1.1 	A bill for an act
1.2 	relating to human services; requiring quarterly resident assessments; modifying 
1.3 	case mix indices for nursing facility reimbursement; providing certain facilities 
1.4 	with rate adjustments;amending Minnesota Statutes 2004, sections 144.0724, 
1.5 	subdivision 4; 256B.438, subdivision 4, by adding a subdivision.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 144.0724, subdivision 4, is amended to 
1.8 	read:
1.9 		Subd. 4.Resident assessment schedule. (a) A facility must conduct and 
1.10 	electronically submit to the commissioner of health case mix assessments that conform 
1.11 	with the assessment schedule defined by Code of Federal Regulations, title 42, section  
1.12 	483.20, and published by the United States Department of Health and Human Services, 
1.13 	Centers for Medicare and Medicaid Services, in the Long Term Care Assessment 
1.14 	Instrument User's Manual, version 2.0, October 1995, and subsequent clarifications made 
1.15 	in the Long-Term Care Assessment Instrument Questions and Answers, version 2.0, 
1.16 	August 1996. The commissioner of health may substitute successor manuals or question 
1.17 	and answer documents published by the United States Department of Health and Human 
1.18 	Services, Centers for Medicare and Medicaid Services, to replace or supplement the 
1.19 	current version of the manual or document. 
1.20 	(b) The assessments used to determine a case mix classification for reimbursement 
1.21 	include the following:
1.22 	(1) a new admission assessment must be completed by day 14 following admission;
1.23 	(2) an annual assessment must be completed within 366 days of the last 
1.24 	comprehensive assessment;
2.1 	(3) a significant change assessment must be completed within 14 days of the 
2.2 	identification of a significant change; and
2.3 	(4) ~~the second quarterly assessment following either a new admission assessment, an~~ 
2.4 	~~annual assessment, or a significant change assessment~~ all quarterly assessments following 
2.5 	a new admission assessment, a quarterly assessment, an annual assessment, or a significant 
2.6 	change assessment. Each quarterly assessment must be completed within 92 days of 
2.7 	the previous assessment.

2.8 	EFFECTIVE DATE. This section is effective October 1, 2006.

2.9 	Sec. 2. Minnesota Statutes 2004, section 256B.438, subdivision 4, is amended to read:
2.10 		Subd. 4.Resident assessment schedule. (a) Nursing facilities shall conduct and 
2.11 	submit case mix assessments according to the schedule established by the commissioner 
2.12 	of health under section  144.0724, subdivisions 4 and 5. 
2.13 	(b) The resident reimbursement classifications established under section  144.0724, 
2.14 	subdivision 3, shall be effective the day of admission for new admission assessments. The 
2.15 	effective date for significant change assessments shall be the assessment reference date. 
2.16 	The effective date for annual and ~~second~~ all quarterly assessments shall be the first day of 
2.17 	the month following assessment reference date. 

2.18 	EFFECTIVE DATE. This section is effective October 1, 2006.

2.19 	Sec. 3. Minnesota Statutes 2004, section 256B.438, is amended by adding a 
2.20 	subdivision to read:
2.21 		Subd. 8.New case mix indices. (a) Effective with rates for the rate year beginning 
2.22 	October 1, 2006, the commissioner shall implement the case mix indices recommended 
2.23 	by the time study conducted under Laws 2001, First Special Session chapter 9, article 5, 
2.24 	section 35, paragraph (e). The commissioner shall implement the new case mix indices 
2.25 	as follows:
2.26 	(1) The September 30, 2005, case mix component of the nursing facility operating 
2.27 	payment rate shall be multiplied by the new case mix indices to create 36 case mix 
2.28 	adjusted rates.
2.29 	(2) The 36 case mix adjusted rates determined in clause (1), plus the noncase mix 
2.30 	component, shall be the 36 nursing facility operating payment rates. 
2.31 	(3) The rate increases authorized by sections 256B.431, subdivision 41, and 
2.32 	256B.441, subdivision 46, shall be applied to the rates determined under clause (2).
3.1 	(b) The commissioner shall adjust the October 1, 2006, operating rates in paragraph 
3.2 	(a) for nursing facilities estimated to receive a decrease in operating revenue. The rate 
3.3 	interim adjustment is established as follows:
3.4 	(1) The commissioner shall use the minimum data set to classify private and medical 
3.5 	assistance patient days by RUG classification for the rate year ending June 30, 2006, 
3.6 	according to both the case mix indices and resident assessment schedule to be used on 
3.7 	September 30, 2006, and the case mix indices and resident assessment schedule to be 
3.8 	used on October 1, 2006.
3.9 	(2) The commissioner shall use the resident days in clause (1) and the nursing 
3.10 	facility's October 1, 2006, unadjusted operating payment rate to estimate operating 
3.11 	revenue according to both the case mix indices and resident assessment schedule to be 
3.12 	used on September 30, 2006, and the case mix indices and resident assessment schedule 
3.13 	to be used on October 1, 2006.
3.14 	(3) The estimated operating revenue determined with the case mix indices and 
3.15 	resident assessment schedule to be used on September 30, 2006, minus the operating 
3.16 	revenue determined with the case mix indices and resident assessment schedule to be 
3.17 	used on October 1, 2006, shall equal the decrease in medical assistance and private pay 
3.18 	operating revenue.
3.19 	(4) Facilities with an estimated decrease in clause (3) shall receive an interim rate 
3.20 	adjustment equal to the value determined in clause (3) divided by the medical assistance 
3.21 	and private pay resident days in clause (1).
3.22 	(5) The interim rate adjustment shall be in effect from October 1, 2006, through 
3.23 	June 30, 2007, and shall not be part of a facility's operating payment rate after June 30, 
3.24 	2007. The interim rate adjustment shall be applied to the case mix portion of the facility 
3.25 	operating rate.
3.26 	(6) The commissioner, by August 15, 2006, shall provide nursing facilities which 
3.27 	the commissioner has estimated will experience a decrease in operating revenue, with 
3.28 	written notice that specifies the amount of the estimated decrease in operating revenue 
3.29 	and the amount of the interim rate adjustment. Nursing facilities shall have 30 days to 
3.30 	decline the interim rate adjustment.
3.31 	(c) The commissioner shall adjust the July 1, 2007, operating rates of facilities 
3.32 	receiving the interim rate adjustments in paragraph (b) and facilities that demonstrate a 
3.33 	decrease in operating revenue from the implementation of the case mix indices and use of 
3.34 	all quarterly assessments. The adjustment is calculated as follows:
3.35 	(1) Facilities that received the interim rate adjustment in paragraph (b) shall report 
3.36 	to the commissioner the number of medical assistance and private pay resident days 
4.1 	by RUG classification for the six-month period October 1, 2006, through March 31, 
4.2 	2007, according to both the case mix indices and resident assessment schedule used on 
4.3 	September 30, 2006, and the case mix indices and resident assessment schedule used on 
4.4 	October 1, 2006. A facility not receiving the rate adjustment in paragraph (b) that had a 
4.5 	decrease in operating revenue resulting from implementation of the new case mix indices 
4.6 	and the use of quarterly assessments may report to the commissioner the number of 
4.7 	medical assistance and private pay resident days by RUG classification for the six-month 
4.8 	period October 1, 2006, through March 31, 2007, according to both the case mix indices 
4.9 	and resident assessment schedule used on September 30, 2006, and the case mix indices 
4.10 	and resident assessment schedule used on October 1, 2006. Nursing facilities shall submit 
4.11 	the required information to the commissioner by May 15, 2007, in the manner specified by 
4.12 	the commissioner.
4.13 	(2) The commissioner shall use the resident days reported in clause (1) and the 
4.14 	nursing facility's October 1, 2006, unadjusted operating payment rate to determine 
4.15 	operating revenue under both the case mix indices and resident assessment schedule 
4.16 	used on September 30, 2006, and the case mix indices and resident assessment schedule 
4.17 	used on October 1, 2006.
4.18 	(3) The operating revenue determined using the case mix indices and resident 
4.19 	assessment schedule used on September 30, 2006, minus the operating revenue determined 
4.20 	using the case mix indices and resident assessment schedule used on October 1, 2006, 
4.21 	shall equal the decrease in operating revenue.
4.22 	(4) The July 1, 2007, operating payment rate adjustment shall be the decrease in 
4.23 	operating revenue determined in clause (3) divided by the total medical assistance and 
4.24 	private pay days reported in clause (1) for the six-month period October 1, 2006, through 
4.25 	March 31, 2007. The operating payment rate adjustment shall be applied to the case 
4.26 	mix portion of the facility operating rate.
4.27 	(5) If the amount determined in clause (4) is greater than the amount determined 
4.28 	under paragraph (b), clause (4), the commissioner shall retroactively pay to nursing 
4.29 	facilities the difference between the two amounts for all paid medical assistance days 
4.30 	between October 1, 2006, to June 30, 2007.

4.31 	EFFECTIVE DATE. This section is effective July 1, 2006.