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Chapter 144A

Section 144A.073

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144A.073 EXCEPTIONS TO THE MORATORIUM; REVIEW.
    Subdivision 1. Definitions. For purposes of this section, the following terms have the
meanings given them:
(a) "Conversion" means the relocation of a nursing home bed from a nursing home to an
attached hospital.
(b) "Relocation" means the movement of licensed nursing home beds or certified boarding
care beds as permitted under subdivision 4, clause (3), and subdivision 5.
(c) "Renovation" means extensive remodeling of, or construction of an addition to, a facility
on an existing site with a total cost exceeding ten percent of the appraised value of the facility or
$200,000, whichever is less.
(d) "Replacement" means the demolition, delicensure, reconstruction, or construction of an
addition to all or part of an existing facility.
(e) "Upgrading" means a change in the level of licensure of a bed from a boarding care bed
to a nursing home bed in a certified boarding care facility.
    Subd. 2. Request for proposals. At the authorization by the legislature of additional medical
assistance expenditures for exceptions to the moratorium on nursing homes, the commissioner
shall publish in the State Register a request for proposals for nursing home projects to be licensed
or certified under section 144A.071, subdivision 4a, clause (c). The public notice of this funding
and the request for proposals must specify how the approval criteria will be prioritized by
the commissioner. The notice must describe the information that must accompany a request
and state that proposals must be submitted to the commissioner within 90 days of the date of
publication. The notice must include the amount of the legislative appropriation available for
the additional costs to the medical assistance program of projects approved under this section.
If no money is appropriated for a year, the commissioner shall publish a notice to that effect,
and no proposals shall be requested. If money is appropriated, the commissioner shall initiate
the application and review process described in this section at least twice each biennium and up
to four times each biennium, according to dates established by rule. Authorized funds shall be
allocated proportionally to the number of processes. Funds not encumbered by an earlier process
within a biennium shall carry forward to subsequent iterations of the process. Authorization for
expenditures does not carry forward into the following biennium. To be considered for approval, a
proposal must include the following information:
(1) whether the request is for renovation, replacement, upgrading, conversion, or relocation;
(2) a description of the problem the project is designed to address;
(3) a description of the proposed project;
(4) an analysis of projected costs of the nursing facility proposal, which are not required to
exceed the cost threshold referred to in section 144A.071, subdivision 1, to be considered under
this section, including initial construction and remodeling costs; site preparation costs; technology
costs; financing costs, including the current estimated long-term financing costs of the proposal,
which consists of estimates of the amount and sources of money, reserves if required under the
proposed funding mechanism, annual payments schedule, interest rates, length of term, closing
costs and fees, insurance costs, and any completed marketing study or underwriting review; and
estimated operating costs during the first two years after completion of the project;
(5) for proposals involving replacement of all or part of a facility, the proposed location of
the replacement facility and an estimate of the cost of addressing the problem through renovation;
(6) for proposals involving renovation, an estimate of the cost of addressing the problem
through replacement;
(7) the proposed timetable for commencing construction and completing the project;
(8) a statement of any licensure or certification issues, such as certification survey
deficiencies;
(9) the proposed relocation plan for current residents if beds are to be closed so that the
Department of Human Services can estimate the total costs of a proposal; and
(10) other information required by permanent rule of the commissioner of health in
accordance with subdivisions 4 and 8.
    Subd. 3. Review and approval of proposals. Within the limits of money specifically
appropriated to the medical assistance program for this purpose, the commissioner of health may
grant exceptions to the nursing home licensure or certification moratorium for proposals that
satisfy the requirements of this section. The commissioner of health shall approve or disapprove
a project. The commissioner of health shall base approvals or disapprovals on a comparison
and ranking of proposals using only the criteria in subdivision 4 and in rules adopted by the
commissioner. The cost to the medical assistance program of the proposals approved must be
within the limits of the appropriations specifically made for this purpose. Approval of a proposal
expires 18 months after approval by the commissioner of health unless the facility has commenced
construction as defined in section 144A.071, subdivision 1a, paragraph (d).
    Subd. 3a.[Repealed, 1995 c 207 art 7 s 43]
    Subd. 3b. Amendments to approved projects. (a) Nursing facilities that have received
approval on or after July 1, 1993, for exceptions to the moratorium on nursing homes through the
process described in this section may request amendments to the designs of the projects by writing
the commissioner within 18 months of receiving approval. Applicants shall submit supporting
materials that demonstrate how the amended projects meet the criteria described in paragraph (b).
(b) The commissioner shall approve requests for amendments for projects approved on or
after July 1, 1993, according to the following criteria:
(1) the amended project designs must provide solutions to all of the problems addressed by
the original application that are at least as effective as the original solutions;
(2) the amended project designs may not reduce the space in each resident's living area or in
the total amount of common space devoted to resident and family uses by more than five percent;
(3) the costs recognized for reimbursement of amended project designs shall be the threshold
amount of the original proposal as identified according to section 144A.071, subdivision 2, except
under conditions described in clause (4); and
(4) total costs up to ten percent greater than the cost identified in clause (3) may be recognized
for reimbursement if the proposer can document that one of the following circumstances is true:
(i) changes are needed due to a natural disaster;
(ii) conditions that affect the safety or durability of the project that could not have reasonably
been known prior to approval are discovered;
(iii) state or federal law require changes in project design; or
(iv) documentable circumstances occur that are beyond the control of the owner and require
changes in the design.
(c) Approval of a request for an amendment does not alter the expiration of approval of the
project according to subdivision 3.
    Subd. 3c. Cost neutral relocation projects. (a) Notwithstanding subdivision 3, the
commissioner may at any time accept proposals, or amendments to proposals previously approved
under this section, for relocations that are cost neutral with respect to state costs as defined in
section 144A.071, subdivision 5a. The commissioner, in consultation with the commissioner of
human services, shall evaluate proposals according to subdivision 4, clauses (1), (2), and (3),
and other criteria established in rule. The commissioner shall approve or disapprove a project
within 90 days. Proposals and amendments approved under this subdivision are not subject to the
six-mile limit in subdivision 5, paragraph (e).
(b) For the purposes of paragraph (a), cost neutrality shall be measured over the first three
12-month periods of operation after completion of the project.
    Subd. 3d. Project amendment authorized. Notwithstanding the provisions of subdivision
3b:
(1) the commissioner may approve a request by a nursing facility located in the city of
Duluth with 48 licensed beds as of January 1, 2005, that received approval under this section in
2002 for a moratorium exception project for amendment of the project design that:
(i) reduces the total amount of common space devoted to resident and family uses by more
than five percent if the total amount of common space in the facility, including that added by the
project, is at least 175 percent of the state requirement for common space; and
(ii) reduces the space for no more than two residents' living areas by increasing the size of a
majority of the single-bed rooms from the size in the project design as originally approved and
converting two single-bed rooms in the project design as originally approved to one semi-private
room; and
(2) the commissioner may approve a request by a nursing facility located in the city of
Duluth with 129 licensed beds as of January 1, 2005, that received approval under this section in
2002 for a moratorium exception project for amendment of the project design that:
(i) reduces the total amount of common space devoted to resident and family uses by more
than five percent if the total amount of common space in the facility, including that added by the
project, is at least 175 percent of the state requirement for common space; and
(ii) reduces the space for no more than four residents' living areas by increasing the size of a
majority of the single-bed rooms from the size in the project design as originally approved and
converting four single-bed rooms in the project design as originally approved to two semi-private
rooms; and
(3) the amended project designs in clauses (1) and (2) must provide solutions to all of
the problems addressed by the original application that are at least as effective as the original
solutions.
    Subd. 4. Criteria for review. The following criteria shall be used in a consistent manner to
compare, evaluate, and rank all proposals submitted. Except for the criteria specified in clause (3),
the application of criteria listed under this subdivision shall not reflect any distinction based on
the geographic location of the proposed project:
    (1) the extent to which the proposal furthers state long-term care goals, including the goal of
enhancing the availability and use of alternative care services and the goal of reducing the number
of long-term care resident rooms with more than two beds;
    (2) the proposal's long-term effects on state costs including the cost estimate of the project
according to section 144A.071, subdivision 5a;
    (3) the extent to which the proposal promotes equitable access to long-term care services in
nursing homes through redistribution of the nursing home bed supply, as measured by the number
of beds relative to the population 85 or older, projected to the year 2000 by the state demographer,
and according to items (i) to (iv):
    (i) reduce beds in counties where the supply is high, relative to the statewide mean, and
increase beds in counties where the supply is low, relative to the statewide mean;
    (ii) adjust the bed supply so as to create the greatest benefits in improving the distribution of
beds;
    (iii) adjust the existing bed supply in counties so that the bed supply in a county moves
toward the statewide mean; and
    (iv) adjust the existing bed supply so that the distribution of beds as projected for the
year 2020 would be consistent with projected need, based on the methodology outlined in the
Interagency Long-Term Care Committee's nursing home bed distribution study;
    (4) the extent to which the project improves conditions that affect the health or safety of
residents, such as narrow corridors, narrow door frames, unenclosed fire exits, and wood frame
construction, and similar provisions contained in fire and life safety codes and licensure and
certification rules;
    (5) the extent to which the project improves conditions that affect the comfort or quality
of life of residents in a facility or the ability of the facility to provide efficient care, such as
a relatively high number of residents in a room; inadequate lighting or ventilation; poor access
to bathing or toilet facilities; a lack of available ancillary space for dining rooms, day rooms,
or rooms used for other activities; problems relating to heating, cooling, or energy efficiency;
inefficient location of nursing stations; narrow corridors; or other provisions contained in the
licensure and certification rules;
    (6) the extent to which the applicant demonstrates the delivery of quality care, as defined in
state and federal statutes and rules, to residents as evidenced by the two most recent state agency
certification surveys and the applicants' response to those surveys;
    (7) the extent to which the project removes the need for waivers or variances previously
granted by either the licensing agency, certifying agency, fire marshal, or local government entity;
    (8) the extent to which the project increases the number of private or single bed rooms;
    (9) the extent to which the applicant demonstrates the continuing need for nursing facility
care in the community and adjacent communities; and
    (10) other factors that may be developed in permanent rule by the commissioner of health
that evaluate and assess how the proposed project will further promote or protect the health,
safety, comfort, treatment, or well-being of the facility's residents.
    Subd. 5. Replacement restrictions. (a) Proposals submitted or approved under this section
involving replacement must provide for replacement of the facility on the existing site except as
allowed in this subdivision.
(b) Facilities located in a metropolitan statistical area other than the Minneapolis-St. Paul
seven-county metropolitan area may relocate to a site within the same census tract or a contiguous
census tract.
(c) Facilities located in the Minneapolis-St. Paul seven-county metropolitan area may
relocate to a site within the same or contiguous health planning area as adopted in March 1982 by
the Metropolitan Council.
(d) Facilities located outside a metropolitan statistical area may relocate to a site within the
same city or township, or within a contiguous township.
(e) A facility relocated to a different site under paragraph (b), (c), or (d) must not be relocated
to a site more than six miles from the existing site.
(f) The relocation of part of an existing first facility to a second location, under paragraphs
(d) and (e), may include the relocation to the second location of up to four beds from part of an
existing third facility located in a township contiguous to the location of the first facility. The
six-mile limit in paragraph (e) does not apply to this relocation from the third facility.
(g) For proposals approved on January 13, 1994, under this section involving the replacement
of 102 licensed and certified beds, the relocation of the existing first facility to the new location
under paragraphs (d) and (e) may include the relocation of up to 75 beds of the existing facility.
The six-mile limit in paragraph (e) does not apply to this relocation.
    Subd. 6. Conversion restrictions. Proposals submitted or approved under this section
involving conversion must satisfy the following conditions:
(a) Conversion is limited to a total of five beds.
(b) An equivalent number of hospital beds must be delicensed.
(c) The average occupancy rate in the existing nursing home beds must be greater than 96
percent according to the most recent annual statistical report of the Department of Health.
(d) The cost of remodeling the hospital rooms to meet current nursing home construction
standards must not exceed ten percent of the appraised value of the nursing home or $200,000,
whichever is less.
(e) The conversion must not result in an increase in operating costs.
    Subd. 7. Upgrading restrictions. Proposals submitted or approved under this section
involving upgrading must satisfy the following conditions:
(a) The facility must meet minimum nursing home care standards.
(b) If beds are upgraded to nursing home beds, the number of boarding care beds in a facility
must not increase in the future.
(c) The average occupancy rate in the existing nursing home beds in an attached facility
must be greater than 96 percent according to the most recent annual statistical report of the
Department of Health.
    Subd. 8. Rulemaking. The commissioner of health shall adopt rules to implement this
section. The permanent rules must be in accordance with and implement only the criteria listed in
this section. The authority to adopt permanent rules continues until July 1, 1996.
    Subd. 9. Budget request. The commissioner of human services, in consultation with the
commissioner of finance, shall include in each biennial budget request a line item for the nursing
home moratorium exception process. If the commissioner of human services does not request
funding for this item, the commissioner of human services must justify the decision in the budget
pages.
    Subd. 10. Extension of approval of moratorium exception. Notwithstanding subdivision
3, the commissioner of health shall extend project approval for an additional 36 months for any
proposed exception to the nursing home licensure and certification moratorium if the proposal
was approved under this section between July 1, 2001, and June 30, 2003.
    Subd. 11. Funding from expired and canceled proposals. The commissioner shall monitor
the status of projects approved under this section to identify, in consultation with each facility
with an approved project, if projects will be canceled or will expire. For projects that have been
canceled or have expired, if originally approved after June 30, 2001, the commissioner's approval
authority for the estimated annual state cost to medical assistance shall carry forward and shall
be available for the issuance of a new moratorium round later in that fiscal year or in either
of the following two fiscal years.
History: 1987 c 403 art 4 s 4; 1988 c 689 art 2 s 37-39; 1989 c 282 art 3 s 12; 1990 c 568
art 3 s 4; 1992 c 292 art 7 s 25; 1992 c 513 art 7 s 4-6; 1Sp1993 c 1 art 5 s 3-5; 1995 c 207 art 7 s
13-19; 1996 c 305 art 2 s 29; 1997 c 7 art 5 s 11; 1997 c 203 art 3 s 3,4; 1999 c 245 art 3 s 1;
2001 c 161 s 22-24; 1Sp2001 c 9 art 5 s 7,8; 2002 c 379 art 1 s 113; 2003 c 72 s 1,2; 1Sp2005 c
4 art 7 s 1,2; 2007 c 147 art 7 s 1

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