfers under subdivision 2
shall be retained by the commissioner for deposit each month into the general fund:
(1) 18 percent, plus any federal matching funds, shall be allocated for the following purposes:
(i) during the fiscal year beginning July 1, 2001, of the amount available under this clause,
39.7 percent shall be allocated to make increased hospital payments under section 256.969,
subdivision 26 ; 34.2 percent shall be allocated to fund the amounts due from small rural hospitals,
as defined in section 144.148, for overpayments under section 256.969, subdivision 5a, resulting
from a determination that medical assistance and general assistance payments exceeded the
charge limit during the period from 1994 to 1997; and 26.1 percent shall be allocated to the
commissioner of health for rural hospital capital improvement grants under section 144.148; and
(ii) during fiscal years beginning on or after July 1, 2002, of the amount available under this
clause, 55 percent shall be allocated to make increased hospital payments under section 256.969,
subdivision 26 , and 45 percent shall be allocated to the commissioner of health for rural hospital
capital improvement grants under section 144.148; and
(2) 11 percent shall be allocated to the commissioner of health to fund community clinic
grants under section 145.9268.
(c) This subdivision shall apply to fee-for-service payments only and shall not increase
capitation payments or payments made based on average rates. The allocation in paragraph
(b), clause (1), item (ii), to increase hospital payments under section 256.969, subdivision 26,
shall not limit payments under that section.
(d) Medical assistance rate or payment changes, including those required to obtain federal
financial participation under section 62J.692, subdivision 8, shall precede the determination
of intergovernmental transfer amounts determined in this subdivision. Participation in the
intergovernmental transfer program shall not result in the offset of any health care provider's
receipt of medical assistance payment increases other than limits resulting from hospital-specific
charge limits and limits on disproportionate share hospital payments.
(e) Effective July 1, 2003, if the amount available for allocation under paragraph (b) is greater
than the amounts available during March 2003, after any increase in intergovernmental transfers
and payments that result from section 256.969, subdivision 3a, paragraph (c), are paid to the
general fund, any additional amounts available under this subdivision after reimbursement of the
transfers under subdivision 2 shall be allocated to increase medical assistance payments, subject to
hospital-specific charge limits and limits on disproportionate share hospital payments, as follows:
(1) if the payments under subdivision 5 are approved, the amount shall be paid to the largest
ten percent of hospitals as measured by 2001 payments for medical assistance, general assistance
medical care, and MinnesotaCare in the nonstate government hospital category. Payments shall be
allocated according to each hospital's proportionate share of the 2001 payments; or
(2) if the payments under subdivision 5 are not approved, the amount shall be paid to the
largest ten percent of hospitals as measured by 2001 payments for medical assistance, general
assistance medical care, and MinnesotaCare in the nonstate government category and to the
largest ten percent of hospitals as measured by payments for medical assistance, general assistance
medical care, and MinnesotaCare in the nongovernment hospital category. Payments shall be
allocated according to each hospital's proportionate share of the 2001 payments in their respective
category of nonstate government and nongovernment. The commissioner shall determine which
hospitals are in the nonstate government and nongovernment hospital categories.
    Subd. 4. Adjustments permitted. (a) The commissioner may adjust the intergovernmental
transfers under subdivision 2 and the payments under subdivision 3, and payments and transfers
under subdivision 5, based on the commissioner's determination of Medicare upper payment
limits, hospital-specific charge limits, and hospital-specific limitations on disproportionate share
payments. Any adjustments must be made on a proportional basis. If participation by a particular
hospital under this section is limited, the commissioner shall adjust the payments that relate to
that hospital under subdivisions 2, 3, and 5 on a proportional basis in order to allow the hospital to
participate under this section to the fullest extent possible and shall increase other payments under
subdivisions 2, 3, and 5 to the extent allowable to maintain the overall level of payments under this
section. The commissioner may make adjustments under this subdivision only after consultation
with the counties and hospitals identified in subdivisions 2 and 3, and, if subdivision 5 receives
federal approval, with the hospital and educational institution identified in subdivision 5.
(b) The ratio of medical assistance payments specified in subdivision 3 to the
intergovernmental transfers specified in subdivision 2 shall not be reduced except as provided
under paragraph (a).
    Subd. 5. Inclusion of Fairview University Medical Center. (a) Upon federal approval of the
payments in paragraph (b), the commissioner shall establish an intergovernmental transfer with
the University of Minnesota in an amount determined by the commissioner based on the amount of
Medicare upper payment limit available for nongovernment hospitals adjusted by hospital-specific
charge limits and the amount available under the hospital-specific disproportionate share limit.
(b) Effective July 1, 2003, the commissioner shall increase payments for medical assistance
admissions at Fairview University Medical Center by 71 percent of the transfer plus any federal
matching payments on that amount, to increase payments for medical assistance admissions and
to recognize higher medical assistance costs in institutions that provide high levels of charity
care. Twenty-nine percent of the transfer plus federal matching funds available as a result of the
transfers in subdivision 5 shall be paid to the largest ten percent of hospitals in the nongovernment
hospital category as measured by 2001 payments for medical assistance, general assistance
medical care, and MinnesotaCare. Payments shall be allocated according to each hospital's
proportionate share of the 2001 payments. The commissioner shall determine which hospitals
are in the nongovernment hospital category.
History: 1Sp2001 c 9 art 2 s 46; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 12 s 53,54;
1Sp2005 c 4 art 8 s 49

256B.199 PAYMENTS REPORTED BY GOVERNMENTAL ENTITIES.
(a) Hennepin County, Hennepin County Medical Center, Ramsey County, Regions Hospital,
the University of Minnesota, and Fairview-University Medical Center shall report quarterly to the
commissioner beginning June 1, 2007, payments made during the second previous quarter that
may qualify for reimbursement under federal law.
(b) Based on these reports, the commissioner shall apply for federal matching funds. These
funds are appropriated to the commissioner for the payments under section 256.969, subdivision
27 .
(c) By May 1 of each year, beginning May 1, 2007, the commissioner shall inform the
nonstate entities listed in paragraph (a) of the amount of federal disproportionate share hospital
payment money expected to be available in the current federal fiscal year.
(d) This section sunsets on June 30, 2009. The commissioner shall report to the legislature
by December 15, 2008, with recommendations for maximizing federal disproportionate share
hospital payments after June 30, 2009.
History: 1Sp2005 c 4 art 8 s 50

256B.20 COUNTY APPROPRIATIONS.
The providing of funds necessary to carry out the provisions hereof on the part of the counties
and the manner of administering the funds of the counties and the state shall be as follows:
(1) The board of county commissioners of each county shall annually set up in its budget
an item designated as the county medical assistance fund and levy taxes and fix a rate therefor
sufficient to produce the full amount of such item, in addition to all other tax levies and tax
rate, however fixed or determined, sufficient to carry out the provisions hereof and sufficient to
pay in full the county share of assistance and administrative expense for the ensuing year; and
annually on or before October 10 shall certify the same to the county auditor to be entered by the
auditor on the tax rolls. Such tax levy and tax rate shall make proper allowance and provision for
shortage in tax collections.
(2) Any county may transfer surplus funds from any county fund, except the sinking or ditch
fund, to the general fund or to the county medical assistance fund in order to provide money
necessary to pay medical assistance awarded hereunder. The money so transferred shall be
used for no other purpose, but any portion thereof no longer needed for such purpose shall be
transferred back to the fund from which taken.
(3) Upon the order of the county agency the county auditor shall draw a warrant on the
proper fund in accordance with the order, and the county treasurer shall pay out the amounts
ordered to be paid out as medical assistance hereunder. When necessary by reason of failure to
levy sufficient taxes for the payment of the medical assistance in the county, the county auditor
shall carry any such payments as an overdraft on the medical assistance funds of the county
until sufficient tax funds shall be provided for such assistance payments. The board of county
commissioners shall include in the tax levy and tax rate in the year following the year in which
such overdraft occurred, an amount sufficient to liquidate such overdraft in full.
(4) Claims for reimbursement and reports shall be presented to the state agency by the
respective counties as required under section 256.01, subdivision 2, paragraph (17). The state
agency shall audit such claims and certify to the commissioner of finance the amounts due the
respective counties without delay. The amounts so certified shall be paid within ten days after
such certification, from the state treasury upon warrant of the commissioner of finance from any
money available therefor. The money available to the state agency to carry out the provisions
hereof, including all federal funds available to the state, shall be kept and deposited by the
commissioner of finance in the revenue fund and disbursed upon warrants in the same manner
as other state funds.
History: Ex1967 c 16 s 20; 1973 c 492 s 14; 1986 c 444; 1989 c 89 s 11; 2003 c 112 art 2 s 50

256B.21 CHANGE OF RESIDENCE.
On changing residence, a recipient shall notify the county agency through which the
recipient's medical assistance hereunder is paid. On removing to another county, the recipient
shall declare whether such absence is temporary or for the purpose of residing therein.
History: Ex1967 c 16 s 21; 1986 c 444

256B.22 COMPLIANCE WITH SOCIAL SECURITY ACT.
The various terms and provisions hereof, including the amount of medical assistance paid
hereunder, are intended to comply with and give effect to the program set out in Title XIX of
the federal Social Security Act. During any period when federal funds shall not be available or
shall be inadequate to pay in full the federal share of medical assistance as defined in Title XIX
of the federal Social Security Act, as amended by Public Law 92-603, the state may reduce
by an amount equal to such deficiency the payments it would otherwise be obligated to make
pursuant to section 256B.041.
History: Ex1967 c 16 s 22; 1973 c 717 s 20

256B.23 USE OF FEDERAL FUNDS.
All federal funds made available for the purposes hereof are hereby appropriated to the state
agency to be disbursed and paid out in accordance with the provisions hereof.
History: Ex1967 c 16 s 23

256B.24 PROHIBITIONS.
No enrollment fee, premium, or similar charge shall be required as a condition of eligibility
for medical assistance hereunder.
History: Ex1967 c 16 s 24

256B.25 PAYMENTS TO CERTIFIED FACILITIES.
    Subdivision 1. Licensing required. Payments may not be made hereunder for care in
any private or public institution, including but not limited to hospitals and nursing homes,
unless licensed by an appropriate licensing authority of this state, any other state, or a Canadian
province and if applicable, certified by an appropriate authority under United States Code, title
42, sections 1396-1396p.
    Subd. 2. Payment distribution. The payment of state or county funds to nursing homes,
boarding care homes, and supervised living facilities, except payments to state operated
institutions, for the care of persons who are eligible for medical assistance, shall be made only
through the medical assistance program, except as provided in subdivision 3.
    Subd. 3. Payment exceptions. The limitation in subdivision 2 shall not apply to:
(a) payment of Minnesota supplemental assistance funds to recipients who reside in facilities
which are involved in litigation contesting their designation as an institution for treatment of
mental disease;
(b) payment or grants to a boarding care home or supervised living facility licensed by
the Department of Human Services under Minnesota Rules, parts 9520.0500 to 9520.0690,
9530.2500 to 9530.4000, 9545.0900 to 9545.1090, or 9545.1400 to 9545.1500, or payment to
recipients who reside in these facilities;
(c) payments or grants to a boarding care home or supervised living facility which are
ineligible for certification under United States Code, title 42, sections 1396-1396p;
(d) payments or grants otherwise specifically authorized by statute or rule.
    Subd. 4. Payment during suspended admissions. A nursing home or boarding care home
that has received a notice to suspend admissions under section 144A.10, subdivision 4a, shall
be ineligible to receive payment for admissions that occur during the effective dates of the
suspension. Upon termination of the suspension by the commissioner of health, payments may be
made for eligible persons, beginning with the day after the suspension ends.
History: Ex1967 c 16 s 25; 1969 c 395 s 2; 1984 c 641 s 13; 1984 c 654 art 5 s 58; 1985
c 248 s 69; 1989 c 282 art 3 s 64

256B.26 AGREEMENTS WITH OTHER STATE DEPARTMENTS.
The commissioner of the Department of Human Services is authorized to enter into
cooperative agreements with other state departments or divisions of this state or of other states
responsible for administering or supervising the administration of health services and vocational
rehabilitation services in the state for maximum utilization of such service in the provision of
medical assistance under sections 256B.01 to 256B.26.
History: Ex1967 c 16 s 26; 1984 c 654 art 5 s 58

256B.27 MEDICAL ASSISTANCE; COST REPORTS.
    Subdivision 1. Reports and audits. In the interests of efficient administration of the medical
assistance to the needy program and incident to the approval of rates and charges therefor, the
commissioner of human services may require any reports, information, and audits of medical
vendors which the commissioner deems necessary.
    Subd. 2. Verification of report. All reports as to the costs of operations or of medical care
provided which are submitted by vendors of medical care for use in determining their rates or
reimbursement shall be submitted under oath as to the truthfulness of their contents by the vendor
or an officer or authorized representative of the vendor.
    Subd. 2a. On-site audits. Each year the commissioner shall provide for the on-site audit
of the cost reports of nursing homes participating as vendors of medical assistance. The
commissioner shall select for audit at least 15 percent of these nursing homes at random or using
factors including, but not limited to: change in ownership; frequent changes in administration
in excess of normal turnover rates; complaints to the commissioner of health about care, safety,
or rights; where previous inspections or reinspections under section 144A.10 have resulted in
correction orders related to care, safety, or rights; or where persons involved in ownership or
administration of the facility have been indicted for alleged criminal activity.
    Subd. 3. Access to medical records. The commissioner of human services, with the written
consent of the recipient, on file with the local welfare agency, shall be allowed access to all
personal medical records of medical assistance recipients solely for the purposes of investigating
whether or not: (a) a vendor of medical care has submitted a claim for reimbursement, a cost report
or a rate application which is duplicative, erroneous, or false in whole or in part, or which results
in the vendor obtaining greater compensation than the vendor is legally entitled to; or (b) the
medical care was medically necessary. The vendor of medical care shall receive notification from
the commissioner at least 24 hours before the commissioner gains access to such records. The
determination of provision of services not medically necessary shall be made by the commissioner.
The commissioner may consult with an advisory task force of vendors the commissioner may
appoint, on the recommendation of appropriate professional organizations. The task force expires
as provided in section 15.059, subdivision 6. Notwithstanding any other law to the contrary, a
vendor of medical care shall not be subject to any civil or criminal liability for providing access to
medical records to the commissioner of human services pursuant to this section.
    Subd. 4. Authorization of commissioner to examine records. A person determined to be
eligible for medical assistance shall be deemed to have authorized the commissioner of human
services in writing to examine, for the investigative purposes identified in subdivision 3, all
personal medical records developed while receiving medical assistance.
    Subd. 5. Private data. Medical records obtained by the commissioner of human services
pursuant to this section are private data, as defined in section 13.02, subdivision 12.
History: 1971 c 961 s 24; 1976 c 188 s 3; 1977 c 326 s 11; 1980 c 349 s 7,8; 1981 c 311 s
39; 1982 c 476 s 1; 1982 c 545 s 24; 1982 c 640 s 8; 1983 c 312 art 5 s 25,26; 1984 c 654 art 5 s
58; 1986 c 444; 1987 c 370 art 1 s 5,6; 1988 c 629 s 53; 1995 c 207 art 11 s 6

256B.30 HEALTH CARE FACILITY REPORT.
Every facility required to be licensed under the provisions of sections 144.50 to 144.58, or
144A.02, shall provide annually to the commissioner of human services the reports as may be
required under law and under rules adopted by the commissioner of human services under the
Administrative Procedure Act. The rules shall provide for the submission of a full and complete
financial report of a facility's operations including:
(1) An annual statement of income and expenditures;
(2) A complete statement of fees and charges;
(3) The names of all persons other than mortgage companies owning any interest in the
facility including stockholders with an ownership interest of ten percent or more of the facility.
The financial reports and supporting data of the facility shall be available for inspection and
audit by the commissioner of human services.
History: 1973 c 688 s 8; 1976 c 173 c 57; 1984 c 654 art 5 s 58

256B.31 CONTINUED HOSPITAL CARE FOR LONG-TERM POLIO PATIENT.
A medical assistance recipient who has been a polio patient in an acute care hospital for a
period of not less than 25 consecutive years is eligible to continue receiving hospital care, whether
or not the care is medically necessary for purposes of federal reimbursement. The cost of continued
hospital care not reimbursable by the federal government must be paid with state money allocated
for the medical assistance program. The rate paid to the hospital is the rate per day established
using Medicare principles for the hospital's fiscal year ending December 31, 1981, adjusted each
year by the annual hospital cost index established under section 256.969, subdivision 1, or by
other limits in effect at the time of the adjustment. This section does not prohibit a voluntary move
to another living arrangement by a recipient whose care is reimbursed under this section.
History: 1988 c 689 art 2 s 152

256B.32 FACILITY FEE PAYMENT.
    Subdivision 1. Facility fee for hospital emergency room and clinic visit. (a) The
commissioner shall establish a facility fee payment mechanism that will pay a facility fee to
all enrolled outpatient hospitals for each emergency room or outpatient clinic visit provided
on or after July 1, 1989. This payment mechanism may not result in an overall increase in
outpatient payment rates. This section does not apply to federally mandated maximum payment
limits, department-approved program packages, or services billed using a nonoutpatient hospital
provider number.
(b) For fee-for-service services provided on or after July 1, 2002, the total payment, before
third-party liability and spenddown, made to hospitals for outpatient hospital facility services is
reduced by .5 percent from the current statutory rates.
(c) In addition to the reduction in paragraph (b), the total payment for fee-for-service services
provided on or after July 1, 2003, made to hospitals for outpatient hospital facility services before
third-party liability and spenddown, is reduced five percent from the current statutory rates.
Facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.
    Subd. 2. Prospective payment system. Effective for services provided on or after July 1,
2003, rates that are based on the Medicare outpatient prospective payment system shall be replaced
by a budget-neutral prospective payment system that is derived using medical assistance data.
History: 1989 c 285 s 4; 2002 c 220 art 15 s 14; 2002 c 275 s 4; 1Sp2003 c 14 art 12 s 55

256B.35 PERSONAL NEEDS ALLOWANCE; PERSONS IN CERTAIN FACILITIES.
    Subdivision 1. Personal needs allowance. (a) Notwithstanding any law to the contrary,
welfare allowances for clothing and personal needs for individuals receiving medical assistance
while residing in any skilled nursing home, intermediate care facility, or medical institution
including recipients of supplemental security income, in this state shall not be less than $45 per
month from all sources. When benefit amounts for Social Security or supplemental security
income recipients are increased pursuant to United States Code, title 42, sections 415(i) and
1382f, the commissioner shall, effective in the month in which the increase takes effect, increase
by the same percentage to the nearest whole dollar the clothing and personal needs allowance
for individuals receiving medical assistance while residing in any skilled nursing home, medical
institution, or intermediate care facility. The commissioner shall provide timely notice to local
agencies, providers, and recipients of increases under this provision.
(b) The personal needs allowance may be paid as part of the Minnesota supplemental aid
program, notwithstanding the provisions of section 256D.37, subdivision 2, and payments
to recipients of Minnesota supplemental aid may be made once each three months covering
liabilities that accrued during the preceding three months.
(c) The personal needs allowance shall be increased to include income garnished for child
support under a court order, up to a maximum of $250 per month but only to the extent that the
amount garnished is not deducted as a monthly allowance for children under section 256B.0575,
paragraph (a) , clause (5).
    Subd. 2. Purpose for allowance. Neither the skilled nursing home, the intermediate care
facility, the medical institution, nor the Department of Human Services shall withhold or deduct
any amount of this allowance for any purpose contrary to this section.
    Subd. 3. Prohibition on commingling of funds. The nursing home may not commingle the
patient's funds with nursing home funds or in any way use the funds for nursing home purposes.
    Subd. 4. Field audits required. The commissioner of human services shall conduct field
audits at the same time as cost report audits required under section 256B.27, subdivision 2a, and
at any other time but at least once every four years, without notice, to determine whether this
section was complied with and that the funds provided residents for their personal needs were
actually expended for that purpose.
    Subd. 5. Designation on use of funds. The nursing home may transfer the personal
allowance to someone other than the recipient only when the recipient or the recipient's guardian
or conservator designates that person in writing to receive or expend funds on behalf of the
recipient and that person certifies in writing that the allowance is spent for the well-being of the
recipient. Persons, other than the recipient, in possession of the personal allowance, may use the
allowance only for the well-being of the recipient. Any person, other than the recipient, who, with
intent to defraud, uses the personal needs allowance for purposes other than the well-being of the
recipient shall be guilty of theft and shall be sentenced pursuant to section 609.52, subdivision 3,
clauses (2), (3)(a) and (c), (4), and (5). To prosecute under this subdivision, the attorney general
or the appropriate county attorney, acting independently or at the direction of the attorney general,
may institute a criminal action. A nursing home that transfers personal needs allowance funds to
a person other than the recipient in good faith and in compliance with this section shall not be
held liable under this subdivision.
    Subd. 6. Civil action to recover damages. In addition to the remedies otherwise provided
by law, any person injured by a violation of any of the provisions of this section, may bring a
civil action and recover damages, together with costs and disbursements, including costs of
investigation and reasonable attorney's fees, and receive other equitable relief as determined by
the court.
History: 1974 c 575 s 15; 1977 c 271 s 1,2; 1980 c 563 s 1; 1982 c 476 s 2; 1984 c 534 s 25;
1984 c 654 art 5 s 58; 1986 c 444; 1987 c 254 s 7; 1987 c 403 art 2 s 86,87; 1988 c 689 art 2 s
153; 1990 c 566 s 7; 1996 c 451 art 2 s 31

256B.36 SPECIAL PERSONAL ALLOWANCE FOR CERTAIN INDIVIDUALS.
In addition to the personal allowance established in section 256B.35, any disabled recipient
of medical assistance who is a resident of a nursing facility or intermediate care facility for the
developmentally disabled, shall also be permitted a special personal allowance drawn solely
from earnings from any employment under an individual plan of rehabilitation. This special
personal allowance shall consist of the sum of the following amounts, deducted from earnings in
the following order:
(1) $80 for the costs of meals and miscellaneous work expenses;
(2) Federal Insurance Contributions Act payments withheld from the person's earned income;
(3) actual employment related transportation expenses;
(4) other actual employment related expenses; and
(5) state and federal income taxes withheld from the person's earned income, if the person
cannot be claimed as exempt from federal income tax withholding.
The maximum special personal allowance from earnings is the sum of items (1) to (5).
History: 1974 c 575 s 16; 1985 c 21 s 56; 1986 c 444; 1992 c 513 art 7 s 83; 2005 c 56 s 1

256B.37 PRIVATE INSURANCE POLICIES, CAUSES OF ACTION.
    Subdivision 1. Subrogation. Upon furnishing medical assistance to any person who has
private accident or health care coverage, or receives or has a right to receive health or medical
care from any type of organization or entity, or has a cause of action arising out of an occurrence
that necessitated the payment of medical assistance, the state agency or the state agency's agent
shall be subrogated, to the extent of the cost of medical care furnished, to any rights the person
may have under the terms of the coverage, or against the organization or entity providing or liable
to provide health or medical care, or under the cause of action.
The right of subrogation created in this section includes all portions of the cause of action,
notwithstanding any settlement allocation or apportionment that purports to dispose of portions of
the cause of action not subject to subrogation.
    Subd. 2. Civil action for recovery. To recover under this section, the attorney general may
institute or join a civil action to enforce the subrogation rights of the commissioner established
under this section.
Any prepaid health plan providing services under sections 256B.69, 256D.03, subdivision
4 , paragraph (c), and 256L.12; children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; nursing homes under
the alternative payment demonstration project under section 256B.434; or the county-based
purchasing entity providing services under section 256B.692 may retain legal representation to
enforce the subrogation rights created under this section or, if no action has been brought, may
initiate and prosecute an independent action on their behalf against a person, firm, or corporation
that may be liable to the person to whom the care or payment was furnished.
    Subd. 3. Notice. The state agency must be given notice of monetary claims against a person,
firm, or corporation that may be liable in damages, or otherwise obligated to pay part or all of the
cost of medical care when the state agency has paid or become liable for the cost of care. Notice
must be given as follows:
(a) Applicants for medical assistance shall notify the state or local agency of any possible
claims when they submit the application. Recipients of medical assistance shall notify the state or
local agency of any possible claims when those claims arise.
(b) A person providing medical care services to a recipient of medical assistance shall
notify the state agency when the person has reason to believe that a third party may be liable for
payment of the cost of medical care.
(c) A person who is party to a claim upon which the state agency may be entitled to
subrogation under this section shall notify the state agency of its potential subrogation claim
before filing a claim, commencing an action, or negotiating a settlement. A person who is a party
to a claim includes the plaintiff, the defendants, and any other party to the cause of action.
Notice given to the local agency is not sufficient to meet the requirements of paragraphs
(b) and (c).
    Subd. 4. Recovery. Upon any judgment, award, or settlement of a cause of action, or any part
of it, upon which the state agency has a subrogation right, including compensation for liquidated,
unliquidated, or other damages, reasonable costs of collection, including attorney fees, must be
deducted first. The full amount of medical assistance paid to or on behalf of the person as a
result of the injury must be deducted next and paid to the state agency. The rest must be paid to
the medical assistance recipient or other plaintiff. The plaintiff, however, must receive at least
one-third of the net recovery after attorney fees and collection costs.
    Subd. 5. Private benefits to be used first. Private accident and health care coverage
including Medicare for medical services is primary coverage and must be exhausted before
medical assistance is paid for medical services including home health care, personal care assistant
services, hospice, or services covered under a Centers for Medicare and Medicaid Services
waiver. When a person who is otherwise eligible for medical assistance has private accident or
health care coverage, including Medicare or a prepaid health plan, the private health care benefits
available to the person must be used first and to the fullest extent.
    Subd. 5a. Supplemental payment by medical assistance. Medical assistance payment will
not be made when either covered charges are paid in full by a third party or the provider has an
agreement to accept payment for less than charges as payment in full. Payment for patients that
are simultaneously covered by medical assistance and a liable third party other than Medicare will
be determined as the lesser of clauses (1) to (3):
(1) the patient liability according to the provider/insurer agreement;
(2) covered charges minus the third party payment amount; or
(3) the medical assistance rate minus the third party payment amount.
A negative difference will not be implemented.
All providers must reduce their submitted charge to medical assistance programs to reflect
all discount amounts applied to the charge by any provider/insurer agreement or contract. The net
submitted charge may not be greater than the patient liability for the service.
    Subd. 6. Parent's or obligee's health plan. When a parent or a person with an obligation
of support has enrolled in a prepaid health care plan under section 518A.41, subdivision 1, the
commissioner of human services shall limit the recipient of medical assistance to the benefits
payable under that prepaid health care plan to the extent that services available under medical
assistance are also available under the prepaid health care plan.
History: 1975 c 247 s 7; 1987 c 370 art 2 s 9-14; 1987 c 403 art 3 s 26; 1Sp1993 c 1 art 5 s
87-89; 1996 c 451 art 2 s 32; 1997 c 217 art 2 s 8; 1999 c 245 art 4 s 66,68; 2002 c 277 s 24,32;
2004 c 228 art 1 s 75; 2005 c 164 s 29; 1Sp2005 c 7 s 28; 2006 c 280 s 46

256B.39 AVOIDANCE OF DUPLICATE PAYMENTS.
Billing statements forwarded to recipients of medical assistance by vendors seeking payment
for medical care rendered shall clearly state that reimbursement from the state agency is
contemplated.
History: 1975 c 247 s 8

256B.40 SUBSIDY FOR ABORTIONS PROHIBITED.
No medical assistance funds of this state or any agency, county, municipality or any other
subdivision thereof and no federal funds passing through the state treasury or the state agency
shall be authorized or paid pursuant to this chapter to any person or entity for or in connection
with any abortion that is not eligible for funding pursuant to sections 256B.02, subdivision 8,
and 256B.0625.
History: 1978 c 508 s 3; 1988 c 689 art 2 s 268

NURSING FACILITY RATES

256B.41 INTENT.
    Subdivision 1. Authority. The commissioner shall establish, by rule, procedures for
determining rates for care of residents of nursing facilities which qualify as vendors of medical
assistance, and for implementing the provisions of this section and sections 256B.421, 256B.431,
256B.432, 256B.433, 256B.47, 256B.48, 256B.50, and 256B.502. The procedures shall specify
the costs that are allowable for establishing payment rates through medical assistance.
    Subd. 2. Federal requirements. If any provision of this section and sections 256B.421,
256B.431, 256B.432, 256B.433, 256B.47, 256B.48, 256B.50, and 256B.502, is determined
by the United States government to be in conflict with existing or future requirements of the
United States government with respect to federal participation in medical assistance, the federal
requirements shall prevail.
    Subd. 3. Payment rates. Payment rates paid to any nursing facility receiving medical
assistance payments must be those rates established pursuant to this chapter and rules adopted
under it.
History: 1976 c 282 s 1; 1983 c 199 s 10; 1Sp1985 c 9 art 2 s 47; 1992 c 513 art 7 s
84,85,136; 1998 c 407 art 4 s 41

256B.411 COMPLIANCE WITH STATE STATUTES.
    Subdivision 1. Funding. Subject to exceptions in section 256B.25, subdivision 3, no nursing
facility may receive any state or local payment for providing care to a person eligible for medical
assistance, except under the medical assistance program.
    Subd. 2. Requirements. No medical assistance payments shall be made to any nursing
facility unless the nursing facility is certified to participate in the medical assistance program
under title XIX of the federal Social Security Act and has in effect a provider agreement with
the commissioner meeting the requirements of state and federal statutes and rules. No medical
assistance payments shall be made to any nursing facility unless the nursing facility complies
with all requirements of Minnesota Statutes including, but not limited to, this chapter and rules
adopted under it that govern participation in the program. This section applies whether the
nursing facility participates fully in the medical assistance program or is withdrawing from the
medical assistance program. No future payments may be made to any nursing facility which has
withdrawn or is withdrawing from the medical assistance program except as provided in section
256B.48, subdivision 1a, or federal law. Payments may also be made under a court order entered
on or before June 7, 1985, unless the court order is reversed on appeal.
History: 1Sp1985 c 9 art 2 s 48; 1992 c 513 art 7 s 136; 2000 c 449 s 2

256B.42 [Repealed, 1983 c 199 s 19]

256B.421 DEFINITIONS.
    Subdivision 1. Scope. For the purposes of this section and sections 256B.41, 256B.411,
256B.431, 256B.432, 256B.433, 256B.434, 256B.47, 256B.48, 256B.50, and 256B.502, the
following terms and phrases shall have the meaning given to them.
    Subd. 2. Actual allowable historical operating cost per diem. "Actual allowable historical
operating cost per diem" means the per diem operating costs allowed by the commissioner for the
most recent reporting year.
    Subd. 3. Commissioner. "Commissioner" means the commissioner of human services.
    Subd. 4. Final rate. "Final rate" means the rate established after any adjustment by the
commissioner, including but not limited to adjustments resulting from cost report reviews and
field audits.
    Subd. 5. General and administrative costs. "General and administrative costs" means
all allowable costs for administering the facility, including but not limited to: salaries of
administrators, assistant administrators, accounting personnel, data processing personnel, and
all clerical personnel; board of directors fees; business office functions and supplies; travel,
except as necessary for training programs for nursing personnel and dietitians required to
maintain licensure, certification, or professional standards requirements; telephone and telegraph;
advertising; membership dues and subscriptions; postage; insurance, except as included as a
fringe benefit under subdivision 14; professional services such as legal, accounting and data
processing services; central or home office costs; management fees; management consultants;
employee training, for any top management personnel and for other than direct resident care
related personnel; and business meetings and seminars.
    Subd. 6. Historical operating costs. "Historical operating costs" means the allowable
operating costs incurred by the facility during the reporting year immediately preceding the rate
year for which the payment rate becomes effective, after the commissioner has reviewed those
costs and determined them to be allowable costs under the medical assistance program, and after
the commissioner has applied appropriate limitations such as the limit on administrative costs.
    Subd. 7. Nursing facility. "Nursing facility" means a facility licensed under chapter 144A or
a boarding care facility licensed under sections 144.50 to 144.56.
    Subd. 8. Operating costs. "Operating costs" means the day-to-day costs of operating the
facility in compliance with licensure and certification standards. Operating cost categories
are: nursing, including nurses and nursing assistants training; dietary; laundry and linen;
housekeeping; plant operation and maintenance; other care-related services; medical directors;
licenses, other than license fees required by the Minnesota Department of Health; permits; general
and administration; payroll taxes; real estate taxes, license fees required by the Minnesota
Department of Health, and actual special assessments paid; and fringe benefits, including clerical
training; and travel necessary for training programs for nursing personnel and dietitians required
to maintain licensure, certification, or professional standards requirements.
    Subd. 9. Payment rate. "Payment rate" means the rate determined under section 256B.431.
    Subd. 10. Private paying resident. "Private paying resident" means a nursing facility
resident who is not a medical assistance recipient and whose payment rate is not established by
another third party, including the Veterans Administration or Medicare.
    Subd. 11. Rate year. "Rate year" means the fiscal year for which a payment rate determined
under section 256B.431 is effective, from July 1 to the next June 30.
    Subd. 12. Reporting year. "Reporting year" means the period from October 1 to September
30, immediately preceding the rate year, for which the nursing facility submits reports required
under section 256B.48, subdivision 2.
    Subd. 13. Actual resident day. "Actual resident day" means a billable, countable day as
defined by the commissioner.
    Subd. 14. Fringe benefits. "Fringe benefits" means workers' compensation insurance, group
health or dental insurance, group life insurance, retirement benefits or plans, except for Public
Employee Retirement Act contributions, and uniform allowances.
    Subd. 15. Payroll taxes. "Payroll taxes" means the employer's share of FICA taxes,
governmentally required retirement contributions, and state and federal unemployment insurance
taxes.
    Subd. 16. Capital assets. "Capital assets," for purposes of section 256B.431, subdivisions
13 to 21 , means a nursing facility's buildings, attached fixtures, land improvements, leasehold
improvements, and all additions to or replacements of those assets used directly for resident care.
History: 1983 c 199 s 11; 1984 c 641 s 14-16; 1984 c 654 art 5 s 58; 1985 c 267 s 2;
1Sp1985 c 3 s 26; 1Sp1985 c 9 art 2 s 49; 1987 c 403 art 2 s 88; 1989 c 282 art 3 s 65; 1992 c
513 art 7 s 86,87,136; 1997 c 203 art 3 s 6; 2004 c 206 s 52

256B.43 [Repealed, 1983 c 199 s 19]

256B.431 RATE DETERMINATION.
    Subdivision 1. In general. The commissioner shall determine prospective payment rates
for resident care costs. For rates established on or after July 1, 1985, the commissioner shall
develop procedures for determining operating cost payment rates that take into account the mix of
resident needs, geographic location, and other factors as determined by the commissioner. The
commissioner shall consider whether the fact that a facility is attached to a hospital or has an
average length of stay of 180 days or less should be taken into account in determining rates. The
commissioner shall consider the use of the standard metropolitan statistical areas when developing
groups by geographic location. The commissioner shall provide notice to each nursing facility
on or before May 1 of the rates effective for the following rate year except that if legislation is
pending on May 1 that may affect rates for nursing facilities, the commissioner shall set the rates
after the legislation is enacted and provide notice to each facility as soon as possible.
Compensation for top management personnel shall continue to be categorized as a general
and administrative cost and is subject to any limits imposed on that cost category.
    Subd. 2.[Repealed, 2000 c 449 s 15]
    Subd. 2a.[Repealed, 2000 c 449 s 15]
    Subd. 2b. Operating costs after July 1, 1985. (a) For rate years beginning on or after July
1, 1985, the commissioner shall establish procedures for determining per diem reimbursement
for operating costs.
(b) The commissioner shall contract with an econometric firm with recognized expertise
in and access to national economic change indices that can be applied to the appropriate cost
categories when determining the operating cost payment rate.
(c) The commissioner shall analyze and evaluate each nursing facility's cost report of
allowable operating costs incurred by the nursing facility during the reporting year immediately
preceding the rate year for which the payment rate becomes effective.
(d) The commissioner shall establish limits on actual allowable historical operating cost
per diems based on cost reports of allowable operating costs for the reporting year that begins
October 1, 1983, taking into consideration relevant factors including resident needs, geographic
location, and size of the nursing facility. In developing the geographic groups for purposes of
reimbursement under this section, the commissioner shall ensure that nursing facilities in any
county contiguous to the Minneapolis-St. Paul seven-county metropolitan area are included in
the same geographic group. The limits established by the commissioner shall not be less, in the
aggregate, than the 60th percentile of total actual allowable historical operating cost per diems for
each group of nursing facilities established under subdivision 1 based on cost reports of allowable
operating costs in the previous reporting year. For rate years beginning on or after July 1, 1989,
facilities located in geographic group I as described in Minnesota Rules, part 9549.0052, on
January 1, 1989, may choose to have the commissioner apply either the care related limits or the
other operating cost limits calculated for facilities located in geographic group II, or both, if either
of the limits calculated for the group II facilities is higher. The efficiency incentive for geographic
group I nursing facilities must be calculated based on geographic group I limits. The phase-in
must be established utilizing the chosen limits. For purposes of these exceptions to the geographic
grouping requirements, the definitions in Minnesota Rules, parts 9549.0050 to 9549.0059
(Emergency), and 9549.0010 to 9549.0080, apply. The limits established under this paragraph
remain in effect until the commissioner establishes a new base period. Until the new base period
is established, the commissioner shall adjust the limits annually using the appropriate economic
change indices established in paragraph (e). In determining allowable historical operating cost per
diems for purposes of setting limits and nursing facility payment rates, the commissioner shall
divide the allowable historical operating costs by the actual number of resident days, except
that where a nursing facility is occupied at less than 90 percent of licensed capacity days, the
commissioner may establish procedures to adjust the computation of the per diem to an imputed
occupancy level at or below 90 percent. The commissioner shall establish efficiency incentives as
appropriate. The commissioner may establish efficiency incentives for different operating cost
categories. The commissioner shall consider establishing efficiency incentives in care related cost
categories. The commissioner may combine one or more operating cost categories and may use
different methods for calculating payment rates for each operating cost category or combination
of operating cost categories. For the rate year beginning on July 1, 1985, the commissioner shall:
(1) allow nursing facilities that have an average length of stay of 180 days or less in their
skilled nursing level of care, 125 percent of the care related limit and 105 percent of the other
operating cost limit established by rule; and
(2) exempt nursing facilities licensed on July 1, 1983, by the commissioner to provide
residential services for the physically disabled under Minnesota Rules, parts 9570.2000 to
9570.3600, from the care related limits and allow 105 percent of the other operating cost limit
established by rule.
For the purpose of calculating the other operating cost efficiency incentive for nursing
facilities referred to in clause (1) or (2), the commissioner shall use the other operating cost limit
established by rule before application of the 105 percent.
(e) The commissioner shall establish a composite index or indices by determining the
appropriate economic change indicators to be applied to specific operating cost categories or
combination of operating cost categories.
(f) Each nursing facility shall receive an operating cost payment rate equal to the sum of the
nursing facility's operating cost payment rates for each operating cost category. The operating cost
payment rate for an operating cost category shall be the lesser of the nursing facility's historical
operating cost in the category increased by the appropriate index established in paragraph (e) for
the operating cost category plus an efficiency incentive established pursuant to paragraph (d) or
the limit for the operating cost category increased by the same index. If a nursing facility's actual
historic operating costs are greater than the prospective payment rate for that rate year, there
shall be no retroactive cost settle-up. In establishing payment rates for one or more operating
cost categories, the commissioner may establish separate rates for different classes of residents
based on their relative care needs.
(g) The commissioner shall include the reported actual real estate tax liability or payments
in lieu of real estate tax of each nursing facility as an operating cost of that nursing facility.
Allowable costs under this subdivision for payments made by a nonprofit nursing facility that
are in lieu of real estate taxes shall not exceed the amount which the nursing facility would have
paid to a city or township and county for fire, police, sanitation services, and road maintenance
costs had real estate taxes been levied on that property for those purposes. For rate years
beginning on or after July 1, 1987, the reported actual real estate tax liability or payments in lieu
of real estate tax of nursing facilities shall be adjusted to include an amount equal to one-half
of the dollar change in real estate taxes from the prior year. The commissioner shall include a
reported actual special assessment, and reported actual license fees required by the Minnesota
Department of Health, for each nursing facility as an operating cost of that nursing facility. For
rate years beginning on or after July 1, 1989, the commissioner shall include a nursing facility's
reported Public Employee Retirement Act contribution for the reporting year as apportioned to
the care-related operating cost categories and other operating cost categories multiplied by the
appropriate composite index or indices established pursuant to paragraph (e) as costs under this
paragraph. Total adjusted real estate tax liability, payments in lieu of real estate tax, actual special
assessments paid, the indexed Public Employee Retirement Act contribution, and license fees paid
as required by the Minnesota Department of Health, for each nursing facility (1) shall be divided
by actual resident days in order to compute the operating cost payment rate for this operating cost
category, (2) shall not be used to compute the care-related operating cost limits or other operating
cost limits established by the commissioner, and (3) shall not be increased by the composite index
or indices established pursuant to paragraph (e), unless otherwise indicated in this paragraph.
(h) For rate years beginning on or after July 1, 1987, the commissioner shall adjust the rates
of a nursing facility that meets the criteria for the special dietary needs of its residents and the
requirements in section 31.651. The adjustment for raw food cost shall be the difference between
the nursing facility's allowable historical raw food cost per diem and 115 percent of the median
historical allowable raw food cost per diem of the corresponding geographic group.
The rate adjustment shall be reduced by the applicable phase-in percentage as provided
under subdivision 2h.
    Subd. 2c. Operating costs after July 1, 1986. For rate years beginning on or after July 1,
1986, the commissioner may allow a one time adjustment to historical operating costs of a nursing
facility that has been found by the commissioner of health to be significantly below care related
minimum standards appropriate to the mix of resident needs in that nursing facility when it is
determined by the commissioners of health and human services that the nursing facility is unable
to meet minimum standards through reallocation of nursing facility costs and efficiency incentives
or allowances. In developing procedures to allow adjustments, the commissioner shall specify the
terms and conditions governing any additional payments made to a nursing facility as a result of
the adjustment. The commissioner shall establish procedures to recover amounts paid under this
subdivision, in whole or in part, and to adjust current and future rates, for nursing facilities that
fail to use the adjustment to satisfy care related minimum standards.
    Subd. 2d. Cost report or audit. If an annual cost report or field audit indicates that
expenditures for direct resident care have been reduced in amounts large enough to indicate a
possible detrimental effect on the quality of care, the commissioner shall notify the commissioner
of health and the interagency long-term care planning committee. If a field audit reveals that
unallowable expenditures have been included in the nursing facility's historical operating costs,
the commissioner shall disallow the expenditures and recover the entire overpayment. The
commissioner shall establish, by rule, procedures for assessing an interest charge at the rate
determined for unpaid taxes or penalties under section 270C.40 on any outstanding balance
resulting from an overpayment or underpayment.
    Subd. 2e. Contracts for services for ventilator-dependent persons. The commissioner
may negotiate with a nursing facility eligible to receive medical assistance payments to provide
services to a ventilator-dependent person identified by the commissioner according to criteria
developed by the commissioner, including:
(1) nursing facility care has been recommended for the person by a preadmission screening
team;
(2) the person has been hospitalized and no longer requires inpatient acute care hospital
services; and
(3) the commissioner has determined that necessary services for the person cannot be
provided under existing nursing facility rates.
The commissioner may negotiate an adjustment to the operating cost payment rate for
a nursing facility with a resident who is ventilator-dependent, for that resident. The negotiated
adjustment must reflect only the actual additional cost of meeting the specialized care needs of a
ventilator-dependent person identified by the commissioner for whom necessary services cannot
be provided under existing nursing facility rates and which are not otherwise covered under
Minnesota Rules, parts 9549.0010 to 9549.0080 or 9505.0170 to 9505.0475. For persons who
are initially admitted to a nursing facility before July 1, 2001, and have their payment rate under
this subdivision negotiated after July 1, 2001, the negotiated payment rate must not exceed 200
percent of the highest multiple bedroom payment rate for the facility, as initially established by
the commissioner for the rate year for case mix classification K; or, upon implementation of
the RUG's-based case mix system, 200 percent of the highest RUG's rate. For persons initially
admitted to a nursing facility on or after July 1, 2001, the negotiated payment rate must not exceed
300 percent of the facility's multiple bedroom payment rate for case mix classification K; or, upon
implementation of the RUG's-based case mix system, 300 percent of the highest RUG's rate. The
negotiated adjustment shall not affect the payment rate charged to private paying residents under
the provisions of section 256B.48, subdivision 1.
    Subd. 2f.[Repealed, 2000 c 449 s 15]
    Subd. 2g. Required consultants. Costs considered general and administrative costs under
section 256B.421 must be included in general and administrative costs in total, without direct
or indirect allocation to other cost categories. In a nursing facility of 60 or fewer beds, part
of an administrator's salary may be allocated to other cost categories to the extent justified in
records kept by the nursing facility. Central or home office costs representing services of required
consultants in areas including, but not limited to, dietary, pharmacy, social services, or activities
may be allocated to the appropriate department, but only if those costs are directly identified
by the nursing facility. Central, affiliated, or corporate office costs representing services of
consultants not required by law in the areas of nursing, quality assurance, medical records, dietary,
other care related services, and plant operations may be allocated to the appropriate operating cost
category of a nursing facility according to paragraphs (a) to (e).
(a) Only the salaries, fringe benefits, and payroll taxes associated with the individual
performing the service may be allocated. No other costs may be allocated.
(b) The allocation must be based on direct identification and only to the extent justified in
time distribution records that show the actual time spent by the consultant performing the services
in the nursing facility.
(c) The cost in paragraph (a) for each consultant must not be allocated to more than one
operating cost category in the nursing facility. If more than one nursing facility is served by a
consultant, all nursing facilities shall allocate the consultant's cost to the same operating category.
(d) Top management personnel must not be considered consultants.
(e) The consultant's full-time responsibilities shall be to provide the services identified in
this item.
    Subd. 2h.[Repealed, 2000 c 449 s 15]
    Subd. 2i. Operating costs after July 1, 1988. (a) Other operating cost limits.For rate
years beginning on or after July 1, 1989, the adjusted other operating cost limits must be indexed
as in Minnesota Rules, part 9549.0056, subparts 3 and 4. For the rate period beginning October 1,
1992, and for rate years beginning after June 30, 1993, the amount of the surcharge under section
256.9657, subdivision 1, shall be included in the plant operations and maintenance operating cost
category. The surcharge shall be an allowable cost for the purpose of establishing the payment rate.
(b) Care-related operating cost limits. For rate years beginning on or after July 1, 1989, the
adjusted care-related limits must be indexed as in Minnesota Rules, part 9549.0056, subparts 1
and 2.
(c) Salary adjustment per diem. Effective July 1, 1998, to June 30, 2000, the commissioner
shall make available the salary adjustment per diem calculated in clause (1) or (2) to the total
operating cost payment rate of each nursing facility reimbursed under this section or section
256B.434. The salary adjustment per diem for each nursing facility must be determined as follows:
(1) For each nursing facility that reports salaries for registered nurses, licensed practical
nurses, and aides, orderlies and attendants separately, the commissioner shall determine the
salary adjustment per diem by multiplying the total salaries, payroll taxes, and fringe benefits
allowed in each operating cost category, except management fees and administrator and central
office salaries and the related payroll taxes and fringe benefits, by 3.0 percent and then dividing
the resulting amount by the nursing facility's actual resident days.
(2) For each nursing facility that does not report salaries for registered nurses, licensed
practical nurses, aides, orderlies, and attendants separately, the salary adjustment per diem is the
weighted average salary adjustment per diem increase determined under clause (1).
(3) A nursing facility may apply for the salary adjustment per diem calculated under clauses
(1) and (2). The application must be made to the commissioner and contain a plan by which the
nursing facility will distribute the salary adjustment to employees of the nursing facility. In order
to apply for a salary adjustment, a nursing facility reimbursed under section 256B.434, must
report the information required by clause (1) or (2) in the application, in the manner specified by
the commissioner. For nursing facilities in which the employees are represented by an exclusive
bargaining representative, an agreement negotiated and agreed to by the employer and the
exclusive bargaining representative, after July 1, 1998, may constitute the plan for the salary
distribution. The commissioner shall review the plan to ensure that the salary adjustment per diem
is used solely to increase the compensation of nursing home facility employees. To be eligible, a
facility must submit its plan for the salary distribution by December 31, 1998. If a facility's plan
for salary distribution is effective for its employees after July 1, 1998, the salary adjustment cost
per diem shall be effective the same date as its plan.
(4) Additional costs incurred by nursing facilities as a result of this salary adjustment are not
allowable costs for purposes of the September 30, 1998, cost report.
(d) New base year. The commissioner shall establish a new base year for the reporting
years ending September 30, 1991, and September 30, 1992. In establishing a new base year, the
commissioner must take into account:
(1) statutory changes made in geographic groups;
(2) redefinitions of cost categories; and
(3) reclassification, pass-through, or exemption of certain costs.
    Subd. 2j. Hospital-attached nursing facility status. (a) For the purpose of setting rates
under Minnesota Rules, parts 9549.0010 to 9549.0080, for rate years beginning after June 30,
1989, a hospital-attached nursing facility means a nursing facility which meets the requirements
of clauses (1) to (3):
(1) the nursing facility is recognized by the federal Medicare program to be a hospital-based
nursing facility for purposes of being subject to higher cost limits accorded hospital-based
nursing facilities under the Medicare program, or, prior to June 30, 1983, was classified as a
hospital-attached nursing facility under Minnesota Rules, parts 9510.0010 to 9510.0480;
(2) the nursing facility's cost report filed under Minnesota Rules, parts 9549.0010 to
9549.0080, shall use the same cost allocation principles and methods used in the reports filed
for the Medicare program except as provided in clause (3); and
(3) direct identification of costs to the nursing facility cost center will be permitted only
when the comparable hospital costs have also been directly identified to a cost center which is
not allocated to the nursing facility.
(b) For rate years beginning after June 30, 1989, a nursing facility and hospital, which have
applied for hospital-based nursing facility status under the federal Medicare program during the
reporting year or the nine-month period following the nursing facility's reporting year, shall
be considered a hospital-attached nursing facility for purposes of setting payment rates under
Minnesota Rules, parts 9549.0010 to 9549.0080, for the rate year following the reporting year or
the nine-month period in which the facility made its Medicare application. The nursing facility
must file its cost report or an amended cost report for that reporting year before the following rate
year using Medicare principles and Medicare's recommended cost allocation methods had the
Medicare program's hospital-based nursing facility status been granted to the nursing facility. For
each subsequent rate year, the nursing facility must meet the definition requirements in paragraph
(a). If the nursing facility is denied hospital-based nursing facility status under the Medicare
program, the nursing facility's payment rates for the rate years the nursing facility was considered
to be a hospital-attached nursing facility pursuant to this paragraph shall be recalculated treating
the nursing facility as a non-hospital-attached nursing facility.
(c) For rate years beginning on or after July 1, 1995, a nursing facility shall be considered a
hospital attached nursing facility for purposes of setting payment rates under Minnesota Rules,
parts 9549.0010 to 9549.0080 and this section if it meets the requirements of paragraphs (a)
and (b), and
(1) the hospital and nursing facility are physically attached or connected by a tunnel or
skyway; or
(2) the nursing facility was recognized by the Medicare program as hospital attached as of
January 1, 1995, and this status has been maintained continuously.
    Subd. 2k. Operating costs after July 1, 1989. For rate years beginning on or after July 1,
1989, a nursing facility that is exempt under subdivision 2b, paragraph (d), clause (2); whose
total number of licensed beds are licensed under Minnesota Rules, parts 9570.2000 to 9570.3600;
and that maintains an average length of stay of less than 365 days during each reporting year, is
limited to 140 percent of the other-operating-cost limit for hospital-attached nursing facilities
as established by Minnesota Rules, part 9549.0055, subpart 2, item E, subitem (2), as modified
by subdivision 2i, paragraph (a). For purposes of this subdivision, the nursing facility's average
length of stay must be computed by dividing the nursing facility's actual resident days for the
reporting year by the nursing facility's total discharges for that reporting year.
    Subd. 2l. Inflation adjustments after July 1, 1990. (a) For rate years beginning on or after
July 1, 1990, the forecasted composite price index for a nursing facility's allowable operating
cost per diems shall be determined using Data Resources, Inc., forecast for change in the Nursing
Home Market Basket. The commissioner of human services shall use the indices as forecasted by
Data Resources, Inc., in the fourth quarter of the calendar year preceding the rate year.
(b) For rate years beginning on or after July 1, 1992, the commissioner shall index the
prior year's operating cost limits by the percentage change in the Data Resources, Inc., Nursing
Home Market Basket between the midpoint of the current reporting year and the midpoint of the
previous reporting year. The commissioner shall use the indices as forecasted by Data Resources,
Inc., in the fourth quarter of the calendar year preceding the rate year.
(c) For rate years beginning on or after July 1, 1993, the commissioner shall not provide
automatic annual inflation adjustments for nursing facilities. The commissioner of finance shall
include annual adjustments in operating costs for nursing facilities as a budget change request in
each biennial detailed expenditure budget submitted to the legislature under section 16A.11.
    Subd. 2m.[Repealed, 2000 c 449 s 15]
    Subd. 2n. Efficiency incentive reductions for substandard care. For rate years beginning
on or after July 1, 1991, the efficiency incentive established under subdivision 2b, paragraph (d),
shall be reduced or eliminated for nursing facilities determined by the commissioner of health
under section 144A.10, subdivision 4, to have uncorrected or repeated violations which create a
risk to resident care, safety, or rights, except for uncorrected or repeated violations relating to a
facility's physical plant. Upon being notified by the commissioner of health of uncorrected or
repeated violations, the commissioner of human services shall require the nursing facility to use
efficiency incentive payments to correct the violations. The commissioner of human services shall
require the nursing facility to forfeit efficiency incentive payments for failure to correct the
violations. Any forfeiture shall be limited to the amount necessary to correct the violation.
    Subd. 2o. Special payment rates for short-stay nursing facilities. Notwithstanding
contrary provisions of this section and rules adopted by the commissioner, for the rate years
beginning on or after July 1, 1993, a nursing facility whose average length of stay for the
preceding reporting year is (1) less than 180 days; or (2) less than 225 days in a nursing facility
with more than 315 licensed beds must be reimbursed for allowable costs up to 125 percent of
the total care-related limit and 105 percent of the other-operating-cost limit for hospital-attached
nursing facilities. A nursing facility that received the benefit of this limit during the rate year
beginning July 1, 1992, continues to receive this rate during the rate year beginning July 1, 1993,
even if the facility's average length of stay is more than 180 days in the rate years subsequent
to the rate year beginning July 1, 1991. For purposes of this subdivision, a nursing facility shall
compute its average length of stay by dividing the nursing facility's actual resident days for the
reporting year by the nursing facility's total resident discharges for that reporting year.
    Subd. 2p.[Repealed, 2000 c 449 s 15]
    Subd. 2q.[Repealed, 2000 c 449 s 15]
    Subd. 2r. Payment restrictions on leave days. Effective July 1, 1993, the commissioner
shall limit payment for leave days in a nursing facility to 79 percent of that nursing facility's
total payment rate for the involved resident. For services rendered on or after July 1, 2003, for
facilities reimbursed under this section or section 256B.434, the commissioner shall limit payment
for leave days in a nursing facility to 60 percent of that nursing facility's total payment rate
for the involved resident.
    Subd. 2s. Nonallowable cost. Costs incurred for any activities which are directed at or are
intended to influence or dissuade employees in the exercise of their legal rights to freely engage in
the process of selecting an exclusive representative for the purpose of collective bargaining with
their employer shall not be allowable for purposes of setting payment rates.
    Subd. 2t. Payment limitation. For services rendered on or after July 1, 2003, for facilities
reimbursed under this section or section 256B.434, the Medicaid program shall only pay a
co-payment during a Medicare-covered skilled nursing facility stay if the Medicare rate less
the resident's co-payment responsibility is less than the Medicaid RUG-III case-mix payment
rate. The amount that shall be paid by the Medicaid program is equal to the amount by which
the Medicaid RUG-III case-mix payment rate exceeds the Medicare rate less the co-payment
responsibility. Health plans paying for nursing home services under section 256B.69, subdivision
6a , may limit payments as allowed under this subdivision.
    Subd. 3.[Repealed, 2000 c 449 s 15]
    Subd. 3a. Property-related costs after July 1, 1985. (a) For rate years beginning on or after
July 1, 1985, the commissioner, by permanent rule, shall reimburse nursing facility providers that
are vendors in the medical assistance program for the rental use of real estate and depreciable
equipment. "Real estate" means land improvements, buildings, and attached fixtures used directly
for resident care. "Depreciable equipment" means the standard movable resident care equipment
and support service equipment generally used in long-term care facilities.
(b) In developing the method for determining payment rates for the rental use of nursing
facilities, the commissioner shall consider factors designed to:
(1) simplify the administrative procedures for determining payment rates for property-related
costs;
(2) minimize discretionary or appealable decisions;
(3) eliminate any incentives to sell nursing facilities;
(4) recognize legitimate costs of preserving and replacing property;
(5) recognize the existing costs of outstanding indebtedness allowable under the statutes
and rules in effect on May 1, 1983;
(6) address the current value of, if used directly for patient care, land improvements,
buildings, attached fixtures, and equipment;
(7) establish an investment per bed limitation;
(8) reward efficient management of capital assets;
(9) provide equitable treatment of facilities;
(10) consider a variable rate; and
(11) phase-in implementation of the rental reimbursement method.
(c) For rate years beginning on or after July 1, 1987, a nursing facility which has reduced
licensed bed capacity after January 1, 1986, shall be allowed to:
(1) aggregate the applicable investment per bed limits based on the number of beds licensed
prior to the reduction; and
(2) establish capacity days for each rate year following the licensure reduction based on the
number of beds licensed on the previous April 1 if the commissioner is notified of the change by
April 4. The notification must include a copy of the delicensure request that has been submitted to
the commissioner of health.
(d) For rate years beginning on or after July 1, 1989, the interest expense that results from a
refinancing of a nursing facility's demand call loan, when the loan that must be refinanced was
incurred before May 22, 1983, is an allowable interest expense if:
(1) the demand call loan or any part of it was in the form of a loan that was callable at
the demand of the lender;
(2) the demand call loan or any part of it was called by the lender through no fault of the
nursing facility;
(3) the demand call loan or any part of it was made by a government agency operating
under a statutory or regulatory loan program;
(4) the refinanced debt does not exceed the sum of the allowable remaining balance of the
demand call loan at the time of payment on the demand call loan and refinancing costs;
(5) the term of the refinanced debt does not exceed the remaining term of the demand call
loan, had the debt not been subject to an on-call payment demand; and
(6) the refinanced debt is not a debt between related organizations as defined in Minnesota
Rules, part 9549.0020, subpart 38.
    Subd. 3b.[Repealed, 2000 c 449 s 15]
    Subd. 3c. Plant and maintenance costs. For the rate years beginning on or after July 1,
1987, the commissioner shall allow as an expense in the reporting year of occurrence the lesser
of the actual allowable plant and maintenance costs for supplies, minor equipment, equipment
repairs, building repairs, purchased services and service contracts, except for arm's-length service
contracts whose primary purpose is supervision, or $325 per licensed bed.
    Subd. 3d.[Repealed, 2000 c 449 s 15]
    Subd. 3e. Hospital-attached convalescent and nursing care facilities. If a nonprofit
or community-operated hospital and attached convalescent and nursing care facility suspend
operation of the hospital, the surviving nursing care facility must be allowed to continue its status
as a hospital-attached convalescent and nursing care facility for reimbursement purposes in five
subsequent rate years. In the fourth year the facility shall receive 60 percent of the difference
between the hospital-attached limit and the freestanding nursing facility limit, and in the fifth year
the facility shall receive 30 percent of the difference.
    Subd. 3f. Property costs after July 1, 1988. (a) Investment per bed limit. For the rate year
beginning July 1, 1988, the replacement-cost-new per bed limit must be $32,571 per licensed
bed in multiple bedrooms and $48,857 per licensed bed in a single bedroom. For the rate year
beginning July 1, 1989, the replacement-cost-new per bed limit for a single bedroom must be
$49,907 adjusted according to Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1).
Beginning January 1, 1990, the replacement-cost-new per bed limits must be adjusted annually
as specified in Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1). Beginning
January 1, 1991, the replacement-cost-new per bed limits will be adjusted annually as specified in
Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1), except that the index utilized
will be the Bureau of the Census: Composite fixed-weighted price index as published in the C30
Report, Value of New Construction Put in Place.
(b) Rental factor. For the rate year beginning July 1, 1988, the commissioner shall increase
the rental factor as established in Minnesota Rules, part 9549.0060, subpart 8, item A, by 6.2
percent rounded to the nearest 100th percent for the purpose of reimbursing nursing facilities for
soft costs and entrepreneurial profits not included in the cost valuation services used by the state's
contracted appraisers. For rate years beginning on or after July 1, 1989, the rental factor is the
amount determined under this paragraph for the rate year beginning July 1, 1988.
(c) Occupancy factor. For rate years beginning on or after July 1, 1988, in order to
determine property-related payment rates under Minnesota Rules, part 9549.0060, for all nursing
facilities except those whose average length of stay in a skilled level of care within a nursing
facility is 180 days or less, the commissioner shall use 95 percent of capacity days. For a nursing
facility whose average length of stay in a skilled level of care within a nursing facility is 180 days
or less, the commissioner shall use the greater of resident days or 80 percent of capacity days but
in no event shall the divisor exceed 95 percent of capacity days.
(d) Equipment allowance. For rate years beginning on July 1, 1988, and July 1, 1989, the
commissioner shall add ten cents per resident per day to each nursing facility's property-related
payment rate. The ten-cent property-related payment rate increase is not cumulative from rate
year to rate year. For the rate year beginning July 1, 1990, the commissioner shall increase each
nursing facility's equipment allowance as established in Minnesota Rules, part 9549.0060,
subpart 10, by ten cents per resident per day. For rate years beginning on or after July 1, 1991,
the adjusted equipment allowance must be adjusted annually for inflation as in Minnesota Rules,
part 9549.0060, subpart 10, item E. For the rate period beginning October 1, 1992, the equipment
allowance for each nursing facility shall be increased by 28 percent. For rate years beginning after
June 30, 1993, the allowance must be adjusted annually for inflation.
(e) Post chapter 199 related-organization debts and interest expense. For rate years
beginning on or after July 1, 1990, Minnesota Rules, part 9549.0060, subpart 5, item E, shall not
apply to outstanding related organization debt incurred prior to May 23, 1983, provided that the
debt was an allowable debt under Minnesota Rules, parts 9510.0010 to 9510.0480, the debt is
subject to repayment through annual principal payments, and the nursing facility demonstrates
to the commissioner's satisfaction that the interest rate on the debt was less than market interest
rates for similar arm's-length transactions at the time the debt was incurred. If the debt was
incurred due to a sale between family members, the nursing facility must also demonstrate that
the seller no longer participates in the management or operation of the nursing facility. Debts
meeting the conditions of this paragraph are subject to all other provisions of Minnesota Rules,
parts 9549.0010 to 9549.0080.
(f) Building capital allowance for nursing facilities with operating leases. For rate years
beginning on or after July 1, 1990, a nursing facility with operating lease costs incurred for the
nursing facility's buildings shall receive its building capital allowance computed in accordance
with Minnesota Rules, part 9549.0060, subpart 8. If an operating lease provides that the lessee's
rent is adjusted to recognize improvements made by the lessor and related debt, the costs for
capital improvements and related debt shall be allowed in the computation of the lessee's building
capital allowance, provided that reimbursement for these costs under an operating lease shall
not exceed the rate otherwise paid.
    Subd. 3g. Property costs after July 1, 1990, for certain facilities. (a) For rate years
beginning on or after July 1, 1990, nursing facilities that, on or after January 1, 1976, but prior to
January 1, 1987, were newly licensed after new construction, or increased their licensed beds
by a minimum of 35 percent through new construction, and whose building capital allowance is
less than their allowable annual principal and interest on allowable debt prior to the application
of the replacement-cost-new per bed limit and whose remaining weighted average debt
amortization schedule as of January 1, 1988, exceeded 15 years, must receive a property-related
payment rate equal to the greater of their rental per diem or their annual allowable principal and
allowable interest without application of the replacement-cost-new per bed limit, divided by their
capacity days as determined under Minnesota Rules, part 9549.0060, subpart 11, as modified by
subdivision 3f, paragraph (c), for the preceding reporting year, plus their equipment allowance.
A nursing facility that is eligible for a property-related payment rate under this subdivision and
whose property-related payment rate in a subsequent rate year is its rental per diem must continue
to have its property-related payment rates established for all future rate years based on the rental
reimbursement method in Minnesota Rules, part 9549.0060.
The commissioner may require the nursing facility to apply for refinancing as a condition of
receiving special rate treatment under this subdivision.
(b) If a nursing facility is eligible for a property-related payment rate under this subdivision,
and the nursing facility's debt is refinanced after October 1, 1988, the provisions in paragraphs
(1) to (7) also apply to the property-related payment rate for rate years beginning on or after
July 1, 1990.
(1) A nursing facility's refinancing must not include debts with balloon payments.
(2) If the issuance costs, including issuance costs on the debt refinanced, are financed as part
of the refinancing, the historical cost of capital assets limit in Minnesota Rules, part 9549.0060,
subpart 5, item A, subitem (6), includes issuance costs that do not exceed seven percent of the
debt refinanced, plus the related issuance costs. For purposes of this paragraph, issuance costs
means the fees charged by the underwriter, issuer, attorneys, bond raters, appraisers, and trustees,
and includes the cost of printing, title insurance, registration tax, and a feasibility study for the
refinancing of a nursing facility's debt. Issuance costs do not include bond premiums or discounts
when bonds are sold at other than their par value, points, or a bond reserve fund. To the extent
otherwise allowed under this paragraph, the straight-line amortization of the refinancing issuance
costs is not an allowable cost.
(3) The annual principal and interest expense payments and any required annual municipal
fees on the nursing facility's refinancing replace those of the refinanced debt and, together with
annual principal and interest payments on other allowable debts, are allowable costs subject to the
limitation on historical cost of capital assets plus issuance costs as limited in paragraph (2), if any.
(4) If the nursing facility's refinancing includes zero coupon bonds, the commissioner shall
establish a monthly debt service payment schedule based on an annuity that will produce an
amount equal to the zero coupon bonds at maturity. The term and interest rate is the term and
interest rate of the zero coupon bonds. Any refinancing to repay the zero coupon bonds is not an
allowable cost.
(5) The annual amount of annuity payments is added to the nursing facility's allowable
annual principal and interest payment computed in paragraph (3).
(6) The property-related payment rate is equal to the amount in paragraph (5), divided
by the nursing facility's capacity days as determined under Minnesota Rules, part 9549.0060,
subpart 11, as modified by subdivision 3f, paragraph (c), for the preceding reporting year plus an
equipment allowance.
(7) Except as provided in this subdivision, the provisions of Minnesota Rules, part 9549.0060
apply.
    Subd. 3h.[Repealed, 2000 c 449 s 15]
    Subd. 3i. Property costs for the rate year beginning July 1, 1990. Notwithstanding
Minnesota Rules, part 9549.0060, subpart 13, item H, the commissioner shall determine
property-related payment rates for nursing facilities for the rate year beginning July 1, 1990,
as follows:
(a) The property-related payment rate for a nursing facility that qualifies under subdivision
3g is the greater of the rate determined under that subdivision or the rate determined under
paragraph (c), (d), or (e), whichever is applicable.
(b) Nursing facilities shall be grouped according to the type of property-related payment rate
the commissioner determined for the rate year beginning July 1, 1989. A nursing facility whose
property-related payment rate was determined under Minnesota Rules, part 9549.0060, subpart
13, item A (full rental reimbursement), shall be considered group A. A nursing facility whose
property-related payment rate was determined under Minnesota Rules, part 9549.0060, subpart 13,
item B (phase-down to full rental reimbursement), shall be considered group B. A nursing facility
whose property-related payment rate was determined under Minnesota Rules, part 9549.0060,
subpart 13, item C or D (phase-up to full rental reimbursement), shall be considered group C.
(c) For the rate year beginning July 1, 1990, a group A nursing facility shall receive its
property-related payment rate determined under Minnesota Rules, parts 9549.0010 to 9549.0080,
and this section.
(d) For the rate year beginning July 1, 1990, a Group B nursing facility shall receive the
greater of 87 percent of the property-related payment rate in effect on July 1, 1989; or the
rental per diem rate determined under Minnesota Rules, parts 9549.0010 to 9549.0080, and this
section in effect on July 1, 1990; or the sum of 100 percent of the nursing facility's allowable
principal and interest expense, plus its equipment allowance multiplied by the resident days for
the reporting year ending September 30, 1989, divided by the nursing facility's capacity days as
determined under Minnesota Rules, part 9549.0060, subpart 11, as modified by subdivision 3f,
paragraph (c); except that the nursing facility's property-related payment rate must not exceed its
property-related payment rate in effect on July 1, 1989.
(e) For the rate year beginning July 1, 1990, a group C nursing facility shall receive its
property-related payment rate determined under Minnesota Rules, parts 9549.0010 to 9549.0080,
and this section, except the rate must not exceed the lesser of its property-related payment rate
determined for the rate year beginning July 1, 1989, multiplied by 116 percent or its rental per
diem rate determined effective July 1, 1990.
(f) The property-related payment rate for a nursing facility that qualifies for a rate adjustment
under Minnesota Rules, part 9549.0060, subpart 13, item G (special reappraisals), shall have
the property-related payment rate determined in paragraphs (a) to (e) adjusted according to the
provisions in that rule.
(g) Except as provided in subdivision 4, paragraph (f), and subdivision 11, a nursing facility
that has a change in ownership or a reorganization of provider entity is subject to the provisions of
Minnesota Rules, part 9549.0060, subpart 13, item F.
    Subd. 3j.[Repealed, 2000 c 449 s 15]
    Subd. 4.[Repealed, 2000 c 449 s 15]
    Subd. 5.[Repealed, 2000 c 449 s 15]
    Subd. 6.[Repealed, 1991 c 292 art 7 s 26]
    Subd. 7.[Repealed, 2000 c 449 s 15]
    Subd. 8.[Repealed, 2000 c 449 s 15]
    Subd. 9.[Repealed, 2000 c 449 s 15]
    Subd. 9a.[Repealed, 2000 c 449 s 15]
    Subd. 10. Property rate adjustments and construction projects. A nursing facility's
request for a property-related payment rate adjustment and the related supporting documentation
of project construction cost information must be submitted to the commissioner within 60 days
after the construction project's completion date to be considered eligible for a property-related
payment rate adjustment. The commissioner shall provide a rate notice reflecting the allowable
costs within 60 days after receiving all the necessary information to compute the rate adjustment.
No sooner than the effective date of the rate adjustment for the building project, a nursing facility
may adjust its rates by the amount anticipated to be allowed. Any amounts collected from private
pay residents in excess of the allowable rate must be repaid to private pay residents with interest
at the rate used by the commissioner of revenue for the late payment of taxes and in effect on the
date the rate increase is effective. Construction projects with completion dates within one year
of the completion date associated with the property rate adjustment request and phased projects
with project completion dates within three years of the last phase of the phased project must be
aggregated for purposes of the minimum thresholds in subdivisions 16 and 17, and the maximum
threshold in section 144A.071, subdivision 2. "Construction project" and "project construction
costs" have the meanings given them in Minnesota Statutes, section 144A.071, subdivision 1a.
    Subd. 11. Special property rate setting procedures for certain nursing facilities. (a)
Notwithstanding Minnesota Rules, part 9549.0060, subpart 13, item H, to the contrary, for the
rate year beginning July 1, 1990, a nursing facility leased prior to January 1, 1986, and currently
subject to adverse licensure action under section 144A.04, subdivision 4, paragraph (a), or section
144A.11, subdivision 2, and whose ownership changes prior to July 1, 1990, shall be allowed a
property-related payment equal to the lesser of its current lease obligation divided by its capacity
days as determined in Minnesota Rules, part 9549.0060, subpart 11, as modified by subdivision
3f, paragraph (c), or the frozen property-related payment rate in effect for the rate year beginning
July 1, 1989. For rate years beginning on or after July 1, 1991, the property-related payment rate
shall be its rental rate computed using the previous owner's allowable principal and interest
expense as allowed by the department prior to that prior owner's sale and lease-back transaction
of December 1985.
(b) Notwithstanding other provisions of applicable law, a nursing facility licensed for 122
beds on January 1, 1998, and located in Columbia Heights shall have its property-related payment
rate set under this subdivision. The commissioner shall make a rate adjustment by adding $2.41 to
the facility's July 1, 1997, property-related payment rate. The adjusted property-related payment
rate shall be effective for rate years beginning on or after July 1, 1998. The adjustment in this
paragraph shall remain in effect so long as the facility's rates are set under this section. If the
facility participates in the alternative payment system under section 256B.434, the adjustment
in this paragraph shall be included in the facility's contract payment rate. If historical rates or
property costs recognized under this section become the basis for future medical assistance
payments to the facility under a managed care, capitation, or other alternative payment system,
the adjustment in this paragraph shall be included in the computation of the facility's payments.
    Subd. 12.[Repealed, 2000 c 449 s 15]
    Subd. 13. Hold-harmless property-related rates. (a) Terms used in subdivisions 13 to 21
shall be as defined in Minnesota Rules, parts 9549.0010 to 9549.0080, and this section.
(b) Except as provided in this subdivision, for rate periods beginning on October 1, 1992,
and for rate years beginning after June 30, 1993, the property-related rate for a nursing facility
shall be the greater of $4 or the property-related payment rate in effect on September 30, 1992. In
addition, the incremental increase in the nursing facility's rental rate will be determined under
Minnesota Rules, parts 9549.0010 to 9549.0080, and this section.
(c) Notwithstanding Minnesota Rules, part 9549.0060, subpart 13, item F, a nursing
facility that has a sale permitted under subdivision 14 after June 30, 1992, shall receive the
property-related payment rate in effect at the time of the sale or reorganization. For rate periods
beginning after October 1, 1992, and for rate years beginning after June 30, 1993, a nursing
facility shall receive, in addition to its property-related payment rate in effect at the time of the
sale, the incremental increase allowed under subdivision 14.
(d) For rate years beginning after June 30, 1993, the property-related rate for a nursing
facility licensed after July 1, 1989, after relocating its beds from a separate nursing home to a
building formerly used as a hospital and sold during the cost reporting year ending September 30,
1991, shall be its property-related rate prior to the sale in addition to the incremental increases
provided under this section effective on October 1, 1992, of 29 cents per day, and any incremental
increases after October 1, 1992, calculated by using its rental rate under Minnesota Rules, parts
9549.0010 to 9549.0080, and this section, recognizing the current appraised value of the facility
at the new location, and including as allowable debt otherwise allowable debt incurred to remodel
the facility in the new location prior to the relocation of beds.
    Subd. 14. Limitations on sales of nursing facilities. (a) For rate periods beginning
on October 1, 1992, and for rate years beginning after June 30, 1993, a nursing facility's
property-related payment rate as established under subdivision 13 shall be adjusted by either
paragraph (b) or (c) for the sale of the nursing facility, including sales occurring after June 30,
1992, as provided in this subdivision.
(b) If the nursing facility's property-related payment rate under subdivision 13 prior to sale is
greater than the nursing facility's rental rate under Minnesota Rules, parts 9549.0010 to 9549.0080,
and this section prior to sale, the nursing facility's property-related payment rate after sale shall be
the greater of its property-related payment rate under subdivision 13 prior to sale or its rental rate
under Minnesota Rules, parts 9549.0010 to 9549.0080, and this section calculated after sale.
(c) If the nursing facility's property-related payment rate under subdivision 13 prior to sale
is equal to or less than the nursing facility's rental rate under Minnesota Rules, parts 9549.0010
to 9549.0080, and this section prior to sale, the nursing facility's property-related payment rate
after sale shall be the nursing facility's property-related payment rate under subdivision 13 plus
the difference between its rental rate calculated under Minnesota Rules, parts 9549.0010 to
9549.0080, and this section prior to sale and its rental rate calculated under Minnesota Rules,
parts 9549.0010 to 9549.0080, and this section calculated after sale.
(d) For purposes of this subdivision, "sale" means the purchase of a nursing facility's capital
assets with cash or debt. The term sale does not include a stock purchase of a nursing facility or
any of the following transactions:
(1) a sale and leaseback to the same licensee that does not constitute a change in facility
license;
(2) a transfer of an interest to a trust;
(3) gifts or other transfers for no consideration;
(4) a merger of two or more related organizations;
(5) a change in the legal form of doing business, other than a publicly held organization that
becomes privately held or vice versa;
(6) the addition of a new partner, owner, or shareholder who owns less than 20 percent of the
nursing facility or the issuance of stock; and
(7) a sale, merger, reorganization, or any other transfer of interest between related
organizations other than those permitted in this section.
(e) For purposes of this subdivision, "sale" includes the sale or transfer of a nursing facility
to a close relative as defined in Minnesota Rules, part 9549.0020, subpart 38, item C, upon the
death of an owner, due to serious illness or disability, as defined under the Social Security Act,
under United States Code, title 42, section 423(d)(1)(A), or upon retirement of an owner from the
business of owning or operating a nursing home at 62 years of age or older. For sales to a close
relative allowed under this paragraph, otherwise nonallowable debt resulting from seller financing
of all or a portion of the debt resulting from the sale shall be allowed and shall not be subject
to Minnesota Rules, part 9549.0060, subpart 5, item E, provided that in addition to existing
requirements for allowance of debt and interest, the debt is subject to repayment through annual
principal payments and the interest rate on the related organization debt does not exceed three
percentage points above the posted yield for standard conventional fixed rate mortgages of the
Federal Home Loan Mortgage Corporation for delivery in 60 days in effect on the day of sale.
If at any time, the seller forgives the related organization debt allowed under this paragraph for
other than equal amount of payment on that debt, then the buyer shall pay to the state the total
revenue received by the nursing facility after the sale attributable to the amount of allowable debt
which has been forgiven. Any assignment, sale, or transfer of the debt instrument entered into
by the close relatives, either directly or indirectly, which grants to the close relative buyer the
right to receive all or a portion of the payments under the debt instrument shall, effective on
the date of the transfer, result in the prospective reduction in the corresponding portion of the
allowable debt and interest expense. Upon the death of the close relative seller, any remaining
balance of the close relative debt must be refinanced and such refinancing shall be subject to the
provisions of Minnesota Rules, part 9549.0060, subpart 7, item G. This paragraph shall not apply
to sales occurring on or after June 30, 1997.
(f) For purposes of this subdivision, "effective date of sale" means the later of either the date
on which legal title to the capital assets is transferred or the date on which closing for the sale
occurred.
(g) The effective day for the property-related payment rate determined under this subdivision
shall be the first day of the month following the month in which the effective date of sale occurs
or October 1, 1992, whichever is later, provided that the notice requirements under section
256B.47, subdivision 2, have been met.
(h) Notwithstanding Minnesota Rules, part 9549.0060, subparts 5, item A, subitems (3) and
(4), and 7, items E and F, the commissioner shall limit the total allowable debt and related interest
for sales occurring after June 30, 1992, to the sum of clauses (1) to (3):
(1) the historical cost of capital assets, as of the nursing facility's most recent previous
effective date of sale or, if there has been no previous sale, the nursing facility's initial historical
cost of constructing capital assets;
(2) the average annual capital asset additions after deduction for capital asset deletions, not
including depreciations; and
(3) one-half of the allowed inflation on the nursing facility's capital assets. The commissioner
shall compute the allowed inflation as described in paragraph (i).
(i) For purposes of computing the amount of allowed inflation, the commissioner must
apply the following principles:
(1) the lesser of the Consumer Price Index for all urban consumers or the Dodge Construction
Systems Costs for Nursing Homes for any time periods during which both are available must
be used. If the Dodge Construction Systems Costs for Nursing Homes becomes unavailable, the
commissioner shall substitute the index in subdivision 3f, or such other index as the secretary of
the Centers for Medicare and Medicaid Services may designate;
(2) the amount of allowed inflation to be applied to the capital assets in paragraph (h),
clauses (1) and (2), must be computed separately;
(3) the amount of allowed inflation must be determined on an annual basis, prorated on a
monthly basis for partial years and if the initial month of use is not determinable for a capital
asset, then one-half of that calendar year shall be used for purposes of prorating;
(4) the amount of allowed inflation to be applied to the capital assets in paragraph (h), clauses
(1) and (2), must not exceed 300 percent of the total capital assets in any one of those clauses; and
(5) the allowed inflation must be computed starting with the month following the nursing
facility's most recent previous effective date of sale or, if there has been no previous sale, the
month following the date of the nursing facility's initial occupancy, and ending with the month
preceding the effective date of sale.
(j) If the historical cost of a capital asset is not readily available for the date of the nursing
facility's most recent previous sale or if there has been no previous sale for the date of the
nursing facility's initial occupancy, then the commissioner shall limit the total allowable debt and
related interest after sale to the extent recognized by the Medicare intermediary after the sale.
For a nursing facility that has no historical capital asset cost data available and does not have
allowable debt and interest calculated by the Medicare intermediary, the commissioner shall use
the historical cost of capital asset data from the point in time for which capital asset data is
recorded in the nursing facility's audited financial statements.
(k) The limitations in this subdivision apply only to debt resulting from a sale of a nursing
facility occurring after June 30, 1992, including debt assumed by the purchaser of the nursing
facility.
    Subd. 15. Capital repair and replacement cost reporting and rate calculation. For rate
years beginning after June 30, 1993, a nursing facility's capital repair and replacement payment
rate shall be established annually as provided in paragraphs (a) to (e).
(a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 12, the costs of any of the
following items not included in the equity incentive computations under subdivision 16 or
reported as a capital asset addition under subdivision 18, paragraph (b), including cash payment
for equity investment and principal and interest expense for debt financing, must be reported in
the capital repair and replacement cost category:
(1) wall coverings;
(2) paint;
(3) floor coverings;
(4) window coverings;
(5) roof repair; and
(6) window repair or replacement.
(b) Notwithstanding Minnesota Rules, part 9549.0060, subpart 12, the repair or replacement
of a capital asset not included in the equity incentive computations under subdivision 16 or
reported as a capital asset addition under subdivision 18, paragraph (b), must be reported
under this subdivision when the cost of the item exceeds $500, or in the plant operations and
maintenance cost category when the cost of the item is equal to or less than $500.
(c) To compute the capital repair and replacement payment rate, the allowable annual repair
and replacement costs for the reporting year must be divided by actual resident days for the
reporting year. The annual allowable capital repair and replacement costs shall not exceed $150
per licensed bed. The excess of the allowed capital repair and replacement costs over the capital
repair and replacement limit shall be a cost carryover to succeeding cost reporting periods, except
that sale of a facility, under subdivision 14, shall terminate the carryover of all costs except
those incurred in the most recent cost reporting year. The termination of the carryover shall have
effect on the capital repair and replacement rate on the same date as provided in subdivision 14,
paragraph (f), for the sale. For rate years beginning after June 30, 1994, the capital repair and
replacement limit shall be subject to the index provided in subdivision 3f, paragraph (a). For
purposes of this subdivision, the number of licensed beds shall be the number used to calculate
the nursing facility's capacity days. The capital repair and replacement rate must be added to the
nursing facility's total payment rate.
(d) Capital repair and replacement costs under this subdivision shall not be counted as either
care-related or other operating costs, nor subject to care-related or other operating limits.
(e) If costs otherwise allowable under this subdivision are incurred as the result of a project
approved under the moratorium exception process in section 144A.073, or in connection with an
addition to or replacement of buildings, attached fixtures, or land improvements for which the
total historical cost of these assets exceeds the lesser of $150,000 or ten percent of the nursing
facility's appraised value, these costs must be claimed under subdivision 16 or 17, as appropriate.
    Subd. 16. Major additions and replacements; equity incentive. For rate years beginning
after June 30, 1993, if a nursing facility acquires capital assets in connection with a project
approved under the moratorium exception process in section 144A.073 or in connection with an
addition to or replacement of buildings, attached fixtures, or land improvements for which the
total historical cost of those capital asset additions exceeds the lesser of $150,000 or ten percent
of the most recent appraised value, the nursing facility shall be eligible for an equity incentive
payment rate as in paragraphs (a) to (d). This computation is separate from the determination
of the nursing facility's rental rate. An equity incentive payment rate as computed under this
subdivision is limited to one in a 12-month period.
(a) An eligible nursing facility shall receive an equity incentive payment rate equal to the
allowable historical cost of the capital asset acquired, minus the allowable debt directly identified
to that capital asset, multiplied by the equity incentive factor as described in paragraphs (b) and
(c), and divided by the nursing facility's occupancy factor under subdivision 3f, paragraph (c).
This amount shall be added to the nursing facility's total payment rate and shall be effective the
same day as the incremental increase in paragraph (d) or subdivision 17. The allowable historical
cost of the capital assets and the allowable debt shall be determined as provided in Minnesota
Rules, parts 9549.0010 to 9549.0080, and this section.
(b) The equity incentive factor shall be determined under clauses (1) to (4):
(1) divide the initial allowable debt in paragraph (a) by the initial historical cost of the capital
asset additions referred to in paragraph (a), then cube the quotient,
(2) subtract the amount calculated in clause (1) from the number one,
(3) determine the difference between the rental factor and the lesser of two percentage points
above the posted yield for standard conventional fixed rate mortgages of the Federal Home Loan
Mortgage Corporation as published in the Wall Street Journal and in effect on the first day of the
month the debt or cost is incurred, or 16 percent,
(4) multiply the amount calculated in clause (2) by the amount calculated in clause (3).
(c) The equity incentive payment rate shall be limited to the term of the allowable debt in
paragraph (a), not greater than 20 years nor less than ten years. If no debt is incurred in acquiring
the capital asset, the equity incentive payment rate shall be paid for ten years. The sale of a
nursing facility under subdivision 14 shall terminate application of the equity incentive payment
rate effective on the date provided in subdivision 14, paragraph (f), for the sale.
(d) A nursing facility with an addition to or a renovation of its buildings, attached fixtures, or
land improvements meeting the criteria in this subdivision and not receiving the property-related
payment rate adjustment in subdivision 17, shall receive the incremental increase in the nursing
facility's rental rate as determined under Minnesota Rules, parts 9549.0010 to 9549.0080, and this
section. The incremental increase shall be added to the nursing facility's property-related payment
rate. The effective date of this incremental increase shall be the first day of the month following
the month in which the addition or replacement is completed.
    Subd. 17. Special provisions for moratorium exceptions. Notwithstanding Minnesota
Rules, part 9549.0060, subpart 3, for rate periods beginning on October 1, 1992, and for rate years
beginning after June 30, 1993, a nursing facility that (1) has completed a construction project
approved under section 144A.071, subdivision 4a, clause (m); (2) has completed a construction
project approved under section 144A.071, subdivision 4a, and effective after June 30, 1995; (3)
has completed a construction project approved under section 144A.071, subdivision 4c; or (4)
has completed a renovation, replacement, or upgrading project approved under the moratorium
exception process in section 144A.073 shall be reimbursed for costs directly identified to that
project as provided in subdivision 16 and subdivisions 17 to 17f.
    Subd. 17a. Allowable interest expense. (a) Notwithstanding Minnesota Rules, part
9549.0060, subparts 5, item A, subitems (1) and (3), and 7, item D, allowable interest expense
on debt shall include:
(1) interest expense on debt related to the cost of purchasing or replacing depreciable
equipment, excluding vehicles, not to exceed six percent of the total historical cost of the project;
and
(2) interest expense on debt related to financing or refinancing costs, including costs related
to points, loan origination fees, financing charges, legal fees, and title searches; and issuance costs
including bond discounts, bond counsel, underwriter's counsel, corporate counsel, printing, and
financial forecasts. Allowable debt related to items in this clause shall not exceed seven percent
of the total historical cost of the project. To the extent these costs are financed, the straight-line
amortization of the costs in this clause is not an allowable cost; and
(3) interest on debt incurred for the establishment of a debt reserve fund, net of the interest
earned on the debt reserve fund.
(b) Debt incurred for costs under paragraph (a) is not subject to Minnesota Rules, part
9549.0060, subpart 5, item A, subitem (5) or (6).
    Subd. 17b. Property-related payment rate. The incremental increase in a nursing facility's
rental rate, determined under Minnesota Rules, parts 9549.0010 to 9549.0080, and this section,
resulting from the acquisition of allowable capital assets, and allowable debt and interest expense
under this subdivision shall be added to its property-related payment rate and shall be effective on
the first day of the month following the month in which the moratorium project was completed.
    Subd. 17c. Replacement-costs-new per bed limit. Notwithstanding subdivision 3f,
paragraph (a), for rate periods beginning on October 1, 1992, and for rate years beginning after
June 30, 1993, the replacement-costs-new per bed limit to be used in Minnesota Rules, part
9549.0060, subpart 4, item B, for a nursing facility that has completed a renovation, replacement,
or upgrading project that has been approved under the moratorium exception process in section
144A.073, or that has completed an addition to or replacement of buildings, attached fixtures, or
land improvements for which the total historical cost exceeds the lesser of $150,000 or ten percent
of the most recent appraised value, must be $47,500 per licensed bed in multiple-bed rooms and
$71,250 per licensed bed in a single-bed room. These amounts must be adjusted annually as
specified in subdivision 3f, paragraph (a), beginning January 1, 1993.
    Subd. 17d. Determination of rental per diem for total replacement projects. (a) For
purposes of this subdivision, a total replacement means the complete replacement of the nursing
facility's physical plant through the construction of a new physical plant, the transfer of the
nursing facility's license from one physical plant location to another, or a new building addition to
relocate beds from three- and four-bed wards. For total replacement projects completed on or after
July 1, 1992, the commissioner shall compute the incremental change in the nursing facility's
rental per diem, for rate years beginning on or after July 1, 1995, by replacing its appraised value,
including the historical capital asset costs, and the capital debt and interest costs with the new
nursing facility's allowable capital asset costs and the related allowable capital debt and interest
costs. If the new nursing facility has decreased its licensed capacity, the aggregate investment per
bed limit in subdivision 3a, paragraph (c), shall apply.
(b) If the new nursing facility has retained a portion of the original physical plant for nursing
facility usage, then a portion of the appraised value prior to the replacement must be retained
and included in the calculation of the incremental change in the nursing facility's rental per
diem. For purposes of this subdivision, the original nursing facility means the nursing facility
prior to the total replacement project. The portion of the appraised value to be retained shall
be calculated according to clauses (1) to (3):
(1) The numerator of the allocation ratio shall be the square footage of the area in the original
physical plant which is being retained for nursing facility usage.
(2) The denominator of the allocation ratio shall be the total square footage of the original
nursing facility physical plant.
(3) Each component of the nursing facility's allowable appraised value prior to the total
replacement project shall be multiplied by the allocation ratio developed by dividing clause
(1) by clause (2).
(c) In the case of either type of total replacement as authorized under section 144A.071 or
144A.073, the provisions of subdivisions 17 to 17f shall also apply.
(d) For purposes of the moratorium exception authorized under section 144A.071,
subdivision 4a , paragraph (s), if the total replacement involves the renovation and use of an
existing health care facility physical plant, the new allowable capital asset costs and related
debt and interest costs shall include first the allowable capital asset costs and related debt and
interest costs of the renovation, to which shall be added the allowable capital asset costs of the
existing physical plant prior to the renovation, and if reported by the facility, the related allowable
capital debt and interest costs.
    Subd. 17e. Replacement-costs-new per bed limit effective July 1, 2001. Notwithstanding
Minnesota Rules, part 9549.0060, subpart 11, item C, subitem (2), for a total replacement, as
defined in paragraph (f), authorized under section 144A.071 or 144A.073 after July 1, 1999, or
any building project that is a relocation, renovation, upgrading, or conversion completed on or
after July 1, 2001, the replacement-costs-new per bed limit shall be $74,280 per licensed bed
in multiple-bed rooms, $92,850 per licensed bed in semiprivate rooms with a fixed partition
separating the resident beds, and $111,420 per licensed bed in single rooms. Minnesota Rules,
part 9549.0060, subpart 11, item C, subitem (2), does not apply. These amounts must be adjusted
annually as specified in subdivision 3f, paragraph (a), beginning January 1, 2000.
    Subd. 17f. Provisions for specific facilities. (a) For a total replacement, as defined in
subdivision 17d, authorized under section 144A.073 for a 96-bed nursing home in Carlton County,
the replacement-costs-new per bed limit shall be $74,280 per licensed bed in multiple-bed rooms,
$92,850 per licensed bed in semiprivate rooms with a fixed partition separating the resident's
beds, and $111,420 per licensed bed in a single room. Minnesota Rules, part 9549.0060, subpart
11, item C, subitem (2), does not apply. The resulting maximum allowable replacement-costs-new
multiplied by 1.25 shall constitute the project's dollar threshold for purposes of application of the
limit set forth in section 144A.071, subdivision 2. The commissioner of health may waive the
requirements of section 144A.073, subdivision 3b, paragraph (b), clause (2), on the condition that
the other requirements of that paragraph are met.
(b) For a renovation authorized under section 144A.073 for a 65-bed nursing home in St.
Louis County, the incremental increase in rental rate for purposes of subdivision 17b shall be
$8.16, and the total replacement cost, allowable appraised value, allowable debt, and allowable
interest shall be increased according to the incremental increase.
(c) For a total replacement, as defined in subdivision 17d, authorized under section 144A.073
involving a new building addition that relocates beds from three-bed wards for an 80-bed nursing
home in Redwood County, the replacement-costs-new per bed limit shall be $74,280 per licensed
bed for multiple-bed rooms; $92,850 per licensed bed for semiprivate rooms with a fixed partition
separating the beds; and $111,420 per licensed bed for single rooms. These amounts shall be
adjusted annually, beginning January 1, 2001. Minnesota Rules, part 9549.0060, subpart 11,
item C, subitem (2), does not apply. The resulting maximum allowable replacement-costs-new
multiplied by 1.25 shall constitute the project's dollar threshold for purposes of application of the
limit set forth in section 144A.071, subdivision 2. The commissioner of health may waive the
requirements of section 144A.073, subdivision 3b, paragraph (b), clause (2), on the condition that
the other requirements of that paragraph are met.
    Subd. 18. Updating appraisals, additions, and replacements. (a) Notwithstanding
Minnesota Rules, part 9549.0060, subparts 1 to 3, the appraised value, routine updating of the
appraised value, and special reappraisals are subject to this subdivision.
For all rate years after June 30, 1993, the commissioner shall no longer conduct any
appraisals under Minnesota Rules, part 9549.0060, for the purpose of determining property-related
payment rates.
(b) Notwithstanding Minnesota Rules, part 9549.0060, subpart 2, for rate years beginning
after June 30, 1993, the commissioner shall routinely update the appraised value of each nursing
facility by adding the cost of capital asset acquisitions to its allowable appraised value.
The commissioner shall also annually index each nursing facility's allowable appraised value
by the inflation index referenced in subdivision 3f, paragraph (a), for the purpose of computing
the nursing facility's annual rental rate. In annually adjusting the nursing facility's appraised
value, the commissioner must not include the historical cost of capital assets acquired during the
reporting year in the nursing facility's appraised value.
In addition, the nursing facility's appraised value must be reduced by the historical cost of
capital asset disposals or applicable credits such as public grants and insurance proceeds. Capital
asset additions and disposals must be reported on the nursing facility's annual cost report in the
reporting year of acquisition or disposal. The incremental increase in the nursing facility's rental
rate resulting from this annual adjustment as determined under Minnesota Rules, parts 9549.0010
to 9549.0080, and this section shall be added to the nursing facility's property-related payment
rate for the rate year following the reporting year.
    Subd. 19. Refinancing incentive. (a) A nursing facility that refinances debt after May 30,
1992, in order to save in interest expense payments as determined in clauses (1) to (5) may be
eligible for the refinancing incentive under this subdivision. To be eligible for the refinancing
incentive, a nursing facility must notify the commissioner in writing of such a refinancing within
60 days following the date on which the refinancing occurs. If the nursing facility meets these
conditions, the commissioner shall determine the refinancing incentive as in clauses (1) to (5).
(1) Compute the aggregate amount of interest expense, including amortized issuance and
financing costs, remaining on the debt to be refinanced, and divide this amount by the number
of years remaining for the term of that debt.
(2) Compute the aggregate amount of interest expense, including amortized issuance and
financing costs, for the new debt, and divide this amount by the number of years for the term of
that debt.
(3) Subtract the amount in clause (2) from the amount in clause (1), and multiply the
amount, if positive, by .5.
(4) The amount in clause (3) shall be divided by the nursing facility's occupancy factor
under subdivision 3f, paragraph (c).
(5) The per diem amount in clause (4) shall be deducted from the nursing facility's
property-related payment rate for three full rate years following the rate year in which the
refinancing occurs. For the fourth full rate year following the rate year in which the refinancing
occurs, and each rate year thereafter, the per diem amount in clause (4) shall again be deducted
from the nursing facility's property-related payment rate.
(b) An increase in a nursing facility's debt for costs in subdivision 17, paragraph (b),
clause (2), including the cost of refinancing the issuance or financing costs of the debt
refinanced resulting from refinancing that meets the conditions of this section shall be allowed,
notwithstanding Minnesota Rules, part 9549.0060, subpart 5, item A, subitem (6).
(c) The proceeds of refinancing may not be used for the purpose of withdrawing equity from
the nursing facility.
(d) Sale of a nursing facility under subdivision 14 shall terminate the payment of the incentive
payments under this subdivision effective the date provided in subdivision 14, paragraph (f), for
the sale, and the full amount of the refinancing incentive in paragraph (a) shall be implemented.
(e) If a nursing facility eligible under this subdivision fails to notify the commissioner
as required, the commissioner shall determine the full amount of the refinancing incentive in
paragraph (a), and shall deduct one-half that amount from the nursing facility's property-related
payment rate effective the first day of the month following the month in which the refinancing
is completed. For the next three full rate years, the commissioner shall deduct one-half the
amount in paragraph (a), clause (5). The remaining per diem amount shall be deducted in each
rate year thereafter.
(f) The commissioner shall reestablish the nursing facility's rental rate under Minnesota
Rules, parts 9549.0010 to 9549.0080, and this section following the refinancing using the new debt
and interest expense information for the purpose of measuring future incremental rental increases.
    Subd. 20. Special property rate setting. For rate periods beginning on October 1, 1992,
and for rate years beginning after June 30, 1993, the property-related payment rate for a nursing
facility approved for total replacement under the moratorium exception process in section
144A.073 through an addition to another nursing facility shall have its property-related rate under
subdivision 13 recalculated using the greater of actual resident days or 80 percent of capacity
days. This rate shall apply until the nursing facility is replaced or until the moratorium exception
authority lapses, whichever is sooner.
    Subd. 21. Indexing thresholds. Beginning January 1, 1993, and each January 1 thereafter,
the commissioner shall annually update the dollar thresholds in subdivisions 15, paragraph (e),
16, and 17, and in section 144A.071, subdivisions 2 and 4a, clauses (b) and (e), by the inflation
index referenced in subdivision 3f, paragraph (a).
    Subd. 22. Changes to nursing facility reimbursement. The nursing facility reimbursement
changes in paragraphs (a) to (d) apply to Minnesota Rules, parts 9549.0010 to 9549.0080, and
this section, and are effective for rate years beginning on or after July 1, 1993, unless otherwise
indicated.
(a) In addition to the approved pension or profit sharing plans allowed by the reimbursement
rule, the commissioner shall allow those plans specified in Internal Revenue Code, sections
403(b) and 408(k).
(b) The commissioner shall allow as workers' compensation insurance costs under section
256B.421, subdivision 14, the costs of workers' compensation coverage obtained under the
following conditions:
(1) a plan approved by the commissioner of commerce as a Minnesota group or individual
self-insurance plan as provided in section 79A.03;
(2) a plan in which:
(i) the nursing facility, directly or indirectly, purchases workers' compensation coverage in
compliance with section 176.181, subdivision 2, from an authorized insurance carrier;
(ii) a related organization to the nursing facility reinsures the workers' compensation
coverage purchased, directly or indirectly, by the nursing facility; and
(iii) all of the conditions in clause (4) are met;
(3) a plan in which:
(i) the nursing facility, directly or indirectly, purchases workers' compensation coverage in
compliance with section 176.181, subdivision 2, from an authorized insurance carrier;
(ii) the insurance premium is calculated retrospectively, including a maximum premium
limit, and paid using the paid loss retro method; and
(iii) all of the conditions in clause (4) are met;
(4) additional conditions are:
(i) the costs of the plan are allowable under the federal Medicare program;
(ii) the reserves for the plan are maintained in an account controlled and administered by a
person which is not a related organization to the nursing facility;
(iii) the reserves for the plan cannot be used, directly or indirectly, as collateral for debts
incurred or other obligations of the nursing facility or related organizations to the nursing facility;
(iv) if the plan provides workers' compensation coverage for non-Minnesota nursing
facilities, the plan's cost methodology must be consistent among all nursing facilities covered by
the plan, and if reasonable, is allowed notwithstanding any reimbursement laws regarding cost
allocation to the contrary;
(v) central, affiliated, corporate, or nursing facility costs related to their administration of
the plan are costs which must remain in the nursing facility's administrative cost category and
must not be allocated to other cost categories;
(vi) required security deposits, whether in the form of cash, investments, securities, assets,
letters of credit, or in any other form are not allowable costs for purposes of establishing the
facilities payment rate; and
(vii) for the rate year beginning on July 1, 1998, a group of nursing facilities related by
common ownership that self-insures workers' compensation may allocate its directly identified
costs of self-insuring its Minnesota nursing facility workers among those nursing facilities in the
group that are reimbursed under this section or section 256B.434. The method of cost allocation
shall be based on the ratio of each nursing facility's total allowable salaries and wages to that of
the nursing facility group's total allowable salaries and wages, then similarly allocated within
each nursing facility's operating cost categories. The costs associated with the administration of
the group's self-insurance plan must remain classified in the nursing facility's administrative cost
category. A written request of the nursing facility group's election to use this alternate method
of allocation of self-insurance costs must be received by the commissioner no later than May 1,
1998, to take effect July 1, 1998, or such costs shall continue to be allocated under the existing
cost allocation methods. Once a nursing facility group elects this method of cost allocation for its
workers' compensation self-insurance costs, it shall remain in effect until such time as the group
no longer self-insures these costs;
(5) any costs allowed pursuant to clauses (1) to (3) are subject to the following requirements:
(i) if the nursing facility is sold or otherwise ceases operations, the plan's reserves must be
subject to an actuarially based settle-up after 36 months from the date of sale or the date on which
operations ceased. The facility's medical assistance portion of the total excess plan reserves
must be paid to the state within 30 days following the date on which excess plan reserves are
determined;
(ii) any distribution of excess plan reserves made to or withdrawals made by the nursing
facility or a related organization are applicable credits and must be used to reduce the nursing
facility's workers' compensation insurance costs in the reporting period in which a distribution
or withdrawal is received;
(iii) if reimbursement for the plan is sought under the federal Medicare program, and is
audited pursuant to the Medicare program, the nursing facility must provide a copy of Medicare's
final audit report, including attachments and exhibits, to the commissioner within 30 days of
receipt by the nursing facility or any related organization. The commissioner shall implement
the audit findings associated with the plan upon receipt of Medicare's final audit report. The
department's authority to implement the audit findings is independent of its authority to conduct a
field audit.
(c) In the determination of incremental increases in the nursing facility's rental rate as
required in subdivisions 14 to 21, except for a refinancing permitted under subdivision 19, the
commissioner must adjust the nursing facility's property-related payment rate for both incremental
increases and decreases in recomputations of its rental rate;
(d) A nursing facility's administrative cost limitation must be modified as follows:
(1) if the nursing facility's licensed beds exceed 195 licensed beds, the general and
administrative cost category limitation shall be 13 percent;
(2) if the nursing facility's licensed beds are more than 150 licensed beds, but less than 196
licensed beds, the general and administrative cost category limitation shall be 14 percent; or
(3) if the nursing facility's licensed beds is less than 151 licensed beds, the general and
administrative cost category limitation shall remain at 15 percent.
(e) For the rate year beginning on July 1, 1998, a group of nursing facilities related by
common ownership that self-insures group health, dental, or life insurance may allocate its directly
identified costs of self-insuring its Minnesota nursing facility workers among those nursing
facilities in the group that are reimbursed under this section or section 256B.434. The method of
cost allocation shall be based on the ratio of each nursing facility's total allowable salaries and
wages to that of the nursing facility group's total allowable salaries and wages, then similarly
allocated within each nursing facility's operating cost categories. The costs associated with the
administration of the group's self-insurance plan must remain classified in the nursing facility's
administrative cost category. A written request of the nursing facility group's election to use this
alternate method of allocation of self-insurance costs must be received by the commissioner no
later than May 1, 1998, to take effect July 1, 1998, or those self-insurance costs shall continue to
be allocated under the existing cost allocation methods. Once a nursing facility group elects this
method of cost allocation for its group health, dental, or life insurance self-insurance costs, it shall
remain in effect until such time as the group no longer self-insures these costs.
    Subd. 23. County nursing home payment adjustments. (a) Beginning in 1994, the
commissioner shall pay a nursing home payment adjustment on May 31 after noon to a county
in which is located a nursing home that, on that date, was county-owned and operated, with the
county named as licensee by the commissioner of health, and had over 40 beds and medical
assistance occupancy in excess of 50 percent during the reporting year ending September 30,
1991. The adjustment shall be an amount equal to $16 per calendar day multiplied by the number
of beds licensed in the facility on that date.
(b) Payments under paragraph (a) are excluded from medical assistance per diem rate
calculations. These payments are required notwithstanding any rule prohibiting medical assistance
payments from exceeding payments from private pay residents. A facility receiving a payment
under paragraph (a) may not increase charges to private pay residents by an amount equivalent to
the per diem amount payments under paragraph (a) would equal if converted to a per diem.
(c) Beginning in 2002, in addition to any payment under paragraph (a), the commissioner
shall pay to a nursing facility described in paragraph (a) an adjustment in an amount equal to
$29.55 per calendar day multiplied by the number of beds licensed in the facility on that date. The
provisions of paragraphs (a) and (b) apply to payments under this paragraph.
(d) Beginning in 2003, in addition to any payment under paragraphs (a) and (c), the
commissioner shall pay to a nursing facility described in paragraph (a) an adjustment in an
amount equal to $6.11 per calendar day multiplied by the number of beds licensed in the facility
on that date. The provisions of paragraphs (a) and (b) apply to payments under this paragraph.
(e) The commissioner may reduce payments under paragraphs (c) and (d) based on the
commissioner's determination of Medicare upper payment limits. Any adjustments must be
proportional to adjustments made under section 256B.19, subdivision 1d, paragraph (e).
    Subd. 24.[Repealed, 2000 c 449 s 15]
    Subd. 25. Changes to nursing facility reimbursement beginning July 1, 1995. A nursing
facility licensed for 302 beds on September 30, 1993, that was approved under the moratorium
exception process in section 144A.073 for a partial replacement, and completed the replacement
project in December 1994, is exempt from Minnesota Statutes 1998, section 256B.431,
subdivision 25 , paragraphs (b) to (d) for rate years beginning on or after July 1, 1995.
For the rate year beginning July 1, 1997, after computing this nursing facility's payment rate
according to section 256B.434, the commissioner shall make a one-year rate adjustment of $8.62
to the facility's contract payment rate for the rate effect of operating cost changes associated
with the facility's 1994 downsizing project.
For rate years beginning on or after July 1, 1997, the commissioner shall add 35 cents to the
facility's base property related payment rate for the rate effect of reducing its licensed capacity
to 290 beds from 302 beds and shall add 83 cents to the facility's real estate tax and special
assessment payment rate for payments in lieu of real estate taxes. The adjustments in this clause
shall remain in effect for the duration of the facility's contract under section 256B.434.
    Subd. 26. Changes to nursing facility reimbursement beginning July 1, 1997. The nursing
facility reimbursement changes in paragraphs (a) to (e) shall apply in the sequence specified in
Minnesota Rules, parts 9549.0010 to 9549.0080, and this section, beginning July 1, 1997.
(a) For rate years beginning on or after July 1, 1997, the commissioner shall limit a nursing
facility's allowable operating per diem for each case mix category for each rate year. The
commissioner shall group nursing facilities into two groups, freestanding and nonfreestanding,
within each geographic group, using their operating cost per diem for the case mix A
classification. A nonfreestanding nursing facility is a nursing facility whose other operating cost
per diem is subject to the hospital attached, short length of stay, or the rule 80 limits. All other
nursing facilities shall be considered freestanding nursing facilities. The commissioner shall then
array all nursing facilities in each grouping by their allowable case mix A operating cost per diem.
In calculating a nursing facility's operating cost per diem for this purpose, the commissioner
shall exclude the raw food cost per diem related to providing special diets that are based on
religious beliefs, as determined in subdivision 2b, paragraph (h). For those nursing facilities in
each grouping whose case mix A operating cost per diem:
(1) is at or below the median of the array, the commissioner shall limit the nursing facility's
allowable operating cost per diem for each case mix category to the lesser of the prior reporting
year's allowable operating cost per diem as specified in Laws 1996, chapter 451, article 3, section
11, paragraph (h), plus the inflation factor as established in paragraph (d), clause (2), increased
by two percentage points, or the current reporting year's corresponding allowable operating
cost per diem; or
(2) is above the median of the array, the commissioner shall limit the nursing facility's
allowable operating cost per diem for each case mix category to the lesser of the prior reporting
year's allowable operating cost per diem as specified in Laws 1996, chapter 451, article 3, section
11, paragraph (h), plus the inflation factor as established in paragraph (d), clause (2), increased
by one percentage point, or the current reporting year's corresponding allowable operating cost
per diem.
For purposes of paragraph (a), if a nursing facility reports on its cost report a reduction in
cost due to a refund or credit for a rate year beginning on or after July 1, 1998, the commissioner
shall increase that facility's spend-up limit for the rate year following the current rate year by the
amount of the cost reduction divided by its resident days for the reporting year preceding the rate
year in which the adjustment is to be made.
(b) For rate years beginning on or after July 1, 1997, the commissioner shall limit the
allowable operating cost per diem for high cost nursing facilities. After application of the limits in
paragraph (a) to each nursing facility's operating cost per diem, the commissioner shall group
nursing facilities into two groups, freestanding or nonfreestanding, within each geographic
group. A nonfreestanding nursing facility is a nursing facility whose other operating cost per
diem are subject to hospital attached, short length of stay, or rule 80 limits. All other nursing
facilities shall be considered freestanding nursing facilities. The commissioner shall then array all
nursing facilities within each grouping by their allowable case mix A operating cost per diem.
In calculating a nursing facility's operating cost per diem for this purpose, the commissioner
shall exclude the raw food cost per diem related to providing special diets that are based on
religious beliefs, as determined in subdivision 2b, paragraph (h). For those nursing facilities in
each grouping whose case mix A operating cost per diem exceeds 1.0 standard deviation above
the median, the commissioner shall reduce their allowable operating cost per diem by three
percent. For those nursing facilities in each grouping whose case mix A operating cost per diem
exceeds 0.5 standard deviation above the median but is less than or equal to 1.0 standard deviation
above the median, the commissioner shall reduce their allowable operating cost per diem by two
percent. However, in no case shall a nursing facility's operating cost per diem be reduced below
its grouping's limit established at 0.5 standard deviations above the median.
(c) For rate years beginning on or after July 1, 1997, the commissioner shall determine
a nursing facility's efficiency incentive by first computing the allowable difference, which is
the lesser of $4.50 or the amount by which the facility's other operating cost limit exceeds its
nonadjusted other operating cost per diem for that rate year. The commissioner shall compute
the efficiency incentive by:
(1) subtracting the allowable difference from $4.50 and dividing the result by $4.50;
(2) multiplying 0.20 by the ratio resulting from clause (1), and then;
(3) adding 0.50 to the result from clause (2); and
(4) multiplying the result from clause (3) times the allowable difference.
The nursing facility's efficiency incentive payment shall be the lesser of $2.25 or the product
obtained in clause (4).
(d) For rate years beginning on or after July 1, 1997, the forecasted price index for a nursing
facility's allowable operating cost per diem shall be determined under clauses (1) and (2) using the
change in the Consumer Price Index-All Items (United States city average) (CPI-U) as forecasted
by Data Resources, Inc. The commissioner shall use the indices as forecasted in the fourth quarter
of the calendar year preceding the rate year, subject to subdivision 2l, paragraph (c).
(1) The CPI-U forecasted index for allowable operating cost per diem shall be based on
the 21-month period from the midpoint of the nursing facility's reporting year to the midpoint
of the rate year following the reporting year.
(2) For rate years beginning on or after July 1, 1997, the forecasted index for operating cost
limits referred to in subdivision 21, paragraph (b), shall be based on the CPI-U for the 12-month
period between the midpoints of the two reporting years preceding the rate year.
(e) After applying these provisions for the respective rate years, the commissioner shall
index these allowable operating cost per diem by the inflation factor provided for in paragraph
(d), clause (1), and add the nursing facility's efficiency incentive as computed in paragraph (c).
(f) For the rate years beginning on July 1, 1997, July 1, 1998, and July 1, 1999, a
nursing facility licensed for 40 beds effective May 1, 1992, with a subsequent increase of 20
Medicare/Medicaid certified beds, effective January 26, 1993, in accordance with an increase in
licensure is exempt from paragraphs (a) and (b).
(g) For a nursing facility whose construction project was authorized according to section
144A.073, subdivision 5, paragraph (g), the operating cost payment rates for the new location
shall be determined based on Minnesota Rules, part 9549.0057. The relocation allowed under
section 144A.073, subdivision 5, paragraph (g), and the rate determination allowed under this
paragraph must meet the cost neutrality requirements of section 144A.073, subdivision 3c.
Paragraphs (a) and (b) shall not apply until the second rate year after the settle-up cost report is
filed. Notwithstanding subdivision 2b, paragraph (g), real estate taxes and special assessments
payable by the new location, a 501(c)(3) nonprofit corporation, shall be included in the payment
rates determined under this subdivision for all subsequent rate years.
(h) For the rate year beginning July 1, 1997, the commissioner shall compute the payment
rate for a nursing facility licensed for 94 beds on September 30, 1996, that applied in October
1993 for approval of a total replacement under the moratorium exception process in section
144A.073, and completed the approved replacement in June 1995, with other operating cost
spend-up limit under paragraph (a), increased by $3.98, and after computing the facility's payment
rate according to this section, the commissioner shall make a one-year positive rate adjustment of
$3.19 for operating costs related to the newly constructed total replacement, without application
of paragraphs (a) and (b). The facility's per diem, before the $3.19 adjustment, shall be used as
the prior reporting year's allowable operating cost per diem for payment rate calculation for the
rate year beginning July 1, 1998. A facility described in this paragraph is exempt from paragraph
(b) for the rate years beginning July 1, 1997, and July 1, 1998.
(i) For the purpose of applying the limit stated in paragraph (a), a nursing facility in
Kandiyohi County licensed for 86 beds that was granted hospital-attached status on December 1,
1994, shall have the prior year's allowable care-related per diem increased by $3.207 and the prior
year's other operating cost per diem increased by $4.777 before adding the inflation in paragraph
(d), clause (2), for the rate year beginning on July 1, 1997.
(j) For the purpose of applying the limit stated in paragraph (a), a 117 bed nursing facility
located in Pine County shall have the prior year's allowable other operating cost per diem
increased by $1.50 before adding the inflation in paragraph (d), clause (2), for the rate year
beginning on July 1, 1997.
(k) For the purpose of applying the limit under paragraph (a), a nursing facility in Hibbing
licensed for 192 beds shall have the prior year's allowable other operating cost per diem increased
by $2.67 before adding the inflation in paragraph (d), clause (2), for the rate year beginning
July 1, 1997.
    Subd. 27. Changes to nursing facility reimbursement beginning July 1, 1998. (a) For
the purpose of applying the limit stated in subdivision 26, paragraph (a), a nursing facility
in Hennepin County licensed for 181 beds on September 30, 1996, shall have the prior year's
allowable care-related per diem increased by $1.455 and the prior year's other operating cost per
diem increased by $0.439 before adding the inflation in subdivision 26, paragraph (d), clause (2),
for the rate year beginning on July 1, 1998.
(b) For the purpose of applying the limit stated in subdivision 26, paragraph (a), a nursing
facility in Hennepin County licensed for 161 beds on September 30, 1996, shall have the prior
year's allowable care-related per diem increased by $1.154 and the prior year's other operating
cost per diem increased by $0.256 before adding the inflation in subdivision 26, paragraph (d),
clause (2), for the rate year beginning on July 1, 1998.
(c) For the purpose of applying the limit stated in subdivision 26, paragraph (a), a nursing
facility in Ramsey County licensed for 176 beds on September 30, 1996, shall have the prior
year's allowable care-related per diem increased by $0.803 and the prior year's other operating
cost per diem increased by $0.272 before adding the inflation in subdivision 26, paragraph (d),
clause (2), for the rate year beginning on July 1, 1998.
(d) For the purpose of applying the limit stated in subdivision 26, paragraph (a), a nursing
facility in Brown County licensed for 86 beds on September 30, 1996, shall have the prior year's
allowable care-related per diem increased by $0.850 and the prior year's other operating cost per
diem increased by $0.275 before adding the inflation in subdivision 26, paragraph (d), clause (2),
for the rate year beginning on July 1, 1998.
(e) For the rate year beginning July 1, 1998, the commissioner shall compute the payment
rate for a nursing facility, which was licensed for 110 beds on May 1, 1997, was granted approval
in January 1994 for a replacement and remodeling project under the moratorium exception
process in section 144A.073, and completed the approved replacement and remodeling project
on March 14, 1997, by increasing the other operating cost spend-up limit under paragraph (a)
by $1.64. After computing the facility's payment rate for the rate year beginning July 1, 1998,
according to this section, the commissioner shall make a one-year positive rate adjustment of
48 cents for increased real estate taxes resulting from completion of the moratorium exception
project, without application of paragraphs (a) and (b).
(f) For the rate year beginning July 1, 1998, the commissioner shall compute the payment
rate for a nursing facility exempted from care-related limits under subdivision 2b, paragraph (d),
clause (2), with a minimum of three-quarters of its beds licensed to provide residential services
for the physically disabled under Minnesota Rules, parts 9570.2000 to 9570.3400, with the
care-related spend-up limit under subdivision 26, paragraph (a), increased by $13.21 for the rate
year beginning July 1, 1998, without application of subdivision 26, paragraph (b). For rate years
beginning on or after July 1, 1999, the commissioner shall exclude that amount in calculating the
facility's operating cost per diem for purposes of applying subdivision 26, paragraph (b).
(g) For the rate year beginning July 1, 1998, a nursing facility in Canby, Minnesota, licensed
for 75 beds shall be reimbursed without the limitation imposed under subdivision 26, paragraph
(a), and for rate years beginning on or after July 1, 1999, its base costs shall be calculated on the
basis of its September 30, 1997, cost report.
(h) The nursing facility reimbursement changes in paragraphs (i) and (j) shall apply in the
sequence specified in this section and Minnesota Rules, parts 9549.0010 to 9549.0080, beginning
July 1, 1998.
(i) For rate years beginning on or after July 1, 1998, the operating cost limits established in
subdivisions 2, 2b, 2i, 3c, and 22, paragraph (d), and any previously effective corresponding limits
in law or rule shall not apply, except that these cost limits shall still be calculated for purposes of
determining efficiency incentive per diems. For rate years beginning on or after July 1, 1998, the
total operating cost payment rates for a nursing facility shall be the greater of the total operating
cost payment rates determined under this section or the total operating cost payment rates in effect
on June 30, 1998, subject to rate adjustments due to field audit or rate appeal resolution.
(j) For rate years beginning on or after July 1, 1998, the operating cost per diem referred
to in subdivision 26, paragraph (a), clauses (1) and (2), is the sum of the care-related and other
operating per diems for a given case mix class. Any reductions to the combined operating per
diem shall be divided proportionately between the care-related and other operating per diems.
(k) For rate years beginning on or after July 1, 1998, the commissioner shall modify the
determination of the spend-up limits referred to in subdivision 26, paragraph (a), by indexing each
group's previous year's median value by the factor in subdivision 26, paragraph (d), clause (2),
plus one percentage point.
(l) For rate years beginning on or after July 1, 1998, the commissioner shall modify the
determination of the high cost limits referred to in subdivision 26, paragraph (b), by indexing
each group's previous year's high cost per diem limits at .5 and one standard deviations above the
median by the factor in subdivision 26, paragraph (d), clause (2), plus one percentage point.
    Subd. 28. Nursing facility rate increases beginning July 1, 1999, and July 1, 2000. (a) For
the rate years beginning July 1, 1999, and July 1, 2000, the commissioner shall make available to
each nursing facility reimbursed under this section or section 256B.434 an adjustment to the total
operating payment rate. For nursing facilities reimbursed under this section or section 256B.434,
the July 1, 2000, operating payment rate increases provided in this subdivision shall be applied to
each facility's June 30, 2000, operating payment rate. For each facility, total operating costs shall
be separated into costs that are compensation related and all other costs. Compensation-related
costs include salaries, payroll taxes, and fringe benefits for all employees except management
fees, the administrator, and central office staff.
(b) For the rate year beginning July 1, 1999, the commissioner shall make available a rate
increase for compensation-related costs of 4.843 percent and a rate increase for all other operating
costs of 3.446 percent.
(c) For the rate year beginning July 1, 2000, the commissioner shall make available:
(1) a rate increase for compensation-related costs of 3.632 percent;
(2) an additional rate increase for each case mix payment rate which must be used to increase
the per-hour pay rate of all employees except management fees, the administrator, and central
office staff by an equal dollar amount and to pay associated costs for FICA, the Medicare tax,
workers' compensation premiums, and federal and state unemployment insurance, to be calculated
according to clauses (i) to (iii):
(i) the commissioner shall calculate the arithmetic mean of the 11 June 30, 2000, operating
rates for each facility;
(ii) the commissioner shall construct an array of nursing facilities from highest to lowest,
according to the arithmetic mean calculated in clause (i). A numerical rank shall be assigned to
each facility in the array. The facility with the highest mean shall be assigned a numerical rank
of one. The facility with the lowest mean shall be assigned a numerical rank equal to the total
number of nursing facilities in the array. All other facilities shall be assigned a numerical rank in
accordance with their position in the array;
(iii) the amount of the additional rate increase shall be $1 plus an amount equal to $3.13
multiplied by the ratio of the facility's numeric rank divided by the number of facilities in the
array; and
(3) a rate increase for all other operating costs of 2.585 percent.
Money received by a facility as a result of the additional rate increase provided under clause
(2) shall be used only for wage increases implemented on or after July 1, 2000, and shall not be
used for wage increases implemented prior to that date.
(d) The payment rate adjustment for each nursing facility must be determined under clause
(1) or (2):
(1) for each nursing facility that reports salaries for registered nurses, licensed practical
nurses, aides, orderlies, and attendants separately, the commissioner shall determine the payment
rate adjustment using the categories specified in paragraph (a) multiplied by the rate increases
specified in paragraph (b) or (c), and then dividing the resulting amount by the nursing facility's
actual resident days. In determining the amount of a payment rate adjustment for a nursing facility
reimbursed under section 256B.434, the commissioner shall determine the proportions of the
facility's rates that are compensation-related costs and all other operating costs based on the
facility's most recent cost report; and
(2) for each nursing facility that does not report salaries for registered nurses, licensed
practical nurses, aides, orderlies, and attendants separately, the payment rate adjustment shall
be computed using the facility's total operating costs, separated into the categories specified in
paragraph (a) in proportion to the weighted average of all facilities determined under clause (1),
multiplied by the rate increases specified in paragraph (b) or (c), and then dividing the resulting
amount by the nursing facility's actual resident days.
(e) A nursing facility may apply for the compensation-related payment rate adjustment
calculated under this subdivision. The application must be made to the commissioner and contain
a plan by which the nursing facility will distribute the compensation-related portion of the
payment rate adjustment to employees of the nursing facility. For nursing facilities in which the
employees are represented by an exclusive bargaining representative, an agreement negotiated and
agreed to by the employer and the exclusive bargaining representative constitutes the plan. For the
second rate year, a negotiated agreement constitutes the plan only if the agreement is finalized
after the date of enactment of all rate increases for the second rate year. The commissioner
shall review the plan to ensure that the payment rate adjustment per diem is used as provided
in paragraphs (a) to (c). To be eligible, a facility must submit its plan for the compensation
distribution by December 31 each year. A facility may amend its plan for the second rate year by
submitting a revised plan by December 31, 2000. If a facility's plan for compensation distribution
is effective for its employees after July 1 of the year that the funds are available, the payment rate
adjustment per diem shall be effective the same date as its plan.
(f) A copy of the approved distribution plan must be made available to all employees. This
must be done by giving each employee a copy or by posting it in an area of the nursing facility to
which all employees have access. If an employee does not receive the compensation adjustment
described in their facility's approved plan and is unable to resolve the problem with the facility's
management or through the employee's union representative, the employee may contact the
commissioner at an address or phone number provided by the commissioner and included in the
approved plan.
(g) If the reimbursement system under section 256B.435 is not implemented until July 1,
2001, the salary adjustment per diem authorized in subdivision 2i, paragraph (c), shall continue
until June 30, 2001.
(h) For the rate year beginning July 1, 1999, the following nursing facilities shall be allowed
a rate increase equal to 67 percent of the rate increase that would be allowed if subdivision
26, paragraph (a), was not applied:
(1) a nursing facility in Carver County licensed for 33 nursing home beds and four boarding
care beds;
(2) a nursing facility in Faribault County licensed for 159 nursing home beds on September
30, 1998; and
(3) a nursing facility in Houston County licensed for 68 nursing home beds on September
30, 1998.
(i) For the rate year beginning July 1, 1999, the following nursing facilities shall be allowed
a rate increase equal to 67 percent of the rate increase that would be allowed if subdivision
26, paragraphs (a) and (b), were not applied:
(1) a nursing facility in Chisago County licensed for 135 nursing home beds on September
30, 1998; and
(2) a nursing facility in Murray County licensed for 62 nursing home beds on September
30, 1998.
(j) For the rate year beginning July 1, 1999, a nursing facility in Hennepin County licensed
for 134 beds on September 30, 1998, shall:
(1) have the prior year's allowable care-related per diem increased by $3.93 and the prior
year's other operating cost per diem increased by $1.69 before adding the inflation in subdivision
26, paragraph (d), clause (2); and
(2) be allowed a rate increase equal to 67 percent of the rate increase that would be allowed
if subdivision 26, paragraphs (a) and (b), were not applied.
The increases provided in paragraphs (h), (i), and (j) shall be included in the facility's total
payment rates for the purposes of determining future rates under this section or any other section.
(k) For the rate years beginning on or after July 1, 2000, a nursing home facility in Goodhue
County that was licensed for 104 beds on February 1, 2000, shall have its employee pension
benefit costs reported on its Rule 50 cost report treated as PERA contributions for the purpose of
computing its payment rates.
    Subd. 29. Facility rate increases effective July 1, 2000. Following the determination
under subdivision 28 of the payment rate for the rate year beginning July 1, 2000, for a facility
in Roseau County licensed for 49 beds, the facility's operating cost per diem shall be increased
by the following amounts:
(1) case mix class A, $1.97;
(2) case mix class B, $2.11;
(3) case mix class C, $2.26;
(4) case mix class D, $2.39;
(5) case mix class E, $2.54;
(6) case mix class F, $2.55;
(7) case mix class G, $2.66;
(8) case mix class H, $2.90;
(9) case mix class I, $2.97;
(10) case mix class J, $3.10; and
(11) case mix class K, $3.36.
These increases shall be included in the facility's total payment rates for the purpose of
determining future rates under this section or any other section.
    Subd. 30. Bed layaway and delicensure. (a) For rate years beginning on or after July
1, 2000, a nursing facility reimbursed under this section which has placed beds on layaway
shall, for purposes of application of the downsizing incentive in subdivision 3a, paragraph (c),
and calculation of the rental per diem, have those beds given the same effect as if the beds had
been delicensed so long as the beds remain on layaway. At the time of a layaway, a facility may
change its single bed election for use in calculating capacity days under Minnesota Rules, part
9549.0060, subpart 11. The property payment rate increase shall be effective the first day of the
month following the month in which the layaway of the beds becomes effective under section
144A.071, subdivision 4b.
(b) For rate years beginning on or after July 1, 2000, notwithstanding any provision to the
contrary under section 256B.434, a nursing facility reimbursed under that section which has
placed beds on layaway shall, for so long as the beds remain on layaway, be allowed to:
(1) aggregate the applicable investment per bed limits based on the number of beds licensed
immediately prior to entering the alternative payment system;
(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and
(3) establish capacity days based on the number of beds immediately prior to the layaway
and the number of beds after the layaway.
The commissioner shall increase the facility's property payment rate by the incremental increase
in the rental per diem resulting from the recalculation of the facility's rental per diem applying
only the changes resulting from the layaway of beds and clauses (1), (2), and (3). If a facility
reimbursed under section 256B.434 completes a moratorium exception project after its base year,
the base year property rate shall be the moratorium project property rate. The base year rate
shall be inflated by the factors in section 256B.434, subdivision 4, paragraph (c). The property
payment rate increase shall be effective the first day of the month following the month in which
the layaway of the beds becomes effective.
(c) If a nursing facility removes a bed from layaway status in accordance with section
144A.071, subdivision 4b, the commissioner shall establish capacity days based on the number of
licensed and certified beds in the facility not on layaway and shall reduce the nursing facility's
property payment rate in accordance with paragraph (b).
(d) For the rate years beginning on or after July 1, 2000, notwithstanding any provision to
the contrary under section 256B.434, a nursing facility reimbursed under that section, which
has delicensed beds after July 1, 2000, by giving notice of the delicensure to the commissioner
of health according to the notice requirements in section 144A.071, subdivision 4b, shall be
allowed to:
(1) aggregate the applicable investment per bed limits based on the number of beds licensed
immediately prior to entering the alternative payment system;
(2) retain or change the facility's single bed election for use in calculating capacity days
under Minnesota Rules, part 9549.0060, subpart 11; and
(3) establish capacity days based on the number of beds immediately prior to the delicensure
and the number of beds after the delicensure.
The commissioner shall increase the facility's property payment rate by the incremental increase
in the rental per diem resulting from the recalculation of the facility's rental per diem applying
only the changes resulting from the delicensure of beds and clauses (1), (2), and (3). If a facility
reimbursed under section 256B.434 completes a moratorium exception project after its base year,
the base year property rate shall be the moratorium project property rate. The base year rate
shall be inflated by the factors in section 256B.434, subdivision 4, paragraph (c). The property
payment rate increase shall be effective the first day of the month following the month in which
the delicensure of the beds becomes effective.
(e) For nursing facilities reimbursed under this section or section 256B.434, any beds placed
on layaway shall not be included in calculating facility occupancy as it pertains to leave days
defined in Minnesota Rules, part 9505.0415.
(f) For nursing facilities reimbursed under this section or section 256B.434, the rental rate
calculated after placing beds on layaway may not be less than the rental rate prior to placing
beds on layaway.
(g) A nursing facility receiving a rate adjustment as a result of this section shall comply
with section 256B.47, subdivision 2.
(h) A facility that does not utilize the space made available as a result of bed layaway or
delicensure under this subdivision to reduce the number of beds per room or provide more
common space for nursing facility uses or perform other activities related to the operation of the
nursing facility shall have its property rate increase calculated under this subdivision reduced
by the ratio of the square footage made available that is not used for these purposes to the total
square footage made available as a result of bed layaway or delicensure.
    Subd. 31. Nursing facility rate increases beginning July 1, 2001, and July 1, 2002. For
the rate years beginning July 1, 2001, and July 1, 2002, the commissioner shall provide to each
nursing facility reimbursed under this section or section 256B.434 an adjustment equal to 3.0
percent of the total operating payment rate. The operating payment rates in effect on June 30,
2001, shall include the adjustment in subdivision 2i, paragraph (c).
    Subd. 32. Payment during first 90 days. (a) For rate years beginning on or after July 1,
2001, the total payment rate for a facility reimbursed under this section, section 256B.434, or any
other section for the first 90 paid days after admission shall be:
(1) for the first 30 paid days, the rate shall be 120 percent of the facility's medical assistance
rate for each case mix class;
(2) for the next 60 paid days after the first 30 paid days, the rate shall be 110 percent of the
facility's medical assistance rate for each case mix class;
(3) beginning with the 91st paid day after admission, the payment rate shall be the rate
otherwise determined under this section, section 256B.434, or any other section; and
(4) payments under this paragraph apply to admissions occurring on or after July 1, 2001,
and before July 1, 2003, and to resident days occurring before July 30, 2003.
(b) For rate years beginning on or after July 1, 2003, the total payment rate for a facility
reimbursed under this section, section 256B.434, or any other section shall be:
(1) for the first 30 calendar days after admission, the rate shall be 120 percent of the facility's
medical assistance rate for each RUG class;
(2) beginning with the 31st calendar day after admission, the payment rate shall be the rate
otherwise determined under this section, section 256B.434, or any other section; and
(3) payments under this paragraph apply to admissions occurring on or after July 1, 2003.
(c) Effective January 1, 2004, the enhanced rates under this subdivision shall not be allowed
if a resident has resided during the previous 30 calendar days in:
(1) the same nursing facility;
(2) a nursing facility owned or operated by a related party; or
(3) a nursing facility or part of a facility that closed or was in the process of closing.
    Subd. 33. Staged reduction in rate disparities. (a) For the rate years beginning July 1,
2001, and July 1, 2002, the commissioner shall adjust the operating payment rates for low-rate
nursing facilities reimbursed under this section or section 256B.434.
(b) For the rate year beginning July 1, 2001, for each case mix level, if the amount computed
under subdivision 31 is less than the amount in clause (1), the commissioner shall make available
the lesser of the amount in clause (1) or an increase of ten percent over the rate in effect on June
30, 2001, as an adjustment to the operating payment rate. For the rate year beginning July 1, 2002,
for each case mix level, if the amount computed under subdivision 31 is less than the amount in
clause (2), the commissioner shall make available the lesser of the amount in clause (2) or an
increase of ten percent over the rate in effect on June 30, 2002, as an adjustment to the operating
payment rate. For purposes of this subdivision, nursing facilities shall be considered to be metro if
they are located in Anoka, Carver, Dakota, Hennepin, Olmsted, Ramsey, Scott, or Washington
Counties; or in the cities of Moorhead or Breckenridge; or in St. Louis County, north of Toivola
and south of Cook; or in Itasca County, east of a north south line two miles west of Grand Rapids:
(1) Operating Payment Rate Target Level for July 1, 2001:

	Case Mix Classification	Metro	Nonmetro
	A	$ 76.00	$ 68.13
	B	$ 83.40	$ 74.46
	C	$ 91.67	$ 81.63
	D	$ 99.51	$ 88.04
	E	$107.46	$ 94.87
	F	$107.96	$ 95.29
	G	$114.67	$100.98
	H	$126.99	$111.31
	I	$131.42	$115.06
	J	$138.34	$120.85
	K	$152.26	$133.10

(2) Operating Payment Rate Target Level for July 1, 2002:

	Case Mix Classification	Metro	Nonmetro
	A	$ 78.28	$ 70.51
	B	$ 85.91	$ 77.16
	C	$ 94.42	$ 84.62
	D	$102.50	$ 91.42
	E	$110.68	$ 98.40
	F	$111.20	$ 98.84
	G	$118.11	$104.77
	H	$130.80	$115.64
	I	$135.38	$119.50
	J	$142.49	$125.38
	K	$156.85	$137.77

    Subd. 34. Nursing facility rate increases beginning July 1, 2001, and July 1, 2002. (a) For
the rate years beginning July 1, 2001, and July 1, 2002, two-thirds of the money resulting from the
rate adjustment under subdivision 31 and one-half of the money resulting from the rate adjustment
under subdivisions 32 and 33 must be used to increase the wages and benefits and pay associated
costs of all employees except management fees, the administrator, and central office staff.
(b) Money received by a facility as a result of the rate adjustments provided in subdivisions
31 to 33, which must be used as provided in paragraph (a), must be used only for wage and benefit
increases implemented on or after July 1, 2001, or July 1, 2002, respectively, and must not be
used for wage increases implemented prior to those dates.
(c) Nursing facilities may apply for the portions of the rate adjustments under subdivisions
31 to 33, which must be used as provided in paragraph (a). The application must be made to the
commissioner and contain a plan by which the nursing facility will distribute to employees of the
nursing facility the funds, which must be used as provided in paragraph (a). For nursing facilities
in which the employees are represented by an exclusive bargaining representative, an agreement
negotiated and agreed to by the employer and the exclusive bargaining representative constitutes
the plan. A negotiated agreement may constitute the plan only if the agreement is finalized after
the date of enactment of all increases for the rate year. The commissioner shall review the plan to
ensure that the rate adjustments are used as provided in paragraph (a). To be eligible, a facility
must submit its plan for the wage and benefit distribution by December 31 each year. If a facility's
plan for wage and benefit distribution is effective for its employees after July 1 of the year that
the funds are available, the portion of the rate adjustments, which must be used as provided in
paragraph (a), are effective the same date as its plan.
(d) A hospital-attached nursing facility may include costs in their distribution plan for wages
and benefits and associated costs of employees in the organization's shared services departments,
provided that:
(1) the nursing facility and the hospital share common ownership; and
(2) adjustments for hospital services using the diagnostic-related grouping payment rates
per admission under Medicare are less than three percent during the 12 months prior to the
effective date of these rate adjustments.
If a hospital-attached facility meets the qualifications in this paragraph, the difference
between the rate adjustments approved for nursing facility services and the rate increase approved
for hospital services may be permitted as a distribution in the hospital-attached facility's plan
regardless of whether the use of those funds is shown as being attributable to employee hours
worked in the nursing facility or employee hours worked in the hospital.
For the purposes of this paragraph, a hospital-attached nursing facility is one that meets the
definition under subdivision 2j, or, in the case of a facility reimbursed under section 256B.434,
met this definition at the time their last payment rate was established under Minnesota Rules,
parts 9549.0010 to 9549.0080, and this section.
(e) A copy of the approved distribution plan must be made available to all employees by
giving each employee a copy or by posting it in an area of the nursing facility to which all
employees have access. If an employee does not receive the wage and benefit adjustment described
in the facility's approved plan and is unable to resolve the problem with the facility's management
or through the employee's union representative, the employee may contact the commissioner at an
address or telephone number provided by the commissioner and included in the approved plan.
(f) Notwithstanding section 256B.48, subdivision 1, clause (a), upon the request of a nursing
facility, the commissioner may authorize the facility to raise per diem rates for private-pay
residents on July 1 by the amount anticipated to be required upon implementation of the rate
adjustments allowable under subdivisions 31 to 33. The commissioner shall require any amounts
collected under this paragraph, which must be used as provided in paragraph (a), to be placed in
an escrow account established for this purpose with a financial institution that provides deposit
insurance until the medical assistance rate is finalized. The commissioner shall conduct audits
as necessary to ensure that:
(1) the amounts collected are retained in escrow until medical assistance rates are increased
to reflect the wage-related adjustment; and
(2) any amounts collected from private-pay residents in excess of the final medical assistance
rate are repaid to the private-pay residents with interest at the rate used by the commissioner of
revenue for the late payment of taxes and in effect on the date the distribution plan is approved by
the commissioner of human services.
    Subd. 35. Exclusion of raw food cost adjustment. For rate years beginning on or after July
1, 2001, in calculating a nursing facility's operating cost per diem for the purposes of constructing
an array, determining a median, or otherwise performing a statistical measure of nursing facility
payment rates to be used to determine future rate increases under this section, section 256B.434,
or any other section, the commissioner shall exclude adjustments for raw food costs under
subdivision 2b, paragraph (h), that are related to providing special diets based on religious beliefs.
    Subd. 36. Employee scholarship costs and training in English as a second language. (a)
For the period between July 1, 2001, and June 30, 2003, the commissioner shall provide to
each nursing facility reimbursed under this section, section 256B.434, or any other section, a
scholarship per diem of 25 cents to the total operating payment rate to be used:
(1) for employee scholarships that satisfy the following requirements:
(i) scholarships are available to all employees who work an average of at least 20 hours per
week at the facility except the administrator, department supervisors, and registered nurses; and
(ii) the course of study is expected to lead to career advancement with the facility or in
long-term care, including medical care interpreter services and social work; and
(2) to provide job-related training in English as a second language.
(b) A facility receiving a rate adjustment under this subdivision may submit to the
commissioner on a schedule determined by the commissioner and on a form supplied by the
commissioner a calculation of the scholarship per diem, including: the amount received from
this rate adjustment; the amount used for training in English as a second language; the number
of persons receiving the training; the name of the person or entity providing the training; and
for each scholarship recipient, the name of the recipient, the amount awarded, the educational
institution attended, the nature of the educational program, the program completion date, and a
determination of the per diem amount of these costs based on actual resident days.
(c) On July 1, 2003, the commissioner shall remove the 25 cent scholarship per diem from
the total operating payment rate of each facility.
(d) For rate years beginning after June 30, 2003, the commissioner shall provide to each
facility the scholarship per diem determined in paragraph (b). In calculating the per diem under
paragraph (b), the commissioner shall allow only costs related to tuition and direct educational
expenses.
    Subd. 37. Nursing home rate increases effective July 1, 2002. For rate years beginning on
or after July 1, 2002, the commissioner shall provide to each nursing home reimbursed under
this section or section 256B.434 an increase in each case mix payment rate equal to the increase
in the per-bed surcharge paid under section 256.9657, subdivision 1, paragraph (c), divided by
365 and further divided by .80. The increase under this subdivision shall be added following
the determination of the payment rate for the home under this chapter. The increase shall not
be subject to any annual percentage increase.
    Subd. 38. Nursing home rate increases effective in fiscal year 2003. Effective June 1,
2003, the commissioner shall provide to each nursing home reimbursed under this section or
section 256B.434, an increase in each case mix payment rate equal to the increase in the per-bed
surcharge paid under section 256.9657, subdivision 1, paragraph (d), divided by 365 and further
divided by .90. The increase shall not be subject to any annual percentage increase. The 30-day
advance notice requirement in section 256B.47, subdivision 2, shall not apply to rate increases
resulting from this section. The commissioner shall not adjust the rate increase under this
subdivision unless the adjustment is greater than 1.5 percent of the monthly surcharge payment
amount under section 256.9657, subdivision 4.
    Subd. 39. Facility rates beginning on or after July 1, 2003. For rate years beginning on or
after July 1, 2003, nursing facilities reimbursed under this section shall have their July 1 operating
payment rate be equal to their operating payment rate in effect on the prior June 30th.
    Subd. 40. Designation of areas to receive metropolitan rates. (a) For rate years beginning
on or after July 1, 2004, and subject to paragraph (b), nursing facilities located in areas designated
as metropolitan areas by the federal Office of Management and Budget using Census Bureau
data shall be considered metro, in order to:
(1) determine rate increases under this section, section 256B.434, or any other section; and
(2) establish nursing facility reimbursement rates for the new nursing facility reimbursement
system developed under Laws 2001, First Special Session chapter 9, article 5, section 35, as
amended by Laws 2002, chapter 220, article 14, section 19.
(b) Paragraph (a) applies only if designation as a metro facility results in a level of
reimbursement that is higher than the level the facility would have received without application of
that paragraph.
    Subd. 41. Rate increases for October 1, 2005, and October 1, 2006. (a) For the rate
period beginning October 1, 2005, the commissioner shall make available to each nursing facility
reimbursed under this section or section 256B.434 an adjustment equal to 2.2553 percent of the
total operating payment rate, and for the rate year beginning October 1, 2006, the commissioner
shall make available to each nursing facility reimbursed under this section or section 256B.434 an
adjustment equal to 1.2553 percent of the total operating payment rate.
(b) 75 percent of the money resulting from the rate adjustment under paragraph (a) must
be used to increase wages and benefits and pay associated costs for all employees, except
management fees, the administrator, and central office staff. Except as provided in paragraph (c),
75 percent of the money received by a facility as a result of the rate adjustment provided in
paragraph (a) must be used only for wage, benefit, and staff increases implemented on or after
the effective date of the rate increase each year, and must not be used for increases implemented
prior to that date.
(c) With respect only to the October 1, 2005, rate increase, a nursing facility that incurred
costs for salary and employee benefit increases first provided after July 1, 2003, may count those
costs towards the amount required to be spent on salaries and benefits under paragraph (b). These
costs must be reported to the commissioner in the form and manner specified by the commissioner.
(d) Nursing facilities may apply for the portion of the rate adjustment under paragraph (a)
for employee wages and benefits and associated costs. The application must be made to the
commissioner and contain a plan by which the nursing facility will distribute the funds according
to paragraph (b). For nursing facilities in which the employees are represented by an exclusive
bargaining representative, an agreement negotiated and agreed to by the employer and the
exclusive bargaining representative constitutes the plan. A negotiated agreement may constitute
the plan only if the agreement is finalized after the date of enactment of all increases for the rate
year and signed by both parties prior to submission to the commissioner. The commissioner shall
review the plan to ensure that the rate adjustments are used as provided in paragraph (b). To be
eligible, a facility must submit its distribution plan by March 31, 2006, and March 31, 2007,
respectively. The commissioner may approve distribution plans on or before June 30, 2006, and
June 30, 2007, respectively. If a facility's distribution plan is effective after the first day of the
applicable rate period that the funds are available, the rate adjustments are effective the same
date as the facility's plan.
(e) A copy of the approved distribution plan must be made available to all employees by
giving each employee a copy or by posting a copy in an area of the nursing facility to which all
employees have access. If an employee does not receive the wage and benefit adjustment described
in the facility's approved plan and is unable to resolve the problem with the facility's management
or through the employee's union representative, the employee may contact the commissioner at an
address or telephone number provided by the commissioner and included in the approved plan.
    Subd. 42. Incentive to establish single-bed rooms. (a) Beginning July 1, 2005, the operating
payment rate for nursing facilities reimbursed under this section, section 256B.434, or 256B.441
shall be increased by 20 percent multiplied by the ratio of the number of new single-bed rooms
created divided by the number of active beds on July 1, 2005, for each bed closure that results
in the creation of a single-bed room after July 1, 2005. The commissioner may implement rate
adjustments for up to 3,000 new single-bed rooms each year. For eligible bed closures for which
the commissioner receives a notice from a facility during a calendar quarter that a bed has been
delicensed and a new single-bed room has been established, the rate adjustment in this paragraph
shall be effective on the first day of the second month following that calendar quarter.
(b) A nursing facility is prohibited from discharging residents for purposes of establishing
single-bed rooms. A nursing facility must submit documentation to the commissioner in a
form prescribed by the commissioner, certifying the occupancy status of beds closed to create
single-bed rooms. In the event that the commissioner determines that a facility has discharged a
resident for purposes of establishing a single-bed room, the commissioner shall not provide a
rate adjustment under paragraph (a).
(c) If after August 1, 2005, and before December 31, 2007, more than 4,000 nursing home
beds are removed from service, a portion of the appropriation for nursing homes shall be
transferred to the alternative care program. The amount of this transfer shall equal the number
of beds removed from service less 4,000, multiplied by the average monthly per-person cost for
alternative care, multiplied by 12, and further multiplied by 0.3.
    Subd. 43. Rate increase for facilities in Stearns, Sherburne, and Benton Counties.
Effective July 1, 2006, operating payment rates of nursing facilities in Stearns, Sherburne, and
Benton Counties that are reimbursed under this section, section 256B.434, or section 256B.441
shall be increased to be equal, for a RUG's rate with a weight of 1.00, to the geographic group III
median rate for the same RUG's weight. The percentage of the operating payment rate for each
facility to be case-mix adjusted shall be equal to the percentage that is case-mix adjusted in that
facility's June 30, 2006, operating payment rate. This subdivision shall apply only if it results in a
rate increase. Increases provided by this subdivision shall be added to the rate determined under
any new reimbursement system established under section 256B.440.
History: 1983 c 199 s 12; 1984 c 640 s 32; 1984 c 641 s 17-20,22; 1984 c 654 art 5 s 58;
1984 c 655 art 1 s 40,41; 1985 c 248 s 40,69; 1985 c 267 s 3; 1Sp1985 c 3 s 25,27-29,31; 1986 c
316 s 2; 1987 c 403 art 2 s 89; art 4 s 6-11; 1988 c 689 art 2 s 154-161; 1988 c 719 art 19 s 9;
1989 c 12 s 1,2; 1989 c 282 art 3 s 66-78; 1990 c 568 art 3 s 65-72; 1991 c 292 art 4 s 54-60; art
6 s 49,50; art 7 s 25; 1992 c 464 art 1 s 29; 1992 c 513 art 7 s 88-103,136; 1992 c 603 s 19; 1993
c 339 s 20; 1Sp1993 c 1 art 5 s 90-99; 1995 c 207 art 6 s 85,86; art 7 s 23-26; 1996 c 305 art 2 s
48; 1996 c 451 art 3 s 3; 1997 c 2 s 10; 1997 c 107 s 8; 1997 c 187 art 3 s 29; 1997 c 203 art 3 s
7,8; art 4 s 46; 1998 c 407 art 3 s 4-11; art 4 s 42; 1999 c 245 art 3 s 17-20; 2000 c 271 s 1;
2000 c 294 s 2; 2000 c 449 s 3-12; 2000 c 488 art 9 s 18-21; 2000 c 499 s 23; 1Sp2001 c 9 art
5 s 15-21; art 6 s 6; 2002 c 220 art 14 s 9,10; 2002 c 277 s 32; 2002 c 374 art 10 s 5,6; 2002
c 375 art 2 s 35-38; 2002 c 379 art 1 s 113; 2003 c 9 s 2; 2003 c 16 s 2; 1Sp2003 c 14 art 2 s
30-35; 2004 c 194 s 1; 2004 c 288 art 5 s 7,8; 2005 c 10 art 1 s 54; 2005 c 56 s 1; 2005 c 151
art 2 s 17; 1Sp2005 c 4 art 7 s 33,34; 2006 c 282 art 20 s 20

256B.432 LONG-TERM CARE FACILITIES; OFFICE COSTS.
    Subdivision 1. Definitions. For purposes of this section, the following terms have the
meanings given them.
(a) "Management agreement" means an agreement in which one or more of the following
criteria exist:
(1) the central, affiliated, or corporate office has or is authorized to assume day-to-day
operational control of the nursing facility for any six-month period within a 24-month period.
"Day-to-day operational control" means that the central, affiliated, or corporate office has the
authority to require, mandate, direct, or compel the employees of the nursing facility to perform
or refrain from performing certain acts, or to supplant or take the place of the top management of
the nursing facility. "Day-to-day operational control" includes the authority to hire or terminate
employees or to provide an employee of the central, affiliated, or corporate office to serve as
administrator of the nursing facility;
(2) the central, affiliated, or corporate office performs or is authorized to perform two or more
of the following: the execution of contracts; authorization of purchase orders; signature authority
for checks, notes, or other financial instruments; requiring the nursing facility to use the group or
volume purchasing services of the central, affiliated, or corporate office; or the authority to make
annual capital expenditures for the nursing facility exceeding $50,000, or $500 per licensed bed,
whichever is less, without first securing the approval of the nursing facility board of directors;
(3) the central, affiliated, or corporate office becomes or is required to become the licensee
under applicable state law;
(4) the agreement provides that the compensation for services provided under the agreement
is directly related to any profits made by the nursing facility; or
(5) the nursing facility entering into the agreement is governed by a governing body that
meets fewer than four times a year, that does not publish notice of its meetings, or that does
not keep formal records of its proceedings.
(b) "Consulting agreement" means any agreement the purpose of which is for a central,
affiliated, or corporate office to advise, counsel, recommend, or suggest to the owner or operator
of the nonrelated nursing facility measures and methods for improving the operations of the
nursing facility.
(c) "Nursing facility" means a facility with a medical assistance provider agreement that
is licensed as a nursing home under chapter 144A or as a boarding care home under sections
144.50 to 144.56.
    Subd. 2. Effective date. For rate years beginning on or after July 1, 1990, the central,
affiliated, or corporate office cost allocations in subdivisions 3 to 6 must be used when determining
medical assistance rates under section 256B.431, 256B.434, or 256B.441.
    Subd. 3. Allocation; direct identification of costs; management agreement. All costs that
can be directly identified with a specific nursing facility that is a related organization to the
central, affiliated, or corporate office, or that is controlled by the central, affiliated, or corporate
office under a management agreement, must be allocated to that nursing facility.
    Subd. 4. Allocation; direct identification of costs to other activities. All costs that can
be directly identified with any other activity or function not described in subdivision 3 must be
allocated to that activity or function.
    Subd. 4a. Cost allocation on a functional basis. (a) Costs that have not been directly
identified must be allocated to nursing facilities on a basis designed to equitably allocate the costs
to the nursing facilities or activities receiving the benefits of the costs. This allocation must be
made in a manner reasonably related to the services received by the nursing facilities. Where
practical and the amounts are material, these costs must be allocated on a functional basis. The
functions, or cost centers used to allocate central office costs, and the unit bases used to allocate
the costs, including those central office costs allocated according to subdivision 5, must be used
consistently from one central office accounting period to another.
(b) If the central office wishes to change its allocation bases and believes the change will
result in more appropriate and more accurate allocations, the central office must make a written
request, with its justification, to the commissioner for approval of the change no later than 120
days after the beginning of the central office accounting period to which the change is to apply.
The commissioner's approval of a central office request will be furnished to the central office in
writing. Where the commissioner approves the central office request, the change must be applied
to the accounting period for which the request was made, and to all subsequent central office
accounting periods unless the commissioner approves a subsequent request for change by the
central office. The effective date of the change will be the beginning of the accounting period for
which the request was made.
    Subd. 5. Allocation of remaining costs; allocation ratio. (a) After the costs that can be
directly identified according to subdivisions 3 and 4 have been allocated, the remaining central,
affiliated, or corporate office costs must be allocated between the nursing facility operations and
the other activities or facilities unrelated to the nursing facility operations based on the ratio of
total operating costs. However, in the event that these remaining costs are partially attributable to
the start-up of home and community-based services intended to fill a gap identified by the local
agency, the facility may assign these remaining costs to the appropriate cost category of the
facility for a period not to exceed two years.
(b) For purposes of allocating these remaining central, affiliated, or corporate office costs,
the numerator for the allocation ratio shall be determined as follows:
(1) for nursing facilities that are related organizations or are controlled by a central, affiliated,
or corporate office under a management agreement, the numerator of the allocation ratio shall be
equal to the sum of the total operating costs incurred by each related organization or controlled
nursing facility;
(2) for a central, affiliated, or corporate office providing goods or services to related
organizations that are not nursing facilities, the numerator of the allocation ratio shall be equal to
the sum of the total operating costs incurred by the nonnursing facility related organizations;
(3) for a central, affiliated, or corporate office providing goods or services to unrelated nursing
facilities under a consulting agreement, the numerator of the allocation ratio shall be equal to the
greater of directly identified central, affiliated, or corporate costs or the contracted amount; or
(4) for business activities that involve the providing of goods or services to unrelated parties
which are not nursing facilities, the numerator of the allocation ratio shall be equal to the greater
of directly identified costs or revenues generated by the activity or function.
(c) The denominator for the allocation ratio is the sum of the numerators in paragraph (b),
clauses (1) to (4).
    Subd. 6. Cost allocation between nursing facilities. (a) Those nursing operations that have
nursing facilities both in Minnesota and comparable facilities outside of Minnesota must allocate
the nursing operation's central, affiliated, or corporate office costs identified in subdivision 5 to
Minnesota based on the ratio of total resident days in Minnesota nursing facilities to the total
resident days in all facilities.
(b) The Minnesota nursing operation's central, affiliated, or corporate office costs identified
in paragraph (a) must be allocated to each Minnesota nursing facility on the basis of resident days.
    Subd. 6a. Related organization costs. (a) Costs applicable to services, capital assets, and
supplies directly or indirectly furnished to the nursing facility by any related organization are
includable in the allowable cost of the nursing facility at the purchase price paid by the related
organization for capital assets or supplies and at the cost incurred by the related organization for
the provision of services to the nursing facility if these prices or costs do not exceed the price
of comparable services, capital assets, or supplies that could be purchased elsewhere. For this
purpose, the related organization's costs must not include an amount for markup or profit.
(b) If the related organization in the normal course of business sells services, capital assets,
or supplies to nonrelated organizations, the cost to the nursing facility shall be the nonrelated
organization's price provided that sales to nonrelated organizations constitute at least 50 percent
of total annual sales of similar services, capital assets, or supplies.
    Subd. 7. Receiverships. This section does not apply to payment rates determined under
sections 245A.12, 245A.13, and 256B.495, except that any additional directly identified costs
associated with the Department of Human Services' or the department of health's managing agent
under a receivership agreement must be allocated to the facility under receivership, and are
nonallowable costs to the managing agent on the facility's cost reports.
    Subd. 8. Adequate documentation supporting long-term care facility payrolls. Beginning
July 1, 1998, payroll records supporting compensation costs claimed by long-term care facilities
must be supported by affirmative time and attendance records prepared by each individual
at intervals of not more than one month. The requirements of this subdivision are met when
documentation is provided under either clause (1) or (2) as follows:
(1) the affirmative time and attendance record must identify the individual's name; the
days worked during each pay period; the number of hours worked each day; and the number of
hours taken each day by the individual for vacation, sick, and other leave. The affirmative time
and attendance record must include a signed verification by the individual and the individual's
supervisor, if any, that the entries reported on the record are correct; or
(2) if the affirmative time and attendance records identifying the individual's name, the days
worked each pay period, the number of hours worked each day, and the number of hours taken
each day by the individual for vacation, sick, and other leave are placed on microfilm, equipment
must be made available for viewing and printing them, or if the records are stored as automated
data, summary data must be available for viewing and printing.
History: 1990 c 568 art 3 s 73; 1992 c 513 art 7 s 104,136; 1Sp1993 c 1 art 5 s 100,101;
1995 c 207 art 7 s 27-31; 1996 c 451 art 5 s 27; 1998 c 274 s 1; 1Sp2005 c 4 art 7 s 35-39

256B.433 ANCILLARY SERVICES.
    Subdivision 1. Setting payment; monitoring use of therapy services. The commissioner
shall promulgate rules pursuant to the Administrative Procedure Act to set the amount and
method of payment for ancillary materials and services provided to recipients residing in nursing
facilities. Payment for materials and services may be made to either the nursing facility in the
operating cost per diem, to the vendor of ancillary services pursuant to Minnesota Rules, parts
9505.0170 to 9505.0475 or to a nursing facility pursuant to Minnesota Rules, parts 9505.0170 to
9505.0475. Payment for the same or similar service to a recipient shall not be made to both the
nursing facility and the vendor. The commissioner shall ensure the avoidance of double payments
through audits and adjustments to the nursing facility's annual cost report as required by section
256B.47, and that charges and arrangements for ancillary materials and services are cost-effective
and as would be incurred by a prudent and cost-conscious buyer. Therapy services provided to a
recipient must be medically necessary and appropriate to the medical condition of the recipient.
If the vendor, nursing facility, or ordering physician cannot provide adequate medical necessity
justification, as determined by the commissioner, the commissioner may recover or disallow the
payment for the services and may require prior authorization for therapy services as a condition of
payment or may impose administrative sanctions to limit the vendor, nursing facility, or ordering
physician's participation in the medical assistance program. If the provider number of a nursing
facility is used to bill services provided by a vendor of therapy services that is not related to
the nursing facility by ownership, control, affiliation, or employment status, no withholding of
payment shall be imposed against the nursing facility for services not medically necessary except
for funds due the unrelated vendor of therapy services as provided in subdivision 3, paragraph (c).
For the purpose of this subdivision, no monetary recovery may be imposed against the nursing
facility for funds paid to the unrelated vendor of therapy services as provided in subdivision 3,
paragraph (c), for services not medically necessary. For purposes of this section and section
256B.47, therapy includes physical therapy, occupational therapy, speech therapy, audiology, and
mental health services that are covered services according to Minnesota Rules, parts 9505.0170 to
9505.0475, and that could be reimbursed separately from the nursing facility per diem.
    Subd. 2. Certification that treatment is appropriate. The physical therapist, occupational
therapist, speech therapist, mental health professional, or audiologist who provides or supervises
the provision of therapy services, other than an initial evaluation, to a medical assistance recipient
must certify in writing that the therapy's nature, scope, duration, and intensity are appropriate to
the medical condition of the recipient every 30 days. The therapist's statement of certification must
be maintained in the recipient's medical record together with the specific orders by the physician
and the treatment plan. If the recipient's medical record does not include these documents, the
commissioner may recover or disallow the payment for such services. If the therapist determines
that the therapy's nature, scope, duration, or intensity is not appropriate to the medical condition
of the recipient, the therapist must provide a statement to that effect in writing to the nursing
facility for inclusion in the recipient's medical record. The commissioner shall utilize a peer
review program that meets the requirements of section 256B.064, subdivision 1a, to make
recommendations regarding the medical necessity of services provided.
    Subd. 3. Separate billings for therapy services. Until new procedures are developed under
subdivision 4, payment for therapy services provided to nursing facility residents that are billed
separate from nursing facility's payment rate or according to Minnesota Rules, parts 9505.0170
to 9505.0475, shall be subject to the following requirements:
(a) The practitioner invoice must include, in a format specified by the commissioner, the
provider number of the nursing facility where the medical assistance recipient resides regardless
of the service setting.
(b) Nursing facilities that are related by ownership, control, affiliation, or employment
status to the vendor of therapy services shall report, in a format specified by the commissioner,
the revenues received during the reporting year for therapy services provided to residents of the
nursing facility. For rate years beginning on or after July 1, 1988, the commissioner shall offset
the revenues received during the reporting year for therapy services provided to residents of the
nursing facility to the total payment rate of the nursing facility by dividing the amount of offset by
the nursing facility's actual resident days. Except as specified in paragraphs (d) and (f), the amount
of offset shall be the revenue in excess of 108 percent of the cost removed from the cost report
resulting from the requirement of the commissioner to ensure the avoidance of double payments
as determined by section 256B.47. Therapy revenues that are specific to mental health services
shall be subject to this paragraph for rate years beginning after June 30, 1993. In establishing
a new base period for the purpose of setting operating cost payment rate limits and rates, the
commissioner shall not include the revenues offset in accordance with this section.
(c) For rate years beginning on or after July 1, 1987, nursing facilities shall limit charges
in total to vendors of therapy services for renting space, equipment, or obtaining other services
during the rate year to 108 percent of the annualized cost removed from the reporting year cost
report resulting from the requirement of the commissioner to ensure the avoidance of double
payments as determined by section 256B.47. If the arrangement for therapy services is changed
so that a nursing facility is subject to this paragraph instead of paragraph (b), the cost that is
used to determine rent must be adjusted to exclude the annualized costs for therapy services
that are not provided in the rate year. The maximum charges to the vendors shall be based on
the commissioner's determination of annualized cost and may be subsequently adjusted upon
resolution of appeals. Mental health services shall be subject to this paragraph for rate years
beginning after June 30, 1993.
(d) The commissioner shall require reporting of all revenues relating to the provision of
therapy services and shall establish a therapy cost, as determined by section 256B.47, to revenue
ratio for the reporting year ending in 1986. For subsequent reporting years, the ratio may increase
five percentage points in total until a new base year is established under paragraph (e). Increases
in excess of five percentage points may be allowed if adequate justification is provided to and
accepted by the commissioner. Unless an exception is allowed by the commissioner, the amount
of offset in paragraph (b) is the greater of the amount determined in paragraph (b) or the amount
of offset that is imputed based on one minus the lesser of (1) the actual reporting year ratio or (2)
the base reporting year ratio increased by five percentage points, multiplied by the revenues.
(e) The commissioner may establish a new reporting year base for determining the cost
to revenue ratio.
(f) If the arrangement for therapy services is changed so that a nursing facility is subject to
the provisions of paragraph (b) instead of paragraph (c), an average cost to revenue ratio based
on the ratios of nursing facilities that are subject to the provisions of paragraph (b) shall be
imputed for paragraph (d).
(g) This section does not allow unrelated nursing facilities to reorganize related organization
therapy services and provide services among themselves to avoid offsetting revenues. Nursing
facilities that are found to be in violation of this provision shall be subject to the penalty
requirements of section 256B.48, subdivision 1, paragraph (f).
    Subd. 3a. Exemption from requirement for separate therapy billing. The provisions of
subdivision 3 do not apply to nursing facilities that are reimbursed according to the provisions of
section 256B.431. Nursing facilities that are reimbursed according to the provisions of section
256B.434 and are located in a county participating in the prepaid medical assistance program are
exempt from the maximum therapy rent revenue provisions of subdivision 3, paragraph (c).
    Subd. 4.[Repealed, 1993 c 337 s 20]
History: 1983 c 199 s 18; 1985 c 248 s 69; 1987 c 403 art 2 s 90; 1988 c 629 s 54,55; 1988
c 689 art 2 s 162; 1992 c 513 art 7 s 105-107,136; 1993 c 337 s 17; 1997 c 203 art 3 s 9; 1998 c
407 art 3 s 12; 1Sp2001 c 9 art 5 s 22; 2002 c 379 art 1 s 113

256B.434 ALTERNATIVE PAYMENT DEMONSTRATION PROJECT.
    Subdivision 1. Alternative payment demonstration project established. The commissioner
of human services shall establish a contractual alternative payment demonstration project for
paying for nursing facility services under the medical assistance program. A nursing facility may
apply to be paid under the contractual alternative payment demonstration project instead of the
cost-based payment system established under section 256B.431. A nursing facility electing to use
the alternative payment demonstration project must enter into a contract with the commissioner.
Payment rates and procedures for facilities electing to use the alternative payment demonstration
project are determined and governed by this section and by the terms of the contract. The
commissioner may negotiate different contract terms for different nursing facilities.
    Subd. 2. Requests for proposals. (a) At least twice annually the commissioner shall publish
in the State Register a request for proposals to provide nursing facility services according to this
section. The commissioner must respond to all proposals in a timely manner.
(b) The commissioner may reject any proposal if, in the judgment of the commissioner, a
contract with a particular facility is not in the best interests of the residents of the facility or
the state of Minnesota. The commissioner may accept up to the number of proposals that can
be adequately supported with available state resources, as determined by the commissioner. The
commissioner may accept proposals from a single nursing facility or from a group of facilities
through a managing entity. The commissioner shall seek to ensure that nursing facilities under
contract are located in all geographic areas of the state.
(c) In issuing the request for proposals, the commissioner may develop reasonable
requirements which, in the judgment of the commissioner, are necessary to protect residents or
ensure that the contractual alternative payment demonstration project furthers the interest of
the state of Minnesota. The request for proposals may include, but need not be limited to, the
following:
(1) a requirement that a nursing facility make reasonable efforts to maximize Medicare
payments on behalf of eligible residents;
(2) requirements designed to prevent inappropriate or illegal discrimination against residents
enrolled in the medical assistance program as compared to private paying residents;
(3) requirements designed to ensure that admissions to a nursing facility are appropriate
and that reasonable efforts are made to place residents in home and community-based settings
when appropriate;
(4) a requirement to agree to participate in a project to develop data collection systems and
outcome-based standards. Among other requirements specified by the commissioner, each facility
entering into a contract may be required to pay an annual fee. Revenue generated from the fees
is appropriated to the commissioner and must be used to contract with a qualified consultant or
contractor to develop data collection systems and outcome-based contracting standards;
(5) a requirement that contractors agree to maintain Medicare cost reports and to submit them
to the commissioner upon request or at times specified by the commissioner;
(6) a requirement for demonstrated willingness and ability to develop and maintain data
collection and retrieval systems to be used in measuring outcomes; and
(7) a requirement to provide all information and assurances required by the terms and
conditions of the federal waiver or federal approval.
(d) In addition to the information and assurances contained in the submitted proposals, the
commissioner may consider the following in determining whether to accept or deny a proposal:
(1) the facility's history of compliance with federal and state laws and rules, except that a
facility deemed to be in substantial compliance with federal and state laws and rules is eligible to
respond to a request for proposal. A facility's compliance history shall not be the sole determining
factor in situations where the facility has been sold and the new owners have submitted a proposal;
(2) whether the facility has a record of excessive licensure fines or sanctions or fraudulent
cost reports;
(3) financial history and solvency; and
(4) other factors identified by the commissioner that the commissioner deems relevant to a
determination that a contract with a particular facility is not in the best interests of the residents of
the facility or the state of Minnesota.
(e) If the commissioner rejects the proposal of a nursing facility, the commissioner shall
provide written notice to the facility of the reason for the rejection, including the factors and
evidence upon which the rejection was based.
    Subd. 3. Duration and termination of contracts. (a) Subject to available resources, the
commissioner may begin to execute contracts with nursing facilities November 1, 1995.
(b) All contracts entered into under this section are for a term not to exceed four years.
Either party may terminate a contract at any time without cause by providing 90 calendar days
advance written notice to the other party. The decision to terminate a contract is not appealable.
Notwithstanding section 16C.05, subdivision 2, paragraph (a), clause (5), the contract shall be
renegotiated for additional terms of up to four years, unless either party provides written notice of
termination. The provisions of the contract shall be renegotiated at a minimum of every four years
by the parties prior to the expiration date of the contract. The parties may voluntarily renegotiate
the terms of the contract at any time by mutual agreement.
(c) If a nursing facility fails to comply with the terms of a contract, the commissioner shall
provide reasonable notice regarding the breach of contract and a reasonable opportunity for the
facility to come into compliance. If the facility fails to come into compliance or to remain in
compliance, the commissioner may terminate the contract. If a contract is terminated, the contract
payment remains in effect for the remainder of the rate year in which the contract was terminated,
but in all other respects the provisions of this section do not apply to that facility effective the
date the contract is terminated. The contract shall contain a provision governing the transition
back to the cost-based reimbursement system established under section 256B.431 and Minnesota
Rules, parts 9549.0010 to 9549.0080. A contract entered into under this section may be amended
by mutual agreement of the parties.
    Subd. 4. Alternate rates for nursing facilities. (a) For nursing facilities which have their
payment rates determined under this section rather than section 256B.431, the commissioner shall
establish a rate under this subdivision. The nursing facility must enter into a written contract
with the commissioner.
(b) A nursing facility's case mix payment rate for the first rate year of a facility's contract
under this section is the payment rate the facility would have received under section 256B.431.
(c) A nursing facility's case mix payment rates for the second and subsequent years of a
facility's contract under this section are the previous rate year's contract payment rates plus
an inflation adjustment and, for facilities reimbursed under this section or section 256B.431,
an adjustment to include the cost of any increase in Health Department licensing fees for the
facility taking effect on or after July 1, 2001. The index for the inflation adjustment must be based
on the change in the Consumer Price Index-All Items (United States City average) (CPI-U)
forecasted by the commissioner of finance's national economic consultant, as forecasted in the
fourth quarter of the calendar year preceding the rate year. The inflation adjustment must be based
on the 12-month period from the midpoint of the previous rate year to the midpoint of the rate
year for which the rate is being determined. For the rate years beginning on July 1, 1999, July
1, 2000, July 1, 2001, July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July
1, 2007, and July 1, 2008, this paragraph shall apply only to the property-related payment rate,
except that adjustments to include the cost of any increase in Health Department licensing fees
taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to the
property payment rate under this section and section 256B.431 shall be effective on October 1. In
determining the amount of the property-related payment rate adjustment under this paragraph,
the commissioner shall determine the proportion of the facility's rates that are property-related
based on the facility's most recent cost report.
(d) The commissioner shall develop additional incentive-based payments of up to five
percent above a facility's operating payment rate for achieving outcomes specified in a contract.
The commissioner may solicit contract amendments and implement those which, on a competitive
basis, best meet the state's policy objectives. The commissioner shall limit the amount of any
incentive payment and the number of contract amendments under this paragraph to operate
the incentive payments within funds appropriated for this purpose. The contract amendments
may specify various levels of payment for various levels of performance. Incentive payments
to facilities under this paragraph may be in the form of time-limited rate adjustments or
onetime supplemental payments. In establishing the specified outcomes and related criteria, the
commissioner shall consider the following state policy objectives:
(1) successful diversion or discharge of residents to the residents' prior home or other
community-based alternatives;
(2) adoption of new technology to improve quality or efficiency;
(3) improved quality as measured in the Nursing Home Report Card;
(4) reduced acute care costs; and
(5) any additional outcomes proposed by a nursing facility that the commissioner finds
desirable.
    Subd. 4a. Facility rate increases. For the rate year beginning July 1, 1999, the nursing
facilities described in clauses (1) to (5) shall receive the rate increases indicated. The increases
provided under this subdivision shall be included in the facility's total payment rates for the
purpose of determining future rates under this section or any other section:
(1) a nursing facility in Becker County licensed for 102 nursing home beds on September 30,
1998, shall receive an increase of $1.30 in its case mix class A payment rate; an increase of $1.33
in its case mix class B payment rate; an increase of $1.36 in its case mix class C payment rate; an
increase of $1.39 in its case mix class D payment rate; an increase of $1.42 in its case mix class E
payment rate; an increase of $1.42 in its case mix class F payment rate; an increase of $1.45 in
its case mix class G payment rate; an increase of $1.49 in its case mix class H payment rate; an
increase of $1.51 in its case mix class I payment rate; an increase of $1.54 in its case mix class J
payment rate; and an increase of $1.59 in its case mix class K payment rate;
(2) a nursing facility in Chisago County licensed for 101 nursing home beds on September
30, 1998, shall receive an increase of $3.67 in each case mix payment rate;
(3) a nursing facility in Canby, licensed for 75 beds shall have its property-related per diem
rate increased by $1.21. This increase shall be recognized in the facility's contract payment
rate under this section;
(4) a nursing facility in Golden Valley with all its beds licensed to provide residential
rehabilitative services to young adults under Minnesota Rules, parts 9570.2000 to 9570.3400,
shall have the payment rate computed according to this section increased by $14.83; and
(5) a county-owned 130-bed nursing facility in Park Rapids shall have its per diem
contract payment rate increased by $1.02 for costs related to compliance with comparable
worth requirements.
    Subd. 4b. Facility rate increases effective July 1, 2000. For the rate year beginning July 1,
2000, the nursing facilities described in clauses (1) to (6) shall receive the rate increases indicated.
The increases under this subdivision shall be added following the determination under section
256B.431, subdivision 28, of the payment rate for the rate year beginning July 1, 2000, and
shall be included in the facility's total payment rates for the purposes of determining future
rates under this section or any other section:
(1) a nursing facility in Hennepin County licensed for 290 beds shall receive an operating
cost per diem increase of 5.9 percent, provided that the facility delicenses, decertifies, or places on
layaway status, if that status is otherwise permitted by law, 70 beds;
(2) a nursing facility in Goodhue County licensed for 84 beds shall receive an increase of
$1.54 in each case mix payment rate;
(3) a nursing facility located in Rochester and licensed for 103 beds on January 1, 2000,
shall receive an increase in its case mix resident class A payment of $3.78, and an increase in the
payment rate for all other case mix classes of that amount multiplied by the class weight for that
case mix class established in Minnesota Rules, part 9549.0058, subpart 3;
(4) a nursing facility in Wright County licensed for 154 beds shall receive an increase of
$2.03 in each case mix payment rate to be used for employee wage and benefit enhancements;
(5) a facility in Todd County licensed for 78 beds, shall have its operating cost per diem
increased by the following amounts:
(i) case mix class A, $1.16;
(ii) case mix class B, $1.50;
(iii) case mix class C, $1.89;
(iv) case mix class D, $2.26;
(v) case mix class E, $2.63;
(vi) case mix class F, $2.65;
(vii) case mix class G, $2.96;
(viii) case mix class H, $3.55;
(ix) case mix class I, $3.76;
(x) case mix class J, $4.08; and
(xi) case mix class K, $4.76; and
(6) a nursing facility in Pine City that decertified 22 beds in calendar year 1999 shall have
its property-related per diem payment rate increased by $1.59.
    Subd. 4c. Facility rate increases effective January 1, 2002. For the rate period beginning
January 1, 2002, and for the rate year beginning July 1, 2002, a nursing facility in Morrison
County licensed for 83 beds as of March 1, 2001, shall receive an increase of $2.54 in each case
mix payment rate to offset property tax payments due as a result of the facility's conversion from
nonprofit to for-profit status. The increase under this subdivision shall be added following the
determination under this chapter of the payment rate for the rate year beginning July 1, 2001,
and shall be included in the facility's total payment rates for the purposes of determining future
rates under this section or any other section.
    Subd. 4d. Facility rate increases effective July 1, 2001. For the rate year beginning July 1,
2001, a nursing facility in Hennepin County licensed for 302 beds shall receive an increase of 29
cents in each case mix payment rate to correct an error in the cost-reporting system that occurred
prior to the date that the facility entered the alternative payment demonstration project. The
increase under this subdivision shall be added following the determination under this chapter of
the payment rate for the rate year beginning July 1, 2001, and shall be included in the facility's total
payment rates for the purposes of determining future rates under this section or any other section.
    Subd. 4e. Rate increase effective July 1, 2001. A nursing facility in Anoka County licensed
for 98 beds as of July 1, 2000, shall receive a total increase of $10 in each case mix rate for the
rate year beginning July 1, 2001, as a result of increases provided under this subdivision and
section 256B.431, subdivision 33. The increases under this subdivision shall be added prior to
the determination under section 256B.431, subdivision 33, of the payment rate for the rate year
beginning July 1, 2001, and shall be included in the facility's total payment rate for purposes of
determining future rates under this section or any other section through June 30, 2004.
    Subd. 4f. Construction project rate adjustments effective October 1, 2006. (a) Effective
October 1, 2006, facilities reimbursed under this section may receive a property rate adjustment
for construction projects exceeding the threshold in section 256B.431, subdivision 16, and below
the threshold in section 144A.071, subdivision 2, clause (a). For these projects, capital assets
purchased shall be counted as construction project costs for a rate adjustment request made
by a facility if they are: (1) purchased within 24 months of the completion of the construction
project; (2) purchased after the completion date of any prior construction project; and (3) are
not purchased prior to July 14, 2005. Except as otherwise provided in this subdivision, the
definitions, rate calculation methods, and principles in sections 144A.071 and 256B.431 and
Minnesota Rules, parts 9549.0010 to 9549.0080, shall be used to calculate rate adjustments
for allowable construction projects under this subdivision and section 144A.073. Facilities
completing construction projects between October 1, 2005, and October 1, 2006, are eligible to
have a property rate adjustment effective October 1, 2006. Facilities completing projects after
October 1, 2006, are eligible for a property rate adjustment effective on the first day of the month
following the completion date.
(b) Notwithstanding subdivision 18, as of July 14, 2005, facilities with rates set under section
256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, that commenced a construction
project on or after October 1, 2004, and do not have a contract under subdivision 3 by September
30, 2006, are eligible to request a rate adjustment under section 256B.431, subdivision 10, through
September 30, 2006. If the request results in the commissioner determining a rate adjustment is
allowable, the rate adjustment is effective on the first of the month following project completion.
These facilities shall be allowed to accumulate construction project costs for the period October 1,
2004, to September 30, 2006.
(c) Facilities shall be allowed construction project rate adjustments no sooner than 12 months
after completing a previous construction project. Facilities must request the rate adjustment
according to section 256B.431, subdivision 10.
(d) Capacity days shall be computed according to Minnesota Rules, part 9549.0060, subpart
11. For rate calculations under this section, the number of licensed beds in the nursing facility
shall be the number existing after the construction project is completed and the number of days in
the nursing facility's reporting period shall be 365.
(e) The value of assets to be recognized for a total replacement project as defined in section
256B.431, subdivision 17d, shall be computed as described in clause (1). The value of assets to be
recognized for all other projects shall be computed as described in clause (2):
(1) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the number of
beds allowed under subdivision 3a, paragraph (c), shall be used to compute the maximum amount
of assets allowable in a facility's property rate calculation. If a facility's current request for a rate
adjustment results from the completion of a construction project that was previously approved
under section 144A.073, the assets to be used in the rate calculation cannot exceed the lesser of
the amount determined under sections 144A.071, subdivision 2, and 144A.073, subdivision 3b, or
the actual allowable costs of the construction project. A current request that is not the result of a
project under section 144A.073 cannot exceed the limit under section 144A.071, subdivision 2,
paragraph (a). Applicable credits must be deducted from the cost of the construction project.
(2)(i) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the number
of beds allowed under section 256B.431, subdivision 3a, paragraph (c), shall be used to compute
the maximum amount of assets allowable in a facility's property rate calculation.
(ii) The value of a facility's assets to be compared to the amount in item (i) begins with
the total appraised value from the last rate notice a facility received when its rates were set
under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080. This value shall
be indexed by the factor in section 256B.431, subdivision 3f, paragraph (a), for each rate year
the facility received an inflation factor on its property-related rate when its rates were set under
this section. The value of assets listed as previous capital additions, capital additions, and special
projects on the facility's base year rate notice and the value of assets related to a construction
project for which the facility received a rate adjustment when its rates were determined under this
section shall be added to the indexed appraised value.
(iii) The maximum amount of assets to be recognized in computing a facility's rate adjustment
after a project is completed is the lesser of the aggregate replacement-cost-new limit computed in
(i) minus the assets recognized in (ii) or the actual allowable costs of the construction project.
(iv) If a facility's current request for a rate adjustment results from the completion of a
construction project that was previously approved under section 144A.073, the assets to be
added to the rate calculation cannot exceed the lesser of the amount determined under sections
144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable costs of the
construction project. A current request that is not the result of a project under section 144A.073
cannot exceed the limit stated in section 144A.071, subdivision 2, paragraph (a). Assets disposed
of as a result of a construction project and applicable credits must be deducted from the cost
of the construction project.
(f) For construction projects approved under section 144A.073, allowable debt may never
exceed the lesser of the cost of the assets purchased, the threshold limit in section 144A.071,
subdivision 2, or the replacement-cost-new limit less previously existing capital debt.
(g) For construction projects that were not approved under section 144A.073, allowable debt
is limited to the lesser of the threshold in section 144A.071, subdivision 2, for such construction
projects or the applicable limit in paragraph (e), clause (1) or (2), less previously existing capital
debt. Amounts of debt taken out that exceed the costs of a construction project shall not be
allowed regardless of the use of the funds.
For all construction projects being recognized, interest expense and average debt shall
be computed based on the first 12 months following project completion. "Previously existing
capital debt" means capital debt recognized on the last rate determined under section 256B.431
and Minnesota Rules, parts 9549.0010 to 9549.0080, and the amount of debt recognized for
a construction project for which the facility received a rate adjustment when its rates were
determined under this section.
For a total replacement project as defined in section 256B.431, subdivision 17d, the value of
previously existing capital debt shall be zero.
(h) In addition to the interest expense allowed from the application of paragraph (f), the
amounts allowed under section 256B.431, subdivision 17a, paragraph (a), clauses (2) and (3),
will be added to interest expense.
(i) The equity portion of the construction project shall be computed as the allowable assets in
paragraph (e), less the average debt in paragraph (f). The equity portion must be multiplied by
5.66 percent and the allowable interest expense in paragraph (f) must be added. This sum must be
divided by 95 percent of capacity days to compute the construction project rate adjustment.
(j) For projects that are not a total replacement of a nursing facility, the amount in paragraph
(i) is adjusted for nonreimbursable areas and then added to the current property payment rate
of the facility.
(k) For projects that are a total replacement of a nursing facility, the amount in paragraph
(i) becomes the new property payment rate after being adjusted for nonreimbursable areas. Any
amounts existing in a facility's rate before the effective date of the construction project for equity
incentives under section 256B.431, subdivision 16; capital repairs and replacements under section
256B.431, subdivision 15; or refinancing incentives under section 256B.431, subdivision 19, shall
be removed from the facility's rates.
(l) No additional equipment allowance is allowed under Minnesota Rules, part 9549.0060,
subpart 10, as the result of construction projects under this section. Allowable equipment shall
be included in the construction project costs.
(m) Capital assets purchased after the completion date of a construction project shall be
counted as construction project costs for any future rate adjustment request made by a facility
under section 144A.071, subdivision 2, clause (a), if they are purchased within 24 months of the
completion of the future construction project.
(n) In subsequent rate years, the property payment rate for a facility that results from the
application of this subdivision shall be the amount inflated in subdivision 4.
(o) Construction projects are eligible for an equity incentive under section 256B.431,
subdivision 16. When computing the equity incentive for a construction project under this
subdivision, only the allowable costs and allowable debt related to the construction project shall
be used. The equity incentive shall not be a part of the property payment rate and not inflated
under subdivision 4. Effective October 1, 2006, all equity incentives for nursing facilities
reimbursed under this section shall be allowed for a duration determined under section 256B.431,
subdivision 16, paragraph (c).
    Subd. 4g. Facility rate increase effective October 1, 2007; Otter Tail County. For the rate
year beginning October 1, 2007, a nursing facility in Otter Tail County that was licensed for 57
beds as of December 31, 2004, shall receive a rate increase to increase its operating rate to the 60th
percentile of the operating rates of all other Otter Tail County nursing facilities. The commissioner
shall determine the 60th percentile of the case mix portion of the operating rates with a RUG's
weight of 1.0 of all other Otter Tail County nursing facilities and then apply the case mix weights.
The 60th percentile of the other operating per diem for all other Otter Tail County nursing facilities
will be added to the above-determined case mix rates to compute the operating payment rates.
The nonoperating components of the facility's rates will not be adjusted under this subdivision.
    Subd. 4h. Nursing facility rate increase effective October 1, 2007; Martin County. For
the rate year beginning October 1, 2007, the commissioner shall provide to a nursing facility in
Martin County licensed for 93 beds as of January 1, 2006, an increase in the total operating
payment rate of $5 per resident day for all case mix classes.
    Subd. 5.[Repealed, 1Sp2001 c 9 art 5 s 41]
    Subd. 6. Contract payment rates; appeals. If an appeal is pending concerning the
cost-based payment rates that are the basis for the calculation of the payment rate under the
alternative payment demonstration project, the commissioner and the nursing facility may agree
on an interim contract rate to be used until the appeal is resolved. When the appeal is resolved, the
contract rate must be adjusted retroactively in accordance with the appeal decision.
    Subd. 7. Case mix assessments. The commissioner may allow a contract facility to develop
and implement a case mix assessment using the federal minimum data set resident assessment.
    Subd. 8. Optional higher payments for first 100 days. The commissioner may include
in the contract with a nursing facility under this section a higher rate for the first 100 days after
admission than for subsequent days. The rate for the subsequent days must be reduced so that
the estimated total cost to the medical assistance program will not exceed the estimated cost
without the differential payment rates.
    Subd. 9. Managed care contracts for other services. Beginning July 1, 1995, the
commissioner may contract with nursing facilities that have entered into alternative payment
demonstration project contracts under this section to provide medical assistance services other
than nursing facility care to residents of the facility under a prepaid, managed care payment
system. Managed care contracts for other services may be entered into at any time during the
duration of a nursing facility's alternative payment demonstration project contract, and the terms
of the managed care contracts need not coincide with the terms of the alternative payment
demonstration project contract.
    Subd. 10. Exemptions. (a) To the extent permitted by federal law, (1) a facility that
has entered into a contract under this section is not required to file a cost report, as defined
in Minnesota Rules, part 9549.0020, subpart 13, for any year after the base year that is the
basis for the calculation of the contract payment rate for the first rate year of the alternative
payment demonstration project contract; and (2) a facility under contract is not subject to audits
of historical costs or revenues, or paybacks or retroactive adjustments based on these costs or
revenues, except audits, paybacks, or adjustments relating to the cost report that is the basis for
calculation of the first rate year under the contract.
(b) A facility that is under contract with the commissioner under this section is not subject
to the moratorium on licensure or certification of new nursing home beds in section 144A.071,
unless the project results in a net increase in bed capacity or involves relocation of beds from
one site to another. Contract payment rates must not be adjusted to reflect any additional costs
that a nursing facility incurs as a result of a construction project undertaken under this paragraph.
In addition, as a condition of entering into a contract under this section, a nursing facility
must agree that any future medical assistance payments for nursing facility services will not
reflect any additional costs attributable to the sale of a nursing facility under this section and to
construction undertaken under this paragraph that otherwise would not be authorized under the
moratorium in section 144A.073. Nothing in this section prevents a nursing facility participating
in the alternative payment demonstration project under this section from seeking approval of an
exception to the moratorium through the process established in section 144A.073, and if approved
the facility's rates shall be adjusted to reflect the cost of the project. Nothing in this section
prevents a nursing facility participating in the alternative payment demonstration project from
seeking legislative approval of an exception to the moratorium under section 144A.071, and, if
enacted, the facility's rates shall be adjusted to reflect the cost of the project.
(c) Notwithstanding section 256B.48, subdivision 6, paragraphs (c), (d), and (e), and
pursuant to any terms and conditions contained in the facility's contract, a nursing facility that is
under contract with the commissioner under this section is in compliance with section 256B.48,
subdivision 6 , paragraph (b), if the facility is Medicare certified.
(d) Notwithstanding paragraph (a), if by April 1, 1996, the health care financing
administration has not approved a required waiver, or the Centers for Medicare and Medicaid
Services otherwise requires cost reports to be filed prior to the waiver's approval, the commissioner
shall require a cost report for the rate year.
(e) A facility that is under contract with the commissioner under this section shall be allowed
to change therapy arrangements from an unrelated vendor to a related vendor during the term of
the contract. The commissioner may develop reasonable requirements designed to prevent an
increase in therapy utilization for residents enrolled in the medical assistance program.
(f) Nursing facilities participating in the alternative payment system demonstration
project must either participate in the alternative payment system quality improvement program
established by the commissioner or submit information on their own quality improvement process
to the commissioner for approval. Nursing facilities that have had their own quality improvement
process approved by the commissioner must report results for at least one key area of quality
improvement annually to the commissioner.
    Subd. 11. Consumer protection. As a condition of entering into a contract under this
section, a nursing facility must agree to establish resident grievance procedures that are similar to
those required under section 256.045, subdivision 3. The commissioner may also require nursing
facilities to establish expedited grievance procedures to resolve complaints made by short-stay
residents. The facility must notify its resident council of its intent to enter into a contract and must
consult with the council regarding any changes in operation expected as a result of the contract.
    Subd. 12. Contracts are voluntary. Participation of nursing facilities in the alternative
payment demonstration project is voluntary. The terms and procedures governing the alternative
payment demonstration project are determined under this section and through negotiations
between the commissioner and nursing facilities that have submitted a letter of intent to participate
in the alternative demonstration project. For purposes of developing requests for proposals and
contract requirements, and negotiating the terms, conditions, and requirements of contracts the
commissioner is exempt from the rulemaking requirements in chapter 14 until December 31, 2000.
    Subd. 13.[Repealed, 2001 c 161 s 58]
    Subd. 14. Federal requirements. The commissioner shall implement the contractual
alternative payment demonstration project subject to any required federal waivers or approval
and in a manner that is consistent with federal requirements. If a provision of this section is
inconsistent with a federal requirement the federal requirement supersedes the inconsistent
provision. The commissioner shall seek federal approval and request waivers as necessary
to implement this section.
    Subd. 15. External review panel. The commissioner may establish an external review panel
consisting of persons appointed by the commissioner for their expertise on issues relating to
nursing facility services, quality, payment systems, and other matters, to advise the commissioner
on the development and implementation of the contractual alternative payment demonstration
project and to assist the commissioner in assessing the quality of care provided and evaluating
a facility's compliance with performance standards specified in a contract. The external review
panel must include, among other members, representatives of nursing facilities.
    Subd. 16. Alternative contracts. 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. 17.[Repealed, 1999 c 245 art 3 s 51]
    Subd. 18. Facilities without APS contracts as of October 1, 2006. Effective October
1, 2006, payment rates for property shall no longer be determined under section 256B.431. A
facility that does not have a contract with the commissioner under this section shall not be
eligible for a rate increase.
History: 1995 c 207 art 7 s 32; 1996 c 451 art 5 s 28; 1997 c 187 art 4 s 8; 1997 c 203 art 3
s 10-12; art 9 s 11,12; 1998 c 407 art 3 s 13; 1999 c 245 art 3 s 21-24; 2000 c 449 s 13,14; 2000 c
488 art 9 s 22; 1Sp2001 c 9 art 5 s 23-26; 2002 c 277 s 32; 2002 c 370 art 1 s 113; 2003 c 55 s 4;
1Sp2003 c 14 art 2 s 36,37,57; 1Sp2005 c 4 art 7 s 40-42; 2006 c 282 art 20 s 21-24

256B.435 JULY 1, 2001, NURSING FACILITY REIMBURSEMENT SYSTEM.
    Subdivision 1. In general. Effective July 1, 2001, 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. Operating cost payment rates for newly established facilities under Minnesota
Rules, part 9549.0057, shall be established using section 256B.431 and Minnesota Rules,
parts 9549.0010 to 9549.0070. 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 and funding for
incentive-based payments 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. The commissioner shall present additional recommendations
for performance-based contracting for nursing facilities to the legislature by February 15, 2000, in
the following specific areas:
(1) development of an interim default payment mechanism for nursing facilities that do
not respond to the state's request for proposal but wish to continue participation in the medical
assistance program, and nursing facilities the state does not select in the request for proposal
process, and nursing facilities whose contract has been canceled;
(2) development of criteria for facilities to earn performance-based incentive payments based
on relevant outcomes negotiated by nursing facilities and the commissioner and that recognize
both continuous quality efforts and quality improvement;
(3) development of criteria and a process under which nursing facilities can request rate
adjustments for low base rates, geographic disparities, or other reasons;
(4) development of a dispute resolution mechanism for nursing facilities that are denied a
contract, denied incentive payments, or denied a rate adjustment;
(5) development of a property payment system to address the capital needs of nursing
facilities that will be funded with additional appropriations;
(6) establishment of a transitional plan to move from dual assessment instruments to the
federally mandated resident assessment system, whereby the financial impact for each facility
would be budget neutral;
(7) identification of net cost implications for facilities and to the department of preparing for
and implementing performance-based contracting or any proposed alternative system;
(8) identification of facility financial and statistical reporting requirements; and
(9) identification of exemptions from current regulations and statutes applicable under
performance-based contracting.
    Subd. 1a. Requests for proposals. (a) For nursing facilities with rates established under
section 256B.434 on January 1, 2001, the commissioner shall renegotiate contracts without
requiring a response to a request for proposal, notwithstanding the solicitation process described
in chapter 16C.
(b) Prior to July 1, 2001, the commissioner shall publish in the State Register a request for
proposals to provide nursing facility services according to this section. The commissioner will
consider proposals from all nursing facilities that have payment rates established under section
256B.431. The commissioner must respond to all proposals in a timely manner.
(c) In issuing a request for proposals, the commissioner may develop reasonable requirements
which, in the judgment of the commissioner, are necessary to protect residents or ensure that the
performance-based contracting system furthers the interests of the state of Minnesota. The request
for proposals may include, but need not be limited to:
(1) a requirement that a nursing facility make reasonable efforts to maximize Medicare
payments on behalf of eligible residents;
(2) requirements designed to prevent inappropriate or illegal discrimination against residents
enrolled in the medical assistance program as compared to private paying residents;
(3) requirements designed to ensure that admissions to a nursing facility are appropriate
and that reasonable efforts are made to place residents in home and community-based settings
when appropriate;
(4) a requirement to agree to participate in the development of data collection systems
and outcome-based standards. Among other requirements specified by the commissioner, each
facility entering into a contract may be required to pay an annual fee not to exceed $1,000. The
commissioner must use revenue generated from the fees to contract with a qualified consultant or
contractor to develop data collection systems and outcome-based contracting standards;
(5) a requirement that Medicare-certified contractors agree to maintain Medicare cost reports
and to submit them to the commissioner upon request, or at times specified by the commissioner;
and that contractors that are not Medicare-certified agree to maintain a uniform cost report in a
format established by the commissioner and to submit the report to the commissioner upon
request, or at times specified by the commissioner;
(6) a requirement that demonstrates willingness and ability to develop and maintain data
collection and retrieval systems to measure outcomes; and
(7) a requirement to provide all information and assurances required by the terms and
conditions of the federal waiver or federal approval.
(d) In addition to the information and assurances contained in the submitted proposals, the
commissioner may consider the following criteria in developing the terms of the contract:
(1) the facility's history of compliance with federal and state laws and rules. A facility
deemed to be in substantial compliance with federal and state laws and rules is eligible to respond
to a request for proposals. A facility's compliance history shall not be the sole determining factor
in situations where the facility has been sold and the new owners have submitted a proposal;
(2) whether the facility has a record of excessive licensure fines or sanctions or fraudulent
cost reports;
(3) the facility's financial history and solvency; and
(4) other factors identified by the commissioner deemed relevant to developing the terms of
the contract, including a determination that a contract with a particular facility is not in the best
interests of the residents of the facility or the state of Minnesota.
(e) Notwithstanding the requirements of the solicitation process described in chapter 16C,
the commissioner may contract with nursing facilities established according to section 144A.073
without issuing a request for proposals.
(f) Notwithstanding subdivision 1, after July 1, 2001, the commissioner may contract with
additional nursing facilities, according to requests for proposals.
    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;
(6) specify the method for resolving disputes; and
(7) establish additional requirements 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
specified 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.
(d) The commissioner may negotiate different contract terms for different nursing facilities.
    Subd. 2a. Duration and termination of contracts. (a) All contracts entered into under this
section are for a term of one year. Either party may terminate this contract at any time without
cause by providing 90 calendar days' advance written notice to the other party. Notwithstanding
section 16C.05, subdivisions 2, paragraph (b), and 5, if neither party provides written notice
of termination, the contract shall be renegotiated for additional one-year terms or the terms
of the existing contract will be extended for one year. The provisions of the contract shall be
renegotiated annually by the parties prior to the expiration date of the contract. The parties may
voluntarily renegotiate the terms of the contract at any time by mutual agreement.
(b) If a nursing facility fails to comply with the terms of a contract, the commissioner shall
provide reasonable notice regarding the breach of contract and a reasonable opportunity for the
facility to come into compliance. If the facility fails to come into compliance or to remain in
compliance, the commissioner may terminate the contract. If a contract is terminated, provisions
of section 256B.48, subdivision 1a, shall apply.
    Subd. 3. Payment rate provisions. (a) For rate years beginning on or after July 1, 2001,
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, 2001, for inflation. For rate years beginning on
or after July 1, 2001, the inflation factor must be based on the change in the Employment Cost
Index for Private Industry Workers - Total Compensation as forecasted by the commissioner
of finance's national economic consultant, in the fourth quarter preceding the rate year. The
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. The operating cost payment rate to be inflated
shall be the total payment rate in effect on June 30, 2001, minus the portion determined to be the
property-related payment rate, minus the per diem amount of the preadmission screening cost
included in the nursing facility's last payment rate established under section 256B.431.
(b) A per diem amount for preadmission screening will be added onto the contract payment
rates according to the method of distribution of county allocation described in section 256B.0911,
subdivision 6 , paragraph (a).
(c) For rate years beginning on or after July 1, 2001, the commissioner may implement a
new method of payment for property-related costs that addresses the capital needs of facilities.
The new property payment system or systems, if implemented, shall replace the current methods
of setting property payment rates under sections 256B.431 and 256B.434.
    Subd. 4. Contract payment rates; appeals. If an appeal is pending concerning the
cost-based payment rates that are the basis for the calculation of the payment rate under this
section, the commissioner and the nursing facility may agree on an interim contract rate to be
used until the appeal is resolved. When the appeal is resolved, the contract rate must be adjusted
retroactively according to the appeal decision.
    Subd. 5. Consumer protection. In addition to complying with all applicable laws regarding
consumer protection, as a condition of entering into a contract under this section, a nursing
facility must agree to:
(1) establish resident grievance procedures;
(2) establish expedited grievance procedures to resolve complaints made by short-stay
residents; and
(3) make available to residents and families a copy of the performance-based contract and
outcomes to be achieved.
    Subd. 6. Contracts are voluntary. Participation of nursing facilities in the medical
assistance program is voluntary. The terms and procedures governing the performance-based
contract are determined under this section and through negotiations between the commissioner
and nursing facilities.
    Subd. 7. Federal requirements. The commissioner shall implement the performance-based
contracting system subject to any required federal waivers or approval and in a manner that is
consistent with federal requirements. If a provision of this section is inconsistent with a federal
requirement, the federal requirement supersedes the inconsistent provision. The commissioner
shall seek federal approval and request waivers as necessary to implement this section.
    Subd. 8. Case-mix adjustments based upon the minimum data set. The performance-based
contracting system must include case-mix adjustments that are based upon the federally mandated
minimum data set assessment instrument. These case-mix adjustments must be incorporated into
the performance-based contracting system beginning on or after July 1, 2001, but no later than
January 1, 2002, and must have a budget neutral financial impact on each facility at the time of
implementation, relative to case-mix adjustments based upon the current state case-mix.
History: 1998 c 407 art 3 s 14; 1999 c 245 art 3 s 25; 2000 c 315 s 1; 1Sp2003 c 1 art 2 s 76

256B.436 VOLUNTARY CLOSURES; PLANNING.
    Subdivision 1. Definitions. (a) "Closure" means the voluntary cessation of operations of
a nursing facility and voluntary delicensure and decertification of all nursing facility beds of
the nursing facility.
(b) "Commencement of closure" means the date on which the commissioner of health is
notified of a planned closure in accordance with an approved closure plan.
(c) "Completion of closure" means the date on which the final resident of the nursing facility
or nursing facilities designated for closure in an approved closure plan is discharged from the
facility or facilities.
(d) "Closure plan" means a plan to close one or more nursing facilities and reallocate the
resulting savings to provide special rate adjustments at other facilities.
(e) "Interim closure payments" means the medical assistance payments that may be made to
a nursing facility designated for closure in an approved plan under this section.
(f) "Phased plan" means a closure plan affecting more than one nursing facility undergoing
closure that is commenced and completed in phases.
(g) "Special rate adjustment" means an increase in a nursing facility's operating rates under
this section.
(h) "Standardized resident days" means the standardized resident days as calculated under
Minnesota Rules, part 9549.0054, subpart 2, based on the resident days in each resident class for
the most recent reporting period required to be reported to the commissioner.
    Subd. 2. Proposal for a closure plan. (a) One or more nursing facilities that are owned or
operated by a nonprofit corporation owning or operating more than 22 nursing facilities licensed
in the state of Minnesota may submit to the commissioner a proposal for a closure plan under this
section. Between February 25, 2000, and June 30, 2001, the commissioner may negotiate phased
plans for closure of up to seven nursing facilities.
(b) A facility or facilities reimbursed under section 256B.431 or 256B.434 with a closure
plan approved by the commissioner under subdivision 4 are eligible for the following payments:
(1) facilities designated for closure are eligible for interim closure payments under
subdivision 5; and
(2) facilities that remain open are eligible for a special rate adjustment.
(c) To be considered for approval, a proposal must include the following:
(1) a description of the proposed closure plan, which shall include identification of the
facility or facilities to receive a special rate adjustment, the amount and timing of a special rate
adjustment proposed for each facility for the case mix level "A" operating rate, the standardized
resident days for each facility for which a special rate adjustment is proposed, and the effective
date for each special rate adjustment. The actual special rate adjustment for a facility shall be
allocated proportionately to the various rate per diems included in that facility's operating rate;
(2) an analysis of the projected state medical assistance costs of the closure plan as proposed,
including the estimated costs of the special rate adjustments and estimated resident relocation
costs, including county government costs;
(3) an analysis of the projected state medical assistance savings of the closure plan as
proposed, including any savings projected to result from closure of one or more nursing facilities;
(4) the proposed timetable for any proposed closure, including the proposed dates for
commencement and completion of closure;
(5) the proposed relocation plan for current residents of any facility designated for closure.
The proposed relocation plan must be designed to comply with all applicable state and federal
statutes and regulations, including, but not limited to, Minnesota Rules, parts 4655.6810 to
4655.6830; parts 4658.1600 to 4658.1690; and parts 9546.0010 to 9546.0060; and
(6) documentation, in a format approved by the commissioner, that all the nursing facilities
receiving a special rate adjustment under the plan have accepted joint and several liability for
recovery of overpayments under section 256B.0641, subdivision 2, for the facilities designated
for closure under the plan.
    Subd. 3. Phased closure plans. A proposal for a phased plan may include more than one
closure, each of which must meet the requirements of this section and each of which may be
implemented in phases at different times. As part of a phased plan, a nursing facility may receive
a special rate adjustment under more than one phase of the plan, and the cost savings from the
closure of a nursing facility designated for closure under the plan may be applied as an offset
to the subsequent costs of more than one phase of the plan. If a facility is proposed to receive a
special rate adjustment or provide cost savings under more than one phase of a plan, the proposal
must describe the special rate adjustments or cost savings in each of the affected phases of the
plan. Review and approval of a phased plan under subdivision 4 shall apply to all phases of
the plan as proposed.
    Subd. 4. Review and approval of proposals. (a) The commissioner may grant interim
closure payments or special rate adjustments for a nursing facility or facilities according to an
approved plan that satisfies the requirements of this section. The commissioner shall not approve
a proposal unless the commissioner determines that projected state savings of the plan equal or
exceed projected state and county government costs, including facility costs during the closure
period, the estimated costs of special rate adjustments, estimated resident relocation costs, the
cost of services to relocated residents, and state agency administrative costs directly related to
the accomplishment of duties specified in this subdivision relative to that proposal. To achieve
cost neutrality costs may only be offset against savings that occur within the same fiscal year. For
purposes of a phased plan, the requirement that costs must not exceed savings applies to both the
aggregate costs and savings of the plan and to each phase of the plan. A special rate adjustment
under this section shall be effective no earlier than the first day of the month following completion
of closure of all facilities designated for closure under the plan. For purposes of a phased plan, the
special rate adjustment for each phase shall be effective no earlier than the first day of the month
following completion of closure of all facilities designated for closure in that phase of the plan.
No special rate adjustment under this section shall take effect prior to July 1, 2000.
(b) Upon receipt of a proposal for a closure plan, the commissioner shall provide a copy
of the proposal to the commissioner of health. The commissioner of health shall certify to the
commissioner within 30 days whether the proposal, if implemented, will satisfy the requirements
of Minnesota Rules, parts 4655.6810 to 4655.6830, and parts 4658.1600 to 4658.1690. The
commissioner shall not approve a plan under this section unless the commissioner of health has
made the certification required under this paragraph.
(c) The commissioner shall review a proposal for a closure plan to determine whether it
satisfies the requirements of this section. A determination shall be made within 60 days of the date
the proposal is submitted. If the commissioner determines that the proposal does not satisfy the
requirements of this section, or if the commissioner of health does not certify the proposal under
paragraph (b), the applicant shall be provided written notice as soon as practicable specifying the
deficiencies of the proposal. The proposal may be modified and resubmitted for further review
by each commissioner. The commissioner of health shall review a modified proposal within
30 days from the date it is submitted, and the commissioner shall make a final determination
on whether the proposal satisfies the requirements of this section within 60 days of the date
the modified proposal is submitted.
(d) Approval of a closure plan expires 18 months after approval by the commissioner, unless
commencement of closure has occurred at all facilities designated for closure under the plan.
    Subd. 5. Interim closure payments. Instead of payments under section 256B.431 or
256B.434, the commissioner may approve a closure plan under which the commissioner shall:
(1) apply the interim and settle-up rate provisions under Minnesota Rules, part 9549.0057, to
include facilities covered by this section, effective from commencement of closure to completion
of closure;
(2) extend the length of the interim period but not to exceed 12 months;
(3) limit the amount of reimbursable expenses related to the acquisition of new capital assets;
(4) prohibit the acquisition of additional capital debt or refinancing of existing capital debt
unless prior approval is obtained from the commissioner;
(5) establish as the aggregate administrative operating cost limitation for the interim
period the actual aggregate administrative operating costs for the period immediately prior to
commencement of closure that is of the same duration as the interim period;
(6) require the retention of financial and statistical records until the commissioner has audited
the interim period and the settle-up rate;
(7) make aggregate payments under this subdivision for the interim period up to the level
of the aggregate payments for the period immediately prior to commencement of closure that is
of the same duration as the interim period; or
(8) change any other provision to which all parties to the plan agree.
    Subd. 6. Cost savings of closure. For purposes of this section, the calculation of medical
assistance cost savings from the closure of a nursing facility designated for closure under a
closure plan shall be according to the following criteria:
(a) The projected medical assistance savings of the closure of a facility shall be the aggregate
medical assistance payments to the facility for the most recently completed state fiscal year
prior to submission of the proposal, as reflected in the number of resident days of care for each
resident class provided by the facility in that fiscal year, multiplied by the payment rate for each
resident class.
(b) If one or more facilities designated for closure in an approved closure plan are not able
to be closed for any reason, or projection of savings for that closure are otherwise prohibited
under this section, the projected medical assistance savings from that closure may not be offset
against the medical assistance costs of special rate adjustments under the plan. In that event,
the applicant must notify the commissioner in writing and the applicant must either amend its
proposal by reducing the special rate adjustment to reduce the medical assistance cost of the plan
by at least the amount of the medical assistance savings that were projected from the closure of
that facility or withdraw the plan.
(c) No medical assistance savings shall be projected from closure of a nursing facility that is
designated for closure under a closure plan, if the facility is:
(1) subject to adverse licensure action under section 144A.11; or
(2) located in a county with a ratio of nursing facility beds to county residents age 85 and
over that is in the lowest quartile of all counties in the state, at the time the proposal is submitted
or at the commencement of closure.
(d) Medical assistance savings under paragraph (a) shall be recognized for purposes of this
section beginning the first day of the month following the month of completion of closure for
all facilities designated for closure under the plan, or all facilities designated for closure under
that phase for a phased plan.
    Subd. 7. Other rate adjustments. Except as otherwise provided in subdivision 5, facilities
subject to this section remain eligible for any applicable rate adjustments provided under section
256B.431, 256B.434, or any other section.
    Subd. 8. County costs. A portion of the savings estimated under subdivision 4, not to exceed
$75,000 per closing facility, may be transferred from the medical assistance account to the
commissioner to be used for relocation costs incurred by counties.
History: 2000 c 364 s 1; 2001 c 36 s 1; 1Sp2001 c 9 art 5 s 40

256B.437 NURSING FACILITY VOLUNTARY CLOSURE; ALTERNATIVES.
    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to subdivisions 2 to 8.
(b) "Closure" means the cessation of operations of a nursing facility and delicensure and
decertification of all beds within the facility.
(c) "Closure plan" means a plan to close a nursing facility and reallocate a portion of the
resulting savings to provide planned closure rate adjustments at other facilities.
(d) "Commencement of closure" means the date on which residents and designated
representatives are notified of a planned closure as provided in section 144A.161, subdivision 5a,
as part of an approved closure plan.
(e) "Completion of closure" means the date on which the final resident of the nursing facility
designated for closure in an approved closure plan is discharged from the facility.
(f) "Partial closure" means the delicensure and decertification of a portion of the beds within
the facility.
(g) "Planned closure rate adjustment" means an increase in a nursing facility's operating rates
resulting from a planned closure or a planned partial closure of another facility.
    Subd. 2.[Repealed, 1Sp2003 c 14 art 2 s 57]
    Subd. 3. Applications for planned closure of nursing facilities. (a) By August 15, 2001,
the commissioner of human services shall implement and announce a program for closure or
partial closure of nursing facilities. Names and identifying information provided in response to
the announcement shall remain private unless approved, according to the timelines established
in the plan. The announcement must specify:
(1) the criteria in subdivision 4 that will be used by the commissioner to approve or reject
applications;
(2) the information that must accompany an application; and
(3) that applications may combine planned closure rate adjustments with moratorium
exception funding, in which case a single application may serve both purposes.
Between August 1, 2001, and June 30, 2003, the commissioner may approve planned closures of
up to 5,140 nursing facility beds, less the number of beds delicensed in facilities during the same
time period without approved closure plans or that have notified the commissioner of health of
their intent to close without an approved closure plan. Beginning July 1, 2004, the commissioner
may negotiate a planned closure rate adjustment for nursing facilities providing the proposal,
cumulatively, with other proposals that have been approved, has no cost to the state. For planned
closure rate adjustments negotiated after March 1, 2006, the limit of $2,080 in subdivision 6,
paragraph (a), clause (1), shall not apply. The removal of the limit in subdivision 6, paragraph (a),
clause (1), shall not constitute an increase to the amount specified in subdivision 6, paragraph
(a), clause (1), for the purposes of subdivision 6, paragraph (f).
(b) A facility or facilities reimbursed under section 256B.431 or 256B.434 with a closure
plan approved by the commissioner under subdivision 5 may assign a planned closure rate
adjustment to another facility or facilities that are not closing or in the case of a partial closure, to
the facility undertaking the partial closure. A facility may also elect to have a planned closure rate
adjustment shared equally by the five nursing facilities with the lowest total operating payment
rates in the state development region designated under section 462.385, in which the facility that
is closing is located. The planned closure rate adjustment must be calculated under subdivision 6.
Facilities that delicense beds without a closure plan, or whose closure plan is not approved by the
commissioner, are not eligible to assign a planned closure rate adjustment under subdivision 6,
unless they are delicensing five or fewer beds, or less than six percent of their total licensed bed
capacity, whichever is greater, are located in a county in the top three quartiles of beds per 1,000
persons aged 65 or older, and have not delicensed beds in the prior three months. Facilities meeting
these criteria are eligible to assign the amount calculated under subdivision 6 to themselves. If a
facility is delicensing the greater of six or more beds, or six percent or more of its total licensed
bed capacity, and does not have an approved closure plan or is not eligible for the adjustment
under subdivision 6, the commissioner shall calculate the amount the facility would have been
eligible to assign under subdivision 6, and shall use this amount to provide equal rate adjustments
to the five nursing facilities with the lowest total operating payment rates in the state development
region designated under section 462.385, in which the facility that delicensed beds is located.
(c) To be considered for approval, an application must include:
(1) a description of the proposed closure plan, which must include identification of the
facility or facilities to receive a planned closure rate adjustment;
(2) the proposed timetable for any proposed closure, including the proposed dates for
announcement to residents, commencement of closure, and completion of closure;
(3) if available, the proposed relocation plan for current residents of any facility designated
for closure. If a relocation plan is not available, the application must include a statement agreeing
to develop a relocation plan designed to comply with section 144A.161;
(4) a description of the relationship between the nursing facility that is proposed for closure
and the nursing facility or facilities proposed to receive the planned closure rate adjustment. If
these facilities are not under common ownership, copies of any contracts, purchase agreements, or
other documents establishing a relationship or proposed relationship must be provided;
(5) documentation, in a format approved by the commissioner, that all the nursing facilities
receiving a planned closure rate adjustment under the plan have accepted joint and several
liability for recovery of overpayments under section 256B.0641, subdivision 2, for the facilities
designated for closure under the plan; and
(6) an explanation of how the application coordinates with planning efforts under subdivision
2. If the planning group does not support a level of nursing facility closures that the commissioner
considers to be reasonable, the commissioner may approve a planned closure proposal without
its support.
(d) The application must address the criteria listed in subdivision 4.
    Subd. 4. Criteria for review of application. In reviewing and approving closure proposals,
the commissioner shall consider, but not be limited to, the following criteria:
(1) improved quality of care and quality of life for consumers;
(2) closure of a nursing facility that has a poor physical plant, which may be evidenced by
the conditions referred to in section 144A.073, subdivision 4, clauses (4) and (5);
(3) the existence of excess nursing facility beds, measured in terms of beds per thousand
persons aged 85 or older. The excess must be measured in reference to:
(i) the county in which the facility is located;
(ii) the county and all contiguous counties;
(iii) the region in which the facility is located; or
(iv) the facility's service area;
the facility shall indicate in its application the service area it believes is appropriate for this
measurement. A facility in a county that is in the lowest quartile of counties with reference to
beds per thousand persons aged 85 or older is not in an area of excess capacity;
(4) low-occupancy rates, provided that the unoccupied beds are not the result of a personnel
shortage. In analyzing occupancy rates, the commissioner shall examine waiting lists in the
applicant facility and at facilities in the surrounding area, as determined under clause (3);
(5) evidence of coordination between the community planning process and the facility
application. If the planning group does not support a level of nursing facility closures that the
commissioner considers to be reasonable, the commissioner may approve a planned closure
proposal without its support;
(6) proposed usage of funds available from a planned closure rate adjustment for care-related
purposes;
(7) innovative use planned for the closed facility's physical plant;
(8) evidence that the proposal serves the interests of the state; and
(9) evidence of other factors that affect the viability of the facility, including excessive
nursing pool costs.
    Subd. 5. Review and approval of applications. (a) The commissioner of human services, in
consultation with the commissioner of health, shall approve or disapprove an application within
30 days after receiving it. The commissioner may appoint an advisory review panel composed
of representatives of counties, SAIL projects, consumers, and providers to review proposals
and provide comments and recommendations to the committee. The commissioners of human
services and health shall provide staff and technical assistance to the committee for the review
and analysis of proposals.
(b) Approval of a planned closure expires 18 months after approval by the commissioner of
human services, unless commencement of closure has begun.
(c) The commissioner of human services may change any provision of the application to
which the applicant, the regional planning group, and the commissioner agree.
    Subd. 6. Planned closure rate adjustment. (a) The commissioner of human services shall
calculate the amount of the planned closure rate adjustment available under subdivision 3,
paragraph (b), for up to 5,140 beds according to clauses (1) to (4):
(1) the amount available is the net reduction of nursing facility beds multiplied by $2,080;
(2) the total number of beds in the nursing facility or facilities receiving the planned closure
rate adjustment must be identified;
(3) capacity days are determined by multiplying the number determined under clause (2)
by 365; and
(4) the planned closure rate adjustment is the amount available in clause (1), divided by
capacity days determined under clause (3).
(b) A planned closure rate adjustment under this section is effective on the first day of the
month following completion of closure of the facility designated for closure in the application and
becomes part of the nursing facility's total operating payment rate.
(c) Applicants may use the planned closure rate adjustment to allow for a property payment
for a new nursing facility or an addition to an existing nursing facility or as an operating payment
rate adjustment. Applications approved under this subdivision are exempt from other requirements
for moratorium exceptions under section 144A.073, subdivisions 2 and 3.
(d) Upon the request of a closing facility, the commissioner must allow the facility a closure
rate adjustment as provided under section 144A.161, subdivision 10.
(e) A facility that has received a planned closure rate adjustment may reassign it to another
facility that is under the same ownership at any time within three years of its effective date. The
amount of the adjustment shall be computed according to paragraph (a).
(f) If the per bed dollar amount specified in paragraph (a), clause (1), is increased, the
commissioner shall recalculate planned closure rate adjustments for facilities that delicense beds
under this section on or after July 1, 2001, to reflect the increase in the per bed dollar amount.
The recalculated planned closure rate adjustment shall be effective from the date the per bed
dollar amount is increased.
    Subd. 7. Other rate adjustments. Facilities receiving planned closure rate adjustments
remain eligible for any applicable rate adjustments provided under section 256B.431, 256B.434,
or any other section.
    Subd. 8. County costs. The commissioner of human services shall allocate funds for
relocation costs incurred by counties for planned closures under this section as provided under
section 144A.161, subdivision 11.
    Subd. 9. Transfer of beds. The board of commissioners of Saint Louis County may amend
their planned closure rate adjustment application to allow up to 50 beds of a 159-licensed
bed county-owned nursing facility that is in the process of closing to be transferred to a
hospital-attached nursing facility in Aurora and up to 50 beds to a 235-bed nursing facility in
Duluth, and may also assign all or a portion of the planned closure rate adjustment that would be
received as a result of closure to the Aurora facility or the Duluth facility.
History: 1Sp2001 c 9 art 5 s 27; 2002 c 220 art 14 s 11; 2002 c 362 s 5; 2002 c 375 art 2 s
39,40; 2002 c 379 art 1 s 113; 2004 c 194 s 2; 2006 c 282 art 20 s 25

256B.438 IMPLEMENTATION OF A CASE MIX SYSTEM.
    Subdivision 1. Scope. This section establishes the method and criteria used to determine
resident reimbursement classifications based upon the assessments of residents of nursing homes
and boarding care homes whose payment rates are established under section 256B.431, 256B.434,
or 256B.435. Resident reimbursement classifications shall be established according to the 34
group, resource utilization groups, version III or RUG-III model as described in section 144.0724.
Reimbursement classifications established under this section shall be implemented after June 30,
2002, but no later than January 1, 2003. Reimbursement classifications established under this
section shall be implemented no earlier than six weeks after the commissioner mails notices of
payment rates to the facilities.
    Subd. 2. Definitions. For purposes of this section, the following terms have the meanings
given.
(a) Assessment reference date. "Assessment reference date" has the meaning given in
section 144.0724, subdivision 2, paragraph (a).
(b) Case mix index. "Case mix index" has the meaning given in section 144.0724,
subdivision 2 , paragraph (b).
(c) Index maximization. "Index maximization" has the meaning given in section 144.0724,
subdivision 2 , paragraph (c).
(d) Minimum data set. "Minimum data set" has the meaning given in section 144.0724,
subdivision 2 , paragraph (d).
(e) Representative. "Representative" has the meaning given in section 144.0724, subdivision
2 , paragraph (e).
(f) Resource utilization groups or rug. "Resource utilization groups" or "RUG" has the
meaning given in section 144.0724, subdivision 2, paragraph (f).
    Subd. 3. Case mix indices. (a) The commissioner of human services shall assign a case mix
index to each resident class based on the Centers for Medicare and Medicaid Services staff time
measurement study and adjusted for Minnesota-specific wage indices. The case mix indices
assigned to each resident class shall be published in the Minnesota State Register at least 120 days
prior to the implementation of the 34 group, RUG-III resident classification system.
(b) An index maximization approach shall be used to classify residents.
(c) After implementation of the revised case mix system, the commissioner of human
services may annually rebase case mix indices and base rates using more current data on average
wage rates and staff time measurement studies. This rebasing shall be calculated under subdivision
7, paragraph (b). The commissioner shall publish in the Minnesota State Register adjusted case
mix indices at least 45 days prior to the effective date of the adjusted case mix indices.
    Subd. 4. Resident assessment schedule. (a) Nursing facilities shall conduct and submit case
mix assessments according to the schedule established by the commissioner of health under
section 144.0724, subdivisions 4 and 5.
(b) The resident reimbursement classifications established under section 144.0724,
subdivision 3 , shall be effective the day of admission for new admission assessments. The
effective date for significant change assessments shall be the assessment reference date. The
effective date for annual and quarterly assessments shall be the first day of the month following
assessment reference date.
(c) Effective October 1, 2006, the commissioner shall rebase payment rates to account for
the change in the resident assessment schedule in section 144.0724, subdivision 4, paragraph (b),
clause (4), in a facility specific budget neutral manner, according to subdivision 7, paragraph (b).
    Subd. 5. Notice of resident reimbursement classification. Nursing facilities shall provide
notice to a resident of the resident's case mix classification according to procedures established by
the commissioner of health under section 144.0724, subdivision 7.
    Subd. 6. Reconsideration of resident classification. Any request for reconsideration of a
resident classification must be made under section 144.0724, subdivision 8.
    Subd. 7. Rate determination upon transition to RUG-III payment rates. (a) The
commissioner of human services shall determine payment rates at the time of transition to the
RUG based payment model in a facility-specific, budget-neutral manner. The case mix indices
as defined in subdivision 3 shall be used to allocate the case mix adjusted component of total
payment across all case mix groups. To transition from the current calculation methodology to
the RUG based methodology, the commissioner of health shall report to the commissioner of
human services the resident days classified according to the categories defined in subdivision
3 for the 12-month reporting period ending September 30, 2001, for each nursing facility. The
commissioner of human services shall use this data to compute the standardized days for the
reporting period under the RUG system.
(b) The commissioner of human services shall determine the case mix adjusted component
of the rate as follows:
(1) determine the case mix portion of the 11 case mix rates in effect on June 30, 2002, or the
34 case mix rates in effect on or after June 30, 2003;
(2) multiply each amount in clause (1) by the number of resident days assigned to each group
for the reporting period ending September 30, 2001, or the most recent year for which data is
available;
(3) compute the sum of the amounts in clause (2);
(4) determine the total RUG standardized days for the reporting period ending September
30, 2001, or the most recent year for which data is available using the new indices calculated
under subdivision 3, paragraph (c);
(5) divide the amount in clause (3) by the amount in clause (4) which shall be the average
case mix adjusted component of the rate under the RUG method; and
(6) multiply this average rate by the case mix weight in subdivision 3 for each RUG group.
(c) The noncase mix component will be allocated to each RUG group as a constant amount
to determine the transition payment rate. Any other rate adjustments that are effective on or after
July 1, 2002, shall be applied to the transition rates determined under this section.
History: 1Sp2001 c 9 art 5 s 28; 2002 c 277 s 32; 2002 c 375 art 2 s 41; 2002 c 379 art 1 s
113; 2006 c 282 art 20 s 26

256B.439 LONG-TERM CARE QUALITY PROFILES.
    Subdivision 1. Development and implementation of quality profiles. (a) The commissioner
of human services, in cooperation with the commissioner of health, shall develop and implement
a quality profile system for nursing facilities and, beginning not later than July 1, 2004, other
providers of long-term care services, except when the quality profile system would duplicate
requirements under section 256B.5011, 256B.5012, or 256B.5013. The system must be developed
and implemented to the extent possible without the collection of significant amounts of new data.
To the extent possible, the system must incorporate or be coordinated with information on quality
maintained by area agencies on aging, long-term care trade associations, and other entities. The
system must be designed to provide information on quality to:
(1) consumers and their families to facilitate informed choices of service providers;
(2) providers to enable them to measure the results of their quality improvement efforts and
compare quality achievements with other service providers; and
(3) public and private purchasers of long-term care services to enable them to purchase
high-quality care.
(b) The system must be developed in consultation with the long-term care task force, area
agencies on aging, and representatives of consumers, providers, and labor unions. Within the limits
of available appropriations, the commissioners may employ consultants to assist with this project.
    Subd. 2. Quality measurement tools. The commissioners shall identify and apply existing
quality measurement tools to:
(1) emphasize quality of care and its relationship to quality of life; and
(2) address the needs of various users of long-term care services, including, but not limited
to, short-stay residents, persons with behavioral problems, persons with dementia, and persons
who are members of minority groups.
The tools must be identified and applied, to the extent possible, without requiring providers to
supply information beyond current state and federal requirements.
    Subd. 3. Consumer surveys. Following identification of the quality measurement tool, the
commissioners shall conduct surveys of long-term care service consumers to develop quality
profiles of providers. To the extent possible, surveys must be conducted face-to-face by state
employees or contractors. At the discretion of the commissioners, surveys may be conducted by
telephone or by provider staff. Surveys must be conducted periodically to update quality profiles
of individual service providers.
    Subd. 4. Dissemination of quality profiles. By July 1, 2003, the commissioners shall
implement a system to disseminate the quality profiles developed from consumer surveys using
the quality measurement tool. Profiles may be disseminated to the Senior LinkAge line and to
consumers, providers, and purchasers of long-term care services through all feasible printed and
electronic outlets. The commissioners may conduct a public awareness campaign to inform
potential users regarding profile contents and potential uses.
History: 1Sp2001 c 9 art 5 s 29; 2002 c 220 art 14 s 12,13; 2002 c 379 art 1 s 113

    Subdivision 1.[Repealed, 1983 c 199 s 19]
    Subd. 2.[Repealed, 1979 c 336 s 18; 1983 c 199 s 19]
    Subd. 3.[Repealed, 1983 c 199 s 19]

256B.440 RECOMMENDATION FOR A NEW REIMBURSEMENT SYSTEM.
    Subdivision 1. In general. The commissioner shall present to the legislature, by January 15,
2005, a recommendation to establish a new nursing facility reimbursement system that provides
facility-specific, prospective payment rates for nursing facilities participating in the medical
assistance program. The rates shall be determined using a statistical and cost report filed by each
nursing facility. The total payment rate shall be composed of four rate components: direct-care
services, support services, external fixed, and property-related costs. The payment rate shall be
derived from statistical measures of actual costs incurred in the operation of nursing facilities.
From this cost basis, the components of the total payment rate shall be adjusted for quality of
services provided, actual costs of operation of each facility, geographic variation in labor costs,
rental value, and resident acuity.
    Subd. 2. Recommendation for establishment beginning October 1, 2006. The
recommendation in subdivision 1 shall provide for the establishment of all or part of a nursing
facility's rates under the new nursing facility reimbursement system beginning on October 1,
2006. Rates shall be rebased annually. Effective January 1, 2005, each cost reporting year shall
begin on January 1 and end on the following December 31. A cost report shall be filed by each
nursing facility by March 31. Notice of rates shall be distributed by August 1 and the rates shall
go into effect on October 1 for one year.
    Subd. 3. Reporting of baseline statistical and cost information. (a) Nursing facilities shall
file a baseline statistical and cost report on or before August 31, 2004, for the reporting period
ending either September 30, 2003, or December 31, 2003. After July 1, 2004, the report required
under Minnesota Rules, part 9549.0041, subpart 1, shall no longer be required. For the period
between January 1, 2004, and December 31, 2004, the commissioner may collect statistical and
cost information from facilities in no greater detail than items collected from facilities under
section 256B.431 or 256B.434, whichever is applicable, for the year ending September 30, 2003.
(b) All nursing facilities shall provide information to the commissioner in the form and
manner specified by the commissioner. The commissioner shall consult with stakeholders in
developing the baseline statistical and cost report that will be used to collect all data necessary to
develop and model the new nursing facility reimbursement system.
(c) Nursing facilities shall report as costs of the nursing facility only costs directly related
to the operation of the nursing facility. The facility shall not include costs that are separately
reimbursed by residents, medical assistance, or other payors. The commissioner may grant to
facilities one extension of up to ten days for the filing of this report, if the extension is requested
by August 1. The commissioner may require facilities to submit separately, in the form and
manner specified by the commissioner, documentation of statistical and cost information included
in the report, in order to ensure accuracy in modeling payment rates and to perform audit and
appeal review functions under this section. Facilities shall retain all records necessary to document
statistical and cost information provided in the report for a period of no less than seven years.
(d) The commissioner may reject a report filed by a nursing facility under this section if the
commissioner determines that the report has been filed in a form that is incomplete or inaccurate
and the information is insufficient to model accurate payment rates. If a report is rejected or is not
submitted in a timely manner, the commissioner shall reduce payments to a nursing facility to 85
percent of amounts due until the information is completely and accurately filed. The reinstatement
of withheld payments shall be retroactive for no more than 90 days. A nursing facility whose
report is rejected shall be given notice of the rejection, the reasons for the rejection, and an
opportunity to correct the report prior to any payment reduction. A nursing facility that does not
submit a report shall be given a prior written notice of the payment reduction.
(e) The commissioner shall use the baseline statistical and cost report data to model and
simulate the new nursing facility reimbursement system. Modeling shall be done using both
budget neutrality and additional funding assumptions.
(f) The data set in which statistical and cost reports are compiled shall, upon request,
be released by the commissioner, once it has been used for statistical analyses for purposes of
modeling rate setting.
(g) The commissioner shall determine, in consultation with stakeholders and experts,
methods that shall be used to integrate quality measures into the new nursing facility
reimbursement system. For the modeling and simulations of the baseline data, the quality
measures shall include, at a minimum:
(1) direct care hours per standardized resident day;
(2) staff turnover;
(3) staff retention;
(4) use of pool staff;
(5) proportion of beds in single-bed rooms;
(6) quality indicators from the minimum data set; and
(7) survey deficiencies.
If data analysis of the modeling and simulations indicates that revisions, deletions, or additional
indicators are needed, those modifications shall be made prior to the initial rate year. The quality
measures used to determine a component of the payment rates shall be established for a rate year
using data submitted in the statistical and cost report from the associated reporting year, and using
data from other sources related to the reporting year.
History: 2004 c 194 s 3

256B.441 VALUE-BASED NURSING FACILITY REIMBURSEMENT SYSTEM.
    Subdivision 1. Rate determination. (a) The commissioner shall establish a value-based
nursing facility reimbursement system which will provide facility-specific, prospective rates for
nursing facilities participating in the medical assistance program. The rates shall be determined
using an annual statistical and cost report filed by each nursing facility. The total payment rate
shall be composed of four rate components: direct care services, support services, external
fixed, and property-related rate components. The payment rate shall be derived from statistical
measures of actual costs incurred in facility operation of nursing facilities. From this cost basis,
the components of the total payment rate shall be adjusted for quality of services provided,
recognition of staffing levels, geographic variation in labor costs, and resident acuity.
(b) Rates shall be rebased annually. Each cost reporting year shall begin on October 1 and
end on the following September 30. Beginning in 2006, a statistical and cost report shall be filed
by each nursing facility by January 15. Notice of rates shall be distributed by August 15 and the
rates shall go into effect on October 1 for one year.
(c) The commissioner shall begin to phase in the new reimbursement system beginning
October 1, 2007. Full phase-in shall be completed by October 1, 2011.
    Subd. 2. Definitions. For purposes of this section, the terms in subdivisions 3 to 42 have the
meanings given unless otherwise provided for in this section.
    Subd. 3. Active beds. "Active beds" means licensed beds that are not currently in layaway
status.
    Subd. 4. Activities costs. "Activities costs" means the costs for the salaries and wages of
the supervisor and other activities workers, associated fringe benefits and payroll taxes, supplies,
services, and consultants.
    Subd. 5. Administrative costs. "Administrative costs" means the direct costs for
administering the overall activities of the nursing home. These costs include salaries and wages
of the administrator, assistant administrator, business office employees, security guards, and
associated fringe benefits and payroll taxes, fees, contracts, or purchases related to business office
functions, licenses, and permits except as provided in the external fixed costs category, employee
recognition, travel including meals and lodging, training, voice and data communication or
transmission, office supplies, liability insurance and other forms of insurance not designated to
other areas, personnel recruitment, legal services, accounting services, management or business
consultants, data processing, central or home office costs, business meetings and seminars,
postage, fees for professional organizations, subscriptions, security services, advertising, board of
director's fees, working capital interest expense, and bad debts and bad debt collection fees.
    Subd. 6. Allowed costs. "Allowed costs" means the amounts reported by the facility which
are necessary for the operation of the facility and the care of residents and which are reviewed
by the department for accuracy, reasonableness, and compliance with this section and generally
accepted accounting principles.
    Subd. 7. Center for Medicare and Medicaid services. "Center for Medicare and Medicaid
services" means the federal agency, in the United States Department of Health and Human
Services that administers Medicaid, also referred to as "CMS."
    Subd. 8. Commissioner. "Commissioner" means the commissioner of human services
unless specified otherwise.
    Subd. 9. Desk audit. "Desk audit" means the establishment of the payment rate based
on the commissioner's review and analysis of required reports, supporting documentation, and
work sheets submitted by the nursing facility.
    Subd. 10. Dietary costs. "Dietary costs" means the costs for the salaries and wages of the
dietary supervisor, dietitians, chefs, cooks, dishwashers, and other employees assigned to the
kitchen and dining room, and associated fringe benefits and payroll taxes. Dietary costs also
includes the salaries or fees of dietary consultants, direct costs of raw food (both normal and
special diet food), dietary supplies, and food preparation and serving. Also included are special
dietary supplements used for tube feeding or oral feeding, such as elemental high nitrogen diet,
even if written as a prescription item by a physician.
    Subd. 11. Direct care costs category. "Direct care costs category" means costs for nursing
services, activities, and social services.
    Subd. 12. Economic development regions. "Economic development regions" are as defined
in section 462.385, subdivision 1.
    Subd. 13. External fixed costs category. "External fixed costs category" means costs
related to the nursing home surcharge under section 256.9657, subdivision 1; licensure fees
under section 144.122; long-term care consultation fees under section 256B.0911, subdivision
6 ; family advisory council fee under section 144A.33; scholarships under section 256B.431,
subdivision 36 ; planned closure rate adjustments under section 256B.437; property taxes and
property insurance; and PERA.
    Subd. 14. Facility average case mix index. "Facility average case mix index" or "CMI"
means a numerical value score that describes the relative resource use for all residents within
the groups under the resource utilization group (RUG-III) classification system prescribed by
the commissioner based on an assessment of each resident. The facility average CMI shall be
computed as the standardized days divided by total days for all residents in the facility.
    Subd. 15. Field audit. "Field audit" means the examination, verification, and review of the
financial records, statistical records, and related supporting documentation on the nursing home
and any related organization.
    Subd. 16. Final rate. "Final rate" means the rate established after any adjustment by the
commissioner, including, but not limited to, adjustments resulting from audits.
    Subd. 17. Fringe benefit costs. "Fringe benefit costs" means the costs for group life, health,
dental, workers' compensation, and other employee insurances and pension, profit-sharing, and
retirement plans for which the employer pays all or a portion of the costs and that are available
to at least all employees who work at least 20 hours per week.
    Subd. 18. Generally accepted accounting principles. "Generally Accepted Accounting
Principles" means the body of pronouncements adopted by the American Institute of Certified
Public Accountants regarding proper accounting procedures, guidelines, and rules.
    Subd. 19. Hospital-attached nursing facility status. (a) For the purpose of setting rates
under this section, for rate years beginning after September 30, 2006, "hospital-attached nursing
facility" means a nursing facility which meets the requirements of clauses (1) and (2); or (3); or
(4), or had hospital-attached status prior to January 1, 1995, and has been recognized as having
hospital-attached status by CMS continuously since that date:
(1) the nursing facility is recognized by the federal Medicare program to be a hospital-based
nursing facility;
(2) the hospital and nursing facility are physically attached or connected by a corridor;
(3) a nursing facility and hospital, which have applied for hospital-based nursing facility
status under the federal Medicare program during the reporting year, shall be considered a
hospital-attached nursing facility for purposes of setting payment rates under this section. The
nursing facility must file its cost report for that reporting year using Medicare principles and
Medicare's recommended cost allocation methods had the Medicare program's hospital-based
nursing facility status been granted to the nursing facility. For each subsequent rate year, the
nursing facility must meet the definition requirements in clauses (1) and (2). If the nursing facility
is denied hospital-based nursing facility status under the Medicare program, the nursing facility's
payment rates for the rate years the nursing facility was considered to be a hospital-attached
nursing facility according to this paragraph shall be recalculated treating the nursing facility as a
non-hospital-attached nursing facility;
(4) if a nonprofit or community-operated hospital and attached nursing facility suspend
operation of the hospital, the remaining nursing facility must be allowed to continue its status as
hospital-attached for rate calculations in the three rate years subsequent to the one in which the
hospital ceased operations.
(b) The nursing facility's cost report filed as hospital-attached facility shall use the same
cost allocation principles and methods used in the reports filed for the Medicare program.
Direct identification of costs to the nursing facility cost center will be permitted only when the
comparable hospital costs have also been directly identified to a cost center which is not allocated
to the nursing facility.
    Subd. 20. Housekeeping costs. "Housekeeping costs" means the costs for the salaries
and wages of the housekeeping supervisor, housekeepers, and other cleaning employees and
associated fringe benefits and payroll taxes. It also includes the cost of housekeeping supplies,
including cleaning and lavatory supplies and contract services.
    Subd. 21. Labor-related portion. The "labor-related portion" of direct care costs and of
support service costs shall be that portion of costs that is attributable to wages for all compensated
hours, payroll taxes, and fringe benefits.
    Subd. 22. Laundry costs. "Laundry costs" means the costs for the salaries and wages of
the laundry supervisor and other laundry employees, associated fringe benefits, and payroll
taxes. It also includes the costs of linen and bedding, the laundering of resident clothing, laundry
supplies, and contract services.
    Subd. 23. Licensee. "Licensee" means the individual or organization listed on the form
issued by the Minnesota Department of Health under chapter 144A or sections 144.50 to 144.56.
    Subd. 24. Maintenance and plant operations costs. "Maintenance and plant operations
costs" means the costs for the salaries and wages of the maintenance supervisor, engineers,
heating-plant employees, and other maintenance employees and associated fringe benefits and
payroll taxes. It also includes direct costs for maintenance and operation of the building and
grounds, including fuel, electricity, medical waste and garbage removal, water, sewer, supplies,
tools, and repairs.
    Subd. 25. Normalized direct care costs per day. "Normalized direct care costs per day"
means direct care costs divided by standardized days. It is the costs per day for direct care services
associated with a RUG's index of 1.00.
    Subd. 26. Nursing costs. "Nursing costs" means the costs for the wages of nursing
administration, staff education, and direct care registered nurses, licensed practical nurses,
certified nursing assistants, and trained medication aides; mental health workers and other direct
care employees, and associated fringe benefits and payroll taxes; services from a supplemental
nursing services agency and supplies that are stocked at nursing stations or on the floor and
distributed or used individually, including: alcohol, applicators, cotton balls, incontinence pads,
disposable ice bags, dressings, bandages, water pitchers, tongue depressors, disposable gloves,
enemas, enema equipment, soap, medication cups, diapers, plastic waste bags, sanitary products,
thermometers, hypodermic needles and syringes, and clinical reagents or similar diagnostic
agents, and drugs which are not paid on a separate fee schedule by the medical assistance program
or any other payer.
    Subd. 27. Nursing facility. "Nursing facility" means a facility with a medical assistance
provider agreement that is licensed as a nursing home under chapter 144A or as a boarding
care home under sections 144.50 to 144.56.
    Subd. 28. Operating costs. "Operating costs" means costs associated with the direct care
costs category and the support services costs category.
    Subd. 29. Payroll taxes. "Payroll taxes" means the costs for the employer's share of the
FICA and Medicare withholding tax, and state and federal unemployment compensation taxes.
    Subd. 30. Peer groups. Facilities shall be classified into three groups, called "peer groups,"
which shall consist of:
(1) C&NC/Short Stay/R80 - facilities that have three or more admissions per bed per year,
are hospital-attached, or are licensed under Minnesota Rules, parts 9570.2000 to 9570.3600;
(2) boarding care homes - facilities that have more than 50 percent of their beds licensed as
boarding care homes; and
(3) standard - all other facilities.
    Subd. 31. Prior rate-setting method. "Prior rate-setting method" means the rate
determination process in effect prior to October 1, 2006, under Minnesota Rules and Minnesota
Statutes.
    Subd. 32. Private paying resident. "Private paying resident" means a nursing facility
resident who is not a medical assistance recipient and whose payment rate is not established by
another third party, including the veterans administration or Medicare.
    Subd. 33. Rate year. "Rate year" means the 12-month period beginning on October 1
following the second most recent reporting year.
    Subd. 34. Related organization. "Related organization" means a person that furnishes goods
or services to a nursing facility and that is a close relative of a nursing facility, an affiliate of a
nursing facility, a close relative of an affiliate of a nursing facility, or an affiliate of a close relative
of an affiliate of a nursing facility. As used in this subdivision, paragraphs (a) to (d) apply:
(a) "Affiliate" means a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with another person.
(b) "Person" means an individual, a corporation, a partnership, an association, a trust, an
unincorporated organization, or a government or political subdivision.
(c) "Close relative of an affiliate of a nursing facility" means an individual whose relationship
by blood, marriage, or adoption to an individual who is an affiliate of a nursing facility is no
more remote than first cousin.
(d) "Control" including the terms "controlling," "controlled by," and "under common control
with" means the possession, direct or indirect, of the power to direct or cause the direction of
the management, operations, or policies of a person, whether through the ownership of voting
securities, by contract, or otherwise, or to influence in any manner other than through an arms
length, legal transaction.
    Subd. 35. Reporting period. "Reporting period" means the one-year period beginning on
October 1 and ending on the following September 30 during which incurred costs are accumulated
and then reported on the statistical and cost report.
    Subd. 36. Resident day or actual resident day. "Resident day" or "actual resident day"
means a day for which nursing services are rendered and billable, or a day for which a bed is held
and billed. The day of admission is considered a resident day, regardless of the time of admission.
The day of discharge is not considered a resident day, regardless of the time of discharge.
    Subd. 37. Salaries and wages. "Salaries and wages" means amounts earned by and paid to
employees or on behalf of employees to compensate for necessary services provided. Salaries and
wages include accrued vested vacation and accrued vested sick leave pay. Salaries and wages
must be paid within 30 days of the end of the reporting period in order to be allowable costs of
the reporting period.
    Subd. 38. Social services costs. "Social services costs" means the costs for the salaries and
wages of the supervisor and other social work employees, associated fringe benefits and payroll
taxes, supplies, services, and consultants.
    Subd. 39. Stakeholders. "Stakeholders" means individuals and representatives of
organizations interested in long-term care, including nursing homes, consumers, and labor unions.
    Subd. 40. Standardized days. "Standardized days" means the sum of resident days by case
mix category multiplied by the RUG index for each category.
    Subd. 41. Statistical and cost report. "Statistical and cost report" means the forms supplied
by the commissioner for annual reporting of nursing facility expenses and statistics, including
instructions and definitions of items in the report.
    Subd. 42. Support services costs category. "Support services costs category" means the
costs for dietary, housekeeping, laundry, maintenance, and administration.
    Subd. 43. Reporting of statistical and cost information. (a) Beginning in 2006, all
nursing facilities shall provide information annually to the commissioner on a form and in a
manner determined by the commissioner. The commissioner may also require nursing facilities
to provide statistical and cost information for a subset of the items in the annual report on a
semiannual basis. Nursing facilities shall report only costs directly related to the operation of the
nursing facility. The facility shall not include costs which are separately reimbursed by residents,
medical assistance, or other payors. Allocations of costs from central, affiliated, or corporate
office and related organization transactions shall be reported according to section 256B.432.
The commissioner may grant to facilities one extension of up to 15 days for the filing of this
report if the extension is requested by December 15 and the commissioner determines that the
extension will not prevent the commissioner from establishing rates in a timely manner required
by law. The commissioner may separately require facilities to submit in a manner specified by
the commissioner documentation of statistical and cost information included in the report to
ensure accuracy in establishing payment rates and to perform audit and appeal review functions
under this section. Facilities shall retain all records necessary to document statistical and cost
information on the report for a period of no less than seven years. The commissioner may amend
information in the report according to subdivision 47. The commissioner may reject a report filed
by a nursing facility under this section if the commissioner determines that the report has been
filed in a form that is incomplete or inaccurate and the information is insufficient to establish
accurate payment rates. In the event that a complete report is not submitted in a timely manner,
the commissioner shall reduce the reimbursement payments to a nursing facility to 85 percent of
amounts due until the information is filed. The release of withheld payments shall be retroactive
for no more than 90 days. A nursing facility that does not submit a report or whose report is filed
in a timely manner but determined to be incomplete shall be given written notice that a payment
reduction is to be implemented and allowed ten days to complete the report prior to any payment
reduction. The commissioner may delay the payment withhold under exceptional circumstances
to be determined at the sole discretion of the commissioner.
(b) Nursing facilities may, within 12 months of the due date of a statistical and cost report,
file an amendment when errors or omissions in the annual statistical and cost report are discovered
and an amendment would result in a rate increase of at least 0.15 percent of the statewide weighted
average operating payment rate and shall, at any time, file an amendment which would result in a
rate reduction of at least 0.15 percent of the statewide weighted average operating payment rate.
The commissioner shall make retroactive adjustments to the total payment rate of a nursing
facility if an amendment is accepted. Where a retroactive adjustment is to be made as a result
of an amended report, audit findings, or other determination of an incorrect payment rate, the
commissioner may settle the payment error through a negotiated agreement with the facility and a
gross adjustment of the payments to the facility. Retroactive adjustments shall not be applied to
private pay residents. An error or omission for purposes of this item does not include a nursing
facility's determination that an election between permissible alternatives was not advantageous
and should be changed.
(c) If the commissioner determines that a nursing facility knowingly supplied inaccurate
or false information or failed to file an amendment to a statistical and cost report that resulted
in or would result in an overpayment, the commissioner shall immediately adjust the nursing
facility's payment rate and recover the entire overpayment. The commissioner may also terminate
the commissioner's agreement with the nursing facility and prosecute under applicable state
or federal law.
    Subd. 44. Calculation of a quality score. (a) The commissioner shall determine a quality
score for each nursing facility using quality measures established in section 256B.439, according
to methods determined by the commissioner in consultation with stakeholders and experts. These
methods shall be exempt from the rulemaking requirements under chapter 14.
(b) For each quality measure, a score shall be determined with a maximum number of
points available and number of points assigned as determined by the commissioner using the
methodology established according to this subdivision. The scores determined for all quality
measures shall be totaled. The determination of the quality measures to be used and the methods
of calculating scores may be revised annually by the commissioner.
(c) For the initial rate year under the new payment system, the quality measures shall include:
(1) staff turnover;
(2) staff retention;
(3) use of pool staff;
(4) quality indicators from the minimum data set; and
(5) survey deficiencies.
(d) For rate years beginning after October 1, 2006, when making revisions to the quality
measures or method for calculating scores, the commissioner shall publish the methodology in
the State Register at least 15 months prior to the start of the rate year for which the revised
methodology is to be used for rate-setting purposes. The quality score used to determine payment
rates shall be established for a rate year using data submitted in the statistical and cost report from
the associated reporting year, and using data from other sources related to a period beginning
no more than six months prior to the associated reporting year.
    Subd. 45. Operating payment rate for direct care and support services. The
commissioner shall provide recommendations to the legislature by February 15, 2006, on specific
methodology for the establishment of the operating payment rate for direct care and support
services under the new system. The recommendations must not increase expenditures for the
new payment system beyond the limits of the appropriation. The commissioner shall include
recommendations on options for recognizing changes in staffing and services that may require
a supplemental appropriation in the future.
    Subd. 46. Calculation of quality add-on. The payment rate for the quality add-on shall be a
variable amount based on each facility's quality score.
(a) For the rate year beginning October 1, 2006, the maximum quality add-on percent shall
be 2.4 percent and this add-on shall not be subject to a phase-in. The determination of the quality
score to be used in calculating the quality add-on for October 1, 2006, shall be based on a report
which must be filed with the commissioner, according to the requirements in subdivision 43, for
a six-month period ending January 31, 2006. This report shall be filed with the commissioner
by February 28, 2006. The commissioner shall prorate the six months of data to a full year.
When new quality measures are incorporated into the quality score methodology and when
existing quality measures are updated or improved, the commissioner may increase the maximum
quality add-on percent.
(b) For each facility, determine the operating payment rate.
(c) For each facility determine a ratio of the quality score of the facility determined in
subdivision 44, less 40 and then divided by 60. If this value is less than zero, use the value zero.
(d) For each facility, the quality add-on shall be the value determined in paragraph (b) times
the value determined in paragraph (c) times the maximum quality add-on percent.
    Subd. 47. Audit authority. (a) The commissioner may subject reports and supporting
documentation to desk and field audits to determine compliance with this section. Retroactive
adjustments shall be made as a result of desk or field audit findings if the cumulative impact of
the finding would result in a rate adjustment of at least 0.15 percent of the statewide weighted
average operating payment rate. If a field audit reveals inadequacies in a nursing facility's record
keeping or accounting practices, the commissioner may require the nursing facility to engage
competent professional assistance to correct those inadequacies within 90 days so that the field
audit may proceed.
(b) Field audits may cover the four most recent annual statistical and cost reports for which
desk audits have been completed and payment rates have been established. The field audit must
be an independent review of the nursing facility's statistical and cost report. All transactions,
invoices, or other documentation that support or relate to the statistics and costs claimed on
the annual statistical and cost reports are subject to review by the field auditor. If the provider
fails to provide the field auditor access to supporting documentation related to the information
reported on the statistical and cost report within the time period specified by the commissioner,
the commissioner shall calculate the total payment rate by disallowing the cost of the items for
which access to the supporting documentation is not provided.
(c) Changes in the total payment rate which result from desk or field audit adjustments to
statistical and cost reports for reporting years earlier than the four most recent annual cost reports
must be made to the four most recent annual statistical and cost reports, the current statistical and
cost report, and future statistical and cost reports to the extent that those adjustments affect the
total payment rate established by those reporting years.
(d) The commissioner shall extend the period for retention of records under subdivision 43
for purposes of performing field audits as necessary to enforce section 256B.48 with written
notice to the facility postmarked no later than 90 days prior to the expiration of the record
retention requirement.
History: 1Sp2005 c 4 art 7 s 43; 2006 c 212 art 3 s 21

256B.45 [Repealed, 1983 c 199 s 19]

256B.46 [Repealed, 1983 c 199 s 19]

256B.47 NONALLOWABLE COSTS; NOTICE OF INCREASES.
    Subdivision 1. Nonallowable costs. The following costs shall not be recognized as
allowable: (1) political contributions; (2) salaries or expenses of a lobbyist, as defined in section
10A.01, subdivision 21, for lobbying activities; (3) advertising designed to encourage potential
residents to select a particular nursing facility; (4) assessments levied by the commissioner of
health for uncorrected violations; (5) legal and related expenses for unsuccessful challenges
to decisions by governmental agencies; (6) memberships in sports, health or similar social
clubs or organizations; (7) costs incurred for activities directly related to influencing employees
with respect to unionization; and (8) direct and indirect costs of providing services which are
billed separately from the nursing facility's payment rate or pursuant to Minnesota Rules, parts
9500.0750 to 9500.1080. The commissioner shall by rule exclude the costs of any other items not
directly related to the provision of resident care.
    Subd. 2. Notice to residents. (a) No increase in nursing facility rates for private paying
residents shall be effective unless the nursing facility notifies the resident or person responsible
for payment of the increase in writing 30 days before the increase takes effect.
A nursing facility may adjust its rates without giving the notice required by this subdivision
when the purpose of the rate adjustment is to reflect a change in the case-mix classification
of the resident. If the state fails to set rates as required by section 256B.431, subdivision 1,
the time required for giving notice is decreased by the number of days by which the state was
late in setting the rates.
(b) If the state does not set rates by the date required in section 256B.431, subdivision 1,
nursing facilities shall meet the requirement for advance notice by informing the resident or
person responsible for payments, on or before the effective date of the increase, that a rate increase
will be effective on that date. If the exact amount has not yet been determined, the nursing facility
may raise the rates by the amount anticipated to be allowed. Any amounts collected from private
pay residents in excess of the allowable rate must be repaid to private pay residents with interest
at the rate used by the commissioner of revenue for the late payment of taxes and in effect on the
date the rate increase is effective.
    Subd. 3. Allocation of costs. To ensure the avoidance of double payments as required by
section 256B.433, the direct and indirect reporting year costs of providing residents of nursing
facilities that are not hospital attached with therapy services that are billed separately from the
nursing facility payment rate or according to Minnesota Rules, parts 9500.0750 to 9500.1080,
must be determined and deducted from the appropriate cost categories of the annual cost report
as follows:
(a) The costs of wages and salaries for employees providing or participating in providing
and consultants providing services shall be allocated to the therapy service based on direct
identification.
(b) The costs of fringe benefits and payroll taxes relating to the costs in paragraph (a) must
be allocated to the therapy service based on direct identification or the ratio of total costs in
paragraph (a) to the sum of total allowable salaries and the costs in paragraph (a).
(c) The costs of housekeeping, plant operations and maintenance, real estate taxes, special
assessments, and insurance, other than the amounts classified as a fringe benefit, must be
allocated to the therapy service based on the ratio of service area square footage to total facility
square footage.
(d) The costs of bookkeeping and medical records must be allocated to the therapy service
either by the method in paragraph (e) or based on direct identification. Direct identification may
be used if adequate documentation is provided to, and accepted by, the commissioner.
(e) The costs of administrators, bookkeeping, and medical records salaries, except as
provided in paragraph (d), must be allocated to the therapy service based on the ratio of the total
costs in paragraphs (a) to (d) to the sum of total allowable nursing facility costs and the costs in
paragraphs (a) to (d).
(f) The cost of property must be allocated to the therapy service and removed from the
nursing facility's property-related payment rate, based on the ratio of service area square footage
to total facility square footage multiplied by the property-related payment rate.
    Subd. 4. Allocation of costs; hospital-attached facilities. To ensure the avoidance of
double payments as required by section 256B.433, the direct and indirect reporting year costs of
providing therapy services to residents of a hospital-attached nursing facility, when the services
are billed separately from the nursing facility's payment rate or according to Minnesota Rules,
parts 9500.0750 to 9500.1080, must be determined and deducted from the appropriate cost
categories of the annual cost report based on the Medicare step-down as prepared in accordance
with instructions provided by the commissioner.
History: 1976 c 282 s 7; 1977 c 305 s 45; 1977 c 326 s 15,16; 1979 c 35 s 1; 1980 c 570 s 2;
1982 c 424 s 130; 1983 c 199 s 13; 1987 c 403 art 2 s 91-93; 1989 c 282 art 3 s 79; 1992 c 513
art 7 s 136; 1Sp1993 c 1 art 5 s 102; 1999 c 220 s 50; 1Sp2003 c 14 art 3 s 44,45

256B.48 CONDITIONS FOR PARTICIPATION.
    Subdivision 1. Prohibited practices. A nursing facility is not eligible to receive medical
assistance payments unless it refrains from all of the following:
(a) Charging private paying residents rates for similar services which exceed those which are
approved by the state agency for medical assistance recipients as determined by the prospective
desk audit rate, except under the following circumstances: the nursing facility may (1) charge
private paying residents a higher rate for a private room, and (2) charge for special services which
are not included in the daily rate if medical assistance residents are charged separately at the same
rate for the same services in addition to the daily rate paid by the commissioner. Services covered
by the payment rate must be the same regardless of payment source. Special services, if offered,
must be available to all residents in all areas of the nursing facility and charged separately at the
same rate. Residents are free to select or decline special services. Special services must not
include services which must be provided by the nursing facility in order to comply with licensure
or certification standards and that if not provided would result in a deficiency or violation by the
nursing facility. Services beyond those required to comply with licensure or certification standards
must not be charged separately as a special service if they were included in the payment rate for
the previous reporting year. A nursing facility that charges a private paying resident a rate in
violation of this clause is subject to an action by the state of Minnesota or any of its subdivisions
or agencies for civil damages. A private paying resident or the resident's legal representative has a
cause of action for civil damages against a nursing facility that charges the resident rates in
violation of this clause. The damages awarded shall include three times the payments that result
from the violation, together with costs and disbursements, including reasonable attorneys' fees
or their equivalent. A private paying resident or the resident's legal representative, the state,
subdivision or agency, or a nursing facility may request a hearing to determine the allowed rate or
rates at issue in the cause of action. Within 15 calendar days after receiving a request for such a
hearing, the commissioner shall request assignment of an administrative law judge under sections
14.48 to 14.56 to conduct the hearing as soon as possible or according to agreement by the
parties. The administrative law judge shall issue a report within 15 calendar days following the
close of the hearing. The prohibition set forth in this clause shall not apply to facilities licensed as
boarding care facilities which are not certified as skilled or intermediate care facilities level I or II
for reimbursement through medical assistance.
(b)(1) Charging, soliciting, accepting, or receiving from an applicant for admission to the
facility, or from anyone acting in behalf of the applicant, as a condition of admission, expediting
the admission, or as a requirement for the individual's continued stay, any fee, deposit, gift,
money, donation, or other consideration not otherwise required as payment under the state plan;
(2) requiring an individual, or anyone acting in behalf of the individual, to loan any money to
the nursing facility;
(3) requiring an individual, or anyone acting in behalf of the individual, to promise to leave
all or part of the individual's estate to the facility; or
(4) requiring a third-party guarantee of payment to the facility as a condition of admission,
expedited admission, or continued stay in the facility.
Nothing in this paragraph would prohibit discharge for nonpayment of services in accordance
with state and federal regulations.
(c) Requiring any resident of the nursing facility to utilize a vendor of health care services
chosen by the nursing facility. A nursing facility may require a resident to use pharmacies that
utilize unit dose packing systems approved by the Minnesota Board of Pharmacy, and may require
a resident to use pharmacies that are able to meet the federal regulations for safe and timely
administration of medications such as systems with specific number of doses, prompt delivery
of medications, or access to medications on a 24-hour basis. Notwithstanding the provisions of
this paragraph, nursing facilities shall not restrict a resident's choice of pharmacy because the
pharmacy utilizes a specific system of unit dose drug packing.
(d) Providing differential treatment on the basis of status with regard to public assistance.
(e) Discriminating in admissions, services offered, or room assignment on the basis of status
with regard to public assistance or refusal to purchase special services. Admissions discrimination
shall include, but is not limited to:
(1) basing admissions decisions upon assurance by the applicant to the nursing facility, or the
applicant's guardian or conservator, that the applicant is neither eligible for nor will seek public
assistance for payment of nursing facility care costs; and
(2) engaging in preferential selection from waiting lists based on an applicant's ability to pay
privately or an applicant's refusal to pay for a special service.
The collection and use by a nursing facility of financial information of any applicant pursuant
to a preadmission screening program established by law shall not raise an inference that the
nursing facility is utilizing that information for any purpose prohibited by this paragraph.
(f) Requiring any vendor of medical care as defined by section 256B.02, subdivision 7, who
is reimbursed by medical assistance under a separate fee schedule, to pay any amount based
on utilization or service levels or any portion of the vendor's fee to the nursing facility except
as payment for renting or leasing space or equipment or purchasing support services from
the nursing facility as limited by section 256B.433. All agreements must be disclosed to the
commissioner upon request of the commissioner. Nursing facilities and vendors of ancillary
services that are found to be in violation of this provision shall each be subject to an action by the
state of Minnesota or any of its subdivisions or agencies for treble civil damages on the portion
of the fee in excess of that allowed by this provision and section 256B.433. Damages awarded
must include three times the excess payments together with costs and disbursements including
reasonable attorney's fees or their equivalent.
(g) Refusing, for more than 24 hours, to accept a resident returning to the same bed or a bed
certified for the same level of care, in accordance with a physician's order authorizing transfer,
after receiving inpatient hospital services.
For a period not to exceed 180 days, the commissioner may continue to make medical
assistance payments to a nursing facility or boarding care home which is in violation of this
section if extreme hardship to the residents would result. In these cases the commissioner shall
issue an order requiring the nursing facility to correct the violation. The nursing facility shall have
20 days from its receipt of the order to correct the violation. If the violation is not corrected
within the 20-day period the commissioner may reduce the payment rate to the nursing facility by
up to 20 percent. The amount of the payment rate reduction shall be related to the severity of
the violation and shall remain in effect until the violation is corrected. The nursing facility or
boarding care home may appeal the commissioner's action pursuant to the provisions of chapter
14 pertaining to contested cases. An appeal shall be considered timely if written notice of appeal
is received by the commissioner within 20 days of notice of the commissioner's proposed action.
In the event that the commissioner determines that a nursing facility is not eligible for
reimbursement for a resident who is eligible for medical assistance, the commissioner may
authorize the nursing facility to receive reimbursement on a temporary basis until the resident can
be relocated to a participating nursing facility.
Certified beds in facilities which do not allow medical assistance intake on July 1, 1984, or
after shall be deemed to be decertified for purposes of section 144A.071 only.
    Subd. 1a. Termination. If a nursing facility terminates its participation in the medical
assistance program, whether voluntarily or involuntarily, the commissioner may authorize the
nursing facility to receive continued medical assistance reimbursement until medical assistance
residents can be relocated to nursing facilities participating in the medical assistance program.
    Subd. 1b. Exception. Notwithstanding any agreement between a nursing facility and the
Department of Human Services or the provisions of this section or section 256B.411, other
than subdivision 1a, the commissioner may authorize continued medical assistance payments to
a nursing facility which ceased intake of medical assistance recipients prior to July 1, 1983,
and which charges private paying residents rates that exceed those permitted by subdivision
1, paragraph (a), for (i) residents who resided in the nursing facility before July 1, 1983, or
(ii) residents for whom the commissioner or any predecessors of the commissioner granted a
permanent individual waiver prior to October 1, 1983. Nursing facilities seeking continued
medical assistance payments under this subdivision shall make the reports required under
subdivision 2, except that on or after December 31, 1985, the financial statements required need
not be audited by or contain the opinion of a certified public accountant or licensed public
accountant, but need only be reviewed by a certified public accountant or licensed public
accountant. In the event that the state is determined by the federal government to be no longer
eligible for the federal share of medical assistance payments made to a nursing facility under this
subdivision, the commissioner may cease medical assistance payments, under this subdivision, to
that nursing facility.
    Subd. 1c. Case mix rate for provider with addendum to provider agreement. A
nursing facility with an addendum to its provider agreement effective beginning July 1, 1983,
or September 24, 1985, shall have its payment rates established by the commissioner under this
subdivision. To save medical assistance resources, for rate years beginning after July 1, 1991, the
provider's payment rates shall be the payment rates established by the commissioner July 1, 1990,
multiplied by a 12-month inflation factor based on the forecasted inflation between the midpoints
of rate years using the inflation index applied by the commissioner to other nursing facilities.
The provider and the Department of Health shall complete case mix assessments under
Minnesota Rules, chapter 4656, and parts 9549.0058 and 9549.0059, on only those residents
receiving medical assistance. The commissioner of health may audit and verify the limited
provider assessments at any time.
    Subd. 2. Reporting requirements. No later than December 31 of each year, a skilled nursing
facility or intermediate care facility, including boarding care facilities, which receives medical
assistance payments or other reimbursements from the state agency shall:
(a) Provide the state agency with a copy of its audited financial statements. The audited
financial statements must include a balance sheet, income statement, statement of the rate or rates
charged to private paying residents, statement of retained earnings, statement of cash flows,
notes to the financial statements, audited applicable supplemental information, and the certified
public accountant's or licensed public accountant's opinion. The examination by the certified
public accountant or licensed public accountant shall be conducted in accordance with generally
accepted auditing standards as promulgated and adopted by the American Institute of Certified
Public Accountants. Beginning with the reporting year which begins October 1, 1992, a nursing
facility is no longer required to have a certified audit of its financial statements. The cost of a
certified audit shall not be an allowable cost in that reporting year, nor in subsequent reporting
years unless the nursing facility submits its certified audited financial statements in the manner
otherwise specified in this subdivision. A nursing facility which does not submit a certified
audit must submit its working trial balance;
(b) Provide the state agency with a statement of ownership for the facility;
(c) Provide the state agency with separate, audited financial statements as specified in clause
(a) for every other facility owned in whole or part by an individual or entity which has an
ownership interest in the facility;
(d) Upon request, provide the state agency with separate, audited financial statements as
specified in clause (a) for every organization with which the facility conducts business and
which is owned in whole or in part by an individual or entity which has an ownership interest
in the facility;
(e) Provide the state agency with copies of leases, purchase agreements, and other documents
related to the lease or purchase of the nursing facility;
(f) Upon request, provide the state agency with copies of leases, purchase agreements, and
other documents related to the acquisition of equipment, goods, and services which are claimed as
allowable costs; and
(g) Permit access by the state agency to the certified public accountant's and licensed public
accountant's audit workpapers which support the audited financial statements required in clauses
(a), (c), and (d).
Documents or information provided to the state agency pursuant to this subdivision shall
be public. If the requirements of clauses (a) to (g) are not met, the reimbursement rate may be
reduced to 80 percent of the rate in effect on the first day of the fourth calendar month after the
close of the reporting year, and the reduction shall continue until the requirements are met.
Both nursing facilities and intermediate care facilities for the developmentally disabled must
maintain statistical and accounting records in sufficient detail to support information contained
in the facility's cost report for at least six years, including the year following the submission
of the cost report. For computerized accounting systems, the records must include copies of
electronically generated media such as magnetic discs and tapes.
    Subd. 3. Incomplete or inaccurate reports. The commissioner may reject any annual cost
report filed by a nursing facility pursuant to this chapter if the commissioner determines that
the report or the information required in subdivision 2, clause (a) has been filed in a form that
is incomplete or inaccurate. In the event that a report is rejected pursuant to this subdivision,
the commissioner shall reduce the reimbursement rate to a nursing facility to 80 percent of its
most recently established rate until the information is completely and accurately filed. The
reinstatement of the total reimbursement rate is retroactive.
    Subd. 3a. Audit adjustments. If the commissioner requests supporting documentation
during an audit for an item of cost reported by a long-term care facility, and the long-term care
facility's response does not adequately document the item of cost, the commissioner may make
reasoned assumptions considered appropriate in the absence of the requested documentation to
reasonably establish a payment rate rather than disallow the entire item of cost. This provision
shall not diminish the long-term care facility's appeal rights.
    Subd. 4. Extensions. The commissioner may grant up to a 15-day extension of the reporting
deadline to a nursing facility for good cause. To receive such an extension, a nursing facility shall
submit a written request by December 1. The commissioner will notify the nursing facility of
the decision by December 15. Between December 1 and December 31, the nursing facility may
request a reporting extension for good cause by telephone and followed by a written request.
    Subd. 5. False reports. If a nursing facility knowingly supplies inaccurate or false
information in a required report that results in an overpayment, the commissioner shall:
(a) immediately adjust the nursing facility's payment rate to recover the entire overpayment
within the rate year; or
(b) terminate the commissioner's agreement with the nursing facility; or
(c) prosecute under applicable state or federal law; or
(d) use any combination of the foregoing actions.
    Subd. 6. Medicare certification. (a) Definition. For purposes of this subdivision, "nursing
facility" means a nursing facility that is certified as a skilled nursing facility or, after September
30, 1990, a nursing facility licensed under chapter 144A that is certified as a nursing facility.
(b) Medicare participation required. All nursing facilities shall participate in Medicare
Part A and Part B unless, after submitting an application, Medicare certification is denied by the
federal Centers for Medicare and Medicaid Services. Medicare review shall be conducted at the
time of the annual medical assistance review. Charges for Medicare-covered services provided to
residents who are simultaneously eligible for medical assistance and Medicare must be billed to
Medicare Part A or Part B before billing medical assistance. Medical assistance may be billed
only for charges not reimbursed by Medicare.
(c) After September 30, 1990. After September 30, 1990, a nursing facility satisfies the
requirements of paragraph (b) if at least 50 percent of the facility's beds certified as nursing
facility beds under the medical assistance program are Medicare certified.
(d) Conflict with Medicare distinct part requirements. At the request of a facility, the
commissioner of human services may reduce the 50 percent Medicare participation requirement
in paragraph (c) to no less than 20 percent if the commissioner of health determines that, due
to the facility's physical plant configuration, the facility cannot satisfy Medicare distinct part
requirements at the 50 percent certification level. To receive a reduction in the participation
requirement, a facility must demonstrate that the reduction will not adversely affect access of
Medicare-eligible residents to Medicare-certified beds.
(e) Institutions for mental disease. The commissioner may grant exceptions to the
requirements of paragraph (b) for nursing facilities that are designated as institutions for mental
disease.
(f) Notice of rights. The commissioner shall inform recipients of their rights under this
subdivision and section 144.651, subdivision 29.
    Subd. 7. Refund of excess charges. Any nursing facility which has charged a resident a
rate for a case-mix classification upon admission which is in excess of the rate for the case-mix
classification established by the commissioner of health and effective on the date of admission,
must refund the amount of charge in excess of the rate for the case-mix classification established
by the commissioner of health and effective on the date of admission. Refunds must be credited
to the next monthly billing or refunded within 15 days of receipt of the classification notice
from the Department of Health. Failure to refund the excess charge shall be considered to be
a violation of this section.
    Subd. 8. Notification to a spouse. When a private pay resident who has not yet been
screened by the preadmission screening team is admitted to a nursing facility or boarding care
facility, the nursing facility or boarding care facility must notify the resident and the resident's
spouse of the following:
(1) their right to retain certain resources under sections 256B.0575, 256B.058, 256B.059,
256B.0595, and 256B.14, subdivision 2; and
(2) that the federal Medicare hospital insurance benefits program covers posthospital
extended care services in a qualified skilled nursing facility for up to 150 days and that there are
several limitations on this benefit. The resident and the resident's family must be informed about
all mechanisms to appeal limitations imposed under this federal benefit program.
This notice may be included in the nursing facility's or boarding care facility's admission
agreement and must clearly explain what resources the resident and spouse may retain if the
resident applies for medical assistance. The Department of Human Services must notify nursing
facilities and boarding care facilities of changes in the determination of medical assistance
eligibility that relate to resources retained by a resident and the resident's spouse.
The preadmission screening team has primary responsibility for informing all private pay
applicants to a nursing facility or boarding care facility of the resources the resident and spouse
may retain.
    Subd. 9.[Repealed, 2000 c 449 s 15]
History: 1976 c 282 s 8; 1977 c 309 s 1; 1977 c 326 s 17; 1978 c 674 s 28; 1983 c 199 s
14; 1984 c 640 s 32; 1984 c 641 s 23; 1Sp1985 c 3 s 31; 1Sp1985 c 9 art 2 s 50-52; 1986 c 420
s 11,12; 1986 c 444; 1987 c 364 s 1; 1987 c 403 art 2 s 94; 1989 c 282 art 3 s 80-82; 1990 c
568 art 3 s 74,75; 1990 c 599 s 2; 1991 c 199 art 2 s 1; 1991 c 292 art 7 s 6; 1992 c 513 art 7 s
108-113,136; 1993 c 339 s 21; 1Sp1993 c 1 art 5 s 103,104; 1999 c 245 art 3 s 26-29; art 4 s
67; 2002 c 277 s 32; 2005 c 56 s 1

256B.49 HOME AND COMMUNITY-BASED SERVICE WAIVERS FOR DISABLED.
    Subdivision 1.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 2.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 3.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 4.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 5.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 6.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 7.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 8.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 9.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 10.[Repealed, 1Sp2001 c 9 art 3 s 76]
    Subd. 11. Authority. (a) The commissioner is authorized to apply for home and
community-based service waivers, as authorized under section 1915(c) of the Social Security Act
to serve persons under the age of 65 who are determined to require the level of care provided in a
nursing home and persons who require the level of care provided in a hospital. The commissioner
shall apply for the home and community-based waivers in order to:
(i) promote the support of persons with disabilities in the most integrated settings;
(ii) expand the availability of services for persons who are eligible for medical assistance;
(iii) promote cost-effective options to institutional care; and
(iv) obtain federal financial participation.
(b) The provision of waivered services to medical assistance recipients with disabilities shall
comply with the requirements outlined in the federally approved applications for home and
community-based services and subsequent amendments, including provision of services according
to a service plan designed to meet the needs of the individual. For purposes of this section, the
approved home and community-based application is considered the necessary federal requirement.
(c) The commissioner shall provide interested persons serving on agency advisory
committees and task forces, and others upon request, with notice of, and an opportunity to
comment on, any changes or amendments to the federally approved applications for home and
community-based waivers, prior to their submission to the federal Centers for Medicare and
Medicaid Services.
(d) The commissioner shall seek approval, as authorized under section 1915(c) of the Social
Security Act, to allow medical assistance eligibility under this section for children under age 21
without deeming of parental income or assets.
(e) The commissioner shall seek approval, as authorized under section 1915(c) of the Social
Act, to allow medical assistance eligibility under this section for individuals under age 65 without
deeming the spouse's income or assets.
    Subd. 12. Informed choice. Persons who are determined likely to require the level of care
provided in a nursing facility or hospital shall be informed of the home and community-based
support alternatives to the provision of inpatient hospital services or nursing facility services.
Each person must be given the choice of either institutional or home and community-based
services using the provisions described in section 256B.77, subdivision 2, paragraph (p).
    Subd. 13. Case management. (a) Each recipient of a home and community-based waiver
shall be provided case management services by qualified vendors as described in the federally
approved waiver application. The case management service activities provided will include:
(1) assessing the needs of the individual within 20 working days of a recipient's request;
(2) developing the written individual service plan within ten working days after the
assessment is completed;
(3) informing the recipient or the recipient's legal guardian or conservator of service options;
(4) assisting the recipient in the identification of potential service providers;
(5) assisting the recipient to access services;
(6) coordinating, evaluating, and monitoring of the services identified in the service plan;
(7) completing the annual reviews of the service plan; and
(8) informing the recipient or legal representative of the right to have assessments completed
and service plans developed within specified time periods, and to appeal county action or inaction
under section 256.045, subdivision 3.
(b) The case manager may delegate certain aspects of the case management service activities
to another individual provided there is oversight by the case manager. The case manager may not
delegate those aspects which require professional judgment including assessments, reassessments,
and care plan development.
    Subd. 14. Assessment and reassessment. (a) Assessments of each recipient's strengths,
informal support systems, and need for services shall be completed within 20 working days of
the recipient's request. Reassessment of each recipient's strengths, support systems, and need for
services shall be conducted at least every 12 months and at other times when there has been a
significant change in the recipient's functioning.
(b) Persons with developmental disabilities who apply for services under the nursing facility
level waiver programs shall be screened for the appropriate level of care according to section
256B.092.
(c) Recipients who are found eligible for home and community-based services under this
section before their 65th birthday may remain eligible for these services after their 65th birthday
if they continue to meet all other eligibility factors.
    Subd. 15. Individualized service plan. (a) Each recipient of home and community-based
waivered services shall be provided a copy of the written service plan which:
(1) is developed and signed by the recipient within ten working days of the completion of
the assessment;
(2) meets the assessed needs of the recipient;
(3) reasonably ensures the health and safety of the recipient;
(4) promotes independence;
(5) allows for services to be provided in the most integrated settings; and
(6) provides for an informed choice, as defined in section 256B.77, subdivision 2, paragraph
(p), of service and support providers.
(b) When a county is evaluating denials, reductions, or terminations of home and
community-based services under section 256B.49 for an individual, the case manager shall offer
to meet with the individual or the individual's guardian in order to discuss the prioritization of
service needs within the individualized service plan. The reduction in the authorized services for
an individual due to changes in funding for waivered services may not exceed the amount needed
to ensure medically necessary services to meet the individual's health, safety, and welfare.
    Subd. 16. Services and supports. (a) Services and supports included in the home and
community-based waivers for persons with disabilities shall meet the requirements set out
in United States Code, title 42, section 1396n. The services and supports, which are offered
as alternatives to institutional care, shall promote consumer choice, community inclusion,
self-sufficiency, and self-determination.
(b) Beginning January 1, 2003, the commissioner shall simplify and improve access to home
and community-based waivered services, to the extent possible, through the establishment of a
common service menu that is available to eligible recipients regardless of age, disability type,
or waiver program.
(c) Consumer directed community support services shall be offered as an option to all
persons eligible for services under subdivision 11, by January 1, 2002.
(d) Services and supports shall be arranged and provided consistent with individualized
written plans of care for eligible waiver recipients.
(e) A transitional supports allowance shall be available to all persons under a home and
community-based waiver who are moving from a licensed setting to a community setting.
"Transitional supports allowance" means a onetime payment of up to $3,000, to cover the costs,
not covered by other sources, associated with moving from a licensed setting to a community
setting. Covered costs include:
(1) lease or rent deposits;
(2) security deposits;
(3) utilities set-up costs, including telephone;
(4) essential furnishings and supplies; and
(5) personal supports and transports needed to locate and transition to community settings.
(f) The state of Minnesota and county agencies that administer home and community-based
waivered services for persons with disabilities, shall not be liable for damages, injuries,
or liabilities sustained through the purchase of supports by the individual, the individual's
family, legal representative, or the authorized representative with funds received through the
consumer-directed community support service under this section. Liabilities include but are not
limited to: workers' compensation liability, the Federal Insurance Contributions Act (FICA), or
the Federal Unemployment Tax Act (FUTA).
    Subd. 17. Cost of services and supports. (a) The commissioner shall ensure that the average
per capita expenditures estimated in any fiscal year for home and community-based waiver
recipients does not exceed the average per capita expenditures that would have been made to
provide institutional services for recipients in the absence of the waiver.
(b) The commissioner shall implement on January 1, 2002, one or more aggregate,
need-based methods for allocating to local agencies the home and community-based waivered
service resources available to support recipients with disabilities in need of the level of care
provided in a nursing facility or a hospital. The commissioner shall allocate resources to single
counties and county partnerships in a manner that reflects consideration of:
(1) an incentive-based payment process for achieving outcomes;
(2) the need for a state-level risk pool;
(3) the need for retention of management responsibility at the state agency level; and
(4) a phase-in strategy as appropriate.
(c) Until the allocation methods described in paragraph (b) are implemented, the annual
allowable reimbursement level of home and community-based waiver services shall be the
greater of:
(1) the statewide average payment amount which the recipient is assigned under the waiver
reimbursement system in place on June 30, 2001, modified by the percentage of any provider rate
increase appropriated for home and community-based services; or
(2) an amount approved by the commissioner based on the recipient's extraordinary
needs that cannot be met within the current allowable reimbursement level. The increased
reimbursement level must be necessary to allow the recipient to be discharged from an institution
or to prevent imminent placement in an institution. The additional reimbursement may be used to
secure environmental modifications; assistive technology and equipment; and increased costs
for supervision, training, and support services necessary to address the recipient's extraordinary
needs. The commissioner may approve an increased reimbursement level for up to one year of
the recipient's relocation from an institution or up to six months of a determination that a current
waiver recipient is at imminent risk of being placed in an institution.
(d) Beginning July 1, 2001, medically necessary private duty nursing services will be
authorized under this section as complex and regular care according to sections 256B.0651
and 256B.0653 to 256B.0656. The rate established by the commissioner for registered nurse or
licensed practical nurse services under any home and community-based waiver as of January 1,
2001, shall not be reduced.
    Subd. 18. Payments. The commissioner shall reimburse approved vendors from the medical
assistance account for the costs of providing home and community-based services to eligible
recipients using the invoice processing procedures of the Medicaid management information
system (MMIS). Recipients will be screened and authorized for services according to the federally
approved waiver application and its subsequent amendments.
    Subd. 19. Health and welfare. The commissioner of human services shall take the necessary
safeguards to protect the health and welfare of individuals provided services under the waiver.
    Subd. 20. Traumatic brain injury and related conditions. The commissioner shall seek
to amend the traumatic brain injury waiver to include, as eligible persons, individuals with an
acquired or degenerative disease diagnosis where cognitive impairment is present, such as
multiple sclerosis.
    Subd. 21. Report. The commissioner shall expand on the annual report required under
section 256B.0916, subdivision 7, to include information on the county of residence and financial
responsibility, age, and major diagnoses for persons eligible for the home and community-based
waivers authorized under subdivision 11 who are:
(1) receiving those services;
(2) screened and waiting for waiver services; and
(3) residing in nursing facilities and are under age 65.
History: 1984 c 640 s 32; 1984 c 654 art 5 s 24,58; 1990 c 568 art 3 s 76; 1991 c 292 art 4 s
61; 1992 c 513 art 7 s 114; 1Sp1993 c 1 art 5 s 105; 1995 c 207 art 6 s 87-89; 1996 c 451 art 5 s
29-31; 1997 c 7 art 5 s 31; 1997 c 203 art 4 s 47; art 7 s 24; 1999 c 156 s 1; 1Sp2001 c 9 art
3 s 58-67; 2002 c 277 s 32; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 3 s 46; 2004 c 288 art 3
s 25; 2005 c 56 s 1; 1Sp2005 c 4 art 7 s 44

NOTE: The amendment to subdivision 16 by Laws 2005, First Special Session chapter 4,
article 7, section 44, is effective upon federal approval and to the extent approved as a federal
waiver amendment. Laws 2005, First Special Session chapter 4, article 7, section 44, the effective
date.

256B.491 WAIVERED SERVICES.
    Subdivision 1. Study. The commissioner of human services shall prepare a study on the
characteristics of providers who have the potential for offering home and community-based
services under federal waivers authorized by United States Code, title 42, sections 1396 to 1396p.
The study shall include, but not be limited to:
(a) An analysis of the characteristics of providers presently involved in offering services
to the elderly, chronically ill children, disabled persons under age 65, and developmentally
disabled persons;
(b) The potential for conversion to waivered services of facilities which currently provide
services to the disability groups enumerated in clause (a);
(c) Proposals for system redesign to include (1) profiles of the types of providers best able,
within reasonable fiscal constraints, to serve the needs of clients and to fulfill public policy goals
in provision of waivered services, (2) methods for limiting concentration of facilities providing
services under waiver, (3) methods for ensuring that services are provided by the widest array
of provider groups.
The commissioner shall present the study to the legislature no later than March 15, 1985.
    Subd. 2. Control limited. Until July 1, 1985, no one person shall control the delivery of
waivered services to more than 50 persons receiving waivered services as authorized by section
256B.501. For the purposes of this section the following terms have the meanings given them:
(1) A "person" is an individual, a corporation, a partnership, an association, a trust, an
unincorporated organization, a subsidiary of an organization, and an affiliate. A "person" does not
include any governmental authority, agency or body.
(2) An "affiliate" is a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with another person.
(3) "Control" including the terms "controlling," "controlled by," and "under the common
control with" is the possession, direct or indirect, or the power to direct or cause the direction of
the management, operations or policies of a person, whether through the ownership of voting
securities, by contract, through consultation or otherwise.
    Subd. 3. Waivered services; salary adjustments. For the fiscal year beginning July 1,
1991, the commissioner of human services shall increase the statewide reimbursement rates for
home and community-based waivered services for persons with developmental disabilities to
reflect a three percent increase in salaries, payroll taxes, and fringe benefits of personnel below
top management employed by agencies under contract with the county board to provide these
services. The specific rate increase made available to county boards shall be calculated based on
the estimated portion of the fiscal year 1991 reimbursement rate that is attributable to these costs.
County boards shall verify in writing to the commissioner that each waivered service provider has
complied with this requirement. If a county board determines that a waivered service provider has
not complied with this requirement for a specific contract period, the county board shall reduce
the provider's payment rates for the next contract period to reflect the amount of money not spent
appropriately. The commissioner shall modify reporting requirements for vendors and counties as
necessary to monitor compliance with this provision.
History: 1984 c 641 s 24; 1984 c 654 art 5 s 58; 1991 c 292 art 4 s 62; 2005 c 56 s 1

256B.495 NURSING FACILITY RECEIVERSHIP FEES.
    Subdivision 1. Payment of receivership fees. The commissioner in consultation with
the commissioner of health may establish a receivership fee that exceeds a nursing facility
payment rate when the commissioner of health determines a nursing facility is subject to the
receivership provisions under section 144A.14 or 144A.15. In establishing the receivership fee,
the commissioner must reduce the receiver's requested receivership fee by amounts that the
commissioner determines are included in the nursing facility's payment rate and that can be used
to cover part or all of the receivership fee. Amounts that can be used to reduce the receivership
fee shall be determined by reallocating facility staff or costs that were formerly paid by the
nursing facility before the receivership and are no longer required to be paid. The amounts may
include any efficiency incentive, allowance, and other amounts not specifically required to be
paid for expenditures of the nursing facility.
If the receivership fee cannot be covered by amounts in the nursing facility's payment rate, a
receivership fee shall be set according to paragraphs (a) and (b) and payment shall be according to
paragraphs (c) to (e).
(a) The receivership fee per diem shall be determined by dividing the annual receivership fee
by the nursing facility's resident days from the most recent cost report for which the commissioner
has established a payment rate or the estimated resident days in the projected receivership fee
period.
(b) The receivership fee per diem shall be added to the nursing facility's payment rate.
(c) Notification of the payment rate increase must meet the requirements of section 256B.47,
subdivision 2 .
(d) The payment rate in paragraph (b) for a nursing facility shall be effective the first day of
the month following the receiver's compliance with the notice conditions in paragraph (c).
(e) The commissioner may elect to make a lump sum payment of a portion of the receivership
fee to the receiver or managing agent. In this case, the commissioner and the receiver or managing
agent shall agree to a repayment plan. Regardless of whether the commissioner makes a lump sum
payment under this paragraph, the provisions of paragraphs (a) to (d) and subdivision 2 also apply.
    Subd. 1a. Receivership payment rate adjustment. Upon receiving a recommendation from
the commissioner of health for a review of rates under section 144A.154, the commissioner may
grant an adjustment to the nursing home's payment rate. The commissioner shall review the
recommendation of the commissioner of health, together with the nursing home's cost report to
determine whether or not the deficiency or need can be corrected or met by reallocating nursing
home staff, costs, revenues, or other resources including any investments, efficiency incentives, or
allowances. If the commissioner determines that the deficiency cannot be corrected or the need
cannot be met, the commissioner shall determine the payment rate adjustment by dividing the
additional annual costs established during the commissioner's review by the nursing home's actual
resident days from the most recent desk-audited cost report.
    Subd. 2. Deduction of additional receivership payments. If the commissioner has
established a receivership fee per diem for a nursing facility in receivership under subdivision 1 or
a payment rate adjustment under subdivision 1a, the commissioner must deduct these receivership
payments according to paragraphs (a) to (c).
(a) The total receivership fee payments shall be the receivership per diem plus the payment
rate adjustment multiplied by the number of resident days for the period of the receivership. If
actual resident days for the receivership period are not made available within two weeks of the
commissioner's written request, the commissioner shall compute the resident days by prorating
the facility's resident days based on the number of calendar days from each portion of the nursing
facility's reporting years covered by the receivership period.
(b) The amount determined in paragraph (a) must be divided by the nursing facility's resident
days for the reporting year in which the receivership period ends.
(c) The per diem amount in paragraph (b) shall be subtracted from the nursing facility's
operating cost payment rate for the rate year following the reporting year in which the receivership
period ends. This provision applies whether or not there is a sale or transfer of the nursing facility,
unless the provisions of subdivision 5 apply.
    Subd. 3.[Repealed, 1992 c 513 art 8 s 59]
    Subd. 4. Downsizing and closing nursing facilities. (a) If the nursing facility is subject to a
downsizing to closure process during the period of receivership, the commissioner may reestablish
the nursing facility's payment rate. The payment rate shall be established based on the nursing
facility's budgeted operating costs, the receivership property related costs, and the management
fee costs for the receivership period divided by the facility's estimated resident days for the same
period. The commissioner of health and the commissioner shall make every effort to first facilitate
the transfer of private paying residents to alternate service sites prior to the effective date of the
payment rate. The cost limits and the case mix provisions in the rate setting system shall not apply
during the portion of the receivership period over which the nursing facility downsizes to closure.
(b) Any payment rate adjustment under this subdivision must meet the conditions in section
256B.47, subdivision 2, and shall remain in effect until the receivership ends, or until another
date the commissioner sets.
    Subd. 5. Sale or transfer of a nursing facility in receivership after closure. (a) Upon the
subsequent sale or transfer of a nursing facility in receivership, the commissioner must recover
any amounts paid through payment rate adjustments under subdivision 4 which exceed the normal
cost of operating the nursing facility. Examples of costs in excess of the normal cost of operating
the nursing facility include the managing agent's fee, directly identifiable costs of the managing
agent, bonuses paid to employees for their continued employment during the downsizing to
closure of the nursing facility, prereceivership expenditures paid by the receiver, additional
professional services such as accountants, psychologists, and dietitians, and other similar costs
incurred by the receiver to complete receivership. The buyer or transferee shall repay this amount
to the commissioner within 60 days after the commissioner notifies the buyer or transferee of the
obligation to repay. The buyer or transferee must also repay the private-pay resident the amount
the private-pay resident paid through payment rate adjustment.
(b) If a nursing facility with payment rates subject to subdivision 4, paragraph (a), is
later sold while the nursing facility is in receivership, the payment rates in effect prior to the
receivership shall be the new owner's payment rates. Those payment rates shall continue to be
in effect until the rate year following the reporting period ending on September 30 for the new
owner. The reporting period shall, whenever possible, be at least five consecutive months. If the
reporting period is less than five months but more than three months, the nursing facility's resident
days for the last two months of the reporting period must be annualized over the reporting period
for the purpose of computing the payment rate for the rate year following the reporting period.
History: 1989 c 282 art 3 s 83; 1990 c 568 art 3 s 77; 1992 c 513 art 7 s 115-119,136

256B.50 APPEALS.
    Subdivision 1. Scope. A provider may appeal from a determination of a payment rate
established pursuant to this chapter and reimbursement rules of the commissioner if the appeal,
if successful, would result in a change to the provider's payment rate or to the calculation of
maximum charges to therapy vendors as provided by section 256B.433, subdivision 3. Appeals
must be filed in accordance with procedures in this section. This section does not apply to a
request from a resident or long-term care facility for reconsideration of the classification of
a resident under section 144.0722.
    Subd. 1a. Definitions. For the purposes of this section, the following terms have the
meanings given.
(a) "Determination of a payment rate" means the process by which the commissioner
establishes the payment rate paid to a provider pursuant to this chapter, including determinations
made in desk audit, field audit, or pursuant to an amendment filed by the provider.
(b) "Provider" means a nursing facility as defined in section 256B.421, subdivision 7, or a
facility as defined in section 256B.501, subdivision 1.
(c) "Reimbursement rules" means Minnesota Rules, parts 9510.0010 to 9510.0480,
9510.0500 to 9510.0890, and rules adopted by the commissioner pursuant to sections 256B.41
and 256B.501, subdivision 3.
    Subd. 1b. Filing an appeal. To appeal, the provider shall file with the commissioner a
written notice of appeal; the appeal must be postmarked or received by the commissioner within
60 days of the date the determination of the payment rate was mailed or personally received by a
provider, whichever is earlier. The notice of appeal must specify each disputed item; the reason
for the dispute; the total dollar amount in dispute for each separate disallowance, allocation, or
adjustment of each cost item or part of a cost item; the computation that the provider believes is
correct; the authority in statute or rule upon which the provider relies for each disputed item; the
name and address of the person or firm with whom contacts may be made regarding the appeal;
and other information required by the commissioner.
    Subd. 1c. Contested case procedures appeals review process. (a) Effective for desk audit
appeals for rate years beginning on or after July 1, 1997, and for field audit appeals filed on or
after that date, the commissioner shall review appeals and issue a written appeal determination on
each appealed item within one year of the due date of the appeal. Upon mutual agreement, the
commissioner and the provider may extend the time for issuing a determination for a specified
period. The commissioner shall notify the provider by first class mail of the appeal determination.
The appeal determination takes effect 30 days following the date of issuance specified in the
determination.
(b) In reviewing the appeal, the commissioner may request additional written or oral
information from the provider. The provider has the right to present information by telephone,
in writing, or in person concerning the appeal to the commissioner prior to the issuance of the
appeal determination within six months of the date the appeal was received by the commissioner.
Written requests for conferences must be submitted separately from the appeal letter. Statements
made during the review process are not admissible in a contested case hearing absent an express
stipulation by the parties to the contested case.
(c) For an appeal item on which the provider disagrees with the appeal determination, the
provider may file with the commissioner a written demand for a contested case hearing to
determine the proper resolution of specified appeal items. The demand must be postmarked or
received by the commissioner within 30 days of the date of issuance specified in the determination.
A contested case demand for an appeal item nullifies the written appeal determination issued by
the commissioner for that appeal item. The commissioner shall refer any contested case demand
to the Office of the Attorney General.
(d) A contested case hearing must be heard by an administrative law judge according to
sections 14.48 to 14.56. In any proceeding under this section, the appealing party must demonstrate
by a preponderance of the evidence that the determination of a payment rate is incorrect.
(e) Regardless of any rate appeal, the rate established must be the rate paid and must remain
in effect until final resolution of the appeal or subsequent desk or field audit adjustment.
(f) To challenge the validity of rules established by the commissioner pursuant to this section
and sections 256B.41, 256B.421, 256B.431, 256B.47, 256B.48, 256B.501, and 256B.502, a
provider shall comply with section 14.44.
(g) The commissioner has discretion to issue to the provider a proposed resolution for
specified appeal items upon a request from the provider filed separately from the notice of appeal.
The proposed resolution is final upon written acceptance by the provider within 30 days of the date
the proposed resolution was mailed to or personally received by the provider, whichever is earlier.
(h) The commissioner may use the procedures described in this subdivision to resolve
appeals filed prior to July 1, 1997.
    Subd. 1d.[Repealed, 1997 c 107 s 19]
    Subd. 1e. Attorney's fees and costs. (a) Notwithstanding section 15.472, paragraph (a),
for an issue appealed under subdivision 1, the prevailing party in a contested case proceeding
or, if appealed, in subsequent judicial review, must be awarded reasonable attorney's fees and
costs incurred in litigating the appeal, if the prevailing party shows that the position of the
opposing party was not substantially justified. The procedures for awarding fees and costs set
forth in section 15.474 must be followed in determining the prevailing party's fees and costs
except as otherwise provided in this subdivision. For purposes of this subdivision, "costs"
means subpoena fees and mileage, transcript costs, court reporter fees, witness fees, postage and
delivery costs, photocopying and printing costs, amounts charged the commissioner by the office
of administrative hearings, and direct administrative costs of the department; and "substantially
justified" means that a position had a reasonable basis in law and fact, based on the totality of the
circumstances prior to and during the contested case proceeding and subsequent review.
(b) When an award is made to the department under this subdivision, attorney fees must
be calculated at the cost to the department. When an award is made to a provider under this
subdivision, attorney fees must be calculated at the rate charged to the provider except that
attorney fees awarded must be the lesser of the attorney's normal hourly fee or $100 per hour.
(c) In contested case proceedings involving more than one issue, the administrative law judge
shall determine what portion of each party's attorney fees and costs is related to the issue or issues
on which it prevailed and for which it is entitled to an award. In making that determination, the
administrative law judge shall consider the amount of time spent on each issue, the precedential
value of the issue, the complexity of the issue, and other factors deemed appropriate by the
administrative law judge.
(d) When the department prevails on an issue involving more than one provider, the
administrative law judge shall allocate the total amount of any award for attorney fees and costs
among the providers. In determining the allocation, the administrative law judge shall consider
each provider's monetary interest in the issue and other factors deemed appropriate by the
administrative law judge.
(e) Attorney fees and costs awarded to the department for proceedings under this subdivision
must not be reported or treated as allowable costs on the provider's cost report.
(f) Fees and costs awarded to a provider for proceedings under this subdivision must be
reimbursed to them within 120 days of the final decision on the award of attorney fees and costs.
(g) If the provider fails to pay the awarded attorney fees and costs within 120 days of the
final decision on the award of attorney fees and costs, the department may collect the amount
due through any method available to it for the collection of medical assistance overpayments to
providers. Interest charges must be assessed on balances outstanding after 120 days of the final
decision on the award of attorney fees and costs. The annual interest rate charged must be the rate
charged by the commissioner of revenue for late payment of taxes that is in effect on the 121st
day after the final decision on the award of attorney fees and costs.
(h) Amounts collected by the commissioner pursuant to this subdivision must be deemed to
be recoveries pursuant to section 256.01, subdivision 2, clause (15).
(i) This subdivision applies to all contested case proceedings set on for hearing by the
commissioner on or after April 29, 1988, regardless of the date the appeal was filed.
    Subd. 1f. Legal and related expenses. Legal and related expenses for unresolved challenges
to decisions by governmental agencies shall be separately identified and explained on the
provider's cost report for each year in which the expenses are incurred. When the challenge is
resolved in favor of the governmental agency, the provider shall notify the department of the extent
to which its challenge was unsuccessful or the cost report filed for the reporting year in which the
challenge was resolved. In addition, the provider shall inform the department of the years in which
it claimed legal and related expenses and the amount of the expenses claimed in each year relating
to the unsuccessful challenge. The department shall reduce the provider's medical assistance rate
in the subsequent rate year by the total amount claimed by the provider for legal and related
expenses incurred in an unsuccessful challenge to a decision by a governmental agency.
    Subd. 1g.[Repealed, 1997 c 107 s 19]
    Subd. 1h.[Repealed, 1997 c 107 s 19]
    Subd. 2.[Repealed, 1997 c 107 s 19]
    Subd. 3.[Repealed, 2000 c 449 s 15]
History: 1983 c 199 s 15; 1984 c 640 s 32; 1984 c 641 s 21; 1985 c 248 s 69; 1Sp1985 c 3 s
32; 1987 c 403 art 4 s 12; 1988 c 689 art 2 s 163-168; 1990 c 568 art 3 s 78,79; 1991 c 292 art 4
s 63; 1992 c 426 s 1; 1992 c 513 art 7 s 120,121,136; 1Sp1993 c 1 art 5 s 106-108; 1997 c 107 s
9-12; 1999 c 245 art 3 s 30; 2001 c 7 s 51

256B.501 RATES FOR COMMUNITY-BASED SERVICES FOR DISABLED.
    Subdivision 1. Definitions. For the purposes of this section, the following terms have the
meaning given them.
(a) "Commissioner" means the commissioner of human services.
(b) "Facility" means a facility licensed as a developmental disability residential facility
under section 252.28, licensed as a supervised living facility under chapter 144, and certified as
an intermediate care facility for persons with developmental disabilities. The term does not
include a state regional treatment center.
(c) "Habilitation services" means health and social services directed toward increasing
and maintaining the physical, intellectual, emotional, and social functioning of persons with
developmental disabilities. Habilitation services include therapeutic activities, assistance,
training, supervision, and monitoring in the areas of self-care, sensory and motor development,
interpersonal skills, communication, socialization, reduction or elimination of maladaptive
behavior, community living and mobility, health care, leisure and recreation, money management,
and household chores.
(d) "Services during the day" means services or supports provided to a person that enables
the person to be fully integrated into the community. Services during the day must include
habilitation services, and may include a variety of supports to enable the person to exercise
choices for community integration and inclusion activities. Services during the day may include,
but are not limited to: supported work, support during community activities, community volunteer
opportunities, adult day care, recreational activities, and other individualized integrated supports.
(e) "Waivered service" means home or community-based service authorized under United
States Code, title 42, section 1396n(c), as amended through December 31, 1987, and defined in
the Minnesota state plan for the provision of medical assistance services. Waivered services
include, at a minimum, case management, family training and support, developmental training
homes, supervised living arrangements, semi-independent living services, respite care, and
training and habilitation services.
    Subd. 2. Authority. The commissioner shall establish procedures and rules for determining
rates for care of residents of intermediate care facilities for persons with developmental disabilities
which qualify as providers of medical assistance and waivered services. The procedures shall
specify the costs that are allowable for payment through medical assistance. The commissioner
may use experts from outside the department in the establishment of the procedures.
    Subd. 3. Rates for intermediate care facilities. The commissioner shall establish, by rule,
procedures for determining rates for care of residents of intermediate care facilities for persons
with developmental disabilities. In developing the procedures, the commissioner shall include:
(a) cost containment measures that assure efficient and prudent management of capital assets
and operating cost increases which do not exceed increases in other sections of the economy;
(b) limits on the amounts of reimbursement for property and new facilities;
(c) requirements to ensure that the accounting practices of the facilities conform to generally
accepted accounting principles;
(d) incentives to reward accumulation of equity;
(e) rule revisions which:
(1) combine the program, maintenance, and administrative operating cost categories, and
professional liability and real estate insurance expenses into one general operating cost category;
(2) eliminate the maintenance and administrative operating cost category limits and account
for disallowances under the rule existing on July 1, 1995, in the revised rule. If this provision is
later invalidated, the total administrative cost disallowance shall be deducted from economical
facility payments in clause (3);
(3) establish an economical facility incentive that rewards facilities that provide all
appropriate services in a cost-effective manner and penalizes reductions of either direct service
wages or standardized hours of care per resident;
(4) establish a best practices award system that is based on outcome measures and that
rewards quality, innovation, cost-effectiveness, and staff retention;
(5) establish compensation limits for employees on the basis of full-time employment and
the developmentally disabled client base of a provider group or facility. The commissioner may
consider the inclusion of hold harmless provisions;
(6) establish overall limits on a high cost facility's general operating costs. The commissioner
shall consider groupings of facilities that account for a significant variation in cost. The
commissioner may differentiate in the application of these limits between high and very high cost
facilities. The limits, once established, shall be indexed for inflation and may be rebased by the
commissioner;
(7) utilize the client assessment information obtained from the application of the provisions
in subdivision 3g for the revisions in clauses (3), (4), and (6); and
(8) develop cost allocation principles which are based on facility expenses; and
(f) appeals procedures that satisfy the requirements of section 256B.50.
    Subd. 3a. Interim rates. For rate years beginning October 1, 1988, and October 1, 1989, the
commissioner shall establish an interim program operating cost payment rate for care of residents
in intermediate care facilities for persons with developmental disabilities.
(a) For the rate year beginning October 1, 1988, the interim program operating cost payment
rate is the greater of the facility's 1987 reporting year allowable program operating costs per
resident day increased by the composite forecasted index in subdivision 3c, or the facility's
January 1, 1988, program operating cost payment rate increased by the composite forecasted index
in subdivision 3c, except that the composite forecasted index is established based on the midpoint
of the period January 1, 1988, to September 30, 1988, to the midpoint of the following rate year.
(b) For the rate year beginning October 1, 1989, the interim program operating cost payment
rate is the greater of the facility's 1988 reporting year allowable program operating costs per
resident day increased by the composite forecasted index in subdivision 3c, or the facility's
October 1, 1988, program operating cost payment rate increased by the composite forecasted
index in subdivision 3c, except that the composite forecasted index is established based on the
midpoint of the rate year beginning October 1, 1988, to the midpoint of the following rate year.
    Subd. 3b. Settle-up of costs. The facility's program operating costs are subject to a
retroactive settle-up for the 1988 and 1989 reporting years, determined by the following method:
(a) If a facility's program operating costs, including onetime adjustment program operating
costs for the facility's 1988 or 1989 reporting year, are less than 98 percent of the facility's total
program operating cost payments for facilities with 20 or fewer licensed beds, or less than 99
percent of the facility's total program operating cost payments for facilities with more than 20
licensed beds, then the facility must repay the difference to the state according to the desk audit
adjustment procedures in Minnesota Rules, part 9553.0041, subpart 13, items B to E. For the
purpose of determining the retroactive settle-up amounts, the facility's total program operating
cost payments must be computed by multiplying the facility's program operating cost payment
rates, including onetime program operating cost adjustment rates for those reporting years, by
the prorated resident days that correspond to those program operating cost payment rates paid
during those reporting years.
(b) If a facility's program operating costs, including onetime adjustment program operating
costs for the facility's 1989 reporting year are between 102 and 105 percent of the amount
computed by multiplying the facility's program operating cost payment rates, including onetime
program operating cost adjustment rates for those reporting years, by the prorated resident days
that correspond to those program operating cost payment rates paid during that reporting year, the
state must repay the difference to the facility according to the desk audit adjustment procedures
in Minnesota Rules, part 9553.0041, subpart 13, items B to E.
A facility's retroactive settle-up must be calculated by October 1, 1990.
    Subd. 3c. Forecasted index. For rate years beginning on or after October 1, 1990, the
commissioner shall index a facility's allowable operating costs in the program, maintenance, and
administrative operating cost categories by using Data Resources, Inc., forecast for change in the
Consumer Price Index-All Items (U.S. city average) (CPI-U). The commissioner shall use the
indices as forecasted by Data Resources, Inc., in the first quarter of the calendar year in which the
rate year begins. For fiscal years beginning after June 30, 1993, the commissioner shall not provide
automatic inflation adjustments for intermediate care facilities for persons with developmental
disabilities. The commissioner of finance shall include annual inflation adjustments in operating
costs for intermediate care facilities for persons with developmental disabilities as a budget
change request in each biennial detailed expenditure budget submitted to the legislature under
section 16A.11. The commissioner shall use the Consumer Price Index-All Items (United States
city average) (CPI-U) as forecasted by Data Resources, Inc., to take into account economic trends
and conditions for changes in facility allowable historical general operating costs and limits. The
forecasted index shall be established for allowable historical general operating costs as follows:
(1) the CPI-U forecasted index for allowable historical general operating costs shall be
determined in the first quarter of the calendar year in which the rate year begins and shall be based
on the 21-month period from the midpoint of the facility's reporting year to the midpoint of
the rate year following the reporting year; and
(2) for rate years beginning on or after October 1, 1995, the CPI-U forecasted index for the
overall operating cost limits and for the individual compensation limit shall be determined in the
first quarter of the calendar year in which the rate year begins and shall be based on the 12-month
period between the midpoints of the two reporting years preceding the rate year.
    Subd. 3d.[Repealed, 1995 c 207 art 7 s 43]
    Subd. 3e.[Repealed, 1995 c 207 art 7 s 43]
    Subd. 3f.[Repealed, 1995 c 207 art 7 s 43]
    Subd. 3g.[Repealed, 1999 c 245 art 3 s 51]
    Subd. 3h. Waiving interest charges. The commissioner may waive interest charges on
overpayments incurred by intermediate care facilities for persons with developmental disabilities
for the period October 1, 1987, to February 29, 1988, if the overpayments resulted from the
continuation of the desk audit rate in effect on September 30, 1987, through the period.
    Subd. 3i. Scope. Subdivisions 3a to 3e and 3h do not apply to facilities whose payment rates
are governed by Minnesota Rules, part 9553.0075.
    Subd. 3j. Rules. The commissioner shall adopt rules to implement this section. The
commissioner shall consult with provider groups, advocates, and legislators to develop these rules.
    Subd. 3k. Experimental project. The commissioner of human services may conduct and
administer experimental projects to determine the effects of competency-based wage adjustments
for direct-care staff on the quality of care and active treatment for persons with developmental
disabilities. The commissioner shall authorize one project under the following conditions:
(a) One service provider will participate in the project.
(b) The vendor must have an existing competency-based training curriculum and a proposed
salary schedule that is coordinated with the training package.
(c) The University of Minnesota affiliated programs must approve the content of the training
package and assist the vendor in studying the impact on service delivery and outcomes for
residents under a competency-based salary structure. The study and its conclusions must be
presented to the commissioner at the conclusion of the project.
(d) The project will last no more than 21 months from its inception.
(e) The project will be funded by Title XIX, medical assistance and the costs incurred shall be
allowable program operating costs for future rate years under Minnesota Rules, parts 9553.0010
to 9553.0080. The project's total annual cost must not exceed $49,500. The commissioner shall
establish an adjustment to the selected facility's per diem by dividing the $49,500 by the facility's
actual resident days for the reporting year ending December 31, 1988. The facility's experimental
training project per diem shall be effective on October 1, 1989, and shall remain in effect for
the 21-month period ending June 30, 1991.
(f) Only service vendors who have submitted a determination of need pursuant to Minnesota
Rules, parts 9525.0015 to 9525.0165, and Minnesota Statutes, section 252.28, requesting
the competency-based training program cost increase are eligible. Furthermore, they are only
eligible if their determination of need was approved prior to January 1, 1989, and funds were
not available to implement the plan.
    Subd. 3l. Temporary payment rate provisions. If an intermediate care facility for persons
with developmental disabilities located in Kandiyohi County:
(1) was sold during 1994;
(2) is unable to obtain records necessary to complete the cost report from the former operator
at no cost; and
(3) delicensed two beds during that year, then the commissioner shall determine the payment
rate for the period May 1, 1995, through September 30, 1996, as provided in paragraphs (a) to (c).
(a) A temporary payment rate shall be paid which is equal to the rate in effect as of April
30, 1995.
(b) The payment rate in paragraph (a) shall be subject to a retroactive downward adjustment
based on the provisions in paragraph (c).
(c) The temporary payment rate shall be limited to the lesser of the payment in paragraph (a)
or the payment rate calculated based on the facility's cost report for the reporting year January
1, 1995, through December 31, 1995, and the provisions of this section and the reimbursement
rules in effect on June 30, 1995, except that the provisions referred to in clauses (1) to (3) shall
not apply:
(1) the inflation factor in subdivision 3c;
(2) Minnesota Rules, part 9553.0050, subpart 2, items A to E; and
(3) Minnesota Rules, part 9553.0041, subpart 16.
    Subd. 3m. Services during the day. When establishing a rate for services during the day,
the commissioner shall ensure that these services comply with active treatment requirements for
persons residing in an ICF/MR as defined under federal regulations and shall ensure that services
during the day for eligible persons are not provided by the person's residential service provider,
unless the person or the person's legal representative is offered a choice of providers and agrees in
writing to provision of services during the day by the residential service provider, consistent with
the individual service plan. The individual service plan for individuals who choose to have their
residential service provider provide their services during the day must describe how health, safety,
protection, and habilitation needs will be met, including how frequent and regular contact with
persons other than the residential service provider will occur. The individualized service plan
must address the provision of services during the day outside the residence.
    Subd. 4. Waivered services. In establishing rates for waivered services the commissioner
shall consider the need for flexibility in the provision of those services to meet individual needs
identified by the screening team.
    Subd. 4a. Inclusion of home care costs in waiver rates. The commissioner shall adjust the
limits of the established average daily reimbursement rates for waivered services to include the
cost of home care services that may be provided to waivered services recipients. This adjustment
must be used to maintain or increase services and shall not be used by county agencies for inflation
increases for waivered services vendors. Home care services referenced in this section are those
listed in section 256B.0651, subdivision 2. The average daily reimbursement rates established
in accordance with the provisions of this subdivision apply only to the combined average, daily
costs of waivered and home care services and do not change home care limitations under sections
256B.0651 and 256B.0653 to 256B.0656. Waivered services recipients receiving home care as of
June 30, 1992, shall not have the amount of their services reduced as a result of this section.
    Subd. 4b. Waiver rates and group residential housing rates. The average daily
reimbursement rates established by the commissioner for waivered services shall be adjusted to
include the additional costs of services eligible for waiver funding under title XIX of the Social
Security Act and for which there is no group residential housing payment available as a result
of the payment limitations set forth in section 256I.05, subdivision 10. The adjustment to the
waiver rates shall be based on county reports of service costs that are no longer eligible for group
residential housing payments. No adjustment shall be made for any amount of reported payments
that prior to July 1, 1992, exceeded the group residential housing rate limits established in section
256I.05 and were reimbursed through county funds.
    Subd. 4c. Access to respite care. Upon the request of a recipient receiving services under
the community-based waiver for persons with developmental disabilities, or the recipient's legal
representative, a county agency shall screen the recipient for appropriate and necessary services
and shall place the recipient on and off the waiver as needed in order to allow the recipient access
to short-term care as available in an intermediate care facility for persons with developmental
disabilities.
    Subd. 5.[Repealed, 1987 c 403 art 5 s 22]
    Subd. 5a. Changes to ICF/MR reimbursement. The reimbursement rule changes in
paragraphs (a) to (e) apply to Minnesota Rules, parts 9553.0010 to 9553.0080, and this section,
and are effective for rate years beginning on or after October 1, 1993, unless otherwise specified.
(a) The maximum efficiency incentive shall be $1.50 per resident per day.
(b) If a facility's capital debt reduction allowance is greater than 50 cents per resident per
day, that facility's capital debt reduction allowance in excess of 50 cents per resident day shall
be reduced by 25 percent.
(c) Beginning with the biennial reporting year which begins January 1, 1993, a facility is no
longer required to have a certified audit of its financial statements. The cost of a certified audit
shall not be an allowable cost in that reporting year, nor in subsequent reporting years unless
the facility submits its certified audited financial statements in the manner otherwise specified
in this subdivision. A nursing facility which does not submit a certified audit must submit its
working trial balance.
(d) In addition to the approved pension or profit sharing plans allowed by the reimbursement
rule, the commissioner shall allow those plans specified in Internal Revenue Code, sections
403(b) and 408(k).
(e) The commissioner shall allow as workers' compensation insurance costs under this
section, the costs of workers' compensation coverage obtained under the following conditions:
(1) a plan approved by the commissioner of commerce as a Minnesota group or individual
self-insurance plan as provided in sections 79A.03;
(2) a plan in which:
(i) the facility, directly or indirectly, purchases workers' compensation coverage in
compliance with section 176.181, subdivision 2, from an authorized insurance carrier;
(ii) a related organization to the facility reinsures the workers' compensation coverage
purchased, directly or indirectly, by the facility; and
(iii) all of the conditions in clause (4) are met;
(3) a plan in which:
(i) the facility, directly or indirectly, purchases workers' compensation coverage in
compliance with section 176.181, subdivision 2, from an authorized insurance carrier;
(ii) the insurance premium is calculated retrospectively, including a maximum premium
limit, and paid using the paid loss retro method; and
(iii) all of the conditions in clause (4) are met;
(4) additional conditions are:
(i) the reserves for the plan are maintained in an account controlled and administered by a
person which is not a related organization to the facility;
(ii) the reserves for the plan cannot be used, directly or indirectly, as collateral for debts
incurred or other obligations of the facility or related organizations to the facility;
(iii) if the plan provides workers' compensation coverage for non-Minnesota facilities,
the plan's cost methodology must be consistent among all facilities covered by the plan, and if
reasonable, is allowed notwithstanding any reimbursement laws regarding cost allocation to the
contrary;
(iv) central, affiliated, corporate, or nursing facility costs related to their administration of the
plan are costs which must remain in the nursing facility's administrative cost category, and must
not be allocated to other cost categories; and
(v) required security deposits, whether in the form of cash, investments, securities, assets,
letters of credit, or in any other form are not allowable costs for purposes of establishing the
facilities payment rate; and
(5) any costs allowed pursuant to clauses (1) to (3) are subject to the following requirements:
(i) if the facility is sold or otherwise ceases operations, the plan's reserves must be subject to
an actuarially based settle-up after 36 months from the date of sale or the date on which operations
ceased. The facility's medical assistance portion of the total excess plan reserves must be paid to
the state within 30 days following the date on which excess plan reserves are determined;
(ii) any distribution of excess plan reserves made to or withdrawals made by the facility or
a related organization are applicable credits and must be used to reduce the facility's workers'
compensation insurance costs in the reporting period in which a distribution or withdrawal
is received; and
(iii) if the plan is audited pursuant to the Medicare program, the facility must provide a
copy of Medicare's final audit report, including attachments and exhibits, to the commissioner
within 30 days of receipt by the facility or any related organization. The commissioner shall
implement the audit findings associated with the plan upon receipt of Medicare's final audit
report. The department's authority to implement the audit findings is independent of its authority
to conduct a field audit.
    Subd. 5b. ICF/MR operating cost limitation after September 30, 1995. (a) For the rate
year beginning on October 1, 1995, and for rate years beginning on or after October 1, 1997,
the commissioner shall limit the allowable operating cost per diems, as determined under this
subdivision and the reimbursement rules, for high cost ICF's/MR. Prior to indexing each facility's
operating cost per diems for inflation, the commissioner shall group the facilities into eight
groups. The commissioner shall then array all facilities within each grouping by their general
operating cost per service unit per diems.
(b) The commissioner shall annually review and adjust the general operating costs incurred
by the facility during the reporting year preceding the rate year to determine the facility's
allowable historical general operating costs. For this purpose, the term general operating costs
means the facility's allowable operating costs included in the program, maintenance, and
administrative operating costs categories, as well as the facility's related payroll taxes and fringe
benefits, real estate insurance, and professional liability insurance. A facility's total operating cost
payment rate shall be limited according to paragraphs (c) and (d) as follows:
(c) A facility's total operating cost payment rate shall be equal to its allowable historical
operating cost per diems for program, maintenance, and administrative cost categories multiplied
by the forecasted inflation index in subdivision 3c, clause (1), subject to the limitations in
paragraph (d).
(d) For the rate years beginning on or after October 1, 1995, the commissioner shall establish
maximum overall general operating cost per service unit limits for facilities according to clauses
(1) to (8). Each facility's allowable historical general operating costs and client assessment
information obtained from client assessments completed under subdivision 3g for the reporting
year ending December 31, 1994 (the base year), shall be used for establishing the overall limits. If
a facility's proportion of temporary care resident days to total resident days exceeds 80 percent,
the commissioner must exempt that facility from the overall general operating cost per service
unit limits in clauses (1) to (8). For this purpose, "temporary care" means care provided by a
facility to a client for less than 30 consecutive resident days.
(1) The commissioner shall determine each facility's weighted service units for the
reporting year by multiplying its resident days in each client classification level as established
in subdivision 3g, paragraph (d), by the corresponding weights for that classification level, as
established in subdivision 3g, paragraph (i), and summing the results. For the reporting year
ending December 31, 1994, the commissioner shall use the service unit score computed from
the client classifications determined by the Minnesota Department of Health's annual review,
including those of clients admitted during that year.
(2) The facility's service unit score is equal to its weighted service units as computed in
clause (1), divided by the facility's total resident days excluding temporary care resident days,
for the reporting year.
(3) For each facility, the commissioner shall determine the facility's cost per service unit by
dividing its allowable historical general operating costs for the reporting year by the facility's
service unit score in clause (2) multiplied by its total resident days, or 85 percent of the facility's
capacity days times its service unit score in clause (2), if the facility's occupancy is less than 85
percent of licensed capacity. If a facility reports temporary care resident days, the temporary
care resident days shall be multiplied by the service unit score in clause (2), and the resulting
weighted resident days shall be added to the facility's weighted service units in clause (1) prior to
computing the facility's cost per service unit under this clause.
(4) The commissioner shall group facilities based on class A or class B licensure designation,
number of licensed beds, and geographic location. For purposes of this grouping, facilities with
six beds or less shall be designated as small facilities and facilities with more than six beds shall
be designated as large facilities. If a facility has both class A and class B licensed beds, the
facility shall be considered a class A facility for this purpose if the number of class A beds is more
than half its total number of ICF/MR beds; otherwise the facility shall be considered a class B
facility. The metropolitan geographic designation shall include Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington Counties. All other Minnesota counties shall be designated as the
nonmetropolitan geographic group. These characteristics result in the following eight groupings:
(i) small class A metropolitan;
(ii) large class A metropolitan;
(iii) small class B metropolitan;
(iv) large class B metropolitan;
(v) small class A nonmetropolitan;
(vi) large class A nonmetropolitan;
(vii) small class B nonmetropolitan; and
(viii) large class B nonmetropolitan.
(5) The commissioner shall array facilities within each grouping in clause (4) by each
facility's cost per service unit as determined in clause (3).
(6) In each array established under clause (5), facilities with a cost per service unit at or above
the median shall be limited to the lesser of: (i) the current reporting year's cost per service unit; or
(ii) the prior reporting year's allowable historical general operating cost per service unit plus the
inflation factor as established in subdivision 3c, clause (2), increased by three percentage points.
(7) The overall operating cost per service unit limit for each group shall be established
as follows:
(i) each array established under clause (5) shall be arrayed again after the application of
clause (6);
(ii) in each array established in clause (5), two general operating cost limits shall be
determined. The first cost per service unit limit shall be established at 0.5 and less than or equal to
1.0 standard deviation above the median of that array. The second cost per service unit limit shall
be established at 1.0 standard deviation above the median of the array; and
(iii) the overall operating cost per service unit limits shall be indexed for inflation annually
beginning with the reporting year ending December 31, 1995, using the forecasted inflation
index in subdivision 3c, clause (2).
(8) Annually, facilities shall be arrayed using the method described in clauses (5) and (7).
Each facility with a cost per service unit at or above its group's first cost per service unit limit,
but less than the second cost per service unit limit for that group, shall be limited to 98 percent
of its total operating cost per diems then add the forecasted inflation index in subdivision 3c,
clause (1). Each facility with a cost per service unit at or above the second cost per service unit
limit will be limited to 97 percent of its total operating cost per diems, then add the forecasted
inflation index in subdivision 3c, clause (1). Facilities that have undergone a class A to class B
conversion since January 1, 1990, are exempt from the limitations in this clause for six years
after the completion of the conversion process.
(9) The commissioner may rebase these overall limits, using the method described in this
subdivision but no more frequently than once every three years.
(e) For rate years beginning on or after October 1, 1995, the facility's efficiency incentive
shall be determined as provided in the reimbursement rule.
(f) The total operating cost payment rate shall be the sum of paragraphs (c) and (e).
(g) For the rate year beginning on October 1, 1996, the commissioner shall exempt a facility
from the reductions in this subdivision if the facility is involved in a bed relocation project where
more than 25 percent of the facility's beds are transferred to another facility, the relocated beds are
six or fewer, there is no change in the total number of ICF/MR beds for the parent organization of
the facility, and the relocation is not part of an interim or settle-up rate.
    Subd. 5c.[Repealed, 1997 c 203 art 7 s 29]
    Subd. 5d. Adjustment for outreach crisis services. An ICF/MR with crisis services
developed under the authority of Laws 1992, chapter 513, article 9, section 40, shall have its
operating cost per diem calculated according to paragraphs (a) and (b).
(a) Effective for services rendered from April 1, 1996, to September 30, 1996, and for rate
years beginning on or after October 1, 1996, the maintenance limitation in Minnesota Rules, part
9553.0050, subpart 1, item A, subitem (2), shall be calculated to reflect capacity as of October 1,
1992. The maintenance limit shall be the per diem limitation otherwise in effect adjusted by the
ratio of licensed capacity days as of October 1, 1992, divided by resident days in the reporting
year ending December 31, 1993.
(b) Effective for rate years beginning on or after October 1, 1996, the operating cost per
service unit, for purposes of the cost per service unit limit in subdivision 5b, paragraph (d),
clauses (7) and (8), shall be calculated after excluding the costs directly identified to the provision
of outreach crisis services and a four-bed crisis unit.
(c) The efficiency incentive paid to an ICF/MR shall not be increased as a result of this
subdivision.
    Subd. 5e. Rate adjustment for care provided to a medically fragile individual. Beginning
July 1, 1996, the commissioner shall increase reimbursement rates for a facility located in
Chisholm and licensed as an intermediate care facility for persons with developmental disabilities
since 1972, to cover the cost to the facility for providing 24-hour licensed practical nurse care to a
medically fragile individual admitted on March 8, 1996. The commissioner shall include in this
higher rate a temporary adjustment to reimburse the facility for costs incurred between March
8, 1996, and June 30, 1996. Once this resident is discharged, the commissioner shall reduce the
facility's payment rate by the amount of the cost of the 24-hour licensed practical nurse care.
    Subd. 6.[Repealed, 1987 c 403 art 5 s 22]
    Subd. 7.[Repealed, 1987 c 403 art 5 s 22]
    Subd. 8. Payment for persons with special needs. The commissioner shall establish by
December 31, 1983, procedures to be followed by the counties to seek authorization from the
commissioner for medical assistance reimbursement for very dependent persons with special
needs in an amount in excess of the rates allowed pursuant to subdivision 2, including rates
established under section 252.46 when they apply to services provided to residents of intermediate
care facilities for persons with developmental disabilities, and procedures to be followed for rate
limitation exemptions for intermediate care facilities for persons with developmental disabilities.
Rate payments under subdivision 8a are eligible for a rate exception under this subdivision. No
excess payment approved by the commissioner after June 30, 1991, shall be authorized unless:
(1) the need for specific level of service is documented in the individual service plan of the
person to be served;
(2) the level of service needed can be provided within the rates established under section
252.46 and Minnesota Rules, parts 9553.0010 to 9553.0080, without a rate exception within
12 months;
(3) staff hours beyond those available under the rates established under section 252.46 and
Minnesota Rules, parts 9553.0010 to 9553.0080, necessary to deliver services do not exceed
1,440 hours within 12 months;
(4) there is a basis for the estimated cost of services;
(5) the provider requesting the exception documents that current per diem rates are
insufficient to support needed services;
(6) estimated costs, when added to the costs of current medical assistance-funded residential
and day training and habilitation services and calculated as a per diem, do not exceed the per diem
established for the regional treatment centers for persons with developmental disabilities on July
1, 1990, indexed annually by the urban Consumer Price Index, All Items, as forecasted by Data
Resources Inc., for the next fiscal year over the current fiscal year;
(7) any contingencies for an approval as outlined in writing by the commissioner are met; and
(8) any commissioner orders for use of preferred providers are met.
The commissioner shall evaluate the services provided pursuant to this subdivision through
program and fiscal audits.
The commissioner may terminate the rate exception at any time under any of the conditions
outlined in Minnesota Rules, part 9510.1120, subpart 3, for county termination, or by reason of
information obtained through program and fiscal audits which indicate the criteria outlined in this
subdivision have not been, or are no longer being, met.
The commissioner may approve no more than one rate exception, up to 12 months duration,
for an eligible client.
    Subd. 8a. Payment for persons with special needs for crisis intervention services.
Community-based crisis services authorized by the commissioner or the commissioner's designee
for a resident of an intermediate care facility for persons with developmental disabilities
(ICF/MR) reimbursed under this section shall be paid by medical assistance in accordance with
the paragraphs (a) to (g).
(a) "Crisis services" means the specialized services listed in clauses (1) to (3) provided to
prevent the recipient from requiring placement in a more restrictive institutional setting such as
an inpatient hospital or regional treatment center and to maintain the recipient in the present
community setting.
(1) The crisis services provider shall assess the recipient's behavior and environment to
identify factors contributing to the crisis.
(2) The crisis services provider shall develop a recipient-specific intervention plan in
coordination with the service planning team and provide recommendations for revisions to
the individual service plan if necessary to prevent or minimize the likelihood of future crisis
situations. The intervention plan shall include a transition plan to aid the recipient in returning to
the community-based ICF/MR if the recipient is receiving residential crisis services.
(3) The crisis services provider shall consult with and provide training and ongoing technical
assistance to the recipient's service providers to aid in the implementation of the intervention plan
and revisions to the individual service plan.
(b) "Residential crisis services" means crisis services that are provided to a recipient admitted
to an alternative, state-licensed site approved by the commissioner, because the ICF/MR receiving
reimbursement under this section is not able, as determined by the commissioner, to provide the
intervention and protection of the recipient and others living with the recipient that is necessary to
prevent the recipient from requiring placement in a more restrictive institutional setting.
(c) Residential crisis services providers must maintain a license from the commissioner for
the residence when providing crisis services for short-term crisis intervention, and must not be
located in a private residence.
(d) Payment rates shall be established consistent with county negotiated crisis intervention
services.
(e) Payment for residential crisis services is limited to 21 days, unless an additional period is
authorized by the commissioner or part of an approved regional plan.
(f) Payment for crisis services shall be made only for services provided while the ICF/MR
receiving reimbursement under this section has executed a cooperative agreement with the crisis
services provider to implement the intervention plan and revisions to the individual service
plan as necessary to prevent or minimize the likelihood of future crisis situations, to maintain
the recipient in the present community setting, and to prevent the recipient from requiring a
more restrictive institutional setting.
(g) Payment to the ICF/MR receiving reimbursement under this section shall be made for up
to 18 therapeutic leave days during which the recipient is receiving residential crisis services, if
the ICF/MR is otherwise eligible to receive payment for a therapeutic leave day under Minnesota
Rules, part 9505.0415. Payment under this paragraph shall be terminated if the commissioner
determines that the ICF/MR is not meeting the terms of the cooperative service agreement under
paragraph (f) or that the recipient will not return to the ICF/MR.
    Subd. 9.[Repealed, 1987 c 403 art 5 s 22]
    Subd. 10. Rules. To implement this section, the commissioner shall promulgate rules in
accordance with chapter 14.
    Subd. 11. Investment per bed limits; interest expense limitations; leases. (a) The
provisions of Minnesota Rules, part 9553.0075, except as modified under this subdivision, shall
apply to newly constructed or established facilities that are certified for medical assistance on
or after May 1, 1990.
(b) For purposes of establishing payment rates under this subdivision and Minnesota Rules,
parts 9553.0010 to 9553.0080, the term "newly constructed or newly established" means a facility
(1) for which a need determination has been approved by the commissioner under sections 252.28
and 252.291; (2) whose program is newly licensed under Minnesota Rules, parts 9525.0215 to
9525.0355, and certified under Code of Federal Regulations, title 42, section 442.400, et seq.;
and (3) that is part of a proposal that meets the requirements of section 252.291, subdivision
2 , paragraph (2). The term does not include a facility for which a need determination was
granted solely for other reasons such as the relocation of a facility; a change in the facility's
name, program, number of beds, type of beds, or ownership; or the sale of a facility, unless the
relocation of a facility to one or more service sites is the result of a closure of a facility under
section 252.292, in which case clause (3) shall not apply. The term does include a facility that
converts more than 50 percent of its licensed beds from class A to class B residential or class B
institutional to serve persons discharged from state regional treatment centers on or after May 1,
1990, in which case clause (3) does not apply.
(c) Newly constructed or newly established facilities that are certified for medical assistance
on or after May 1, 1990, shall be allowed the capital asset investment per bed limits as provided
in clauses (1) to (4).
(1) The 1990 calendar year investment per bed limit for a facility's land must not exceed
$5,700 per bed for newly constructed or newly established facilities in Hennepin, Ramsey, Anoka,
Washington, Dakota, Scott, Carver, Chisago, Isanti, Wright, Benton, Sherburne, Stearns, St.
Louis, Clay, and Olmsted Counties, and must not exceed $3,000 per bed for newly constructed or
newly established facilities in other counties.
(2) The 1990 calendar year investment per bed limit for a facility's depreciable capital assets
must not exceed $44,800 for class B residential beds, and $45,200 for class B institutional beds.
(3) The investment per bed limit in clause (2) must not be used in determining the three-year
average percentage increase adjustment in Minnesota Rules, part 9553.0060, subpart 1, item C,
subitem (4), for facilities that were newly constructed or newly established before May 1, 1990.
(4) The investment per bed limits in clause (2) and Minnesota Rules, part 9553.0060, subpart
1, item C, subitem (2) shall be adjusted annually beginning January 1, 1991, and each January 1
following, as provided in Minnesota Rules, part 9553.0060, subpart 1, item C, subitem (2), except
that the index utilized will be the Bureau of the Census: Composite Fixed-Weighted Price Index
as published in the Survey of Current Business.
(d) A newly constructed or newly established facility's interest expense limitation as
provided for in Minnesota Rules, part 9553.0060, subpart 3, item F, on capital debt for capital
assets acquired during the interim or settle-up period, shall be increased by 2.5 percentage
points for each full .25 percentage points that the facility's interest rate on its mortgage is below
the maximum interest rate as established in Minnesota Rules, part 9553.0060, subpart 2, item
A, subitem (2). For all following rate periods, the interest expense limitation on capital debt in
Minnesota Rules, part 9553.0060, subpart 3, item F, shall apply to the facility's capital assets
acquired, leased, or constructed after the interim or settle-up period. If a newly constructed or
newly established facility is acquired by the state, the limitations of this paragraph and Minnesota
Rules, part 9553.0060, subpart 3, item F, shall not apply.
(e) If a newly constructed or newly established facility is leased with an arm's-length lease
as provided for in Minnesota Rules, part 9553.0060, subpart 7, the lease agreement shall be
subject to the following conditions:
(1) the term of the lease, including option periods, must not be less than 20 years;
(2) the maximum interest rate used in determining the present value of the lease must not
exceed the lesser of the interest rate limitation in Minnesota Rules, part 9553.0060, subpart 2,
item A, subitem (2), or 16 percent; and
(3) the residual value used in determining the net present value of the lease must be
established using the provisions of Minnesota Rules, part 9553.0060.
(f) All leases of the physical plant of an intermediate care facility for the developmentally
disabled shall contain a clause that requires the owner to give the commissioner notice of any
requests or orders to vacate the premises 90 days before such vacation of the premises is to take
place. In the case of eviction actions, the owner shall notify the commissioner within three days
of notice of an eviction action being served upon the tenant. The only exception to this notice
requirement is in the case of emergencies where immediate vacation of the premises is necessary
to assure the safety and welfare of the residents. In such an emergency situation, the owner shall
give the commissioner notice of the request to vacate at the time the owner of the property is
aware that the vacating of the premises is necessary. This section applies to all leases entered into
after May 1, 1990. Rentals set in leases entered into after that date that do not contain this clause
are not allowable costs for purposes of medical assistance reimbursement.
(g) A newly constructed or newly established facility's preopening costs are subject to the
provisions of Minnesota Rules, part 9553.0035, subpart 12, and must be limited to only those
costs incurred during one of the following periods, whichever is shorter:
(1) between the date the commissioner approves the facility's need determination and 30
days before the date the facility is certified for medical assistance; or
(2) the 12-month period immediately preceding the 30 days before the date the facility
is certified for medical assistance.
(h) The development of any newly constructed or newly established facility as defined
in this subdivision and projected to be operational after July 1, 1991, by the commissioner of
human services shall be delayed until July 1, 1993, except for those facilities authorized by the
commissioner as a result of a closure of a facility according to section 252.292 prior to January 1,
1991, or those facilities developed as a result of a receivership of a facility according to section
245A.12. This paragraph does not apply to state-operated community facilities authorized in
section 252.50.
    Subd. 12. ICF/MR salary adjustments. Effective July 1, 1998, to September 30, 2000, the
commissioner shall make available the appropriate salary adjustment cost per diem calculated
in paragraphs (a) to (e) to the total operating cost payment rate of each facility subject to
reimbursement under this section and Laws 1993, First Special Session chapter 1, article 4,
section 11. The salary adjustment cost per diem must be determined as follows:
(a) Computation and review guidelines. A state-operated community service, and any
facility whose payment rates are governed by closure agreements, receivership agreements, or
Minnesota Rules, part 9553.0075, are not eligible for a salary adjustment otherwise granted under
this subdivision. For purposes of the salary adjustment per diem computation and reviews in this
subdivision, the term "salary adjustment cost" means the facility's allowable program operating
cost category employee training expenses, and the facility's allowable salaries, payroll taxes, and
fringe benefits. The term does not include these same salary-related costs for both administrative
or central office employees.
For the purpose of determining the amount of salary adjustment to be granted under this
subdivision, the commissioner must use the reporting year ending December 31, 1996, as the base
year for the salary adjustment per diem computation.
(b) Salary adjustment per diem computation. For the rate period beginning July 1, 1998,
each facility shall receive a salary adjustment cost per diem equal to its salary adjustment costs
multiplied by 3.0 percent, and then divided by the facility's resident days.
(c) Submittal of plan. A facility may apply for the salary adjustment per diem calculated
under this subdivision. The application must be made to the commissioner and contain a plan by
which the facility will distribute the salary adjustment to employees of the facility. For facilities in
which the employees are represented by an exclusive bargaining representative, an agreement
negotiated and agreed to by the employer and the exclusive bargaining representative, after July
1, 1998, may constitute the plan for the salary distribution. The commissioner shall review the
plan to ensure that the salary adjustment per diem is used solely to increase the compensation of
facility employees. To be eligible, a facility must submit its plan for the salary distribution by
December 31, 1998. If a facility's plan for salary distribution is effective for its employees after
July 1, 1998, the salary adjustment cost per diem shall be effective the same date as its plan.
(d) Cost report. Additional costs incurred by facilities as a result of this salary adjustment
are not allowable costs for purposes of the December 31, 1998, cost report.
(e) Salary adjustment. In order to apply for a salary adjustment, a facility reimbursed under
Laws 1993, First Special Session chapter 1, article 4, section 11, must report the information
referred to in paragraph (a) in the application, in the manner specified by the commissioner.
    Subd. 13. ICF/MR rate increases beginning October 1, 1999, and October 1, 2000. (a)
For the rate years beginning October 1, 1999, and October 1, 2000, the commissioner shall make
available to each facility reimbursed under this section, section 256B.5011, and Laws 1993, First
Special Session chapter 1, article 4, section 11, an adjustment to the total operating payment
rate. For each facility, total operating costs shall be separated into costs that are compensation
related and all other costs. "Compensation-related costs" means the facility's allowable program
operating cost category employee training expenses and the facility's allowable salaries, payroll
taxes, and fringe benefits. The term does not include these same salary-related costs for both
administrative or central office employees.
For the purpose of determining the adjustment to be granted under this subdivision, the
commissioner must use the most recent cost report that has been subject to desk audit.
(b) For the rate year beginning October 1, 1999, the commissioner shall make available
a rate increase for compensation-related costs of 4.6 percent and a rate increase for all other
operating costs of 3.2 percent.
(c) For the rate year beginning October 1, 2000, the commissioner shall make available:
(1) a rate increase for compensation-related costs of 6.6 percent, 45 percent of which shall
be used to increase the per-hour pay rate of all employees except administrative and central
office employees by an equal dollar amount and to pay associated costs for FICA, the Medicare
tax, workers' compensation premiums, and federal and state unemployment insurance provided
that this portion of the compensation-related increase shall be used only for wage increases
implemented on or after October 1, 2000, and shall not be used for wage increases implemented
prior to that date; and
(2) a rate increase for all other operating costs of two percent.
(d) For each facility, the commissioner shall determine the payment rate adjustment using the
categories specified in paragraph (a) multiplied by the rate increases specified in paragraph (b) or
(c), and then dividing the resulting amount by the facility's actual resident days.
(e) Any facility whose payment rates are governed by closure agreements, receivership
agreements, or Minnesota Rules, part 9553.0075, are not eligible for an adjustment otherwise
granted under this subdivision.
(f) A facility may apply for the compensation-related payment rate adjustment calculated
under this subdivision. The application must be made to the commissioner and contain a plan by
which the facility will distribute the compensation-related portion of the payment rate adjustment
to employees of the facility. For facilities in which the employees are represented by an exclusive
bargaining representative, an agreement negotiated and agreed to by the employer and the
exclusive bargaining representative constitutes the plan. For the second rate year, a negotiated
agreement may constitute the plan only if the agreement is finalized after the date of enactment
of all rate increases for the second rate year. The commissioner shall review the plan to ensure
that the payment rate adjustment per diem is used as provided in this subdivision. To be eligible,
a facility must submit its plan for the compensation distribution by December 31 each year. A
facility may amend its plan for the second rate year by submitting a revised plan by December
31, 2000. If a facility's plan for compensation distribution is effective for its employees after
October 1 of the year that the funds are available, the payment rate adjustment per diem shall be
effective the same date as its plan.
(g) A copy of the approved distribution plan must be made available to all employees. This
must be done by giving each employee a copy or by posting it in an area of the facility to which all
employees have access. If an employee does not receive the compensation adjustment described in
their facility's approved plan and is unable to resolve the problem with the facility's management
or through the employee's union representative, the employee may contact the commissioner at an
address or telephone number provided by the commissioner and included in the approved plan.
History: 1983 c 312 art 9 s 7; 1984 c 640 s 32; 1984 c 654 art 5 s 25,58; 1985 c 21 s 57;
1986 c 420 s 13; 1987 c 403 art 5 s 17-19; 1988 c 689 art 2 s 169-180; 1989 c 282 art 3 s 84-86;
1990 c 568 art 3 s 80-82; 1991 c 292 art 4 s 64-66; 1992 c 513 art 7 s 122; art 9 s 28,29; 1993 c
339 s 22; 1Sp1993 c 1 art 5 s 109-112; 1995 c 114 s 1; 1995 c 207 art 7 s 33-40; 1996 c 305 art 2
s 49,50; 1996 c 451 art 3 s 4-7; 1997 c 187 art 5 s 28; 1998 c 407 art 3 s 15; art 4 s 43; 1999 c
245 art 4 s 69; 2000 c 464 art 2 s 2; 2000 c 474 s 12; 2000 c 488 art 9 s 23,37; 2000 c 499 s
24,26; 2001 c 35 s 1; 2003 c 2 art 2 s 2; 1Sp2003 c 14 art 3 s 47,48; 2005 c 56 s 1

256B.5011 ICF/MR REIMBURSEMENT SYSTEM EFFECTIVE OCTOBER 1, 2000.
    Subdivision 1. In general. Effective October 1, 2000, the commissioner shall implement a
contracting system to replace the current method of setting total cost payment rates under section
256B.501 and Minnesota Rules, parts 9553.0010 to 9553.0080. In determining prospective
payment rates of intermediate care facilities for persons with developmental disabilities, the
commissioner shall index each facility's operating payment rate by an inflation factor as described
in section 256B.5012. The commissioner of finance shall include annual inflation adjustments in
operating costs for intermediate care facilities for persons with developmental disabilities as a
budget change request in each biennial detailed expenditure budget submitted to the legislature
under section 16A.11.
    Subd. 2. Contract provisions. (a) The service contract with each intermediate care facility
must include provisions for:
(1) modifying payments when significant changes occur in the needs of the consumers;
(2) the establishment and use of a quality improvement plan. Using criteria and options
for performance measures developed by the commissioner, each intermediate care facility
must identify a minimum of one performance measure on which to focus its efforts for quality
improvement during the contract period;
(3) appropriate and necessary statistical information required by the commissioner;
(4) annual aggregate facility financial information; and
(5) additional requirements for intermediate care facilities not meeting the standards set
forth in the service contract.
(b) The commissioner of human services and the commissioner of health, in consultation
with representatives from counties, advocacy organizations, and the provider community, shall
review the consolidated standards under chapter 245B and the supervised living facility rule under
Minnesota Rules, chapter 4665, to determine what provisions in Minnesota Rules, chapter 4665,
may be waived by the commissioner of health for intermediate care facilities in order to enable
facilities to implement the performance measures in their contract and provide quality services to
residents without a duplication of or increase in regulatory requirements.
    Subd. 3.[Repealed, 1999 c 245 art 3 s 51]
History: 1998 c 407 art 3 s 16; 1999 c 245 art 3 s 31,32; 2000 c 474 s 13; 2005 c 56 s 1

256B.5012 ICF/MR PAYMENT SYSTEM IMPLEMENTATION.
    Subdivision 1. Total payment rate. The total payment rate effective October 1, 2000, for
existing ICF/MR facilities is the total of the operating payment rate and the property payment
rate plus inflation factors as defined in this section. The initial rate year shall run from October
1, 2000, through December 31, 2001. Subsequent rate years shall run from January 1 through
December 31 beginning in the year 2002.
    Subd. 2. Operating payment rate. (a) The operating payment rate equals the facility's total
payment rate in effect on September 30, 2000, minus the property rate. The operating payment
rate includes the special operating rate and the efficiency incentive in effect as of September 30,
2000. Within the limits of appropriations specifically for this purpose, the operating payment
shall be increased for each rate year by the annual percentage change in the Employment Cost
Index for Private Industry Workers - Total Compensation, as forecasted by the commissioner of
finance's economic consultant, in the second quarter of the calendar year preceding the start of
each rate year. In the case of the initial rate year beginning October 1, 2000, and continuing
through December 31, 2001, the percentage change shall be based on the percentage change in the
Employment Cost Index for Private Industry Workers - Total Compensation for the 15-month
period beginning October 1, 2000, as forecast by Data Resources, Inc., in the first quarter of 2000.
(b) Effective October 1, 2000, the operating payment rate shall be adjusted to reflect an
occupancy rate equal to 100 percent of the facility's capacity days as of September 30, 2000.
(c) Effective July 1, 2001, the operating payment rate shall be adjusted for the increases in
the Department of Health licensing fees that were authorized in section 144.122.
    Subd. 3. Property payment rate. (a) The property payment rate effective October 1, 2000,
is based on the facility's modified property payment rate in effect on September 30, 2000. The
modified property payment rate is the actual property payment rate exclusive of the effect of gains
or losses on disposal of capital assets or adjustments for excess depreciation claims. Effective
October 1, 2000, a facility minimum property rate of $8.13 shall be applied to all existing ICF/MR
facilities. Facilities with a modified property payment rate effective September 30, 2000, which is
below the minimum property rate shall receive an increase effective October 1, 2000, equal to the
difference between the minimum property payment rate and the modified property payment rate
in effect as of September 30, 2000. Facilities with a modified property payment rate at or above
the minimum property payment rate effective September 30, 2000, shall receive the modified
property payment rate effective October 1, 2000.
(b) Within the limits of appropriations specifically for this purpose, facility property payment
rates shall be increased annually for inflation, effective January 1, 2002. The increase shall be
based on each facility's property payment rate in effect on September 30, 2000. Modified property
payment rates effective September 30, 2000, shall be arrayed from highest to lowest before
applying the minimum property payment rate in paragraph (a). For modified property payment
rates at the 90th percentile or above, the annual inflation increase shall be zero. For modified
property payment rates below the 90th percentile but equal to or above the 75th percentile, the
annual inflation increase shall be one percent. For modified property payment rates below the
75th percentile, the annual inflation increase shall be two percent.
    Subd. 4. ICF/MR rate increases beginning July 1, 2001, and July 1, 2002. (a) For the
rate years beginning July 1, 2001, and July 1, 2002, the commissioner shall make available to
each facility reimbursed under this section an adjustment to the total operating payment rate of
3.5 percent. Of this adjustment, two-thirds must be used as provided under paragraph (b) and
one-third must be used for operating costs.
(b) The adjustment under this paragraph must be used to increase the wages and benefits and
pay associated costs of all employees except administrative and central office employees, provided
that this increase must be used only for wage and benefit increases implemented on or after the
first day of the rate year and must not be used for increases implemented prior to that date.
(c) For each facility, the commissioner shall make available an adjustment using the
percentage specified in paragraph (a) multiplied by the total payment rate, excluding the
property-related payment rate, in effect on the preceding June 30. The total payment rate shall
include the adjustment provided in section 256B.501, subdivision 12.
(d) A facility whose payment rates are governed by closure agreements, receivership
agreements, or Minnesota Rules, part 9553.0075, is not eligible for an adjustment otherwise
granted under this subdivision.
(e) A facility may apply for the payment rate adjustment provided under paragraph (b). The
application must be made to the commissioner and contain a plan by which the facility will
distribute the adjustment in paragraph (b) to employees of the facility. For facilities in which the
employees are represented by an exclusive bargaining representative, an agreement negotiated
and agreed to by the employer and the exclusive bargaining representative constitutes the plan. A
negotiated agreement may constitute the plan only if the agreement is finalized after the date of
enactment of all rate increases for the rate year. The commissioner shall review the plan to ensure
that the payment rate adjustment per diem is used as provided in this subdivision. To be eligible, a
facility must submit its plan by March 31, 2002, and March 31, 2003, respectively. If a facility's
plan is effective for its employees after the first day of the applicable rate year that the funds are
available, the payment rate adjustment per diem is effective the same date as its plan.
(f) A copy of the approved distribution plan must be made available to all employees by
giving each employee a copy or by posting it in an area of the facility to which all employees have
access. If an employee does not receive the wage and benefit adjustment described in the facility's
approved plan and is unable to resolve the problem with the facility's management or through the
employee's union representative, the employee may contact the commissioner at an address or
telephone number provided by the commissioner and included in the approved plan.
    Subd. 5. Rate increase effective June 1, 2003. For rate periods beginning on or after
June 1, 2003, the commissioner shall increase the total operating payment rate for each facility
reimbursed under this section by $3 per day. The increase shall not be subject to any annual
percentage increase.
    Subd. 6. ICF/MR rate increases October 1, 2005, and October 1, 2006. (a) For the rate
periods beginning October 1, 2005, and October 1, 2006, the commissioner shall make available
to each facility reimbursed under this section an adjustment to the total operating payment rate of
2.2553 percent.
(b) 75 percent of the money resulting from the rate adjustment under paragraph (a) must
be used to increase wages and benefits and pay associated costs for employees, except for
administrative and central office employees. 75 percent of the money received by a facility as a
result of the rate adjustment provided in paragraph (a) must be used only for wage, benefit, and
staff increases implemented on or after the effective date of the rate increase each year, and must
not be used for increases implemented prior to that date. The wage adjustment eligible employees
may receive may vary based on merit, seniority, or other factors determined by the provider.
(c) For each facility, the commissioner shall make available an adjustment, based on
occupied beds, using the percentage specified in paragraph (a) multiplied by the total payment
rate, including variable rate but excluding the property-related payment rate, in effect on the
preceding day. The total payment rate shall include the adjustment provided in section 256B.501,
subdivision 12 .
(d) A facility whose payment rates are governed by closure agreements, receivership
agreements, or Minnesota Rules, part 9553.0075, is not eligible for an adjustment otherwise
granted under this subdivision.
(e) A facility may apply for the portion of the payment rate adjustment provided under
paragraph (a) for employee wages and benefits and associated costs. The application must be
made to the commissioner and contain a plan by which the facility will distribute the funds
according to paragraph (b). For facilities in which the employees are represented by an exclusive
bargaining representative, an agreement negotiated and agreed to by the employer and the
exclusive bargaining representative constitutes the plan. A negotiated agreement may constitute
the plan only if the agreement is finalized after the date of enactment of all rate increases for the
rate year. The commissioner shall review the plan to ensure that the payment rate adjustment
per diem is used as provided in this subdivision. To be eligible, a facility must submit its plan
by March 31, 2006, and December 31, 2006, respectively. If a facility's plan is effective for its
employees after the first day of the applicable rate period that the funds are available, the payment
rate adjustment per diem is effective the same date as its plan.
(f) A copy of the approved distribution plan must be made available to all employees by
giving each employee a copy or by posting it in an area of the facility to which all employees have
access. If an employee does not receive the wage and benefit adjustment described in the facility's
approved plan and is unable to resolve the problem with the facility's management or through the
employee's union representative, the employee may contact the commissioner at an address or
telephone number provided by the commissioner and included in the approved plan.
History: 1999 c 245 art 3 s 33; 1Sp2001 c 9 art 5 s 30; 2002 c 375 art 2 s 42; 2002 c 379 art
1 s 113; 1Sp2003 c 14 art 2 s 38; 1Sp2005 c 4 art 7 s 45; 2006 c 282 art 20 s 27

256B.5013 PAYMENT RATE ADJUSTMENTS.
    Subdivision 1. Variable rate adjustments. (a) For rate years beginning on or after October
1, 2000, when there is a documented increase in the needs of a current ICF/MR recipient, the
county of financial responsibility may recommend a variable rate to enable the facility to meet
the individual's increased needs. Variable rate adjustments made under this subdivision replace
payments for persons with special needs under section 256B.501, subdivision 8, and payments for
persons with special needs for crisis intervention services under section 256B.501, subdivision
8a . Effective July 1, 2003, facilities with a base rate above the 50th percentile of the statewide
average reimbursement rate for a Class A facility or Class B facility, whichever matches the
facility licensure, are not eligible for a variable rate adjustment. Variable rate adjustments may
not exceed a 12-month period, except when approved for purposes established in paragraph (b),
clause (1). Variable rate adjustments approved solely on the basis of changes on a developmental
disabilities screening document will end June 30, 2002.
(b) A variable rate may be recommended by the county of financial responsibility for
increased needs in the following situations:
(1) a need for resources due to an individual's full or partial retirement from participation in
a day training and habilitation service when the individual: (i) has reached the age of 65 or has
a change in health condition that makes it difficult for the person to participate in day training
and habilitation services over an extended period of time because it is medically contraindicated;
and (ii) has expressed a desire for change through the developmental disability screening process
under section 256B.092;
(2) a need for additional resources for intensive short-term programming which is necessary
prior to an individual's discharge to a less restrictive, more integrated setting;
(3) a demonstrated medical need that significantly impacts the type or amount of services
needed by the individual; or
(4) a demonstrated behavioral need that significantly impacts the type or amount of services
needed by the individual.
(c) The county of financial responsibility must justify the purpose, the projected length of
time, and the additional funding needed for the facility to meet the needs of the individual.
(d) The facility shall provide a quarterly report to the county case manager on the use of the
variable rate funds and the status of the individual on whose behalf the funds were approved. The
county case manager will forward the facility's report with a recommendation to the commissioner
to approve or disapprove a continuation of the variable rate.
(e) Funds made available through the variable rate process that are not used by the facility to
meet the needs of the individual for whom they were approved shall be returned to the state.
    Subd. 2. Other payment rate adjustments. Facility total payment rates may be adjusted
by the commissioner following the recommendation of both the host county and the statewide
advisory committee if, through the local system needs planning process, it is determined that a
need exists to amend the package of purchased services with a resulting increase or decrease in
costs. Except as provided in section 252.292, subdivision 4, if a provider demonstrates that
the loss of revenues caused by the downsizing or closure of a facility cannot be absorbed by
the facility based on current operations, the host county or the provider may submit a request
to the statewide advisory committee for a facility base rate adjustment. Funds for this purpose
are limited to those made available through a legislative appropriation and published in the State
Register notice required by section 252.282, subdivision 5.
    Subd. 3. Relocation. (a) Property rates for all facilities relocated after December 31, 1997,
and up to and including October 1, 2000, shall have the full annual costs of relocation included in
their October 1, 2000, property rate. The property rate for the relocated home is subject to the
costs that were allowable under Minnesota Rules, chapter 9553, and the investment per bed
limitation for newly constructed or newly established class B facilities.
(b) In ensuing years, all relocated homes shall be subject to the investment per bed limit for
newly constructed or newly established class B facilities under section 256B.501, subdivision
11 . The limits shall be adjusted on January 1 of each year by the percentage increase in
the construction index published by the Bureau of Economic Analysis of the United States
Department of Commerce in the Survey of Current Business Statistics in October of the previous
two years. Facilities that are relocated within the investment per bed limit may be approved by
the statewide advisory committee. Costs for relocation of a facility that exceed the investment
per bed limit must be absorbed by the facility.
(c) The payment rate shall take effect when the new facility is licensed and certified by the
commissioner of health. Rates for facilities that are relocated after December 31, 1997, through
October 1, 2000, shall be adjusted to reflect the full inclusion of the relocation costs, subject to the
investment per bed limit in paragraph (b). The investment per bed limit calculated rate for the
year in which the facility was relocated shall be the investment per bed limit used.
    Subd. 4.[Repealed, 1Sp2003 c 14 art 3 s 60]
    Subd. 5. Required occupancy data. Facilities shall maintain monthly occupancy bed use
data by client and report this data monthly in a format determined by the commissioner.
    Subd. 6. Commissioner's responsibilities. The commissioner shall:
(1) make a determination to approve, deny, or modify a request for a variable rate adjustment
within 30 days of the receipt of the completed application;
(2) notify the ICF/MR facility and county case manager of the duration and conditions of
variable rate adjustment approvals;
(3) modify MMIS II service agreements to reimburse ICF/MR facilities for approved
variable rates;
(4) provide notification of legislatively appropriated funding for facility closures,
downsizings, and relocations;
(5) assess the fiscal impacts of the proposals for closures, downsizings, and relocations
forwarded for consideration through the state advisory committee; and
(6) review the payment rate process on a biannual basis and make recommendations to the
legislature for necessary adjustments to the review and approval process.
    Subd. 7. Rate adjustments; short-term admissions; crisis or specialized medical care.
Beginning July 1, 2003, the commissioner may designate up to 25 beds in ICF/MR facilities
statewide for short-term admissions due to crisis care needs or care for medically fragile
individuals. The commissioner shall adjust the monthly facility rate to provide payment for
vacancies in designated short-term beds by an amount equal to the rate for each recipient residing
in a designated bed for up to 15 days per bed per month. The commissioner may designate
short-term beds in ICF/MR facilities based on the short-term care needs of a region or county as
provided in section 252.28. Nothing in this section shall be construed as limiting payments for
short-term admissions of eligible recipients to an ICF/MR that is not designated for short-term
admissions for crisis or specialized medical care under this subdivision and does not receive a
temporary rate adjustment.
History: 1999 c 245 art 3 s 34; 2000 c 474 s 14-16; 2001 c 203 s 13; 2002 c 220 art 14 s
14-18; 2002 c 374 art 10 s 7; 1Sp2003 c 14 art 3 s 49; 2005 c 56 s 1

256B.5014 FINANCIAL REPORTING.
All facilities shall maintain financial records and shall provide annual income and expense
reports to the commissioner of human services on a form prescribed by the commissioner no later
than April 30 of each year in order to receive medical assistance payments. The reports for the
reporting year ending December 31 must include:
(1) salaries and related expenses, including program salaries, administrative salaries, other
salaries, payroll taxes, and fringe benefits;
(2) general operating expenses, including supplies, training, repairs, purchased services
and consultants, utilities, food, licenses and fees, real estate taxes, insurance, and working
capital interest;
(3) property related costs, including depreciation, capital debt interest, rent, and leases; and
(4) total annual resident days.
History: 1999 c 245 art 3 s 35

256B.5015 PASS-THROUGH OF OTHER SERVICES COSTS.
    Subdivision 1. Day training and habilitation services. Day training and habilitation
services costs shall be paid as a pass-through payment at the lowest rate paid for the comparable
services at that site under sections 252.40 to 252.46. The pass-through payments for training and
habilitation services shall be paid separately by the commissioner and shall not be included in the
computation of the ICF/MR facility total payment rate.
    Subd. 2. Services during the day. Services during the day, as defined in section 256B.501,
but excluding day training and habilitation services, shall be paid as a pass-through payment no
later than January 1, 2004. The commissioner shall establish rates for these services, other than
day training and habilitation services, at levels that do not exceed 75 percent of a recipient's day
training and habilitation service costs prior to the service change.
When establishing a rate for these services, the commissioner shall also consider an
individual recipient's needs as identified in the individualized service plan and the person's need
for active treatment as defined under federal regulations. The pass-through payments for services
during the day shall be paid separately by the commissioner and shall not be included in the
computation of the ICF/MR facility total payment rate.
History: 1999 c 245 art 3 s 36; 1Sp2003 c 14 art 3 s 50

256B.5016 ICF/MR MANAGED CARE OPTION.
    Subdivision 1. Managed care pilot. The commissioner may initiate a capitated risk-based
managed care option for services in an intermediate care facility for persons with developmental
disabilities according to the terms and conditions of the federal agreement governing the managed
care pilot. The commissioner may grant a variance to any of the provisions in sections 256B.501
to 256B.5015 and Minnesota Rules, parts 9525.1200 to 9525.1330 and 9525.1580.
    Subd. 2. Report. The commissioner shall report to the legislature financial and program
results along with a recommendation as to whether the pilot should be expanded.
History: 2003 c 47 s 2; 2005 c 56 s 1

256B.502 RULES.
The commissioners of health and human services shall promulgate rules necessary to
implement Laws 1983, chapter 199.
History: 1983 c 199 s 16; 1984 c 640 s 32; 1984 c 654 art 5 s 58; 1996 c 305 art 2 s 51;
1997 c 187 art 5 s 29

256B.503 RULES.
To implement Laws 1983, chapter 312, article 9, sections 1 to 7, the commissioner shall
promulgate rules. Rules adopted to implement Laws 1983, chapter 312, article 9, section 5,
must (a) set standards for case management which include, encourage, and enable flexible
administration, (b) require the county boards to develop individualized procedures governing case
management activities, (c) consider criteria promulgated under section 256B.092, subdivision
3 , and the federal waiver plan, (d) identify cost implications to the state and to county boards,
and (e) require the screening teams to make recommendations to the county case manager for
development of the individual service plan.
The commissioner shall adopt rules to implement this section by July 1, 1986.
History: 1983 c 312 art 9 s 8; 1984 c 640 s 32; 1Sp1985 c 9 art 2 s 53; 1996 c 305 art 2 s
52; 1997 c 187 art 5 s 30; 2005 c 98 art 2 s 12

256B.504 [Repealed, 1995 c 248 art 2 s 8]

256B.51 NURSING HOMES; COST OF HOME CARE.
    Subdivision 1. In-home care for elderly; experimental program. To determine the
effectiveness of home care in providing or arranging for the care and services which would
normally be provided in a nursing home, the commissioner of human services may establish an
experimental program to subsidize a limited number of eligible agencies or households which
agree to carry out a planned program of in-home care for an elderly or physically disabled
person. The household or agency to provide the services shall be selected by the person who will
receive the services.
This program shall be limited to agencies or households caring for persons who are
physically disabled or 60 years of age or older, and who otherwise would require and be eligible
for placement in a nursing home.
    Subd. 2. Grants. Grants to eligible agencies or households shall be determined by the
commissioner of human services. In determining the grants, the commissioner shall consider the
cost of diagnostic assessments, homemaker services, specialized equipment, visiting nurses' or
other pertinent therapists' costs, social services, day program costs, and related transportation
expenses, not to exceed 50 percent of the average medical assistance reimbursement rate for
nursing homes in the region of the person's residence.
    Subd. 3. Care plan required. An individual care plan for the person shall be established
and agreed upon by the person or agency providing the care, the person or agency receiving the
subsidy, the person receiving the care, and the appropriate local welfare agency. The plan shall
be periodically evaluated to determine the person's progress.
History: 1976 c 312 s 2; 1984 c 654 art 5 s 58

DENTAL ACCESS GRANTS

256B.53 DENTAL ACCESS GRANTS.
(a) The commissioner shall award grants to community clinics or other nonprofit community
organizations, political subdivisions, professional associations, or other organizations that
demonstrate the ability to provide dental services effectively to public program recipients. Grants
may be used to fund the costs related to coordinating access for recipients, developing and
implementing patient care criteria, upgrading or establishing new facilities, acquiring furnishings
or equipment, recruiting new providers, or other development costs that will improve access
to dental care in a region.
(b) In awarding grants, the commissioner shall give priority to applicants that plan to serve
areas of the state in which the number of dental providers is not currently sufficient to meet the
needs of recipients of public programs or uninsured individuals. The commissioner shall consider
the following in awarding the grants:
(1) potential to successfully increase access to an underserved population;
(2) the long-term viability of the project to improve access beyond the period of initial
funding;
(3) the efficiency in the use of the funding; and
(4) the experience of the applicants in providing services to the target population.
(c) The commissioner shall consider grants for the following:
(1) implementation of new programs or continued expansion of current access programs that
have demonstrated success in providing dental services in underserved areas;
(2) a program for mobile or other types of outreach dental clinics in underserved geographic
areas;
(3) a program for school-based dental clinics in schools with high numbers of children
receiving medical assistance;
(4) a program testing new models of care that are sensitive to the cultural needs of the
recipients;
(5) a program creating new educational campaigns that inform individuals of the importance
of good oral health and the link between dental disease and overall health status;
(6) a program that organizes a network of volunteer dentists to provide dental services to
public program recipients or uninsured individuals; and
(7) a program that tests new delivery models by creating partnerships between local
providers and county public health agencies.
(d) The commissioner shall evaluate the effects of the dental access initiatives funded
through the dental access grants and submit a report to the legislature by January 15, 2003.
History: 1Sp2001 c 9 art 2 s 47; 2002 c 379 art 1 s 113

256B.55 DENTAL ACCESS ADVISORY COMMITTEE.
    Subdivision 1. Establishment. The commissioner shall establish a Dental Access Advisory
Committee to monitor the purchasing, administration, and coverage of dental care services for the
public health care programs to ensure dental care access and quality for public program recipients.
    Subd. 2. Membership. (a) The membership of the advisory committee shall include, but
is not limited to, representatives of dentists, including a dentist practicing in the seven-county
metropolitan area and a dentist practicing outside the seven-county metropolitan area; oral
surgeons; pediatric dentists; dental hygienists; community clinics; client advocacy groups; public
health; health service plans; the University of Minnesota School of Dentistry and the Department
of Pediatrics; and the commissioner of health.
(b) The advisory committee is governed by section 15.059 for membership terms and removal
of members. Members shall not receive per diem compensation or reimbursement for expenses.
    Subd. 3. Duties. The advisory committee shall provide recommendations on the following:
(1) developing a new model for purchasing, administering, and delivering dental care
services to public program recipients based on public health principles;
(2) exploring innovative ways to develop workforce solutions to ensure access to dental
care statewide; and
(3) identifying data needed to effectively evaluate the dental care needs of the state.
    Subd. 4. Report. The commissioner shall submit a report by February 1, 2002, and each
February 1 thereafter, summarizing the activities and recommendations of the advisory committee.
    Subd. 5. Sunset. Notwithstanding section 15.059, subdivision 5, this section expires June
30, 2007.
History: 1Sp2001 c 9 art 2 s 48; 2002 c 379 art 1 s 113; 1Sp2003 c 5 s 6-8

256B.56 [Repealed, 1996 c 310 s 1]

256B.57 [Repealed, 1996 c 310 s 1]

256B.58 [Repealed, 1996 c 310 s 1]

256B.59 [Repealed, 1996 c 310 s 1]

256B.60 [Repealed, 1996 c 310 s 1]

256B.61 [Repealed, 1996 c 310 s 1]

256B.62 [Repealed, 1996 c 310 s 1]

256B.63 [Repealed, 1996 c 310 s 1]

256B.64 ATTENDANTS TO VENTILATOR-DEPENDENT RECIPIENTS.
A ventilator-dependent recipient of medical assistance who has been receiving the services
of a private duty nurse or personal care assistant in the recipient's home may continue to have a
private duty nurse or personal care assistant present upon admission to a hospital licensed under
chapter 144. The personal care assistant or private duty nurse shall perform only the services of
communicator or interpreter for the ventilator-dependent patient during a transition period of up
to 120 hours to assure adequate training of the hospital staff to communicate with the patient and
to understand the unique comfort, safety, and personal care needs of the patient. The personal
care assistant or private duty nurse may offer nonbinding advice to the health care professionals
in charge of the ventilator-dependent patient's care and treatment on matters pertaining to the
comfort and safety of the patient. Within 36 hours of the end of the 120-hour transition period,
an assessment may be made by the ventilator-dependent recipient, the attending physician, and
the hospital staff caring for the recipient. If the persons making the assessment determine that
additional communicator or interpreter services are medically necessary, the hospital must contact
the commissioner 24 hours prior to the end of the 120-hour transition period and submit the
assessment information to the commissioner. The commissioner shall review the request and
determine if it is medically necessary to continue the interpreter services or if the hospital staff
has had sufficient opportunity to adequately determine the needs of the patient. The commissioner
shall determine if continued service is necessary and appropriate and whether or not payments
shall continue. The commissioner may not authorize services beyond the limits of the available
appropriations for this section. The commissioner may adopt rules necessary to implement this
section. Reimbursement under this section must be at the payment rate and in a manner consistent
with the payment rate and manner used in reimbursing these providers for home care services for
the ventilator-dependent recipient under the medical assistance program.
History: 1988 c 689 art 2 s 181; 1991 c 292 art 7 s 20

256B.69 PREPAYMENT DEMONSTRATION PROJECT.
    Subdivision 1. Purpose. The commissioner of human services shall establish a medical
assistance demonstration project to determine whether prepayment combined with better
management of health care services is an effective mechanism to ensure that all eligible individuals
receive necessary health care in a coordinated fashion while containing costs. For the purposes of
this project, waiver of certain statutory provisions is necessary in accordance with this section.
    Subd. 2. Definitions. For the purposes of this section, the following terms have the meanings
given.
(a) "Commissioner" means the commissioner of human services. For the remainder of this
section, the commissioner's responsibilities for methods and policies for implementing the project
will be proposed by the project advisory committees and approved by the commissioner.
(b) "Demonstration provider" means a health maintenance organization, community
integrated service network, or accountable provider network authorized and operating under
chapter 62D, 62N, or 62T that participates in the demonstration project according to criteria,
standards, methods, and other requirements established for the project and approved by the
commissioner. For purposes of this section, a county board, or group of county boards operating
under a joint powers agreement, is considered a demonstration provider if the county or group of
county boards meets the requirements of section 256B.692. Notwithstanding the above, Itasca
County may continue to participate as a demonstration provider until July 1, 2004.
(c) "Eligible individuals" means those persons eligible for medical assistance benefits as
defined in sections 256B.055, 256B.056, and 256B.06.
(d) "Limitation of choice" means suspending freedom of choice while allowing eligible
individuals to choose among the demonstration providers.
    Subd. 3. Geographic area. The commissioner shall designate the geographic areas in which
eligible individuals may be included in the medical assistance prepayment programs.
    Subd. 3a. County authority. (a) The commissioner, when implementing the general
assistance medical care, or medical assistance prepayment program within a county, must include
the county board in the process of development, approval, and issuance of the request for
proposals to provide services to eligible individuals within the proposed county. County boards
must be given reasonable opportunity to make recommendations regarding the development,
issuance, review of responses, and changes needed in the request for proposals. The commissioner
must provide county boards the opportunity to review each proposal based on the identification
of community needs under chapters 145A and 256E and county advocacy activities. If a county
board finds that a proposal does not address certain community needs, the county board and
commissioner shall continue efforts for improving the proposal and network prior to the approval
of the contract. The county board shall make recommendations regarding the approval of local
networks and their operations to ensure adequate availability and access to covered services.
The provider or health plan must respond directly to county advocates and the state prepaid
medical assistance ombudsperson regarding service delivery and must be accountable to the state
regarding contracts with medical assistance and general assistance medical care funds. The county
board may recommend a maximum number of participating health plans after considering the size
of the enrolling population; ensuring adequate access and capacity; considering the client and
county administrative complexity; and considering the need to promote the viability of locally
developed health plans. The county board or a single entity representing a group of county boards
and the commissioner shall mutually select health plans for participation at the time of initial
implementation of the prepaid medical assistance program in that county or group of counties and
at the time of contract renewal. The commissioner shall also seek input for contract requirements
from the county or single entity representing a group of county boards at each contract renewal
and incorporate those recommendations into the contract negotiation process. The commissioner,
in conjunction with the county board, shall actively seek to develop a mutually agreeable
timetable prior to the development of the request for proposal, but counties must agree to initial
enrollment beginning on or before January 1, 1999, in either the prepaid medical assistance and
general assistance medical care programs or county-based purchasing under section 256B.692.
At least 90 days before enrollment in the medical assistance and general assistance medical care
prepaid programs begins in a county in which the prepaid programs have not been established,
the commissioner shall provide a report to the chairs of senate and house committees having
jurisdiction over state health care programs which verifies that the commissioner complied with
the requirements for county involvement that are specified in this subdivision.
(b) At the option of the county board, the board may develop contract requirements related
to the achievement of local public health goals to meet the health needs of medical assistance
and general assistance medical care enrollees. These requirements must be reasonably related
to the performance of health plan functions and within the scope of the medical assistance and
general assistance medical care benefit sets. If the county board and the commissioner mutually
agree to such requirements, the department shall include such requirements in all health plan
contracts governing the prepaid medical assistance and general assistance medical care programs
in that county at initial implementation of the program in that county and at the time of contract
renewal. The county board may participate in the enforcement of the contract provisions related
to local public health goals.
(c) For counties in which prepaid medical assistance and general assistance medical care
programs have not been established, the commissioner shall not implement those programs if
a county board submits acceptable and timely preliminary and final proposals under section
256B.692, until county-based purchasing is no longer operational in that county. For counties in
which prepaid medical assistance and general assistance medical care programs are in existence
on or after September 1, 1997, the commissioner must terminate contracts with health plans
according to section 256B.692, subdivision 5, if the county board submits and the commissioner
accepts preliminary and final proposals according to that subdivision. The commissioner is not
required to terminate contracts that begin on or after September 1, 1997, according to section
256B.692 until two years have elapsed from the date of initial enrollment.
(d) In the event that a county board or a single entity representing a group of county boards
and the commissioner cannot reach agreement regarding: (i) the selection of participating health
plans in that county; (ii) contract requirements; or (iii) implementation and enforcement of county
requirements including provisions regarding local public health goals, the commissioner shall
resolve all disputes after taking into account the recommendations of a three-person mediation
panel. The panel shall be composed of one designee of the president of the association of
Minnesota counties, one designee of the commissioner of human services, and one designee of
the commissioner of health.
(e) If a county which elects to implement county-based purchasing ceases to implement
county-based purchasing, it is prohibited from assuming the responsibility of county-based
purchasing for a period of five years from the date it discontinues purchasing.
(f) Notwithstanding the requirement in this subdivision that a county must agree to
initial enrollment on or before January 1, 1999, the commissioner shall grant a delay in the
implementation of the county-based purchasing authorized in section 256B.692 until federal
waiver authority and approval has been granted, if the county or group of counties has submitted
a preliminary proposal for county-based purchasing by September 1, 1997, has not already
implemented the prepaid medical assistance program before January 1, 1998, and has submitted a
written request for the delay to the commissioner by July 1, 1998. In order for the delay to be
continued, the county or group of counties must also submit to the commissioner the following
information by December 1, 1998. The information must:
(1) identify the proposed date of implementation, as determined under section 256B.692,
subdivision 5 ;
(2) include copies of the county board resolutions which demonstrate the continued
commitment to the implementation of county-based purchasing by the proposed date. County
board authorization may remain contingent on the submission of a final proposal which meets the
requirements of section 256B.692, subdivision 5, paragraph (b);
(3) demonstrate actions taken for the establishment of a governance structure between the
participating counties and describe how the fiduciary responsibilities of county-based purchasing
will be allocated between the counties, if more than one county is involved in the proposal;
(4) describe how the risk of a deficit will be managed in the event expenditures are greater
than total capitation payments. This description must identify how any of the following strategies
will be used:
(i) risk contracts with licensed health plans;
(ii) risk arrangements with providers who are not licensed health plans;
(iii) risk arrangements with other licensed insurance entities; and
(iv) funding from other county resources;
(5) include, if county-based purchasing will not contract with licensed health plans or
provider networks, letters of interest from local providers in at least the categories of hospital,
physician, mental health, and pharmacy which express interest in contracting for services. These
letters must recognize any risk transfer identified in clause (4), item (ii); and
(6) describe the options being considered to obtain the administrative services required in
section 256B.692, subdivision 3, clauses (3) and (5).
(g) For counties which receive a delay under this subdivision, the final proposals required
under section 256B.692, subdivision 5, paragraph (b), must be submitted at least six months prior
to the requested implementation date. Authority to implement county-based purchasing remains
contingent on approval of the final proposal as required under section 256B.692.
(h) If the commissioner is unable to provide county-specific, individual-level fee-for-service
claims to counties by June 4, 1998, the commissioner shall grant a delay under paragraph
(f) of up to 12 months in the implementation of county-based purchasing, and shall require
implementation not later than January 1, 2000. In order to receive an extension of the proposed
date of implementation under this paragraph, a county or group of counties must submit a written
request for the extension to the commissioner by August 1, 1998, must submit the information
required under paragraph (f) by December 1, 1998, and must submit a final proposal as provided
under paragraph (g).
(i) Notwithstanding other requirements of this subdivision, the commissioner shall not
require the implementation of the county-based purchasing authorized in section 256B.692 until
six months after federal waiver approval has been obtained for county-based purchasing, if the
county or counties have submitted the final plan as required in section 256B.692, subdivision
5 . The commissioner shall allow the county or counties which submitted information under
section 256B.692, subdivision 5, to submit supplemental or additional information which was not
possible to submit by April 1, 1999. A county or counties shall continue to submit the required
information and substantive detail necessary to obtain a prompt response and waiver approval. If
amendments to the final plan are necessary due to the terms and conditions of the waiver approval,
the commissioner shall allow the county or group of counties 60 days to make the necessary
amendments to the final plan and shall not require implementation of the county-based purchasing
until six months after the revised final plan has been submitted.
    Subd. 3b. Provision of data to county boards. The commissioner, in consultation with
representatives of county boards of commissioners shall identify program information and
data necessary on an ongoing basis for county boards to: (1) make recommendations to the
commissioner related to state purchasing under the prepaid medical assistance program; and (2)
effectively administer county-based purchasing. This information and data must include, but is
not limited to, county-specific, individual-level fee-for-service and prepaid health plan claims
information.
    Subd. 4. Limitation of choice. (a) The commissioner shall develop criteria to determine
when limitation of choice may be implemented in the experimental counties. The criteria shall
ensure that all eligible individuals in the county have continuing access to the full range of
medical assistance services as specified in subdivision 6.
(b) The commissioner shall exempt the following persons from participation in the project,
in addition to those who do not meet the criteria for limitation of choice:
(1) persons eligible for medical assistance according to section 256B.055, subdivision 1;
(2) persons eligible for medical assistance due to blindness or disability as determined by the
Social Security Administration or the state medical review team, unless:
(i) they are 65 years of age or older; or
(ii) they reside in Itasca County or they reside in a county in which the commissioner
conducts a pilot project under a waiver granted pursuant to section 1115 of the Social Security Act;
(3) recipients who currently have private coverage through a health maintenance
organization;
(4) recipients who are eligible for medical assistance by spending down excess income for
medical expenses other than the nursing facility per diem expense;
(5) recipients who receive benefits under the Refugee Assistance Program, established under
United States Code, title 8, section 1522(e);
(6) children who are both determined to be severely emotionally disturbed and receiving
case management services according to section 256B.0625, subdivision 20;
(7) adults who are both determined to be seriously and persistently mentally ill and received
case management services according to section 256B.0625, subdivision 20;
(8) persons eligible for medical assistance according to section 256B.057, subdivision 10; and
(9) persons with access to cost-effective employer-sponsored private health insurance
or persons enrolled in a non-Medicare individual health plan determined to be cost-effective
according to section 256B.0625, subdivision 15.
Children under age 21 who are in foster placement may enroll in the project on an elective basis.
Individuals excluded under clauses (1), (6), and (7) may choose to enroll on an elective basis. The
commissioner may enroll recipients in the prepaid medical assistance program for seniors who are
(1) age 65 and over, and (2) eligible for medical assistance by spending down excess income.
(c) The commissioner may allow persons with a one-month spenddown who are otherwise
eligible to enroll to voluntarily enroll or remain enrolled, if they elect to prepay their monthly
spenddown to the state.
(d) The commissioner may require those individuals to enroll in the prepaid medical
assistance program who otherwise would have been excluded under paragraph (b), clauses (1),
(3), and (8), and under Minnesota Rules, part 9500.1452, subpart 2, items H, K, and L.
(e) Before limitation of choice is implemented, eligible individuals shall be notified and after
notification, shall be allowed to choose only among demonstration providers. The commissioner
may assign an individual with private coverage through a health maintenance organization,
to the same health maintenance organization for medical assistance coverage, if the health
maintenance organization is under contract for medical assistance in the individual's county of
residence. After initially choosing a provider, the recipient is allowed to change that choice only
at specified times as allowed by the commissioner. If a demonstration provider ends participation
in the project for any reason, a recipient enrolled with that provider must select a new provider
but may change providers without cause once more within the first 60 days after enrollment
with the second provider.
(f) An infant born to a woman who is eligible for and receiving medical assistance and who is
enrolled in the prepaid medical assistance program shall be retroactively enrolled to the month of
birth in the same managed care plan as the mother once the child is enrolled in medical assistance
unless the child is determined to be excluded from enrollment in a prepaid plan under this section.
    Subd. 4a.[Repealed, 1996 c 451 art 5 s 39]
    Subd. 4b. Individual education plan and individualized family service plan services.
The commissioner shall amend the federal waiver allowing the state to separate out individual
education plan and individualized family service plan services for children enrolled in the
prepaid medical assistance program and the MinnesotaCare program. Effective July 1, 1999,
or upon federal approval, medical assistance coverage of eligible individual education plan
and individualized family service plan services shall not be included in the capitated services
for children enrolled in health plans through the prepaid medical assistance program and the
MinnesotaCare program. Upon federal approval, local school districts shall bill the commissioner
for these services, and claims shall be paid on a fee-for-service basis.
    Subd. 5. Prospective per capita payment. The commissioner shall establish the method and
amount of payments for services. The commissioner shall annually contract with demonstration
providers to provide services consistent with these established methods and amounts for payment.
If allowed by the commissioner, a demonstration provider may contract with an insurer,
health care provider, nonprofit health service plan corporation, or the commissioner, to provide
insurance or similar protection against the cost of care provided by the demonstration provider or
to provide coverage against the risks incurred by demonstration providers under this section. The
recipients enrolled with a demonstration provider are a permissible group under group insurance
laws and chapter 62C, the Nonprofit Health Service Plan Corporations Act. Under this type of
contract, the insurer or corporation may make benefit payments to a demonstration provider for
services rendered or to be rendered to a recipient. Any insurer or nonprofit health service plan
corporation licensed to do business in this state is authorized to provide this insurance or similar
protection.
Payments to providers participating in the project are exempt from the requirements of
sections 256.966 and 256B.03, subdivision 2. The commissioner shall complete development
of capitation rates for payments before delivery of services under this section is begun. For
payments made during calendar year 1990 and later years, the commissioner shall contract with
an independent actuary to establish prepayment rates.
By January 15, 1996, the commissioner shall report to the legislature on the methodology
used to allocate to participating counties available administrative reimbursement for advocacy
and enrollment costs. The report shall reflect the commissioner's judgment as to the adequacy
of the funds made available and of the methodology for equitable distribution of the funds. The
commissioner must involve participating counties in the development of the report.
Beginning July 1, 2004, the commissioner may include payments for elderly waiver services
and 180 days of nursing home care in capitation payments for the prepaid medical assistance
program for recipients age 65 and older. Payments for elderly waiver services shall be made no
earlier than the month following the month in which services were received.
    Subd. 5a. Managed care contracts. (a) Managed care contracts under this section and
sections 256L.12 and 256D.03, shall be entered into or renewed on a calendar year basis
beginning January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and
set to renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December 31,
1995 at the same terms that were in effect on June 30, 1995. The commissioner may issue separate
contracts with requirements specific to services to medical assistance recipients age 65 and older.
(b) A prepaid health plan providing covered health services for eligible persons pursuant
to chapters 256B, 256D, and 256L, is responsible for complying with the terms of its contract
with the commissioner. Requirements applicable to managed care programs under chapters 256B,
256D, and 256L, established after the effective date of a contract with the commissioner take
effect when the contract is next issued or renewed.
(c) Effective for services rendered on or after January 1, 2003, the commissioner shall
withhold five percent of managed care plan payments under this section for the prepaid medical
assistance and general assistance medical care programs pending completion of performance
targets. Each performance target must be quantifiable, objective, measurable, and reasonably
attainable, except in the case of a performance target based on a federal or state law or rule.
Criteria for assessment of each performance target must be outlined in writing prior to the
contract effective date. The withheld funds must be returned no sooner than July of the following
year if performance targets in the contract are achieved. The commissioner may exclude special
demonstration projects under subdivision 23. A managed care plan or a county-based purchasing
plan under section 256B.692 may include as admitted assets under section 62D.044 any amount
withheld under this paragraph that is reasonably expected to be returned.
    Subd. 5b. Prospective reimbursement rates. (a) For prepaid medical assistance and general
assistance medical care program contract rates set by the commissioner under subdivision 5 and
effective on or after January 1, 2003, capitation rates for nonmetropolitan counties shall on
a weighted average be no less than 87 percent of the capitation rates for metropolitan counties,
excluding Hennepin County. The commissioner shall make a pro rata adjustment in capitation
rates paid to counties other than nonmetropolitan counties in order to make this provision budget
neutral. The commissioner, in consultation with a health care actuary, shall evaluate the regional
rate relationships based on actual health plan costs for Minnesota health care programs. The
commissioner may establish, based on the actuary's recommendation, new rate regions that
recognize metropolitan areas outside of the seven-county metropolitan area.
(b) This subdivision shall not affect the nongeographically based risk adjusted rates
established under section 62Q.03, subdivision 5a.
    Subd. 5c. Medical education and research fund. (a) Except as provided in paragraph
(c), the commissioner of human services shall transfer each year to the medical education and
research fund established under section 62J.692, the following:
(1) an amount equal to the reduction in the prepaid medical assistance and prepaid general
assistance medical care payments as specified in this clause. Until January 1, 2002, the county
medical assistance and general assistance medical care capitation base rate prior to plan specific
adjustments and after the regional rate adjustments under section 256B.69, subdivision 5b, is
reduced 6.3 percent for Hennepin County, two percent for the remaining metropolitan counties,
and no reduction for nonmetropolitan Minnesota counties; and after January 1, 2002, the
county medical assistance and general assistance medical care capitation base rate prior to plan
specific adjustments is reduced 6.3 percent for Hennepin County, two percent for the remaining
metropolitan counties, and 1.6 percent for nonmetropolitan Minnesota counties. Nursing facility
and elderly waiver payments and demonstration project payments operating under subdivision 23
are excluded from this reduction. The amount calculated under this clause shall not be adjusted
for periods already paid due to subsequent changes to the capitation payments;
(2) beginning July 1, 2003, $2,157,000 from the capitation rates paid under this section plus
any federal matching funds on this amount;
(3) beginning July 1, 2002, an additional $12,700,000 from the capitation rates paid under
this section; and
(4) beginning July 1, 2003, an additional $4,700,000 from the capitation rates paid under
this section.
(b) This subdivision shall be effective upon approval of a federal waiver which allows
federal financial participation in the medical education and research fund.
(c) Effective July 1, 2003, the amount reduced from the prepaid general assistance medical
care payments under paragraph (a), clause (1), shall be transferred to the general fund.
    Subd. 5d. Modification of payment dates effective January 1, 2001. Effective for services
rendered on or after January 1, 2001, capitation payments under this section and under section
256D.03 for services provided in the month of June shall be made no earlier than the first day
after the month of service.
    Subd. 5e. Medical education and research payments. For the calendar years 1999, 2000,
and 2001, a hospital that participates in funding the federal share of the medical education and
research trust fund payment under Laws 1998, chapter 407, article 1, section 3, shall not be held
liable for any amounts attributable to this payment above the charge limit of section 256.969,
subdivision 3a . The commissioner of human services shall assume liability for any corresponding
federal share of the payments above the charge limit.
    Subd. 5f. Capitation rates. Beginning July 1, 2002, the capitation rates paid under this
section are increased by $12,700,000 per year. Beginning July 1, 2003, the capitation rates paid
under this section are increased by $4,700,000 per year.
    Subd. 5g. Payment for covered services. For services rendered on or after January 1, 2003,
the total payment made to managed care plans for providing covered services under the medical
assistance and general assistance medical care programs is reduced by .5 percent from their
current statutory rates. This provision excludes payments for nursing home services, home and
community-based waivers, and payments to demonstration projects for persons with disabilities.
    Subd. 5h. Payment reduction. In addition to the reduction in subdivision 5g, the total
payment made to managed care plans under the medical assistance program is reduced 1.0
percent for services provided on or after October 1, 2003, and an additional 1.0 percent for
services provided on or after January 1, 2004. This provision excludes payments for nursing
home services, home and community-based waivers, and payments to demonstration projects
for persons with disabilities.
    Subd. 6. Service delivery. (a) Each demonstration provider shall be responsible for the
health care coordination for eligible individuals. Demonstration providers:
(1) shall authorize and arrange for the provision of all needed health services including but
not limited to the full range of services listed in sections 256B.02, subdivision 8, and 256B.0625
in order to ensure appropriate health care is delivered to enrollees;
(2) shall accept the prospective, per capita payment from the commissioner in return for the
provision of comprehensive and coordinated health care services for eligible individuals enrolled
in the program;
(3) may contract with other health care and social service practitioners to provide services
to enrollees; and
(4) shall institute recipient grievance procedures according to the method established by the
project, utilizing applicable requirements of chapter 62D. Disputes not resolved through this
process shall be appealable to the commissioner as provided in subdivision 11.
(b) Demonstration providers must comply with the standards for claims settlement under
section 72A.201, subdivisions 4, 5, 7, and 8, when contracting with other health care and social
service practitioners to provide services to enrollees. A demonstration provider must pay a clean
claim, as defined in Code of Federal Regulations, title 42, section 447.45(b), within 30 business
days of the date of acceptance of the claim.
    Subd. 6a. Nursing home services. (a) Notwithstanding Minnesota Rules, part 9500.1457,
subpart 1, item B, up to 180 days of nursing facility services as defined in section 256B.0625,
subdivision 2 , which are provided in a nursing facility certified by the Minnesota Department of
Health for services provided and eligible for payment under Medicaid, shall be covered under the
prepaid medical assistance program for individuals who are not residing in a nursing facility at the
time of enrollment in the prepaid medical assistance program. The commissioner may develop a
schedule to phase in implementation of the 180-day provision.
(b) For individuals enrolled in the Minnesota senior health options project or in other
demonstrations authorized under subdivision 23, nursing facility services shall be covered
according to the terms and conditions of the federal agreement governing that demonstration
project.
(c) For individuals enrolled in demonstrations authorized under subdivision 23, services in an
intermediate care facility for persons with developmental disabilities shall be covered according
to the terms and conditions of the federal agreement governing the demonstration project.
    Subd. 6b. Home and community-based waiver services. (a) For individuals enrolled in the
Minnesota senior health options project authorized under subdivision 23, elderly waiver services
shall be covered according to the terms and conditions of the federal agreement governing that
demonstration project.
(b) For individuals under age 65 enrolled in demonstrations authorized under subdivision
23, home and community-based waiver services shall be covered according to the terms and
conditions of the federal agreement governing that demonstration project.
(c) The commissioner of human services shall issue requests for proposals for collaborative
service models between counties and managed care organizations to integrate the home and
community-based elderly waiver services and additional nursing home services into the prepaid
medical assistance program.
(d) Notwithstanding Minnesota Rules, part 9500.1457, subpart 1, item C, elderly waiver
services shall be covered statewide no sooner than July 1, 2006, under the prepaid medical
assistance program for all individuals who are eligible according to section 256B.0915. The
commissioner may develop a schedule to phase in implementation of these waiver services,
including collaborative service models under paragraph (c). The commissioner shall phase in
implementation beginning with those counties participating under section 256B.692, and those
counties where a viable collaborative service model has been developed. In consultation with
counties and all managed care organizations that have expressed an interest in participating in
collaborative service models, the commissioner shall evaluate the models. The commissioner shall
consider the evaluation in selecting the most appropriate models for statewide implementation.
    Subd. 6c. Dental services demonstration project. The commissioner shall establish a
dental services demonstration project in Crow Wing, Todd, Morrison, Wadena, and Cass Counties
for provision of dental services to medical assistance, general assistance medical care, and
MinnesotaCare recipients. The commissioner may contract on a prospective per capita payment
basis for these dental services with an organization licensed under chapter 62C, 62D, or 62N in
accordance with section 256B.037 or may establish and administer a fee-for-service system for
the reimbursement of dental services.
    Subd. 6d. Prescription drugs. Effective January 1, 2004, the commissioner may exclude or
modify coverage for prescription drugs from the prepaid managed care contracts entered into
under this section in order to increase savings to the state by collecting additional prescription drug
rebates. The contracts must maintain incentives for the managed care plan to manage drug costs
and utilization and may require that the managed care plans maintain an open drug formulary. In
order to manage drug costs and utilization, the contracts may authorize the managed care plans to
use preferred drug lists and prior authorization. This subdivision is contingent on federal approval
of the managed care contract changes and the collection of additional prescription drug rebates.
    Subd. 7. Enrollee benefits. All eligible individuals enrolled by demonstration providers shall
receive all needed health care services as defined in subdivision 6.
All enrolled individuals have the right to appeal if necessary services are not being
authorized as defined in subdivision 11.
    Subd. 8. Preadmission screening waiver. Except as applicable to the project's operation, the
provisions of section 256B.0911 are waived for the purposes of this section for recipients enrolled
with demonstration providers or in the prepaid medical assistance program for seniors.
    Subd. 9. Reporting. (a) Each demonstration provider shall submit information as required by
the commissioner, including data required for assessing client satisfaction, quality of care, cost,
and utilization of services for purposes of project evaluation. The commissioner shall also develop
methods of data reporting and collection in order to provide aggregate enrollee information on
encounters and outcomes to determine access and quality assurance. Required information shall
be specified before the commissioner contracts with a demonstration provider.
(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate spending
data for major categories of service as reported to the commissioners of health and commerce
under section 62D.08, subdivision 3, clause (a), and criteria for service authorization and service
use are public data that the commissioner shall make available and use in public reports. The
commissioner shall require each health plan and county-based purchasing plan to provide:
(1) encounter data for each service provided, using standard codes and unit of service
definitions set by the commissioner, in a form that the commissioner can report by age, eligibility
groups, and health plan; and
(2) criteria, written policies, and procedures required to be disclosed under section 62M.10,
subdivision 7, and Code of Federal Regulations, title 42, part 438.210(b)(1), used for each type of
service for which authorization is required.
    Subd. 10. Information. Notwithstanding any law or rule to the contrary, the commissioner
may allow disclosure of the recipient's identity solely for the purposes of (a) allowing
demonstration providers to provide the information to the recipient regarding services, access to
services, and other provider characteristics, and (b) facilitating monitoring of recipient satisfaction
and quality of care. The commissioner shall develop and implement measures to protect recipients
from invasions of privacy and from harassment.
    Subd. 11. Appeals. A recipient may appeal to the commissioner a demonstration provider's
delay or refusal to provide services, according to section 256.045.
    Subd. 12.[Repealed, 1989 c 282 art 3 s 98]
    Subd. 13.[Repealed, 1989 c 282 art 3 s 98]
    Subd. 14.[Repealed, 1989 c 282 art 3 s 98]
    Subd. 15.[Repealed, 1989 c 282 art 3 s 98]
    Subd. 16. Project extension. Minnesota Rules, parts 9500.1450; 9500.1451; 9500.1452;
9500.1453; 9500.1454; 9500.1455; 9500.1456; 9500.1457; 9500.1458; 9500.1459; 9500.1460;
9500.1461; 9500.1462; 9500.1463; and 9500.1464 are extended.
    Subd. 17. Continuation of prepaid medical assistance. The commissioner may continue
the provisions of this section after June 30, 1990, in any or all of the participating counties if
necessary federal authority is granted. The commissioner may adopt permanent rules to continue
prepaid medical assistance in these areas.
    Subd. 18. Services pending appeal. If the recipient appeals in writing to the state agency
on or before the tenth day after the decision of the prepaid health plan to reduce, suspend, or
terminate services which the recipient had been receiving, and the treating physician or another
plan physician orders the services to be continued at the previous level, the prepaid health plan
must continue to provide services at a level equal to the level ordered by the plan's physician until
the state agency renders its decision.
    Subd. 19. Limitation on reimbursement; providers not with prepaid health plan. A
prepaid health plan may limit any reimbursement it may be required to pay to providers not
employed by or under contract with the prepaid health plan to the medical assistance rates for
medical assistance enrollees, and the general assistance medical care rates for general assistance
medical care enrollees, paid by the commissioner of human services to providers for services to
recipients not enrolled in a prepaid health plan.
    Subd. 20. Ombudsperson. The commissioner shall designate an ombudsperson to advocate
for persons required to enroll in prepaid health plans under this section. The ombudsperson shall
advocate for recipients enrolled in prepaid health plans through complaint and appeal procedures
and ensure that necessary medical services are provided either by the prepaid health plan directly
or by referral to appropriate social services. At the time of enrollment in a prepaid health plan,
the local agency shall inform recipients about the ombudsperson program and their right to
a resolution of a complaint by the prepaid health plan if they experience a problem with the
plan or its providers.
    Subd. 21. Prepayment coordinator. The county board shall designate a prepayment
coordinator to assist the state agency in implementing this section and section 256D.03,
subdivision 4 . Assistance must include educating recipients about available health care options,
enrolling recipients under subdivision 5, providing necessary eligibility and enrollment
information to health plans and the state agency, and coordinating complaints and appeals with
the ombudsman established in subdivision 18.
    Subd. 22. Impact on public or teaching hospitals and community clinics. (a) Before
implementing prepaid programs in counties with a county operated or affiliated public teaching
hospital or a hospital or clinic operated by the University of Minnesota, the commissioner shall
consider the risks the prepaid program creates for the hospital and allow the county or hospital the
opportunity to participate in the program, provided the terms of participation in the program are
competitive with the terms of other participants.
(b) Prepaid health plans serving counties with a nonprofit community clinic or community
health services agency must contract with the clinic or agency to provide services to clients who
choose to receive services from the clinic or agency, if the clinic or agency agrees to payment rates
that are competitive with rates paid to other health plan providers for the same or similar services.
(c) For purposes of this subdivision, "nonprofit community clinic" includes, but is not limited
to, a community mental health center as defined in sections 245.62 and 256B.0625, subdivision 5.
    Subd. 23. Alternative services; elderly and disabled persons. (a) The commissioner may
implement demonstration projects to create alternative integrated delivery systems for acute and
long-term care services to elderly persons and persons with disabilities as defined in section
256B.77, subdivision 7a, that provide increased coordination, improve access to quality services,
and mitigate future cost increases. The commissioner may seek federal authority to combine
Medicare and Medicaid capitation payments for the purpose of such demonstrations and may
contract with Medicare-approved special needs plans to provide Medicaid services. Medicare
funds and services shall be administered according to the terms and conditions of the federal
contract and demonstration provisions. For the purpose of administering medical assistance
funds, demonstrations under this subdivision are subject to subdivisions 1 to 22. The provisions
of Minnesota Rules, parts 9500.1450 to 9500.1464, apply to these demonstrations, with the
exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, subpart 1, items B and C, which
do not apply to persons enrolling in demonstrations under this section. An initial open enrollment
period may be provided. Persons who disenroll from demonstrations under this subdivision
remain subject to Minnesota Rules, parts 9500.1450 to 9500.1464. When a person is enrolled
in a health plan under these demonstrations and the health plan's participation is subsequently
terminated for any reason, the person shall be provided an opportunity to select a new health plan
and shall have the right to change health plans within the first 60 days of enrollment in the second
health plan. Persons required to participate in health plans under this section who fail to make a
choice of health plan shall not be randomly assigned to health plans under these demonstrations.
Notwithstanding section 256L.12, subdivision 5, and Minnesota Rules, part 9505.5220, subpart 1,
item A, if adopted, for the purpose of demonstrations under this subdivision, the commissioner
may contract with managed care organizations, including counties, to serve only elderly persons
eligible for medical assistance, elderly and disabled persons, or disabled persons only. For persons
with a primary diagnosis of developmental disability, serious and persistent mental illness, or
serious emotional disturbance, the commissioner must ensure that the county authority has
approved the demonstration and contracting design. Enrollment in these projects for persons with
disabilities shall be voluntary. The commissioner shall not implement any demonstration project
under this subdivision for persons with a primary diagnosis of developmental disabilities, serious
and persistent mental illness, or serious emotional disturbance, without approval of the county
board of the county in which the demonstration is being implemented.
(b) Notwithstanding chapter 245B, sections 252.40 to 252.46, 256B.092, 256B.501 to
256B.5015, and Minnesota Rules, parts 9525.0004 to 9525.0036, 9525.1200 to 9525.1330,
9525.1580, and 9525.1800 to 9525.1930, the commissioner may implement under this section
projects for persons with developmental disabilities. The commissioner may capitate payments for
ICF/MR services, waivered services for developmental disabilities, including case management
services, day training and habilitation and alternative active treatment services, and other services
as approved by the state and by the federal government. Case management and active treatment
must be individualized and developed in accordance with a person-centered plan. Costs under
these projects may not exceed costs that would have been incurred under fee-for-service.
Beginning July 1, 2003, and until two years after the pilot project implementation date,
subcontractor participation in the long-term care developmental disability pilot is limited to a
nonprofit long-term care system providing ICF/MR services, home and community-based waiver
services, and in-home services to no more than 120 consumers with developmental disabilities in
Carver, Hennepin, and Scott Counties. The commissioner shall report to the legislature prior to
expansion of the developmental disability pilot project. This paragraph expires two years after
the implementation date of the pilot project.
(c) Before implementation of a demonstration project for disabled persons, the commissioner
must provide information to appropriate committees of the house of representatives and senate
and must involve representatives of affected disability groups in the design of the demonstration
projects.
(d) A nursing facility reimbursed under the alternative reimbursement methodology in
section 256B.434 may, in collaboration with a hospital, clinic, or other health care entity provide
services under paragraph (a). The commissioner shall amend the state plan and seek any federal
waivers necessary to implement this paragraph.
(e) The commissioner, in consultation with the commissioners of commerce and health, may
approve and implement programs for all-inclusive care for the elderly (PACE) according to federal
laws and regulations governing that program and state laws or rules applicable to participating
providers. The process for approval of these programs shall begin only after the commissioner
receives grant money in an amount sufficient to cover the state share of the administrative and
actuarial costs to implement the programs during state fiscal years 2006 and 2007. Grant amounts
for this purpose shall be deposited in an account in the special revenue fund and are appropriated
to the commissioner to be used solely for the purpose of PACE administrative and actuarial costs.
A PACE provider is not required to be licensed or certified as a health plan company as defined in
section 62Q.01, subdivision 4. Persons age 55 and older who have been screened by the county
and found to be eligible for services under the elderly waiver or community alternatives for
disabled individuals or who are already eligible for Medicaid but meet level of care criteria for
receipt of waiver services may choose to enroll in the PACE program. Medicare and Medicaid
services will be provided according to this subdivision and federal Medicare and Medicaid
requirements governing PACE providers and programs. PACE enrollees will receive Medicaid
home and community-based services through the PACE provider as an alternative to services for
which they would otherwise be eligible through home and community-based waiver programs
and Medicaid State Plan Services. The commissioner shall establish Medicaid rates for PACE
providers that do not exceed costs that would have been incurred under fee-for-service or other
relevant managed care programs operated by the state.
(f) The commissioner shall seek federal approval to expand the Minnesota disability
health options (MnDHO) program established under this subdivision in stages, first to regional
population centers outside the seven-county metro area and then to all areas of the state. Until
January 1, 2008, expansion for MnDHO projects that include home and community-based services
is limited to the two projects and service areas in effect on March 1, 2006. Enrollment in integrated
MnDHO programs that include home and community-based services shall remain voluntary.
Costs for home and community-based services included under MnDHO must not exceed costs that
would have been incurred under the fee-for-service program. In developing program specifications
for expansion of integrated programs, the commissioner shall involve and consult the state-level
stakeholder group established in subdivision 28, paragraph (d), including consultation on whether
and how to include home and community-based waiver programs. Plans for further expansion
of MnDHO projects shall be presented to the chairs of the house and senate committees with
jurisdiction over health and human services policy and finance by February 1, 2007.
(g) Notwithstanding section 256B.0261, health plans providing services under this
section are responsible for home care targeted case management and relocation targeted case
management. Services must be provided according to the terms of the waivers and contracts
approved by the federal government.
    Subd. 24.[Repealed, 1999 c 245 art 3 s 51]
    Subd. 24a. Social service and public health costs. The commissioner shall report on
recommendations to the legislature by January 15, 1997, identifying county social services and
public health administrative costs for each target population that should be excluded from the
overall capitation rate.
    Subd. 25. Continuation of payments through discharge. In the event a medical assistance
recipient or beneficiary enrolled in a health plan under this section is denied nursing facility
services after residing in the facility for more than 180 days, any denial of medical assistance
payment to a provider under this section shall be prospective only and payments to the provider
shall continue until the resident is discharged or 30 days after the effective date of the service
denial, whichever is sooner.
    Subd. 26. American Indian recipients. (a) Beginning on or after January 1, 1999, for
American Indian recipients of medical assistance who are required to enroll with a demonstration
provider under subdivision 4 or in a county-based purchasing entity, if applicable, under section
256B.692, medical assistance shall cover health care services provided at Indian health services
facilities and facilities operated by a tribe or tribal organization under funding authorized by
United States Code, title 25, sections 450f to 450n, or title III of the Indian Self-Determination
and Education Assistance Act, Public Law 93-638, if those services would otherwise be covered
under section 256B.0625. Payments for services provided under this subdivision shall be made
on a fee-for-service basis, and may, at the option of the tribe or tribal organization, be made
according to rates authorized under sections 256.969, subdivision 16, and 256B.0625, subdivision
34 . Implementation of this purchasing model is contingent on federal approval.
(b) The commissioner of human services, in consultation with the tribal governments, shall
develop a plan for tribes to assist in the enrollment process for American Indian recipients
enrolled in the prepaid medical assistance program under this section or the prepaid general
assistance medical care program under section 256D.03, subdivision 4, paragraph (c). This plan
also shall address how tribes will be included in ensuring the coordination of care for American
Indian recipients between Indian health service or tribal providers and other providers.
(c) For purposes of this subdivision, "American Indian" has the meaning given to persons to
whom services will be provided for in Code of Federal Regulations, title 42, section 36.12.
(d) This subdivision also applies to American Indian recipients of general assistance
medical care and to the prepaid general assistance medical care program under section 256D.03,
subdivision 4 , paragraph (c).
    Subd. 27. Information for persons with limited English-language proficiency. Managed
care contracts entered into under this section and sections 256D.03, subdivision 4, paragraph (c),
and 256L.12 must require demonstration providers to inform enrollees that upon request the
enrollee can obtain a certificate of coverage in the following languages: Spanish, Hmong, Laotian,
Russian, Somali, Vietnamese, or Cambodian. Upon request, the demonstration provider must
provide the enrollee with a certificate of coverage in the specified language of preference.
    Subd. 28. Medicare special needs plans; medical assistance basic health care. (a) The
commissioner may contract with qualified Medicare-approved special needs plans to provide
medical assistance basic health care services to persons with disabilities, including those with
developmental disabilities. Basic health care services include:
(1) those services covered by the medical assistance state plan except for ICF/MR services,
home and community-based waiver services, case management for persons with developmental
disabilities under section 256B.0625, subdivision 20a, and personal care and certain home care
services defined by the commissioner in consultation with the stakeholder group established
under paragraph (d); and
(2) basic health care services may also include risk for up to 100 days of nursing facility
services for persons who reside in a noninstitutional setting and home health services related to
rehabilitation as defined by the commissioner after consultation with the stakeholder group.
The commissioner may exclude other medical assistance services from the basic health care
benefit set. Enrollees in these plans can access any excluded services on the same basis as other
medical assistance recipients who have not enrolled.
Unless a person is otherwise required to enroll in managed care, enrollment in these plans for
Medicaid services must be voluntary. For purposes of this subdivision, automatic enrollment with
an option to opt out is not voluntary enrollment.
(b) Beginning January 1, 2007, the commissioner may contract with qualified Medicare
special needs plans to provide basic health care services under medical assistance to persons who
are dually eligible for both Medicare and Medicaid and those Social Security beneficiaries eligible
for Medicaid but in the waiting period for Medicare. The commissioner shall consult with the
stakeholder group under paragraph (d) in developing program specifications for these services.
The commissioner shall report to the chairs of the house and senate committees with jurisdiction
over health and human services policy and finance by February 1, 2007, on implementation of
these programs and the need for increased funding for the ombudsman for managed care and other
consumer assistance and protections needed due to enrollment in managed care of persons with
disabilities. Payment for Medicaid services provided under this subdivision for the months of
May and June will be made no earlier than July 1 of the same calendar year.
(c) Beginning January 1, 2008, the commissioner may expand contracting under this
subdivision to all persons with disabilities not otherwise required to enroll in managed care.
(d) The commissioner shall establish a state-level stakeholder group to provide advice on
managed care programs for persons with disabilities, including both MnDHO and contracts with
special needs plans that provide basic health care services as described in paragraphs (a) and (b).
The stakeholder group shall provide advice on program expansions under this subdivision and
subdivision 23, including:
(1) implementation efforts;
(2) consumer protections; and
(3) program specifications such as quality assurance measures, data collection and reporting,
and evaluation of costs, quality, and results.
(e) Each plan under contract to provide medical assistance basic health care services shall
establish a local or regional stakeholder group, including representatives of the counties covered
by the plan, members, consumer advocates, and providers, for advice on issues that arise in
the local or regional area.
History: 1983 c 312 art 5 s 27; 1984 c 654 art 5 s 58; 1987 c 403 art 2 s 95-101; 1988 c 689
art 2 s 182,183,268; 1989 c 209 art 1 s 23; 1989 c 282 art 3 s 87-90; 1990 c 426 art 1 s 29; 1990
c 568 art 3 s 83,84; 1991 c 292 art 7 s 25; 1994 c 529 s 11; 1995 c 207 art 6 s 90-102; art 7 s
41; 1995 c 234 art 6 s 40,41; 1996 c 451 art 2 s 33-37; art 5 s 32; 1997 c 203 art 2 s 26; art 4 s
48-55; 1998 c 407 art 3 s 17; art 4 s 44-48; 1999 c 159 s 53; 1999 c 245 art 2 s 38; art 3 s 37,38;
art 4 s 70-75; 2000 c 340 s 12,13; 2000 c 353 s 1; 2000 c 488 art 9 s 24-26; 2001 c 161 s 49;
2001 c 203 s 14; 1Sp2001 c 9 art 2 s 49-52; 2002 c 220 art 15 s 15-19; 2002 c 275 s 5; 2002 c
281 s 1; 2002 c 375 art 2 s 43; 2002 c 379 art 1 s 113; 2003 c 47 s 3,4; 2003 c 101 s 1; 1Sp2003 c
14 art 12 s 56-65; 2004 c 228 art 1 s 75; 2004 c 268 s 14; 2004 c 288 art 3 s 26; art 5 s 9; 2005 c
56 s 1; 1Sp2005 c 4 art 7 s 46; art 8 s 51; 2006 c 282 art 20 s 28-30

NOTE: The amendment to subdivision 4 by Laws 2004, chapter 268, section 14, and chapter
288, article 3, section 26, is effective upon federal approval. Laws 2004, chapter 268, section
14, and chapter 288, article 3, section 26, the effective dates.

NOTE: Subdivision 23, paragraph (b), expires February 1, 2008. Laws 2003, chapter 47,
section 5.

256B.691 RISK-BASED TRANSPORTATION PAYMENTS.
Any contract with a prepaid health plan under the medical assistance, general assistance
medical care, or MinnesotaCare program that requires the health plan to cover transportation
services for obtaining medical care for eligible individuals who are ambulatory must provide
for payment for those services on a risk basis.
History: 1995 c 207 art 6 s 103

256B.692 COUNTY-BASED PURCHASING.
    Subdivision 1. In general. County boards or groups of county boards may elect to purchase
or provide health care services on behalf of persons eligible for medical assistance and general
assistance medical care who would otherwise be required to or may elect to participate in the
prepaid medical assistance or prepaid general assistance medical care programs according to
sections 256B.69 and 256D.03. Counties that elect to purchase or provide health care under
this section must provide all services included in prepaid managed care programs according to
sections 256B.69, subdivisions 1 to 22, and 256D.03. County-based purchasing under this section
is governed by section 256B.69, unless otherwise provided for under this section.
    Subd. 2. Duties of commissioner of health. (a) Notwithstanding chapters 62D and 62N, a
county that elects to purchase medical assistance and general assistance medical care in return for a
fixed sum without regard to the frequency or extent of services furnished to any particular enrollee
is not required to obtain a certificate of authority under chapter 62D or 62N. The county board of
commissioners is the governing body of a county-based purchasing program. In a multicounty
arrangement, the governing body is a joint powers board established under section 471.59.
(b) A county that elects to purchase medical assistance and general assistance medical
care services under this section must satisfy the commissioner of health that the requirements
for assurance of consumer protection, provider protection, and fiscal solvency of chapter 62D,
applicable to health maintenance organizations, or chapter 62N, applicable to community
integrated service networks, will be met.
(c) A county must also assure the commissioner of health that the requirements of sections
62J.041; 62J.48; 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 62Q,
including sections 62Q.075; 62Q.1055; 62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19;
62Q.23, paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.68 to 62Q.72;
and 72A.201 will be met.
(d) All enforcement and rulemaking powers available under chapters 62D, 62J, 62M, 62N,
and 62Q are hereby granted to the commissioner of health with respect to counties that purchase
medical assistance and general assistance medical care services under this section.
(e) The commissioner, in consultation with county government, shall develop administrative
and financial reporting requirements for county-based purchasing programs relating to sections
62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 62N.31, and other sections as
necessary, that are specific to county administrative, accounting, and reporting systems and
consistent with other statutory requirements of counties.
    Subd. 3. Requirements of the county board. A county board that intends to purchase or
provide health care under this section, which may include purchasing all or part of these services
from health plans or individual providers on a fee-for-service basis, or providing these services
directly, must demonstrate the ability to follow and agree to the following requirements:
(1) purchase all covered services for a fixed payment from the state that does not exceed the
estimated state and federal cost that would have occurred under the prepaid medical assistance
and general assistance medical care programs;
(2) ensure that covered services are accessible to all enrollees and that enrollees have a
reasonable choice of providers, health plans, or networks when possible. If the county is also a
provider of service, the county board shall develop a process to ensure that providers employed
by the county are not the sole referral source and are not the sole provider of health care services
if other providers, which meet the same quality and cost requirements are available;
(3) issue payments to participating vendors or networks in a timely manner;
(4) establish a process to ensure and improve the quality of care provided;
(5) provide appropriate quality and other required data in a format required by the state;
(6) provide a system for advocacy, enrollee protection, and complaints and appeals that is
independent of care providers or other risk bearers and complies with section 256B.69;
(7) ensure that the implementation and operation of the Minnesota senior health options
demonstration project and the Minnesota disability health options demonstration project,
authorized under section 256B.69, subdivision 23, will not be impeded;
(8) ensure that all recipients that are enrolled in the prepaid medical assistance or general
assistance medical care program will be transferred to county-based purchasing without utilizing
the department's fee-for-service claims payment system;
(9) ensure that all recipients who are required to participate in county-based purchasing are
given sufficient information prior to enrollment in order to make informed decisions; and
(10) ensure that the state and the medical assistance and general assistance medical care
recipients will be held harmless for the payment of obligations incurred by the county if the
county, or a health plan providing services on behalf of the county, or a provider participating
in county-based purchasing becomes insolvent, and the state has made the payments due to the
county under this section.
    Subd. 4. Payments to counties. The commissioner shall pay counties that are purchasing or
providing health care under this section a per capita payment for all enrolled recipients. Payments
shall not exceed payments that otherwise would have been paid to health plans under medical
assistance and general assistance medical care for that county or region. This payment is in
addition to any administrative allocation to counties for education, enrollment, and advocacy.
The state of Minnesota and the United States Department of Health and Human Services are not
liable for any costs incurred by a county that exceed the payments to the county made under
this subdivision. A county whose costs exceed the payments made by the state, or any affected
enrollees or creditors of that county, shall have no rights under chapter 61B or section 62D.181.
A county may assign risk for the cost of care to a third party.
    Subd. 5. County proposals. (a) On or before September 1, 1997, a county board that wishes
to purchase or provide health care under this section must submit a preliminary proposal that
substantially demonstrates the county's ability to meet all the requirements of this section in
response to criteria for proposals issued by the department on or before July 1, 1997. Counties
submitting preliminary proposals must establish a local planning process that involves input
from medical assistance and general assistance medical care recipients, recipient advocates,
providers and representatives of local school districts, labor, and tribal government to advise on
the development of a final proposal and its implementation.
(b) The county board must submit a final proposal on or before July 1, 1998, that demonstrates
the ability to meet all the requirements of this section, including beginning enrollment on January
1, 1999, unless a delay has been granted under section 256B.69, subdivision 3a, paragraph (g).
(c) After January 1, 1999, for a county in which the prepaid medical assistance program is
in existence, the county board must submit a preliminary proposal at least 15 months prior to
termination of health plan contracts in that county and a final proposal six months prior to the
health plan contract termination date in order to begin enrollment after the termination. Nothing
in this section shall impede or delay implementation or continuation of the prepaid medical
assistance and general assistance medical care programs in counties for which the board does not
submit a proposal, or submits a proposal that is not in compliance with this section.
(d) The commissioner is not required to terminate contracts for the prepaid medical
assistance and prepaid general assistance medical care programs that begin on or after September
1, 1997, in a county for which a county board has submitted a proposal under this paragraph, until
two years have elapsed from the date of initial enrollment in the prepaid medical assistance and
prepaid general assistance medical care programs.
    Subd. 6. Commissioner's authority. The commissioner may:
(1) reject any preliminary or final proposal that:
(a) substantially fails to meet the requirements of this section, or
(b) that the commissioner determines would substantially impair the state's ability to
purchase health care services in other areas of the state, or
(c) would substantially impair an enrollee's choice of care systems when reasonable choice is
possible, or
(d) would substantially impair the implementation and operation of the Minnesota senior
health options demonstration project authorized under section 256B.69, subdivision 23; and
(2) assume operation of a county's purchasing of health care for enrollees in medical
assistance and general assistance medical care in the event that the contract with the county is
terminated.
    Subd. 7. Dispute resolution. In the event the commissioner rejects a proposal under
subdivision 6, the county board may request the recommendation of a three-person mediation
panel. The commissioner shall resolve all disputes after taking into account the recommendations
of the mediation panel. The panel shall be composed of one designee of the president of the
Association of Minnesota Counties, one designee of the commissioner of human services, and
one designee of the commissioner of health.
    Subd. 8. Appeals. A county that conducts county-based purchasing shall be considered to be
a prepaid health plan for purposes of section 256.045.
    Subd. 9. Federal approval. The commissioner shall request any federal waivers and federal
approval required to implement this section. County-based purchasing shall not be implemented
without obtaining all federal approval required to maintain federal matching funds in the medical
assistance program.
    Subd. 10. Report to the legislature. The commissioner shall submit a report to the legislature
by February 1, 1998, on the preliminary proposals submitted on or before September 1, 1997.
History: 1997 c 203 art 4 s 56; 1998 c 407 art 4 s 49,50; 1999 c 239 s 42; 1999 c 245 art 4 s
76; 2001 c 170 s 8; 2002 c 277 s 25; 2005 c 77 s 6; 2006 c 264 s 12

256B.693 STATE-OPERATED SERVICES; MANAGED CARE.
    Subdivision 1. Proposals for managed care; role of state operated services. Any proposal
integrating state-operated services with managed care systems for persons with disabilities shall
identify the specific role to be assumed by state-operated services and the funding arrangement in
which state-operated services shall effectively operate within the managed care initiative. The
commissioner shall not approve or implement the initiative that consolidates funding appropriated
for state-operated services with funding for managed care initiatives for persons with disabilities.
    Subd. 2. Study by the commissioner. To help identify appropriate state-operated services
for managed care systems, the commissioner of human services shall study the integration
of state-operated services into public managed care systems and make recommendations to
the legislature. The commissioner's study and recommendations shall include, but shall not be
limited to, the following:
(1) identification of persons with disabilities on waiting lists for services, which could be
provided by state-operated services;
(2) availability of crisis services to persons with disabilities;
(3) unmet service needs, which could be met by state-operated services; and
(4) deficiencies in managed care contracts and services, which hinder the placement and
maintenance of persons with disabilities in community settings.
In conducting this study, the commissioner shall survey counties concerning their interest in
and need for services that could be provided by state-operated services. The commissioner shall
also consult with the appropriate exclusive bargaining unit representatives. The commissioner
shall report findings to the legislature by February 1, 1998.
History: 1997 c 203 art 9 s 13

256B.70 DEMONSTRATION PROJECT WAIVER.
Each hospital that participates as a provider in a demonstration project, established by the
commissioner of human services to deliver medical assistance, or chemical dependency services
on a prepaid, capitation basis, is exempt from the prospective payment system for inpatient
hospital service during the period of its participation in that project.
History: 1983 c 312 art 5 s 28; 1984 c 654 art 5 s 58; 1986 c 394 s 18

256B.71 SOCIAL HEALTH MAINTENANCE ORGANIZATION DEMONSTRATION.
    Subdivision 1. Purpose. The commissioner of human services may participate in social
health maintenance organization demonstration projects to determine if prepayment combined
with the delivery of alternative services is an effective method of delivering services while
containing costs.
    Subd. 2. Case management. Each participating provider approved by the commissioner
shall serve as case manager for recipients enrolled in its plan. The participating provider shall
authorize and arrange for the provision of all needed health services including but not limited
to the full range of services listed in sections 256B.02, subdivision 8, and 256B.0625 in order
to ensure that appropriate health care is delivered to enrollees.
    Subd. 3. Enrollment of medical assistance recipients. Medical assistance recipients may
voluntarily enroll in the social health maintenance organization projects. However, once enrolled
in a project, the recipient must remain enrolled for a period of six months.
    Subd. 4. Payment for services. Notwithstanding section 256.966 and this chapter, the
method of payment utilized for the social health maintenance organization projects shall be the
method developed by the commissioner of human services in consultation with local project staff
and the federal Department of Health and Human Services, Centers for Medicare and Medicaid
Services, Office of Demonstrations. This subdivision applies only to the payment method for the
social health maintenance organization projects.
    Subd. 5.[Repealed, 1991 c 292 art 7 s 26]
History: 1983 c 295 s 1; 1984 c 654 art 5 s 58; 1986 c 444; 1988 c 689 art 2 s 268; 2002
c 277 s 32

256B.72 RIGHT OF APPEAL.
The commissioner shall not recover overpayments from medical assistance vendors if an
administrative appeal or judicial action challenging the proposed recovery is pending.
History: 1Sp1985 c 9 art 2 s 54

256B.73 DEMONSTRATION PROJECT FOR UNINSURED LOW-INCOME PERSONS.
    Subdivision 1. Purpose. The purpose of the demonstration project is to determine the need
for and the feasibility of establishing a statewide program of medical insurance for uninsured
low-income persons.
    Subd. 2. Establishment; geographic area. The commissioner of human services shall
cooperate with a local coalition to establish a demonstration project to provide low cost medical
insurance to uninsured low-income persons in Cook, Crow Wing, Lake, St. Louis, Carlton,
Aitkin, Pine, Itasca, and Koochiching Counties except an individual county may be excluded
as determined by the county board of commissioners. The coalition shall work with the
commissioners of human services, commerce, and health and potential demonstration providers
as well as other public and private organizations to determine program design, including enrollee
eligibility requirements, benefits, and participation.
    Subd. 3. Definitions. For the purposes of this section, the following terms have the meanings
given:
(1) "coalition" means an organization comprised of members representative of small
business, health care providers, county social service departments, health consumer groups, and
the health industry, established to serve the purposes of this demonstration;
(2) "demonstration provider" means a corporation regulated under chapter 62A, 62C, or 62D;
(3) "individual provider" means a medical provider under contract to the demonstration
provider to provide medical care to enrollees; and
(4) "enrollee" means a person eligible to receive coverage according to subdivision 4.
    Subd. 4. Enrollee eligibility requirements. To be eligible for participation in the
demonstration project, an enrollee must:
(1) not be eligible for Medicare, medical assistance, or general assistance medical care; and
(2) have no medical insurance or health benefits plan available through employment or
other means that would provide coverage for the same medical services as provided by this
demonstration.
    Subd. 5. Enrollee benefits. (a) Eligible persons enrolled by a demonstration provider shall
receive a health services benefit package that includes health services which the enrollees might
reasonably require to be maintained in good health, including emergency care, inpatient hospital
and physician care, outpatient health services, and preventive health services.
(b) Services related to chemical dependency, mental illness, vision care, dental care, and
other benefits may be excluded or limited upon approval by the commissioners. The coalition
may petition the commissioner of commerce or health, whichever is appropriate, for waivers that
allow these benefits to be excluded or limited.
(c) The commissioners, the coalition, and demonstration providers shall work together to
design a package of benefits or packages of benefits that can be provided to enrollees for an
affordable monthly premium.
    Subd. 6. Enrollee participation. The demonstration provider may terminate the coverage
for an enrollee who has not made payment within the first ten calendar days of the month for
which coverage is being purchased. The termination for nonpayment shall be retroactive to
the first day of the month for which no payment has been made by the enrollee. The coalition
will assure that participants receive adequate information about the demonstration nature of the
project. The coalition will assist enrollees with finding alternative coverage at the conclusion of
the demonstration project.
    Subd. 7. Contract with coalition. The commissioner of human services shall contract
with the coalition to administer and direct the demonstration project and to select and retain the
demonstration provider for the duration of the project. This contract shall be for 24 months with
an option to renew for no more than 12 months. This contract may be canceled without cause by
the commissioner upon 90 days' written notice to the coalition or by the coalition with 90 days'
written notice to the commissioner. The commissioner shall assure the cooperation of the county
human services or social services staff in all counties participating in the project.
    Subd. 8. Medical assistance and general assistance medical care coordination. To
assure enrollees of uninterrupted delivery of health care services, the commissioner may pay the
premium to the demonstration provider for persons who become eligible for medical assistance
or general assistance medical care. To determine eligibility for medical assistance, any medical
expenses for eligible services incurred by the demonstration provider shall be considered as
evidence of satisfying the medical expense requirements of section 256B.056, subdivisions 4 and
5 . To determine eligibility for general assistance medical care, any medical expenses for eligible
services incurred by the demonstration provider shall be considered as evidence of satisfying the
medical expense requirements of section 256D.03, subdivision 3.
    Subd. 9. Waiver required. No part of the demonstration project shall become operational
until any required waivers of appropriate federal regulations are obtained from the Centers for
Medicare and Medicaid Services.
    Subd. 10.[Repealed, 1988 c 689 art 2 s 269]
History: 1987 c 337 s 123; 1988 c 689 art 2 s 184,268; 1990 c 454 s 1; 1990 c 568 art 3 s
85; 2002 c 277 s 32

256B.74 SPECIAL PAYMENTS.
    Subdivision 1. Hospital reimbursement. Effective for services rendered on or after July 1,
1991, the commissioner shall reimburse outpatient hospital facility fees at 80 percent of calendar
year 1990 submitted charges, not to exceed the Medicare upper payment limit. Services excepted
from this payment methodology are emergency room facility fees, clinic facility fees, and those
services for which there is a federal maximum allowable payment.
    Subd. 2.[Repealed, 1999 c 245 art 4 s 120]
    Subd. 3.[Repealed, 2000 c 449 s 15]
    Subd. 4. Personal needs allowance. The commissioner shall provide cost of living increases
in the personal needs allowance under section 256B.35, subdivision 1.
    Subd. 5.[Repealed, 1999 c 245 art 4 s 120]
    Subd. 6. Health plans. Effective for services rendered after July 1, 1991, the commissioner
shall adjust the monthly medical assistance capitation rate cell established in contract by the
amount necessary to accommodate the equivalent value of the reimbursement increase established
under subdivisions 1, 2, and 5.
    Subd. 7. Administrative cost. The commissioner may expend up to $1,700,000 for the
administrative costs associated with sections 256.9657 and 256B.74.
    Subd. 8.[Repealed, 1992 c 513 art 7 s 135]
    Subd. 9.[Repealed, 1992 c 513 art 7 s 135]
    Subd. 10. Implementation; rulemaking. The commissioner shall implement sections
256.9657 and 256B.74 on July 1, 1991, without complying with the rulemaking requirements of
the Administrative Procedure Act. The commissioner may adopt rules to implement Laws 1991,
chapter 292, article 4. Rules adopted to implement Laws 1991, chapter 292, article 4, supersede
any provisions adopted under the exemption from rulemaking requirements in this section.
History: 1991 c 292 art 4 s 67; 1992 c 464 art 1 s 30; 1992 c 513 art 7 s 123,124; 1996 c
305 art 2 s 53

256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.
(a) For outpatient hospital facility fee payments for services rendered on or after October 1,
1992, the commissioner of human services shall pay the lower of (1) submitted charge, or (2) 32
percent above the rate in effect on June 30, 1992, except for those services for which there is a
federal maximum allowable payment. Effective for services rendered on or after January 1, 2000,
payment rates for nonsurgical outpatient hospital facility fees and emergency room facility fees
shall be increased by eight percent over the rates in effect on December 31, 1999, except for those
services for which there is a federal maximum allowable payment. Services for which there is a
federal maximum allowable payment shall be paid at the lower of (1) submitted charge, or (2) the
federal maximum allowable payment. Total aggregate payment for outpatient hospital facility
fee services shall not exceed the Medicare upper limit. If it is determined that a provision of this
section conflicts with existing or future requirements of the United States government with respect
to federal financial participation in medical assistance, the federal requirements prevail. The
commissioner may, in the aggregate, prospectively reduce payment rates to avoid reduced federal
financial participation resulting from rates that are in excess of the Medicare upper limitations.
(b) Notwithstanding paragraph (a), payment for outpatient, emergency, and ambulatory
surgery hospital facility fee services for critical access hospitals designated under section
144.1483, clause (10), shall be paid on a cost-based payment system that is based on the
cost-finding methods and allowable costs of the Medicare program.
(c) Effective for services provided on or after July 1, 2003, rates that are based on the
Medicare outpatient prospective payment system shall be replaced by a budget neutral prospective
payment system that is derived using medical assistance data. The commissioner shall provide a
proposal to the 2003 legislature to define and implement this provision.
(d) For fee-for-service services provided on or after July 1, 2002, the total payment, before
third-party liability and spenddown, made to hospitals for outpatient hospital facility services is
reduced by .5 percent from the current statutory rate.
(e) In addition to the reduction in paragraph (d), the total payment for fee-for-service services
provided on or after July 1, 2003, made to hospitals for outpatient hospital facility services before
third-party liability and spenddown, is reduced five percent from the current statutory rates.
Facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.
History: 1992 c 513 art 7 s 130; 1999 c 245 art 4 s 77; 1Sp2001 c 9 art 2 s 53; 2002 c 220
art 15 s 20; 2002 c 275 s 6; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 12 s 66; 2005 c 98 art 2 s 13

256B.76 PHYSICIAN AND DENTAL REIMBURSEMENT.
(a) Effective for services rendered on or after October 1, 1992, the commissioner shall make
payments for physician services as follows:
(1) payment for level one Centers for Medicare and Medicaid Services' common procedural
coding system codes titled "office and other outpatient services," "preventive medicine new
and established patient," "delivery, antepartum, and postpartum care," "critical care," cesarean
delivery and pharmacologic management provided to psychiatric patients, and level three codes
for enhanced services for prenatal high risk, shall be paid at the lower of (i) submitted charges, or
(ii) 25 percent above the rate in effect on June 30, 1992. If the rate on any procedure code within
these categories is different than the rate that would have been paid under the methodology in
section 256B.74, subdivision 2, then the larger rate shall be paid;
(2) payments for all other services shall be paid at the lower of (i) submitted charges, or (ii)
15.4 percent above the rate in effect on June 30, 1992;
(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases except that
payment rates for home health agency services shall be the rates in effect on September 30, 1992;
(4) effective for services rendered on or after January 1, 2000, payment rates for physician
and professional services shall be increased by three percent over the rates in effect on December
31, 1999, except for home health agency and family planning agency services; and
(5) the increases in clause (4) shall be implemented January 1, 2000, for managed care.
(b) Effective for services rendered on or after October 1, 1992, the commissioner shall
make payments for dental services as follows:
(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25 percent above
the rate in effect on June 30, 1992;
(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th percentile of
1989, less the percent in aggregate necessary to equal the above increases;
(3) effective for services rendered on or after January 1, 2000, payment rates for dental
services shall be increased by three percent over the rates in effect on December 31, 1999;
(4) the commissioner shall award grants to community clinics or other nonprofit community
organizations, political subdivisions, professional associations, or other organizations that
demonstrate the ability to provide dental services effectively to public program recipients. Grants
may be used to fund the costs related to coordinating access for recipients, developing and
implementing patient care criteria, upgrading or establishing new facilities, acquiring furnishings
or equipment, recruiting new providers, or other development costs that will improve access to
dental care in a region. In awarding grants, the commissioner shall give priority to applicants that
plan to serve areas of the state in which the number of dental providers is not currently sufficient
to meet the needs of recipients of public programs or uninsured individuals. The commissioner
shall consider the following in awarding the grants:
(i) potential to successfully increase access to an underserved population;
(ii) the ability to raise matching funds;
(iii) the long-term viability of the project to improve access beyond the period of initial
funding;
(iv) the efficiency in the use of the funding; and
(v) the experience of the proposers in providing services to the target population.
The commissioner shall monitor the grants and may terminate a grant if the grantee does not
increase dental access for public program recipients. The commissioner shall consider grants for
the following:
(i) implementation of new programs or continued expansion of current access programs that
have demonstrated success in providing dental services in underserved areas;
(ii) a pilot program for utilizing hygienists outside of a traditional dental office to provide
dental hygiene services; and
(iii) a program that organizes a network of volunteer dentists, establishes a system to refer
eligible individuals to volunteer dentists, and through that network provides donated dental care
services to public program recipients or uninsured individuals;
(5) beginning October 1, 1999, the payment for tooth sealants and fluoride treatments shall
be the lower of (i) submitted charge, or (ii) 80 percent of median 1997 charges;
(6) the increases listed in clauses (3) and (5) shall be implemented January 1, 2000, for
managed care; and
(7) effective for services provided on or after January 1, 2002, payment for diagnostic
examinations and dental x-rays provided to children under age 21 shall be the lower of (i) the
submitted charge, or (ii) 85 percent of median 1999 charges.
(c) Effective for dental services rendered on or after January 1, 2002, the commissioner may,
within the limits of available appropriation, increase reimbursements to dentists and dental clinics
deemed by the commissioner to be critical access dental providers. Reimbursement to a critical
access dental provider may be increased by not more than 50 percent above the reimbursement
rate that would otherwise be paid to the provider. Payments to health plan companies shall be
adjusted to reflect increased reimbursements to critical access dental providers as approved by the
commissioner. In determining which dentists and dental clinics shall be deemed critical access
dental providers, the commissioner shall review:
(1) the utilization rate in the service area in which the dentist or dental clinic operates for
dental services to patients covered by medical assistance, general assistance medical care, or
MinnesotaCare as their primary source of coverage;
(2) the level of services provided by the dentist or dental clinic to patients covered by
medical assistance, general assistance medical care, or MinnesotaCare as their primary source
of coverage; and
(3) whether the level of services provided by the dentist or dental clinic is critical to
maintaining adequate levels of patient access within the service area.
In the absence of a critical access dental provider in a service area, the commissioner may
designate a dentist or dental clinic as a critical access dental provider if the dentist or dental
clinic is willing to provide care to patients covered by medical assistance, general assistance
medical care, or MinnesotaCare at a level which significantly increases access to dental care in
the service area.
The commissioner shall annually establish a reimbursement schedule for critical access dental
providers and provider-specific limits on total reimbursement received under the reimbursement
schedule, and shall notify each critical access dental provider of the schedule and limit.
(d) An entity that operates both a Medicare certified comprehensive outpatient rehabilitation
facility and a facility which was certified prior to January 1, 1993, that is licensed under Minnesota
Rules, parts 9570.2000 to 9570.3600, and for whom at least 33 percent of the clients receiving
rehabilitation services in the most recent calendar year are medical assistance recipients, shall be
reimbursed by the commissioner for rehabilitation services at rates that are 38 percent greater than
the maximum reimbursement rate allowed under paragraph (a), clause (2), when those services
are (1) provided within the comprehensive outpatient rehabilitation facility and (2) provided to
residents of nursing facilities owned by the entity.
(e) Effective for services rendered on or after January 1, 2007, the commissioner shall
make payments for physician and professional services based on the Medicare relative value
units (RVU's). This change shall be budget neutral and the cost of implementing RVU's will be
incorporated in the established conversion factor.
History: 1992 c 513 art 7 s 131; 1Sp1993 c 1 art 5 s 123; 1999 c 245 art 4 s 78; 1Sp2001 c
9 art 2 s 54; 2002 c 277 s 32; 2002 c 375 art 2 s 44; 2002 c 379 art 1 s 113; 1Sp2003 c 14
art 2 s 39; art 12 s 67; 2006 c 282 art 16 s 9

256B.761 REIMBURSEMENT FOR MENTAL HEALTH SERVICES.
(a) Effective for services rendered on or after July 1, 2001, payment for medication
management provided to psychiatric patients, outpatient mental health services, day treatment
services, home-based mental health services, and family community support services shall be paid
at the lower of (1) submitted charges, or (2) 75.6 percent of the 50th percentile of 1999 charges.
(b) Effective July 1, 2001, the medical assistance rates for outpatient mental health
services provided by an entity that operates: (1) a Medicare-certified comprehensive outpatient
rehabilitation facility; and (2) a facility that was certified prior to January 1, 1993, with at least 33
percent of the clients receiving rehabilitation services in the most recent calendar year who are
medical assistance recipients, will be increased by 38 percent, when those services are provided
within the comprehensive outpatient rehabilitation facility and provided to residents of nursing
facilities owned by the entity.
History: 1Sp2001 c 9 art 9 s 43; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 2 s 40

256B.762 REIMBURSEMENT FOR HEALTH CARE SERVICES.
Effective for services provided on or after October 1, 2005, payment rates for the following
services shall be increased by five percent over the rates in effect on September 30, 2005, when
these services are provided as home health services under section 256B.0625, subdivision 6a:
(1) skilled nursing visit;
(2) physical therapy visit;
(3) occupational therapy visit;
(4) speech therapy visit; and
(5) home health aide visit.
History: 1Sp2005 c 4 art 7 s 47

256B.763 CRITICAL ACCESS MENTAL HEALTH RATE INCREASE.
(a) For services defined in paragraph (b) and rendered on or after July 1, 2007, payment rates
shall be increased by 23.7 percent over the rates in effect on January 1, 2006, for:
(1) psychiatrists and advanced practice registered nurses with a psychiatric specialty;
(2) community mental health centers under section 256B.0625, subdivision 5; and
(3) mental health clinics and centers certified under Minnesota Rules, parts 9520.0750
to 9520.0870, or hospital outpatient psychiatric departments that are designated as essential
community providers under section 62Q.19.
(b) This increase applies to group skills training when provided as a component of
children's therapeutic services and support, psychotherapy, medication management, evaluation
and management, diagnostic assessment, explanation of findings, psychological testing,
neuropsychological services, direction of behavioral aides, and inpatient consultation.
(c) This increase does not apply to rates that are governed by section 256B.0625, subdivision
30, or 256B.761, paragraph (b), other cost-based rates, rates that are negotiated with the county,
rates that are established by the federal government, or rates that increased between January 1,
2004, and January 1, 2005.
(d) The commissioner shall adjust rates paid to prepaid health plans under contract with the
commissioner to reflect the rate increases provided in paragraph (a). The prepaid health plan must
pass this rate increase to the providers identified in paragraph (a).
History: 2006 c 282 art 16 s 10

256B.765 PROVIDER RATE INCREASES.
(a) Effective July 1, 2001, within the limits of appropriations specifically for this purpose, the
commissioner shall provide an annual inflation adjustment for the providers listed in paragraph
(c). The index for the inflation adjustment must be based on the change in the Employment Cost
Index for Private Industry Workers - Total Compensation forecasted by Data Resources, Inc., as
forecasted in the fourth quarter of the calendar year preceding the fiscal year. The commissioner
shall increase reimbursement or allocation rates by the percentage of this adjustment, and county
boards shall adjust provider contracts as needed.
(b) The commissioner of finance shall include an annual inflationary adjustment in
reimbursement rates for the providers listed in paragraph (c) using the inflation factor specified in
paragraph (a) as a budget change request in each biennial detailed expenditure budget submitted
to the legislature under section 16A.11.
(c) The annual adjustment under paragraph (a) shall be provided for home and
community-based waiver services for persons with developmental disabilities under section
256B.501; home and community-based waiver services for the elderly under section 256B.0915;
waivered services under community alternatives for disabled individuals under section 256B.49;
community alternative care waivered services under section 256B.49; traumatic brain injury
waivered services under section 256B.49; nursing services and home health services under section
256B.0625, subdivision 6a; personal care services and nursing supervision of personal care
services under section 256B.0625, subdivision 19a; private duty nursing services under section
256B.0625, subdivision 7; day training and habilitation services for adults with developmental
disabilities under sections 252.40 to 252.46; physical therapy services under sections 256B.0625,
subdivision 8 , and 256D.03, subdivision 4; occupational therapy services under sections
256B.0625, subdivision 8a, and 256D.03, subdivision 4; speech-language therapy services under
section 256D.03, subdivision 4, and Minnesota Rules, part 9505.0390; respiratory therapy
services under section 256D.03, subdivision 4, and Minnesota Rules, part 9505.0295; alternative
care services under section 256B.0913; adult residential program grants under Minnesota Rules,
parts 9535.2000 to 9535.3000; adult and family community support grants under Minnesota
Rules, parts 9535.1700 to 9535.1760; semi-independent living services under section 252.275
including SILS funding under county social services grants formerly funded under chapter 256I;
and community support services for deaf and hard-of-hearing adults with mental illness who use
or wish to use sign language as their primary means of communication.
History: 1999 c 245 art 4 s 79; 2005 c 56 s 1

256B.77 COORDINATED SERVICE DELIVERY SYSTEM FOR DISABLED.
    Subdivision 1. Demonstration project for people with disabilities. (a) The commissioner
of human services, in cooperation with county authorities, shall develop and implement a
demonstration project to create a coordinated service delivery system in which the full medical
assistance benefit set for disabled persons eligible for medical assistance is provided and funded
on a capitated basis. The demonstration period shall be a minimum of three years.
(b) Each demonstration site shall, under county authority, establish a local group to
assist the commissioner in planning, designing, implementing, and evaluating the coordinated
service delivery system in their area. This local group shall include county agencies, providers,
consumers, family members, advocates, tribal governments, a local representative of labor, and
advocacy organizations, and may include health plan companies. Consumers, families, and
consumer representatives must be involved in the planning, implementation, and evaluation
processes for the demonstration project.
    Subd. 2. Definitions. For the purposes of this section, the following terms have the meanings
given:
(a) "Acute care" means hospital, physician, and other health and dental services covered
in the medical assistance benefit set that are not specified in the intergovernmental contract or
service delivery contract as continuing care services.
(b) "Additional services" means services developed and provided through the county
administrative entity or service delivery organization, which are in addition to the medical
assistance benefit set.
(c) "Advocate" means an individual who:
(1) has been authorized by the enrollee or the enrollee's legal representative to help the
enrollee understand information presented and to speak on the enrollee's behalf, based on
directions and decisions by the enrollee or the enrollee's legal representative; and
(2) represents only the enrollee and the enrollee's legal representative.
(d) "Advocacy organization" means an organization whose primary purpose is to advocate
for the needs of persons with disabilities.
(e) "Alternative services" means services developed and provided through the county
administrative entity or service delivery organization that are not part of the medical assistance
benefit set.
(f) "Commissioner" means the commissioner of human services.
(g) "Continuing care" means any services, including long-term support services, covered
in the medical assistance benefit set that are not specified in the intergovernmental contract or
service delivery contract as acute care.
(h) "County administrative entity" means the county administrative structure defined and
designated by the county authority to implement the demonstration project under the direction of
the county authority.
(i) "County authority" means the board of county commissioners or a single entity
representing multiple boards of county commissioners.
(j) "Demonstration period" means the period of time during which county administrative
entities or service delivery organizations will provide services to enrollees.
(k) "Demonstration site" means the geographic area in which eligible individuals may be
included in the demonstration project.
(l) "Department" means the Department of Human Services.
(m) "Emergency" means a condition that if not immediately treated could cause a person
serious physical or mental disability, continuation of severe pain, or death. Labor and delivery is
an emergency if it meets this definition.
(n) "Enrollee" means an eligible individual who is enrolled in the demonstration project.
(o) "Informed choice" means a voluntary decision made by the enrollee or the enrollee's
legal representative, after becoming familiar with the alternatives, and having been provided
sufficient relevant written and oral information at an appropriate comprehension level and in a
manner consistent with the enrollee's or the enrollee's legal representative's primary mode of
communication.
(p) "Informed consent" means the written agreement, or an agreement as documented in the
record, by a competent enrollee, or an enrollee's legal representative, who:
(1) has the capacity to make reasoned decisions based on relevant information;
(2) is making decisions voluntarily and without coercion; and
(3) has knowledge to make informed choice.
(q) "Intergovernmental contract" means the agreement between the commissioner and the
county authority.
(r) "Legal representative" means an individual who is legally authorized to provide informed
consent or make informed choices on a person's behalf. A legal representative may be one of
the following individuals:
(1) the parent of a minor who has not been emancipated;
(2) a court-appointed guardian or conservator of a person who is 18 years of age or older, in
areas where legally authorized to make decisions;
(3) a guardian ad litem or special guardian or conservator, in areas where legally authorized
to make decisions;
(4) legal counsel if so specified by the person; or
(5) any other legally authorized individual.
The county administrative entity is prohibited from acting as legal representative for any enrollee,
as long as the provisions of subdivision 15 are funded.
(s) "Life domain areas" include, but are not limited to: home, family, education, employment,
social environment, psychological and emotional health, self-care, independence, physical health,
need for legal representation and legal needs, financial needs, safety, and cultural identification
and spiritual needs.
(t) "Medical assistance benefit set" means the services covered under this chapter and
accompanying rules which are provided according to the definition of medical necessity in
Minnesota Rules, part 9505.0175, subpart 25.
(u) "Outcome" means the targeted behavior, action, or status of the enrollee that can be
observed and or measured.
(v) "Personal support plan" means a document agreed to and signed by the enrollee and the
enrollee's legal representative, if any, which describes:
(1) the assessed needs and strengths of the enrollee;
(2) the outcomes chosen by the enrollee or their legal representative;
(3) the amount, type, setting, start date, duration, and frequency of services and supports
authorized by the county administrative entity or service delivery organization to achieve the
chosen outcomes;
(4) a description of needed services and supports that are not the responsibility of the county
administrative entity or service delivery organization and plans for addressing those needs;
(5) plans for referring to and coordinating between all agencies or individuals providing
needed services and supports;
(6) the use of regulated treatment; and
(7) the transition of a child to the adult service system.
(w) "Regulated treatment" means any behaviorally altering medication of any classification
or any aversive or deprivation procedure as defined in rules or statutes applicable to eligible
individuals.
(x) "Service delivery contract" means the agreement between the commissioner or the county
authority and the service delivery organization in those areas in which the county authority has
provided written approval.
(y) "Service delivery organization" means an entity that is licensed as a health maintenance
organization under chapter 62D or a community integrated service network under chapter 62N and
is under contract with the commissioner or a county authority to participate in the demonstration
project. If authorized in contract by the commissioner or the county authority, a service delivery
organization participating in the demonstration project shall have the duties, responsibilities, and
obligations defined under subdivisions 8, 9, 18, and 19.
(z) "Urgent situation" means circumstances in which care is needed as soon as possible,
usually with 24 hours, to protect the health of an enrollee.
    Subd. 3. Assurances to commissioner of health. A county authority that elects to participate
in a demonstration project for people with disabilities under this section is not required to obtain a
certificate of authority under chapter 62D or 62N. A county authority that elects to participate in a
demonstration project for people with disabilities under this section must assure the commissioner
of health that the requirements of chapters 62D and 62N, and section 256B.692, subdivision
2 , are met. All enforcement and rulemaking powers available under chapters 62D, 62J, 62M,
62N, and 62Q are granted to the commissioner of health with respect to the county authorities
that contract with the commissioner to purchase services in a demonstration project for people
with disabilities under this section.
    Subd. 4. Federal waivers. The commissioner, in consultation with county authorities, shall
request any authority from the United States Department of Health and Human Services that is
necessary to implement the demonstration project under the medical assistance program; and
authority to combine Medicaid and Medicare funding for service delivery to eligible individuals
who are also eligible for Medicare, only if this authority does not preclude county authority
participation under the waiver. Implementation of these programs may begin without authority
to include Medicare funding. The commissioner may authorize county authorities to begin
enrollment of eligible individuals upon federal approval but no earlier than July 1, 1998.
    Subd. 5. Demonstration sites. The commissioner shall designate up to two demonstration
sites with the approval of the county authority. Demonstration sites may include one county or a
multicounty group. At least one of the sites shall implement a model specifically addressing the
needs of eligible individuals with physical disabilities. By February 1, 1998, the commissioner
and the county authorities shall submit to the chairs of the senate Committee on Health and
Family Security and the house Committee on Health and Human Services a phased enrollment
plan to ensure an orderly transition which protects the health and safety of enrollees and ensures
continuity of services.
    Subd. 6. Responsibilities of county authority. (a) The commissioner may execute an
intergovernmental contract with any county authority that demonstrates the ability to arrange
for and coordinate services for enrollees covered under this section according to the terms and
conditions specified by the commissioner. With the written consent of the county authority, the
commissioner may issue a request for proposals for service delivery organizations to provide
portions of the medical assistance benefit set not contracted for by the county authority. County
authorities that do not contract for the full medical assistance benefit set must ensure coordination
with the entities responsible for the remainder of the covered services.
(b) No less than 90 days before the intergovernmental contract is executed, the county
authority shall submit to the commissioner an initial proposal on how it will address the areas
listed in this subdivision and subdivisions 1, 7, 8, 9, 12, 18, and 19. The county authority shall
submit to the commissioner annual reports describing its progress in addressing these areas.
(c) Each county authority shall develop policies to address conflicts of interest, including
public guardianship and representative payee issues.
(d) Each county authority shall annually evaluate the effectiveness of the service coordination
provided according to subdivision 12 and shall take remedial or corrective action if the service
coordination does not fulfill the requirements of that subdivision.
    Subd. 7. Eligibility and enrollment. The commissioner, in consultation with the county
authority, shall develop a process for enrolling eligible individuals in the demonstration project.
A county or counties may limit enrollment in the demonstration project to one or more of
the disability populations described in subdivision 7a, paragraph (b). Enrollment into county
administrative entities and service delivery organizations shall be conducted according to the
terms of the federal waiver. Enrollment of eligible individuals under the demonstration project
may be phased in with approval of the commissioner. The commissioner shall ensure that
eligibility for medical assistance and enrollment for the person are determined by individuals
outside of the county administrative entity.
    Subd. 7a. Eligible individuals. (a) Persons are eligible for the demonstration project as
provided in this subdivision.
(b) "Eligible individuals" means those persons living in the demonstration site who are
eligible for medical assistance and are disabled based on a disability determination under section
256B.055, subdivisions 7 and 12, or who are eligible for medical assistance and have been
diagnosed as having:
(1) serious and persistent mental illness as defined in section 245.462, subdivision 20;
(2) severe emotional disturbance as defined in section 245.4871, subdivision 6; or
(3) developmental disability, or being a developmentally disabled person as defined in
section 252A.02, or a related condition as defined in section 252.27, subdivision 1a.
Other individuals may be included at the option of the county authority based on agreement
with the commissioner.
(c) Eligible individuals include individuals in excluded time status, as defined in chapter
256G. Enrollees in excluded time at the time of enrollment shall remain in excluded time status as
long as they live in the demonstration site and shall be eligible for 90 days after placement outside
the demonstration site if they move to excluded time status in a county within Minnesota other
than their county of financial responsibility.
(d) A person who is a sexual psychopathic personality as defined in section 253B.02,
subdivision 18a , or a sexually dangerous person as defined in section 253B.02, subdivision 18b, is
excluded from enrollment in the demonstration project.
    Subd. 7b. American Indian recipients. (a) Beginning on or after July 1, 1999, for American
Indian recipients of medical assistance who are required to enroll with a county administrative
entity or service delivery organization under subdivision 7, medical assistance shall cover health
care services provided at American Indian health services facilities and facilities operated by a
tribe or tribal organization under funding authorized by United States Code, title 25, sections 450f
to 450n, or title III of the Indian Self-Determination and Education Assistance Act, Public Law
93-638, if those services would otherwise be covered under section 256B.0625. Payments for
services provided under this subdivision shall be made on a fee-for-service basis, and may, at the
option of the tribe or tribal organization, be made according to rates authorized under sections
256.969, subdivision 16, and 256B.0625, subdivision 34. Implementation of this purchasing
model is contingent on federal approval.
(b) The commissioner of human services, in consultation with tribal governments, shall
develop a plan for tribes to assist in the enrollment process for American Indian recipients
enrolled in the demonstration project for people with disabilities under this section. This plan also
shall address how tribes will be included in ensuring the coordination of care for American Indian
recipients between Indian health service or tribal providers and other providers.
(c) For purposes of this subdivision, "American Indian" has the meaning given to persons to
whom services will be provided for in Code of Federal Regulations, title 42, section 36.12.
    Subd. 8. Responsibilities of the county administrative entity. (a) The county administrative
entity shall meet the requirements of this subdivision, unless the county authority or the
commissioner, with written approval of the county authority, enters into a service delivery contract
with a service delivery organization for any or all of the requirements contained in this subdivision.
(b) The county administrative entity shall enroll eligible individuals regardless of health or
disability status.
(c) The county administrative entity shall provide all enrollees timely access to the medical
assistance benefit set. Alternative services and additional services are available to enrollees at
the option of the county administrative entity and may be provided if specified in the personal
support plan. County authorities are not required to seek prior authorization from the department
as required by the laws and rules governing medical assistance.
(d) The county administrative entity shall cover necessary services as a result of an
emergency without prior authorization, even if the services were rendered outside of the provider
network.
(e) The county administrative entity shall authorize necessary and appropriate services when
needed and requested by the enrollee or the enrollee's legal representative in response to an urgent
situation. Enrollees shall have 24-hour access to urgent care services coordinated by experienced
disability providers who have information about enrollees' needs and conditions.
(f) The county administrative entity shall accept the capitation payment from the
commissioner in return for the provision of services for enrollees.
(g) The county administrative entity shall maintain internal grievance and complaint
procedures, including an expedited informal complaint process in which the county administrative
entity must respond to verbal complaints within ten calendar days, and a formal grievance
process, in which the county administrative entity must respond to written complaints within 30
calendar days.
(h) The county administrative entity shall provide a certificate of coverage, upon enrollment,
to each enrollee and the enrollee's legal representative, if any, which describes the benefits
covered by the county administrative entity, any limitations on those benefits, and information
about providers and the service delivery network. This information must also be made available
to prospective enrollees. This certificate must be approved by the commissioner.
(i) The county administrative entity shall present evidence of an expedited process to
approve exceptions to benefits, provider network restrictions, and other plan limitations under
appropriate circumstances.
(j) The county administrative entity shall provide enrollees or their legal representatives with
written notice of their appeal rights under subdivision 16, and of ombudsman and advocacy
programs under subdivisions 13 and 14, at the following times: upon enrollment, upon submission
of a written complaint, when a service is reduced, denied, or terminated, or when renewal of
authorization for ongoing service is refused.
(k) The county administrative entity shall determine immediate needs, including services,
support, and assessments, within 30 calendar days after enrollment, or within a shorter time frame
if specified in the intergovernmental contract.
(l) The county administrative entity shall assess the need for services of new enrollees
within 60 calendar days after enrollment, or within a shorter time frame if specified in the
intergovernmental contract, and periodically reassess the need for services for all enrollees.
(m) The county administrative entity shall ensure the development of a personal support plan
for each person within 60 calendar days of enrollment, or within a shorter time frame if specified
in the intergovernmental contract, unless otherwise agreed to by the enrollee and the enrollee's
legal representative, if any. Until a personal support plan is developed and agreed to by the
enrollee, enrollees must have access to the same amount, type, setting, duration, and frequency of
covered services that they had at the time of enrollment unless other covered services are needed.
For an enrollee who is not receiving covered services at the time of enrollment and for enrollees
whose personal support plan is being revised, access to the medical assistance benefit set must
be assured until a personal support plan is developed or revised. If an enrollee chooses not to
develop a personal support plan, the enrollee will be subject to the network and prior authorization
requirements of the county administrative entity or service delivery organization 60 days after
enrollment. An enrollee can choose to have a personal support plan developed at any time. The
personal support plan must be based on choices, preferences, and assessed needs and strengths of
the enrollee. The service coordinator shall develop the personal support plan, in consultation with
the enrollee or the enrollee's legal representative and other individuals requested by the enrollee.
The personal support plan must be updated as needed or as requested by the enrollee. Enrollees
may choose not to have a personal support plan.
(n) The county administrative entity shall ensure timely authorization, arrangement, and
continuity of needed and covered supports and services.
(o) The county administrative entity shall offer service coordination that fulfills the
responsibilities under subdivision 12 and is appropriate to the enrollee's needs, choices, and
preferences, including a choice of service coordinator.
(p) The county administrative entity shall contract with schools and other agencies as
appropriate to provide otherwise covered medically necessary medical assistance services as
described in an enrollee's individual family support plan, as described in sections 125A.26 to
125A.48, or individual education plan, as described in chapter 125A.
(q) The county administrative entity shall develop and implement strategies, based on
consultation with affected groups, to respect diversity and ensure culturally competent service
delivery in a manner that promotes the physical, social, psychological, and spiritual well-being of
enrollees and preserves the dignity of individuals, families, and their communities.
(r) When an enrollee changes county authorities, county administrative entities shall ensure
coordination with the entity that is assuming responsibility for administering the medical
assistance benefit set to ensure continuity of supports and services for the enrollee.
(s) The county administrative entity shall comply with additional requirements as specified
in the intergovernmental contract.
(t) To the extent that alternatives are approved under subdivision 17, county administrative
entities must provide for the health and safety of enrollees and protect the rights to privacy
and to provide informed consent.
(u) Prepaid health plans serving counties with a nonprofit community clinic or community
health services agency must contract with the clinic or agency to provide services to clients who
choose to receive services from the clinic or agency, if the clinic or agency agrees to payment rates
that are competitive with rates paid to other health plan providers for the same or similar services.
For purposes of this paragraph, "nonprofit community clinic" includes, but is not limited to, a
community mental health center as defined in sections 245.62 and 256B.0625, subdivision 5.
    Subd. 9. Consumer choice and safeguards. (a) The commissioner may require all eligible
individuals to obtain services covered under this chapter through county authorities. Enrollees
shall be given choices among a range of available providers with expertise in serving persons of
their age and with their category of disability. If the county authority is also a provider of services
covered under the demonstration project, other than service coordination, the enrollee shall be
given the choice of at least one other provider of that service. The commissioner shall ensure that
all enrollees have continued access to medically necessary covered services.
(b) The commissioner must ensure that a set of enrollee safeguards in the categories of
access, choice, comprehensive benefits, access to specialist care, disclosure of financial incentives
to providers, prohibition of exclusive provider contracting and gag clauses, legal representation,
guardianship, representative payee, quality, rights and appeals, privacy, data collection, and
confidentiality are in place prior to enrollment of eligible individuals.
(c) If multiple service delivery organizations are offered for acute or continuing care within a
demonstration site, enrollees shall be given a choice of these organizations. A choice is required if
the county authority operates its own health maintenance organization, community integrated
service network, or similar plan. Enrollees shall be given opportunities to change enrollment in
these organizations within 12 months following initial enrollment into the demonstration project
and shall also be offered an annual open enrollment period, during which they are permitted
to change their service delivery organization.
(d) Enrollees shall have the option to change their primary care provider once per month.
(e) The commissioner may waive the choice of provider requirements in paragraph (a) or
the choice of service delivery organization requirements in paragraph (c) if the county authority
can demonstrate that, despite reasonable efforts, no other provider of the service or service
delivery organization can be made available within the cost and quality requirements of the
demonstration project.
    Subd. 10. Capitation payment. (a) The commissioner shall pay a capitation payment to the
county authority and, when applicable under subdivision 6, paragraph (a), to the service delivery
organization for each medical assistance eligible enrollee. The commissioner shall develop
capitation payment rates for the initial contract period for each demonstration site in consultation
with an independent actuary, to ensure that the cost of services under the demonstration project
does not exceed the estimated cost for medical assistance services for the covered population
under the fee-for-service system for the demonstration period. For each year of the demonstration
project, the capitation payment rate shall be based on 96 percent of the projected per person costs
that would otherwise have been paid under medical assistance fee-for-service during each of those
years. Rates shall be adjusted within the limits of the available risk adjustment technology, as
mandated by section 62Q.03. In addition, the commissioner shall implement appropriate risk
and savings sharing provisions with county administrative entities and, when applicable under
subdivision 6, paragraph (a), service delivery organizations within the projected budget limits.
Capitation rates shall be adjusted, at least annually, to include any rate increases and payments
for expanded or newly covered services for eligible individuals. The initial demonstration
project rate shall include an amount in addition to the fee-for-service payments to adjust for
underutilization of dental services. Any savings beyond those allowed for the county authority,
county administrative entity, or service delivery organization shall be first used to meet the unmet
needs of eligible individuals. Payments to providers participating in the project are exempt from
the requirements of sections 256.966 and 256B.03, subdivision 2.
(b) The commissioner shall monitor and evaluate annually the effect of the discount on
consumers, the county authority, and providers of disability services. Findings shall be reported
and recommendations made, as appropriate, to ensure that the discount effect does not adversely
affect the ability of the county administrative entity or providers of services to provide appropriate
services to eligible individuals, and does not result in cost shifting of eligible individuals to
the county authority.
(c) For risk-sharing to occur under this subdivision, the aggregate fee-for-service cost of
covered services provided by the county administrative entity under this section must exceed the
aggregate sum of capitation payments made to the county administrative entity under this section.
The county authority is required to maintain its current level of nonmedical assistance spending
on enrollees. If the county authority spends less in nonmedical assistance dollars on enrollees than
it spent the year prior to the contract year, the amount of underspending shall be deducted from
the aggregate fee-for-service cost of covered services. The commissioner shall then compare the
fee-for-service costs and capitation payments related to the services provided for the term of this
contract. The commissioner shall base its calculation of the fee-for-service costs on application of
the medical assistance fee schedule to services identified on the county administrative entity's
encounter claims submitted to the commissioner. The aggregate fee-for-service cost shall not
include any third-party recoveries or cost-avoided amounts.
If the commissioner finds that the aggregate fee-for-service cost is greater than the sum of
the capitation payments, the commissioner shall settle according to the following schedule:
(1) For the first contract year for each project, the commissioner shall pay the county
administrative entity 50 percent of the difference between the sum of the capitation payments
and 100 percent of projected fee-for-service costs. For aggregate fee-for-service costs in excess
of 100 percent of projected fee-for-service costs, the commissioner shall pay 25 percent of the
difference between the aggregate fee-for-service costs and the projected fee-for-service costs, up
to 104 percent of the projected fee-for-service costs. The county administrative entity shall be
responsible for all costs in excess of 104 percent of projected fee-for-service costs.
(2) For the second contract year for each project, the commissioner shall pay the county
administrative entity 37.5 percent of the difference between the sum of the capitation payments
and 100 percent of projected fee-for-service costs. The county administrative entity shall be
responsible for all costs in excess of 100 percent of projected fee-for-service costs.
(3) For the third contract year for each project, the commissioner shall pay the county
administrative entity 25 percent of the difference between the sum of the capitation payments
and 100 percent of projected fee-for-service costs. The county administrative entity shall be
responsible for all costs in excess of 100 percent of projected fee-for-service costs.
(4) For the fourth and subsequent contract years for each project, the county administrative
entity shall be responsible for all costs in excess of the capitation payments.
(d) In addition to other payments under this subdivision, the commissioner may increase
payments by up to 0.25 percent of the projected per person costs that would otherwise have
been paid under medical assistance fee-for-service. The commissioner may make the increased
payments to:
(1) offset rate increases for regional treatment services under subdivision 22 which are higher
than was expected by the commissioner when the capitation was set at 96 percent; and
(2) implement incentives to encourage appropriate, high quality, efficient services.
    Subd. 11. Integration of funding sources. The county authority may integrate other
local, state, and federal funding sources with medical assistance funding. The commissioner's
approval is required for integration of state and federal funds but not for local funds. During the
demonstration project period, county authorities must maintain the level of local funds expended
during the previous calendar year for populations covered in the demonstration project. Excluding
the state share of Medicaid payments, state appropriations for state-operated services shall not
be integrated unless specifically approved by the legislature. The commissioner may approve
integration of other state and federal funding if the intergovernmental contract includes assurances
that the people who would have been served by these funds will receive comparable or better
services. The commissioner may withdraw approval for integration of state and federal funds
if the county authority does not comply with these assurances. If the county authority chooses
to integrate funding, it must comply with the reporting requirements of the commissioner, as
specified in the intergovernmental contract, to account for federal and state Medicaid expenditures
and expenditures of local funds. The commissioner, upon the request and concurrence of a county
authority, may transfer state grant funds that would otherwise be made available to the county
authority to provide continuing care for enrollees to the medical assistance account and, within
the limits of federal authority and available federal funding, the commissioner shall adjust the
capitation based on the amount of this transfer.
    Subd. 12. Service coordination. (a) For purposes of this section, "service coordinator"
means an individual selected by the enrollee or the enrollee's legal representative and authorized
by the county administrative entity or service delivery organization to work in partnership with the
enrollee to develop, coordinate, and in some instances, provide supports and services identified in
the personal support plan. Service coordinators may only provide services and supports if the
enrollee is informed of potential conflicts of interest, is given alternatives, and gives informed
consent. Eligible service coordinators are individuals age 18 or older who meet the qualifications
as described in paragraph (b). Enrollees, their legal representatives, or their advocates are eligible
to be service coordinators if they have the capabilities to perform the activities and functions
outlined in paragraph (b). Providers licensed under chapter 245A to provide residential services,
or providers who are providing residential services covered under the group residential housing
program may not act as service coordinator for enrollees for whom they provide residential
services. This does not apply to providers of short-term detoxification services. Each county
administrative entity or service delivery organization may develop further criteria for eligible
vendors of service coordination during the demonstration period and shall determine whom it
contracts with or employs to provide service coordination. County administrative entities and
service delivery organizations may pay enrollees or their advocates or legal representatives
for service coordination activities.
(b) The service coordinator shall act as a facilitator, working in partnership with the enrollee
to ensure that their needs are identified and addressed. The level of involvement of the service
coordinator shall depend on the needs and desires of the enrollee. The service coordinator shall
have the knowledge, skills, and abilities to, and is responsible for:
(1) arranging for an initial assessment, and periodic reassessment as necessary, of supports
and services based on the enrollee's strengths, needs, choices, and preferences in life domain areas;
(2) developing and updating the personal support plan based on relevant ongoing assessment;
(3) arranging for and coordinating the provisions of supports and services, including
knowledgeable and skilled specialty services and prevention and early intervention services,
within the limitations negotiated with the county administrative entity or service delivery
organization;
(4) assisting the enrollee and the enrollee's legal representative, if any, to maximize informed
choice of and control over services and supports and to exercise the enrollee's rights and advocate
on behalf of the enrollee;
(5) monitoring the progress toward achieving the enrollee's outcomes in order to evaluate
and adjust the timeliness and adequacy of the implementation of the personal support plan;
(6) facilitating meetings and effectively collaborating with a variety of agencies and persons,
including attending individual family service plan and individual education plan meetings when
requested by the enrollee or the enrollee's legal representative;
(7) soliciting and analyzing relevant information;
(8) communicating effectively with the enrollee and with other individuals participating
in the enrollee's plan;
(9) educating and communicating effectively with the enrollee about good health care
practices and risk to the enrollee's health with certain behaviors;
(10) having knowledge of basic enrollee protection requirements, including data privacy;
(11) informing, educating, and assisting the enrollee in identifying available service
providers and accessing needed resources and services beyond the limitations of the medical
assistance benefit set covered services; and
(12) providing other services as identified in the personal support plan.
(c) For the demonstration project, the qualifications and standards for service coordination in
this section shall replace comparable existing provisions of existing statutes and rules governing
case management for eligible individuals.
(d) The provisions of this subdivision apply only to the demonstration sites designated by
the commissioner under subdivision 5. All other demonstration sites must comply with laws and
rules governing case management services for eligible individuals in effect when the site begins
the demonstration project.
    Subd. 13. Ombudsman. Enrollees shall have access to ombudsman services established in
section 256B.031, subdivision 6, and advocacy services provided by the ombudsman for mental
health and developmental disabilities established in sections 245.91 to 245.97. The managed
care ombudsman and the ombudsman for mental health and developmental disabilities shall
coordinate services provided to avoid duplication of services. For purposes of the demonstration
project, the powers and responsibilities of the Office of the Ombudsman for Mental Health and
Developmental Disabilities, as provided in sections 245.91 to 245.97 are expanded to include
all eligible individuals, health plan companies, agencies, and providers participating in the
demonstration project.
    Subd. 14. External advocacy. In addition to ombudsman services, enrollees shall have
access to advocacy services on a local or regional basis. The purpose of external advocacy
includes providing individual advocacy services for enrollees who have complaints or grievances
with the county administrative entity, service delivery organization, or a service provider;
assisting enrollees to understand the service delivery system and select providers and, if
applicable, a service delivery organization; and understand and exercise their rights as an
enrollee. External advocacy contractors must demonstrate that they have the expertise to advocate
on behalf of eligible individuals and are independent of the commissioner, county authority,
county administrative entity, service delivery organization, or any service provider within the
demonstration project.
These advocacy services shall be provided through the ombudsman for mental health and
developmental disabilities directly, or under contract with private, nonprofit organizations, with
funding provided through the demonstration project. The funding shall be provided annually to
the ombudsman's office. Funding for external advocacy shall be provided through general fund
appropriations. This funding is in addition to the capitation payment available under subdivision
10.
    Subd. 15. Public guardianship alternatives. Each county authority with enrollees under
public guardianship shall develop a plan to discharge all those public guardianships and establish
appropriate private alternatives during the demonstration period.
The commissioner shall provide county authorities with funding for public guardianship
alternatives during the first year of the demonstration project based on a proposal to establish
private alternatives for a specific number of enrollees under public guardianship. Funding in
subsequent years shall be based on the county authority's performance in achieving discharges of
public guardianship and establishing appropriate alternatives. The commissioner may establish
fiscal incentives to encourage county activity in this area. For each year of the demonstration
period, an appropriation is available to the commissioner based on 0.2 percent of the projected per
person costs that would otherwise have been paid under medical assistance fee-for-service for that
year. This funding is in addition to the capitation payment available under subdivision 10.
    Subd. 16. Appeals. Enrollees have the appeal rights specified in section 256.045. Enrollees
may request the conciliation process as outlined under section 256.045, subdivision 4a. If
an enrollee appeals in writing to the state agency on or before the latter of the effective day
of the proposed action or the tenth day after they have received the decision of the county
administrative entity or service delivery organization to reduce, suspend, terminate, or deny
continued authorization for ongoing services which the enrollee had been receiving, the county
administrative entity or service delivery organization must continue to authorize services at a level
equal to the level it previously authorized until the state agency renders its decision.
    Subd. 17. Approval of alternatives. The commissioner may approve alternatives to
administrative rules if the commissioner determines that appropriate alternative measures are
in place to protect the health, safety, and rights of enrollees and to assure that services are
of sufficient quality to produce the outcomes described in the personal support plans. Prior
approved waivers, if needed by the demonstration project, shall be extended. The commissioner
shall not waive the rights or procedural protections under sections 245.825; 245.91 to 245.97;
252.41, subdivision 9; 256B.092, subdivision 10; 626.556; and 626.557; or procedures for the
monitoring of psychotropic medications. Prohibited practices as defined in statutes and rules
governing service delivery to eligible individuals are applicable to services delivered under
this demonstration project.
    Subd. 18. Reporting. Each county authority and service delivery organization, and
their contracted providers, shall submit information as required by the commissioner in the
intergovernmental contract or service delivery contract, including information about complaints,
appeals, outcomes, costs, including spending on services, service utilization, identified unmet
needs, services provided, rates of out-of-home placement of children, institutionalization,
commitments, number of public guardianships discharged and alternatives to public guardianship
established, the use of emergency services, and enrollee satisfaction. This information must
be made available to enrollees and the public. A county authority under an intergovernmental
contract and a service delivery organization under a service delivery contract to provide services
must provide the most current listing of the providers who are participating in the plan. This listing
must be provided to enrollees and be made available to the public. The commissioner, county
authorities, and service delivery organizations shall also made all contracts and subcontracts
related to the demonstration project available to the public.
    Subd. 19. Quality management and evaluation. County authorities and service delivery
organizations participating in this demonstration project shall provide information to the
department as specified in the intergovernmental contract or service delivery contract for
the purpose of project evaluation. This information may include both process and outcome
evaluation measures across areas that shall include enrollee satisfaction, service delivery, service
coordination, individual outcomes, and costs. An independent evaluation of each demonstration
site shall be conducted prior to expansion of the demonstration project to other sites.
    Subd. 20. Limitation on reimbursement. The county administrative entity or service
delivery organization may limit any reimbursement to providers not employed by or under
contract with the county administrative entity or service delivery organization to the medical
assistance rates paid by the commissioner of human services to providers for services to recipients
not participating in the demonstration project.
    Subd. 21. County social services obligations. For services that are outside of the medical
assistance benefit set for enrollees in excluded time status, the county of financial responsibility
must negotiate the provisions and payment of services with the county of service prior to the
provision of services.
    Subd. 22. Minnesota Commitment Act services. The county administrative entity or
service delivery organization is financially responsible for all services for enrollees covered by
the medical assistance benefit set and ordered by the court under the Minnesota Commitment
Act, chapter 253B. The county authority shall seek input from the county administrative entity or
service delivery organization in giving the court information about services the enrollee needs and
least restrictive alternatives. The court order for services is deemed to comply with the definition
of medical necessity in Minnesota Rules, part 9505.0175. The financial responsibility of the
county administrative entity or service delivery organization for regional treatment center services
to an enrollee while committed to the regional treatment center is limited to 45 days following
commitment. Voluntary hospitalization for enrollees at regional treatment centers must be
covered by the county administrative entity or service delivery organization if deemed medically
necessary by the county administrative entity or service delivery organization. The regional
treatment center shall not accept a voluntary admission of an enrollee without the authorization
of the county administrative entity or service delivery organization. An enrollee will maintain
enrollee status while receiving treatment under the Minnesota Commitment Act or voluntary
services in a regional treatment center. For enrollees committed to the regional treatment center
longer than 45 days, the commissioner may adjust the aggregate capitation payments, as specified
in the intergovernmental contract or service delivery contract.
    Subd. 23. Stakeholder committee. The commissioner shall appoint a stakeholder
committee to review and provide recommendations on specifications for demonstration projects;
intergovernmental contracts; service delivery contracts; alternatives to administrative rules
proposed under subdivision 17; specific recommendations for legislation required for the
implementation of this project, including changes to statutes; waivers of choice granted under
subdivision 9, paragraph (e); and other demonstration project policies and procedures as requested
by the commissioner. The stakeholder committee shall include representatives from the following
stakeholders: consumers and their family members, advocates, advocacy organizations, service
providers, state government, counties, and health plan companies. This stakeholder committee
shall be in operation for the demonstration period. The county authorities shall continue to meet
with state government to develop the intergovernmental partnership.
    Subd. 24.[Repealed, 2002 c 277 s 34]
    Subd. 25. Severability. If any subdivision of this section is not approved by the United States
Department of Health and Human Services, the commissioner, with the approval of the county
authority, retains the authority to implement the remaining subdivisions.
    Subd. 26. Southern Minnesota health initiative pilot project. When the commissioner
contracts under subdivisions 1 and 6, paragraph (a), with the joint powers board for the southern
Minnesota health initiative (SMHI) to participate in the demonstration project for persons with
disabilities under subdivision 5, the commissioner shall also require health plans serving counties
participating in the southern Minnesota health initiative under this section to contract with the
southern Minnesota Health Initiative Joint Powers Board to provide covered mental health and
chemical dependency services for the nonelderly/nondisabled persons who reside in one of the
counties and who are required or elect to participate in the prepaid medical assistance and general
assistance medical care programs. Enrollees may obtain covered mental health and chemical
dependency services through the SMHI or through other health plan contractors. Participation
of the nonelderly/nondisabled with the SMHI is voluntary. The commissioner shall identify a
monthly per capita payment amount that health plans are required to pay to the SMHI for all
nonelderly/nondisabled recipients who choose the SMHI for their mental health and chemical
dependency services.
    Subd. 27. Service coordination transition. Demonstration sites designated under
subdivision 5, with the permission of an eligible individual, may implement the provisions
of subdivision 12 beginning 60 calendar days prior to an individual's enrollment. This
implementation may occur prior to the enrollment of eligible individuals, but is restricted to
eligible individuals.
History: 1997 c 203 art 8 s 1; 1998 c 397 art 11 s 3; 1998 c 407 art 4 s 51-54; 1999 c 245
art 4 s 80-85; 2000 c 464 art 2 s 3; 2000 c 474 s 17; 2005 c 56 s 1

256B.78 DEMONSTRATION PROJECT FOR FAMILY PLANNING SERVICES.
(a) The commissioner of human services shall establish a medical assistance demonstration
project to determine whether improved access to coverage of prepregnancy family planning
services reduces medical assistance and MFIP costs.
(b) This section is effective upon federal approval of the demonstration project.
History: 1Sp2001 c 9 art 2 s 55; 2002 c 379 art 1 s 113

256B.81 MENTAL HEALTH PROVIDER APPEAL PROCESS.
If a county contract or certification is required to enroll as an authorized provider of mental
health services under medical assistance, and if a county refuses to grant the necessary contract or
certification, the provider may appeal the county decision to the commissioner. A recipient may
initiate an appeal on behalf of a provider who has been denied certification. The commissioner
shall determine whether the provider meets applicable standards under state laws and rules based
on an independent review of the facts, including comments from the county review. If the
commissioner finds that the provider meets the applicable standards, the commissioner shall
enroll the provider as an authorized provider. The commissioner shall develop procedures for
providers and recipients to appeal a county decision to refuse to enroll a provider. After the
commissioner makes a decision regarding an appeal, the county, provider, or recipient may
request that the commissioner reconsider the commissioner's initial decision. The commissioner's
reconsideration decision is final and not subject to further appeal.
History: 1Sp2001 c 9 art 9 s 44; 2002 c 379 art 1 s 113

256B.82 PREPAID PLANS AND MENTAL HEALTH REHABILITATIVE SERVICES.
Medical assistance and MinnesotaCare prepaid health plans may include coverage for
adult mental health rehabilitative services under section 256B.0623, intensive rehabilitative
services under section 256B.0622, and adult mental health crisis response services under section
256B.0624, beginning January 1, 2005.
By January 15, 2004, the commissioner shall report to the legislature how these services
should be included in prepaid plans. The commissioner shall consult with mental health
advocates, health plans, and counties in developing this report. The report recommendations
must include a plan to ensure coordination of these services between health plans and counties,
assure recipient access to essential community providers, and monitor the health plans' delivery
of services through utilization review and quality standards.
History: 1Sp2001 c 9 art 9 s 45; 2002 c 379 art 1 s 113; 1Sp2003 c 14 art 3 s 51

256B.83 [Repealed, 2006 c 282 art 16 s 17]

256B.84 AMERICAN INDIAN CONTRACTING PROVISIONS.
Notwithstanding other state laws or rules, Indian health services and agencies operated
by Indian tribes are not required to have a county contract or county certification to enroll as
providers of adult rehabilitative mental health services under section 256B.0623; and adult mental
health crisis response services under section 256B.0624. In order to enroll as providers of these
services, Indian health services and agencies operated by Indian tribes must meet the vendor of
medical care requirements in section 256B.02, subdivision 7.
History: 2002 c 275 s 7; 1Sp2003 c 14 art 4 s 23