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Chapter 252

Section 252.46

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252.46 PAYMENT RATES.
    Subdivision 1. Rates. (a) Payment rates to vendors, except regional centers, for
county-funded day training and habilitation services and transportation provided to persons
receiving day training and habilitation services established by a county board are governed by
subdivisions 2 to 19. The commissioner shall approve the following three payment rates for
services provided by a vendor:
(1) a full-day service rate for persons who receive at least six service hours a day, including
the time it takes to transport the person to and from the service site;
(2) a partial-day service rate that must not exceed 75 percent of the full-day service rate for
persons who receive less than a full day of service; and
(3) a transportation rate for providing, or arranging and paying for, transportation of a person
to and from the person's residence to the service site.
(b) Notwithstanding any law or rule to the contrary, the commissioner may authorize
county participation in a voluntary individualized payment rate structure for day training and
habilitation services to allow a county the flexibility to change, after consulting with providers,
from a site-based payment rate structure to an individual payment rate structure for the providers
of day training and habilitation services in the county. The commissioner shall seek input from
providers and consumers in establishing procedures for determining the structure of voluntary
individualized payment rates to ensure that there is no additional cost to the state or counties and
that the rate structure is cost-neutral to providers of day training and habilitation services, on July
1, 2004, or on day one of the individual rate structure, whichever is later.
(c) Medical assistance rates for home and community-based service provided under section
256B.501, subdivision 4, by licensed vendors of day training and habilitation services must not
be greater than the rates for the same services established by counties under sections 252.40
to 252.46. For very dependent persons with special needs the commissioner may approve an
exception to the approved payment rate under section 256B.501, subdivision 4 or 8.
    Subd. 2. Rate minimum. Unless a variance is granted under subdivision 6, the minimum
payment rates set by a county board for each vendor must be equal to the payment rates approved
by the commissioner for that vendor in effect January 1 of the previous calendar year.
    Subd. 3. Rate maximum. Unless a variance is granted under subdivision 6, the maximum
payment rates for each vendor for a calendar year must be equal to the payment rates approved
by the commissioner for that vendor in effect December 1 of the previous calendar year. 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 inflation adjustments
in reimbursement rates for each vendor, based upon the projected percentage change in the Urban
Consumer Price Index, all items, published by the United States Department of Labor, for the
upcoming calendar year over the current calendar year.
    Subd. 4. New vendors. (a) Payment rates established by a county for a new vendor for which
there were no previous rates must not exceed 95 percent of the greater of 125 percent of the
statewide median rates or 125 percent of the average payment rates in the regional development
commission district under sections 462.381 to 462.396 in which the new vendor is located unless
the criteria in paragraph (b) are met.
(b) A payment rate equal to 200 percent of the statewide average rates shall be assigned
to persons served by the new vendor when those persons are persons with very severe
self-injurious or assaultive behaviors, persons with medical conditions requiring delivery of
physician-prescribed medical interventions at one-to-one staffing for at least 15 minutes each time
they are performed, or persons discharged from a regional treatment center after May 1, 1993, to
the vendor's program. All other persons for whom the new service is needed must be assigned
a rate equal to 95 percent of the greater of 125 percent of the statewide median rates or 125
percent of the regional average rates, whichever is higher, and the maximum payment rate that
may be recommended is determined by multiplying the number of clients at each limit by the
rate corresponding to that limit and dividing the sum by the total number of clients. When the
recommended payment rates exceed 95 percent of 125 percent of the greater of the statewide
median or regional average rates, whichever is higher, the county must include documentation
verifying the medical or behavioral needs of clients. The approved payment rates must be based
on 12 months budgeted expenses divided by at least 90 percent of authorized service units
associated with the new vendor's licensed capacity. The county must include documentation
verifying the person's discharge from a regional treatment center and that admission of new
clients to existing services eligible for a rate variance under subdivision 6 was considered before
recommending payment rates for a new vendor. Nothing in this subdivision permits development
of a new program that primarily results in refinancing of services for individuals already receiving
services in existing programs.
    Subd. 5. Submitting recommended rates. The county board shall submit recommended
payment rates to the commissioner on forms supplied by the commissioner at least 60 days before
revised payment rates or payment rates for new vendors are to be effective. The forms must
include the county board's written verification of the individual documentation required under
section 252.44, clause (a). If a vendor provides services at more than one licensed site, the county
board may recommend the same payment rates for each site based on the average rate for all sites.
The county board may also recommend differing payment rates for each licensed site if it would
result in a total annual payment to the vendor that is equal to or less than the total annual payment
that would result if the average rates had been used for all sites. For purposes of this subdivision,
the average payment rate for all service sites used by a vendor must be computed by adding the
amounts that result when the payment rates for each licensed site are multiplied by the projected
annual number of service units to be provided at that site and dividing the sum of those amounts
by the total units of service to be provided by the vendor at all sites.
    Subd. 6. Variances. (a) A variance from the minimum or maximum payment rates in
subdivisions 2 and 3 may be granted by the commissioner when the vendor requests and the
county board submits to the commissioner a written variance request on forms supplied by the
commissioner with the recommended payment rates.
(b) A variance to the rate maximum may be utilized for costs associated with compliance
with state administrative rules, compliance with court orders, capital costs required for continued
licensure, increased insurance costs, start-up and conversion costs for supported employment,
direct service staff salaries and benefits, transportation, and other program related costs when one
of the criterion in clauses (1) to (4) is also met:
(1) A determination of need under section 252.28 is approved for a significant program
change that is necessary for a vendor to provide authorized services to one or more clients who
meet one or more of the following criteria:
(A) the client is a new client and:
(i) exhibits severe behavior as indicated on the screening document;
(ii) periodically requires one-to-one staff time for at least 15 minutes at a time to deliver
physician prescribed medical interventions; or
(iii) has been discharged directly to the vendor's program from a regional treatment center
or the Minnesota extended treatment option.
(B) the client is an existing client who has developed one of the following changed
circumstances which increases costs that are not covered by the vendor's current rate, and for
whom a significant program change is necessary to ensure the continued provision of authorized
services to that client:
(i) severe behavior as indicated on the screening document;
(ii) a medical condition periodically requiring one-to-one staff time for at least 15 minutes at
a time to deliver physician prescribed medical interventions; or
(iii) a permanent decrease in skill functioning, as verified by medical reports or assessments;
(2) A licensing determination requires a program change that the vendor cannot comply with
due to funding restraints;
(3) A determination of need under section 252.28 is approved for a significant and permanent
decrease in licensed capacity and the vendor demonstrates the need to retain certain staffing
levels to serve the remaining clients; or
(4) In cases where conditions in clauses (1) to (3) do not apply, but a determination of need
under section 252.28 is approved for an unusual circumstance which exists that significantly
impacts the type or amount of services delivered, as evidenced by documentation presented by the
vendor and with the concurrence of the commissioner.
(c) A variance to the rate minimum may be granted when:
(1) the county board contracts for increased services from a vendor and for some or all
individuals receiving services from the vendor lower per unit fixed costs result; or
(2) the actual costs of delivering authorized service over a 12-month contract period have
decreased.
(d) The written variance request under this subdivision must include documentation that all
the following criteria have been met:
(1) The commissioner and the county board have both conducted a review and have
identified a need for a change in the payment rates and recommended an effective date for the
change in the rate.
(2) The vendor documents efforts to reallocate current staff and any additional staffing
needs cannot be met by using temporary special needs rate exceptions under Minnesota Rules,
parts 9510.1020 to 9510.1140.
(3) The vendor documents that financial resources have been reallocated before applying for
a variance. No variance may be granted for equipment, supplies, or other capital expenditures
when depreciation expense for repair and replacement of such items is part of the current rate.
(4) For variances related to loss of clientele, the vendor documents the other program and
administrative expenses, if any, that have been reduced.
(5) The county board submits verification of the conditions for which the variance is
requested, a description of the nature and cost of the proposed changes, and how the county will
monitor the use of money by the vendor to make necessary changes in services.
(6) The county board's recommended payment rates do not exceed 95 percent of the greater
of 125 percent of the current statewide median or 125 percent of the regional average payment
rates, whichever is higher, for each of the regional commission districts under sections 462.381 to
462.396 in which the vendor is located except for the following: when a variance is recommended
to allow authorized service delivery to new clients with severe behaviors or with medical
conditions requiring delivery of physician prescribed medical interventions, or to persons being
directly discharged from a regional treatment center or Minnesota extended treatment options to
the vendor's program, those persons must be assigned a payment rate of 200 percent of the current
statewide average rates. All other clients receiving services from the vendor must be assigned a
payment rate equal to the vendor's current rate unless the vendor's current rate exceeds 95 percent
of 125 percent of the statewide median or 125 percent of the regional average payment rates,
whichever is higher. When the vendor's rates exceed 95 percent of 125 percent of the statewide
median or 125 percent of the regional average rates, the maximum rates assigned to all other
clients must be equal to the greater of 95 percent of 125 percent of the statewide median or 125
percent of the regional average rates. The maximum payment rate that may be recommended for
the vendor under these conditions is determined by multiplying the number of clients at each limit
by the rate corresponding to that limit and then dividing the sum by the total number of clients.
(e) The commissioner shall have 60 calendar days from the date of the receipt of the
complete request to accept or reject it, or the request shall be deemed to have been granted. If the
commissioner rejects the request, the commissioner shall state in writing the specific objections to
the request and the reasons for its rejection.
    Subd. 7. Rate reconsiderations. A host county that disagrees with a rate decision of the
commissioner under subdivision 6 or 9 may request reconsideration by the commissioner within
45 days after the date the host county received notification of the commissioner's decision. The
request must state the reasons why the host county is requesting reconsideration of the rate
decision and present evidence explaining the host county's disagreement with the rate decision.
The commissioner shall review the host county's evidence and provide the host county with
written notification of the decision on the request within 60 days. The commissioner's decision
on the request is final.
Until a reconsideration request is decided, payments must continue at a rate the commissioner
determines complies with this section. If a higher rate is approved, the commissioner shall order a
retroactive payment as determined in the commissioner's decision.
    Subd. 8. Commissioner's notice to boards, vendors. The commissioner shall notify the
county boards and vendors of the average regional payment rates, 95 percent of 125 percent of
the average regional payments rates for each of the regional development commission districts
designated in sections 462.381 to 462.396, 95 percent of 125 percent of the statewide median
rates, and 200 percent of the statewide average rates.
    Subd. 9. Approval or denial of rates. The commissioner shall approve the county board's
recommended payment rates when the rates and verification justifying the projected service units
comply with subdivisions 2 to 18. The commissioner shall notify the county board in writing of
the approved payment rates within 60 days of receipt of the rate recommendations. If the rates
are not approved, or if rates different from those originally recommended are approved, the
commissioner shall within 60 days of receiving the rate recommendation notify the county board
in writing of the reasons for denying or substituting a different rate for the recommended rates.
Approved payment rates remain effective until the commissioner approves different rates in
accordance with subdivisions 2 and 3.
    Subd. 10. Vendor's report; audit. The vendor shall report to the commissioner and the
county board on forms prescribed by the commissioner at times specified by the commissioner.
The reports shall include programmatic and fiscal information. The audit must be done according
to generally accepted auditing standards to result in statements that include a balance sheet,
income statement, changes in financial position, and the certified public accountant's opinion.
The county's annual audit shall satisfy the audit required under this subdivision for any
county-operated day training and habilitation program. Except for day training and habilitation
programs operated by a county, the audit must provide supplemental statements for each day
training and habilitation program with an approved unique set of rates.
    Subd. 11. Improper transactions. Transactions that have the effect of circumventing
subdivisions 1 to 18 must not be considered by the commissioner for the purpose of payment rate
approval under the principle that the substance of the transaction prevails over the form.
    Subd. 12.[Repealed, 1Sp1993 c 1 art 4 s 14]
    Subd. 13.[Repealed, 1Sp1993 c 1 art 4 s 14]
    Subd. 14.[Repealed, 1Sp1993 c 1 art 4 s 14]
    Subd. 15.[Repealed, 1992 c 513 art 9 s 44]
    Subd. 16. Payment rate criteria; allocation of expenditures. Payment rates approved
under subdivision 9 must reflect the payment rate criteria in paragraphs (a) and (b) and the
allocation principles in paragraph (c).
(a) Payment rates must be based on reasonable costs that are ordinary, necessary, and related
to delivery of authorized client services.
(b) The commissioner shall not pay for: (i) unauthorized service delivery; (ii) services
provided in accordance with receipt of a special grant; (iii) services provided under contract to a
local school district; (iv) extended employment services under Minnesota Rules, parts 3300.1950
to 3300.3050, or vocational rehabilitation services provided under Title I, section 110 or Title
VI-C, Rehabilitation Act Amendments of 1992, as amended, and not through use of medical
assistance or county social service funds; or (v) services provided to a client by a licensed
medical, therapeutic, or rehabilitation practitioner or any other vendor of medical care which are
billed separately on a fee for service basis.
(c) On an annual basis, actual and projected contract year expenses must be allocated to
standard budget line items corresponding to direct and other program and administrative expenses
as submitted to the commissioner with the host county's recommended payment rates. Central or
corporate office costs must be allocated to licensed vendor sites within the group served by the
central or corporate office according to the cost allocation principles under section 256B.432.
(d) The vendor must maintain records documenting that clients received the billed services.
    Subd. 17. Hourly rate structure. Counties participating as host counties under the pilot
study of hourly rates established under Laws 1988, chapter 689, article 2, section 117, may
recommend continuation of the hourly rates for participating vendors. The recommendation must
be made annually under subdivision 5 and according to the methods and standards provided by
the commissioner. The commissioner shall approve the hourly rates when service authorization,
billing, and payment for services is possible through the Medicaid management information
system and the other criteria in this subdivision are met. Counties and vendors operating under
the pilot study of hourly rates established under Laws 1988, chapter 689, article 2, section 117,
shall work with the commissioner to translate the hourly rates and actual expenditures into
rates meeting the criteria in subdivisions 1 to 16 unless hourly rates are approved under this
subdivision. If the rates meeting the criteria in subdivisions 1 to 16 are lower than the county's or
vendor's current rate, the county or vendor must continue to receive the current rate.
    Subd. 18. Pilot study rates. By January 1, 1994, counties and vendors operating under the
pilot study of hourly rates established under Laws 1988, chapter 689, article 2, section 117,
shall work with the commissioner to translate the hourly rates and actual expenditures into rates
meeting the criteria in subdivisions 1 to 16 unless hourly rates are approved under subdivision 17.
    Subd. 19. Vendor appeals. With the concurrence of the county board, a vendor may appeal
the commissioner's rejection of a variance request which has been submitted by the county under
subdivision 6 and may appeal the commissioner's denial under subdivision 9 of a rate which has
been recommended by the county. To appeal, the vendor and county board must file a written
notice of appeal with the commissioner. The notice of appeal must be filed or received by the
commissioner within 45 days of the postmark date on the commissioner's notification to the
vendor and county agency that a variance request or county recommended rate has been denied.
The notice of appeal must specify the reasons for the appeal, the dollar amount in dispute, and the
basis in statute or rule for challenging the commissioner's decision.
Within 45 days of receipt of the notice of appeal, the commissioner must convene a
reconciliation conference to attempt to resolve the rate dispute. If the dispute is not resolved to
the satisfaction of the parties, the parties may initiate a contested case proceeding under sections
14.57 to 14.69. In a contested case hearing held under this section, the appealing party must
demonstrate by a preponderance of the evidence that the commissioner incorrectly applied the
governing law or regulations, or that the commissioner improperly exercised the commissioner's
discretion, in refusing to grant a variance or in refusing to adopt a county recommended rate.
Until the appeal is fully resolved, payments must continue at the existing rate pending the
appeal. Retroactive payments consistent with the final decision shall be made after the appeal is
fully resolved.
    Subd. 20. Study of day training and habilitation vendors. The commissioner shall study
the feasibility of grouping vendors of similar size, location, direct service staffing needs or
performance outcomes to establish payment rate limits that define cost-effective service. Based
on the conclusions of the feasibility study the department shall consider developing a method
to redistribute dollars from less cost-effective to more cost-effective services based on vendor
achievement of performance outcomes. The department shall report to the legislature by January
15, 1996, with results of the study and recommendations for further action. The department shall
consult with an advisory committee representing counties, service consumers, vendors, and
the legislature.
    Subd. 21. Managed care pilot. (a) The commissioner may initiate a capitated risk-based
managed care option for persons with developmental disabilities, which includes capitated
payments for day training and habilitation and alternative active treatment services. The
commissioner may permit the health plan, care system, or other health plan network participating
in this managed care option to negotiate day training and habilitation rates. The commissioner
may grant a variance to any of the provisions in sections 252.40 to 252.46 and Minnesota Rules,
parts 9525.1200 to 9525.1580, necessary to implement the pilot.
(b) The commissioner shall report to the legislature financial and program results along with
a recommendation as to whether the pilot should be expanded.
History: 1987 c 403 art 5 s 14; 1988 c 532 s 3-8; 1988 c 689 art 2 s 114-117; 1989 c 282 art
2 s 93-98; 1990 c 568 art 3 s 8-12; 1991 c 292 art 4 s 9-11; art 6 s 40; 1992 c 513 art 7 s 12;
1Sp1993 c 1 art 4 s 6; 1Sp1993 c 6 s 42; 1995 c 207 art 3 s 6-11; 1997 c 7 art 1 s 99; 1997 c 36 s
1; 1999 c 245 art 5 s 11; 2003 c 47 s 1; 1Sp2003 c 14 art 3 s 10; 2005 c 56 s 1; 2005 c 98 art 3 s 17