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Chapter 256B

Section 256B.0913

Recent History

    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    Subd. 3.[Repealed, 1Sp2001 c 9 art 4 s 34]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 payment of long-term care services by the medical
assistance program due to an asset transfer penalty under section 256B.0595 or equity interest in
the home exceeding $500,000 as stated in section 256B.056;
    (5) the person needs long-term care 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
. 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
, and the alternative care program monthly service limit defined in this paragraph. If care-related
supplies and equipment or environmental modifications and adaptations 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 lead agency to ensure prompt fee payments.
    The lead agency may 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 fiscal 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) nonmedical 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) consumer-directed community services under the alternative care programs which
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;
    (17) environmental modifications and adaptations; and
    (18) discretionary services, for which lead agencies may make payment from their alternative
care program allocation for services not otherwise defined in this section or section 256B.0625,
following approval by the commissioner.
    Total annual payments for discretionary services for all clients served by a lead agency must
not exceed 25 percent of that lead agency'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 alternative care does not cover transitional support services, assisted living services,
adult foster care services, and residential care and benefits defined under section 256B.0625
that meet primary and acute health care needs.
    (b) The lead agency must ensure that the funds are not used to supplant or supplement
services available through other public assistance or services programs, including supplementation
of client co-pays, deductibles, premiums, or other cost-sharing arrangements for health-related
benefits and services or entitlement programs and services that are available to the person, but in
which they have elected not to enroll. 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 lead 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 lead 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 lead agency 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.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5c.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5d.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5e.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5f.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5g.[Repealed, 2007 c 147 art 7 s 76]
    Subd. 5h.[Repealed, 2007 c 147 art 7 s 76]
    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 lead agency shall be held
harmless for damages or injuries sustained through the use of volunteers under this subdivision
including workers' compensation liability. The case manager 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 or tribe must provide access to and arrange for case management
services, including assuring implementation of the plan. "County of service" has the meaning
given it in Minnesota Rules, part 9505.0015, subpart 11. 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 lead agency:
    (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 lead agency administrative costs;
    (6) evaluation of services previously delivered by the provider; and
    (7) contract or agreement conditions, including billing requirements, cancellation, and
    The lead agency must evaluate its own agency services under the criteria established for
other providers.
    Subd. 10. Allocation formula. (a) By July 15 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 lead agency is the lead agency'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 lead agency, 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 lead agency'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 lead agency'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 lead agency allocations for a biennium, the commissioner shall distribute to
each lead agency the entire annual appropriation as that lead agency'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 lead agencies with the greatest need. Targeted funds are not intended to
be distributed equitably among all lead agencies, 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 lead agency 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 lead agencies 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
    (1) lead agencies 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) lead agencies 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) lead agencies that propose projects to divert community residents from nursing home
placement or convert nursing home residents to community living; and
    (4) lead agencies that can otherwise justify program growth by demonstrating the existence
of waiting lists, demographically justified needs, or other unmet needs.
    (d) Lead agencies 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 make applications available for targeted funds by November
1 of each year. The lead agencies selected for targeted funds shall be notified of the amount of
their additional funding. Targeted funds allocated to a lead agency in one year shall be treated as
part of the lead agency's base allocation for that year in determining allocations for subsequent
years. No reallocations between lead agencies 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
    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 is residing in a nursing facility;
    (2) a married couple is requesting an asset assessment under the spousal impoverishment
    (3) a person is found eligible for alternative care, but is not yet receiving alternative care
services including case management 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 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 lead agency with the client's Social Security number at
the time of application. The lead agency 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 lead
agencies 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 lead agency does not adhere to these reporting requirements, the commissioner may terminate
the billing, collecting, and remitting portions of the pilot project and require the lead agency
involved to operate under the procedures set forth in this paragraph.
    Subd. 13. Lead agency biennial plan. The lead agency 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
    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
    (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 lead agency or vendor must submit
invoices within 12 months following the date of service. The lead agency and its vendors under
contract shall not be reimbursed for services which exceed the county allocation.
    (c) The lead agency 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) Lead agencies 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; 2007 c 147 art 6 s 29-38

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