1.1                          A bill for an act 
  1.2             relating to human services; providing a 3.5 percent 
  1.3             rate increase for nursing facilities, intermediate 
  1.4             care facilities for persons with mental retardation, 
  1.5             and community-based providers; amending Minnesota 
  1.6             Statutes 2000, sections 256B.431, by adding a 
  1.7             subdivision; 256B.434, subdivision 4; 256B.501, by 
  1.8             adding a subdivision. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 256B.431, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 31.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
  1.13  1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
  1.14  July 1, 2001, and July 1, 2002, the commissioner shall provide 
  1.15  each nursing facility reimbursed under this section or section 
  1.16  256B.434 with an adjustment to the total operating payment rates 
  1.17  in effect on June 30, 2001, and June 30, 2002, respectively.  
  1.18  The operating payment rate in effect on June 30, 2001, must 
  1.19  include the adjustment in subdivision 2i, paragraph (c).  
  1.20     (b) The adjustment is calculated according to clauses (1) 
  1.21  to (4): 
  1.22     (1) the commissioner shall calculate the arithmetic mean of 
  1.23  all June 30, 2001, and June 30, 2002, operating rates for each 
  1.24  facility; 
  1.25     (2) the commissioner shall construct an array of nursing 
  1.26  facilities from highest to lowest according to the arithmetic 
  1.27  mean calculated in clause (1).  A numerical rank must be 
  2.1   assigned to each facility in the array.  The facility with the 
  2.2   highest mean must be assigned a numerical rank of one.  The 
  2.3   facility with the lowest mean must be assigned a numerical rank 
  2.4   equal to the total number of nursing facilities in the array.  
  2.5   All other facilities must be assigned a numerical rank in 
  2.6   accordance with their position in the array; 
  2.7      (3) the amount of this rate increase for the rate year 
  2.8   beginning July 1, 2001, is $1 plus an amount equal to $6.11 
  2.9   multiplied by the ratio of the facility's numeric rank divided 
  2.10  by the number of facilities in the array; and 
  2.11     (4) the amount of this rate increase for the rate year 
  2.12  beginning July 1, 2002, is $1 plus an amount equal to $6.40 
  2.13  multiplied by the ratio of the facility's numeric rank divided 
  2.14  by the number of facilities in the array. 
  2.15     Sec. 2.  Minnesota Statutes 2000, section 256B.434, 
  2.16  subdivision 4, is amended to read: 
  2.17     Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
  2.18  nursing facilities which have their payment rates determined 
  2.19  under this section rather than section 256B.431, the 
  2.20  commissioner shall establish a rate under this subdivision.  The 
  2.21  nursing facility must enter into a written contract with the 
  2.22  commissioner. 
  2.23     (b) A nursing facility's case mix payment rate for the 
  2.24  first rate year of a facility's contract under this section is 
  2.25  the payment rate the facility would have received under section 
  2.26  256B.431. 
  2.27     (c) A nursing facility's case mix payment rates for the 
  2.28  second and subsequent years of a facility's contract under this 
  2.29  section are the previous rate year's contract payment rates plus 
  2.30  an inflation adjustment.  The index for the inflation adjustment 
  2.31  must be based on the change in the Consumer Price Index-All 
  2.32  Items (United States City average) (CPI-U) forecasted by Data 
  2.33  Resources, Inc., as forecasted in the fourth quarter of the 
  2.34  calendar year preceding the rate year.  The inflation adjustment 
  2.35  must be based on the 12-month period from the midpoint of the 
  2.36  previous rate year to the midpoint of the rate year for which 
  3.1   the rate is being determined.  For the rate years beginning on 
  3.2   July 1, 1999, and July 1, 2000, July 1, 2001, and July 1, 2002, 
  3.3   this paragraph shall apply only to the property-related payment 
  3.4   rate.  In determining the amount of the property-related payment 
  3.5   rate adjustment under this paragraph, the commissioner shall 
  3.6   determine the proportion of the facility's rates that are 
  3.7   property-related based on the facility's most recent cost report.
  3.8      (d) The commissioner shall develop additional 
  3.9   incentive-based payments of up to five percent above the 
  3.10  standard contract rate for achieving outcomes specified in each 
  3.11  contract.  The specified facility-specific outcomes must be 
  3.12  measurable and approved by the commissioner.  The commissioner 
  3.13  may establish, for each contract, various levels of achievement 
  3.14  within an outcome.  After the outcomes have been specified the 
  3.15  commissioner shall assign various levels of payment associated 
  3.16  with achieving the outcome.  Any incentive-based payment cancels 
  3.17  if there is a termination of the contract.  In establishing the 
  3.18  specified outcomes and related criteria the commissioner shall 
  3.19  consider the following state policy objectives: 
  3.20     (1) improved cost effectiveness and quality of life as 
  3.21  measured by improved clinical outcomes; 
  3.22     (2) successful diversion or discharge to community 
  3.23  alternatives; 
  3.24     (3) decreased acute care costs; 
  3.25     (4) improved consumer satisfaction; 
  3.26     (5) the achievement of quality; or 
  3.27     (6) any additional outcomes proposed by a nursing facility 
  3.28  that the commissioner finds desirable. 
  3.29     Sec. 3.  Minnesota Statutes 2000, section 256B.501, is 
  3.30  amended by adding a subdivision to read: 
  3.31     Subd. 14.  [ICF/MR RATE INCREASES BEGINNING OCTOBER 1, 
  3.32  2000, AND JANUARY 1, 2002.] (a) For the rate years beginning 
  3.33  October 1, 2000, and January 1, 2002, the commissioner shall 
  3.34  make available to each facility reimbursed under this section, 
  3.35  section 256B.5011, and Laws 1993, First Special Session chapter 
  3.36  1, article 4, section 11, an adjustment to the total operating 
  4.1   payment rate of 3.5 percent. 
  4.2      (b) For each facility, the commissioner shall determine the 
  4.3   payment rate adjustment using the percentage specified in 
  4.4   paragraph (a) multiplied by the total operating payment rate in 
  4.5   effect on the last day of the prior rate year, and dividing the 
  4.6   resulting amount by the facility's actual resident days.  The 
  4.7   total operating payment rate shall include the adjustment 
  4.8   provided in subdivision 12. 
  4.9      (c) Any facility whose payment rates are governed by 
  4.10  closure agreements, receivership agreements, or Minnesota Rules, 
  4.11  part 9553.0075, is not eligible for an adjustment otherwise 
  4.12  granted under this subdivision.  
  4.13     Sec. 4.  [PROVIDER RATE INCREASES.] 
  4.14     (a) The commissioner shall increase reimbursement rates by 
  4.15  3.5 percent each year of the biennium for the providers listed 
  4.16  in paragraph (b).  The increases shall be effective for services 
  4.17  rendered on or after July 1 of each year. 
  4.18     (b) The rate increases described in this section shall be 
  4.19  provided to home and community-based waivered services for 
  4.20  persons with mental retardation or related conditions under 
  4.21  Minnesota Statutes, section 256B.501; home and community-based 
  4.22  waivered services for the elderly under Minnesota Statutes, 
  4.23  section 256B.0915; waivered services under community 
  4.24  alternatives for disabled individuals under Minnesota Statutes, 
  4.25  section 256B.49; community alternative care waivered services 
  4.26  under Minnesota Statutes, section 256B.49; traumatic brain 
  4.27  injury waivered services under Minnesota Statutes, section 
  4.28  256B.49; nursing services and home health services under 
  4.29  Minnesota Statutes, section 256B.0625, subdivision 6a; personal 
  4.30  care services and nursing supervision of personal care services 
  4.31  under Minnesota Statutes, section 256B.0625, subdivision 19a; 
  4.32  private-duty nursing services under Minnesota Statutes, section 
  4.33  256B.0625, subdivision 7; day training and habilitation services 
  4.34  for adults with mental retardation or related conditions under 
  4.35  Minnesota Statutes, sections 252.40 to 252.46; alternative care 
  4.36  services under Minnesota Statutes, section 256B.0913; adult 
  5.1   residential program grants under Minnesota Rules, parts 
  5.2   9535.2000 to 9535.3000; adult and family community-support 
  5.3   grants under Minnesota Rules, parts 9535.1700 to 9535.1760; 
  5.4   semi-independent living services under Minnesota Statutes, 
  5.5   section 252.275, including semi-independent living services 
  5.6   funding under county social services grants formerly funded 
  5.7   under Minnesota Statutes, chapter 256I; community-support 
  5.8   services for deaf and hard-of-hearing adults with mental illness 
  5.9   who use or wish to use sign language as their primary means of 
  5.10  communication; and living skills training programs for persons 
  5.11  with intractable epilepsy who need assistance in the transition 
  5.12  to independent living.