Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 194-S.F.No. 1604
An act relating to human services; requiring the
commissioner of human services to provide rate notices
within certain timelines under certain conditions;
requiring a planned nursing facility closure to be
budget neutral; requiring a recommendation to
establish a new nursing facility reimbursement;
amending Minnesota Statutes 2002, sections 256B.431,
subdivision 10; 256B.437, subdivision 3; proposing
coding for new law in Minnesota Statutes, chapter 256B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, section 256B.431,
subdivision 10, is amended to read:
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.
Sec. 2. Minnesota Statutes 2002, section 256B.437,
subdivision 3, is amended to read:
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 for nursing facilities providing
the proposal has no cost to the state.
(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.
Sec. 3. [256B.440] [RECOMMENDATION TO ESTABLISH NEW
NURSING FACILITY 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 section
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.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Presented to the governor May 10, 2004
Signed by the governor May 13, 2004, 12:01 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes