144.0724 RESIDENT REIMBURSEMENT CLASSIFICATION.
Subdivision 1. Resident reimbursement classifications.
The commissioner of health shall
establish resident reimbursement classifications based upon the assessments of residents of
nursing homes and boarding care homes conducted under this section and according to section
. The reimbursement classifications established under this section shall be implemented
after June 30, 2002, but no later than January 1, 2003.
Subd. 2. Definitions.
For purposes of this section, the following terms have the meanings
(a) Assessment reference date.
"Assessment reference date" means the last day of the
minimum data set observation period. The date sets the designated endpoint of the common
observation period, and all minimum data set items refer back in time from that point.
(b) Case mix index.
"Case mix index" means the weighting factors assigned to the RUG-III
(c) Index maximization.
"Index maximization" means classifying a resident who could be
assigned to more than one category, to the category with the highest case mix index.
(d) Minimum data set.
"Minimum data set" means the assessment instrument specified by
the Centers for Medicare and Medicaid Services and designated by the Minnesota Department
"Representative" means a person who is the resident's guardian
or conservator, the person authorized to pay the nursing home expenses of the resident, a
representative of the nursing home ombudsman's office whose assistance has been requested, or
any other individual designated by the resident.
(f) Resource utilization groups or RUG.
"Resource utilization groups" or "RUG" means
the system for grouping a nursing facility's residents according to their clinical and functional
status identified in data supplied by the facility's minimum data set.
Subd. 3. Resident reimbursement classifications.
(a) Resident reimbursement
classifications shall be based on the minimum data set, version 2.0 assessment instrument, or its
successor version mandated by the Centers for Medicare and Medicaid Services that nursing
facilities are required to complete for all residents. The commissioner of health shall establish
resident classes according to the 34 group, resource utilization groups, version III or RUG-III
model. Resident classes must be established based on the individual items on the minimum data
set and must be completed according to the facility manual for case mix classification issued by
the Minnesota Department of Health. The facility manual for case mix classification shall be
drafted by the Minnesota Department of Health and presented to the chairs of health and human
services legislative committees by December 31, 2001.
(b) Each resident must be classified based on the information from the minimum data set
according to general domains in clauses (1) to (7):
(1) extensive services where a resident requires intravenous feeding or medications,
suctioning, or tracheostomy care, or is on a ventilator or respirator;
(2) rehabilitation where a resident requires physical, occupational, or speech therapy;
(3) special care where a resident has cerebral palsy; quadriplegia; multiple sclerosis; pressure
ulcers; ulcers; fever with vomiting, weight loss, pneumonia, or dehydration; surgical wounds with
treatment; or tube feeding and aphasia; or is receiving radiation therapy;
(4) clinically complex status where a resident has tube feeding, burns, coma, septicemia,
pneumonia, internal bleeding, chemotherapy, dialysis, oxygen, transfusions, foot infections or
lesions with treatment, hemiplegia/hemiparesis, physician visits or order changes, or diabetes
with injections and order changes;
(5) impaired cognition where a resident has poor cognitive performance;
(6) behavior problems where a resident exhibits wandering or socially inappropriate or
disruptive behavior, has hallucinations or delusions, is physically or verbally abusive toward
others, or resists care, unless the resident's other condition would place the resident in other
(7) reduced physical functioning where a resident has no special clinical conditions.
(c) The commissioner of health shall establish resident classification according to a 34 group
model based on the information on the minimum data set and within the general domains listed in
paragraph (b), clauses (1) to (7). Detailed descriptions of each resource utilization group shall be
defined in the facility manual for case mix classification issued by the Minnesota Department of
Health. The 34 groups are described as follows:
(1) SE3: requires four or five extensive services;
(2) SE2: requires two or three extensive services;
(3) SE1: requires one extensive service;
(4) RAD: requires rehabilitation services and is dependent in activity of daily living (ADL)
at a count of 17 or 18;
(5) RAC: requires rehabilitation services and ADL count is 14 to 16;
(6) RAB: requires rehabilitation services and ADL count is ten to 13;
(7) RAA: requires rehabilitation services and ADL count is four to nine;
(8) SSC: requires special care and ADL count is 17 or 18;
(9) SSB: requires special care and ADL count is 15 or 16;
(10) SSA: requires special care and ADL count is seven to 14;
(11) CC2: clinically complex with depression and ADL count is 17 or 18;
(12) CC1: clinically complex with no depression and ADL count is 17 or 18;
(13) CB2: clinically complex with depression and ADL count is 12 to 16;
(14) CB1: clinically complex with no depression and ADL count is 12 to 16;
(15) CA2: clinically complex with depression and ADL count is four to 11;
(16) CA1: clinically complex with no depression and ADL count is four to 11;
(17) IB2: impaired cognition with nursing rehabilitation and ADL count is six to ten;
(18) IB1: impaired cognition with no nursing rehabilitation and ADL count is six to ten;
(19) IA2: impaired cognition with nursing rehabilitation and ADL count is four or five;
(20) IA1: impaired cognition with no nursing rehabilitation and ADL count is four or five;
(21) BB2: behavior problems with nursing rehabilitation and ADL count is six to ten;
(22) BB1: behavior problems with no nursing rehabilitation and ADL count is six to ten;
(23) BA2: behavior problems with nursing rehabilitation and ADL count is four to five;
(24) BA1: behavior problems with no nursing rehabilitation and ADL count is four to five;
(25) PE2: reduced physical functioning with nursing rehabilitation and ADL count is 16
(26) PE1: reduced physical functioning with no nursing rehabilitation and ADL count is
16 to 18;
(27) PD2: reduced physical functioning with nursing rehabilitation and ADL count is 11
(28) PD1: reduced physical functioning with no nursing rehabilitation and ADL count is
11 to 15;
(29) PC2: reduced physical functioning with nursing rehabilitation and ADL count is nine
(30) PC1: reduced physical functioning with no nursing rehabilitation and ADL count is
nine or ten;
(31) PB2: reduced physical functioning with nursing rehabilitation and ADL count is six to
(32) PB1: reduced physical functioning with no nursing rehabilitation and ADL count is
six to eight;
(33) PA2: reduced physical functioning with nursing rehabilitation and ADL count is four
or five; and
(34) PA1: reduced physical functioning with no nursing rehabilitation and ADL count is
four or five.
Subd. 4. Resident assessment schedule.
(a) A facility must conduct and electronically
submit to the commissioner of health case mix assessments that conform with the assessment
schedule defined by Code of Federal Regulations, title 42, section
, and published by the
United States Department of Health and Human Services, Centers for Medicare and Medicaid
Services, in the Long Term Care Assessment Instrument User's Manual, version 2.0, October
1995, and subsequent clarifications made in the Long-Term Care Assessment Instrument
Questions and Answers, version 2.0, August 1996. The commissioner of health may substitute
successor manuals or question and answer documents published by the United States Department
of Health and Human Services, Centers for Medicare and Medicaid Services, to replace or
supplement the current version of the manual or document.
(b) The assessments used to determine a case mix classification for reimbursement include
(1) a new admission assessment must be completed by day 14 following admission;
(2) an annual assessment must be completed within 366 days of the last comprehensive
(3) a significant change assessment must be completed within 14 days of the identification
of a significant change; and
(4) the second quarterly assessment following either a new admission assessment, an annual
assessment, or a significant change assessment, and all quarterly assessments beginning October
1, 2006. Each quarterly assessment must be completed within 92 days of the previous assessment.
Subd. 5. Short stays.
(a) A facility must submit to the commissioner of health an initial
admission assessment for all residents who stay in the facility less than 14 days.
(b) Notwithstanding the admission assessment requirements of paragraph (a), a facility may
elect to accept a default rate with a case mix index of 1.0 for all facility residents who stay less
than 14 days in lieu of submitting an initial assessment. Facilities may make this election to be
effective on the day of implementation of the revised case mix system.
(c) After implementation of the revised case mix system, nursing facilities must elect one of
the options described in paragraphs (a) and (b) by reporting to the commissioner of health, as
prescribed by the commissioner. The election is effective on July 1.
(d) For residents who are admitted or readmitted and leave the facility on a frequent basis
and for whom readmission is expected, the resident may be discharged on an extended leave
status. This status does not require reassessment each time the resident returns to the facility
unless a significant change in the resident's status has occurred since the last assessment. The case
mix classification for these residents is determined by the facility election made in paragraphs
(a) and (b).
Subd. 6. Penalties for late or nonsubmission.
A facility that fails to complete or submit an
assessment for a RUG-III classification within seven days of the time requirements in subdivisions
4 and 5 is subject to a reduced rate for that resident. The reduced rate shall be the lowest rate for
that facility. The reduced rate is effective on the day of admission for new admission assessments
or on the day that the assessment was due for all other assessments and continues in effect until
the first day of the month following the date of submission of the resident's assessment.
Subd. 7. Notice of resident reimbursement classification.
(a) A facility must elect
between the options in clauses (1) and (2) to provide notice to a resident of the resident's case
(1) The commissioner of health shall provide to a nursing facility a notice for each resident
of the reimbursement classification established under subdivision 1. The notice must inform the
resident of the classification that was assigned, the opportunity to review the documentation
supporting the classification, the opportunity to obtain clarification from the commissioner, and the
opportunity to request a reconsideration of the classification. The commissioner must send notice
of resident classification by first class mail. A nursing facility is responsible for the distribution of
the notice to each resident, to the person responsible for the payment of the resident's nursing
home expenses, or to another person designated by the resident. This notice must be distributed
within three working days after the facility's receipt of the notice from the commissioner of health.
(2) A facility may choose to provide a classification notice, as prescribed by the commissioner
of health, to a resident upon receipt of the confirmation of the case mix classification calculated by
a facility or a corrected case mix classification as indicated on the final validation report from the
commissioner. A nursing facility is responsible for the distribution of the notice to each resident,
to the person responsible for the payment of the resident's nursing home expenses, or to another
person designated by the resident. This notice must be distributed within three working days after
the facility's receipt of the validation report from the commissioner. If a facility elects this option,
the commissioner of health shall provide the facility with a list of residents and their case mix
classifications as determined by the commissioner. A nursing facility may make this election to be
effective on the day of implementation of the revised case mix system.
(3) After implementation of the revised case mix system, a nursing facility shall elect a notice
of resident reimbursement classification procedure as described in clause (1) or (2) by reporting to
the commissioner of health, as prescribed by the commissioner. The election is effective July 1.
(b) If a facility submits a correction to the most recent assessment used to establish a case
mix classification conducted under subdivision 3 that results in a change in case mix classification,
the facility shall give written notice to the resident or the resident's representative about the
item that was corrected and the reason for the correction. The notice of corrected assessment
may be provided at the same time that the resident or resident's representative is provided the
resident's corrected notice of classification.
Subd. 8. Request for reconsideration of resident classifications.
(a) The resident, or
resident's representative, or the nursing facility or boarding care home may request that the
commissioner of health reconsider the assigned reimbursement classification. The request for
reconsideration must be submitted in writing to the commissioner within 30 days of the day the
resident or the resident's representative receives the resident classification notice. The request
for reconsideration must include the name of the resident, the name and address of the facility
in which the resident resides, the reasons for the reconsideration, the requested classification
changes, and documentation supporting the requested classification. The documentation
accompanying the reconsideration request is limited to documentation which establishes that the
needs of the resident at the time of the assessment justify a classification which is different than
the classification established by the commissioner of health.
(b) Upon request, the nursing facility must give the resident or the resident's representative a
copy of the assessment form and the other documentation that was given to the commissioner of
health to support the assessment findings. The nursing facility shall also provide access to and a
copy of other information from the resident's record that has been requested by or on behalf of the
resident to support a resident's reconsideration request. A copy of any requested material must be
provided within three working days of receipt of a written request for the information. If a facility
fails to provide the material within this time, it is subject to the issuance of a correction order and
penalty assessment under sections
. Notwithstanding those sections, any
correction order issued under this subdivision must require that the nursing facility immediately
comply with the request for information and that as of the date of the issuance of the correction
order, the facility shall forfeit to the state a $100 fine for the first day of noncompliance, and an
increase in the $100 fine by $50 increments for each day the noncompliance continues.
(c) In addition to the information required under paragraphs (a) and (b), a reconsideration
request from a nursing facility must contain the following information: (i) the date the
reimbursement classification notices were received by the facility; (ii) the date the classification
notices were distributed to the resident or the resident's representative; and (iii) a copy of a
notice sent to the resident or to the resident's representative. This notice must inform the resident
or the resident's representative that a reconsideration of the resident's classification is being
requested, the reason for the request, that the resident's rate will change if the request is approved
by the commissioner, the extent of the change, that copies of the facility's request and supporting
documentation are available for review, and that the resident also has the right to request a
reconsideration. If the facility fails to provide the required information with the reconsideration
request, the request must be denied, and the facility may not make further reconsideration requests
on that specific reimbursement classification.
(d) Reconsideration by the commissioner must be made by individuals not involved in
reviewing the assessment, audit, or reconsideration that established the disputed classification.
The reconsideration must be based upon the initial assessment and upon the information provided
to the commissioner under paragraphs (a) and (b). If necessary for evaluating the reconsideration
request, the commissioner may conduct on-site reviews. Within 15 working days of receiving
the request for reconsideration, the commissioner shall affirm or modify the original resident
classification. The original classification must be modified if the commissioner determines that
the assessment resulting in the classification did not accurately reflect the needs or assessment
characteristics of the resident at the time of the assessment. The resident and the nursing facility
or boarding care home shall be notified within five working days after the decision is made. A
decision by the commissioner under this subdivision is the final administrative decision of the
agency for the party requesting reconsideration.
(e) The resident classification established by the commissioner shall be the classification that
applies to the resident while the request for reconsideration is pending.
(f) The commissioner may request additional documentation regarding a reconsideration
necessary to make an accurate reconsideration determination.
Subd. 9. Audit authority.
(a) The commissioner shall audit the accuracy of resident
assessments performed under section
through desk audits, on-site review of residents
and their records, and interviews with staff and families. The commissioner shall reclassify a
resident if the commissioner determines that the resident was incorrectly classified.
(b) The commissioner is authorized to conduct on-site audits on an unannounced basis.
(c) A facility must grant the commissioner access to examine the medical records relating to
the resident assessments selected for audit under this subdivision. The commissioner may also
observe and speak to facility staff and residents.
(d) The commissioner shall consider documentation under the time frames for coding items
on the minimum data set as set out in the Resident Assessment Instrument Manual published by
the Centers for Medicare and Medicaid Services.
(e) The commissioner shall develop an audit selection procedure that includes the following
(1) The commissioner may target facilities that demonstrate an atypical pattern of scoring
minimum data set items, nonsubmission of assessments, late submission of assessments, or a
previous history of audit changes of greater than 35 percent. The commissioner shall select at least
20 percent, with a minimum of ten assessments, of the most current assessments submitted to the
state for audit. Audits of assessments selected in the targeted facilities must focus on the factors
leading to the audit. If the number of targeted assessments selected does not meet the threshold
of 20 percent of the facility residents, then a stratified sample of the remainder of assessments
shall be drawn to meet the quota. If the total change exceeds 35 percent, the commissioner may
conduct an expanded audit up to 100 percent of the remaining current assessments.
(2) Facilities that are not a part of the targeted group shall be placed in a general pool from
which facilities will be selected on a random basis for audit. Every facility shall be audited
annually. If a facility has two successive audits in which the percentage of change is five percent
or less and the facility has not been the subject of a targeted audit in the past 36 months, the
facility may be audited biannually. A stratified sample of 15 percent, with a minimum of ten
assessments, of the most current assessments shall be selected for audit. If more than 20 percent
of the RUGS-III classifications after the audit are changed, the audit shall be expanded to a
second 15 percent sample, with a minimum of ten assessments. If the total change between the
first and second samples exceed 35 percent, the commissioner may expand the audit to all of
the remaining assessments.
(3) If a facility qualifies for an expanded audit, the commissioner may audit the facility again
within six months. If a facility has two expanded audits within a 24-month period, that facility
will be audited at least every six months for the next 18 months.
(4) The commissioner may conduct special audits if the commissioner determines that
circumstances exist that could alter or affect the validity of case mix classifications of residents.
These circumstances include, but are not limited to, the following:
(i) frequent changes in the administration or management of the facility;
(ii) an unusually high percentage of residents in a specific case mix classification;
(iii) a high frequency in the number of reconsideration requests received from a facility;
(iv) frequent adjustments of case mix classifications as the result of reconsiderations or audits;
(v) a criminal indictment alleging provider fraud; or
(vi) other similar factors that relate to a facility's ability to conduct accurate assessments.
(f) Within 15 working days of completing the audit process, the commissioner shall mail
the written results of the audit to the facility, along with a written notice for each resident
affected to be forwarded by the facility. The notice must contain the resident's classification and
a statement informing the resident, the resident's authorized representative, and the facility of
their right to review the commissioner's documents supporting the classification and to request
a reconsideration of the classification. This notice must also include the address and telephone
number of the area nursing home ombudsman.
Subd. 10. Transition.
After implementation of this section, reconsiderations requested for
classifications made under section
144.0722, subdivision 1
, shall be determined under section
144.0722, subdivision 3
History: 1Sp2001 c 9 art 5 s 2; 2002 c 276 s 1-4; 2002 c 277 s 32; 2002 c 379 art 1 s
113; 2006 c 282 art 20 s 1,2