1.1                          A bill for an act 
  1.2             relating to human services; modifying provisions 
  1.3             related to long-term care reform; amending Minnesota 
  1.4             Statutes 2000, sections 144A.04, subdivision 7; 
  1.5             256B.47, subdivision 2; Minnesota Statutes 2001 
  1.6             Supplement, sections 144A.071, subdivision 1a; 
  1.7             144A.36, subdivision 1; 144A.74; 256B.431, subdivision 
  1.8             34; 256B.437, subdivision 3; 256B.438, subdivision 1. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 144A.04, 
  1.11  subdivision 7, is amended to read: 
  1.12     Subd. 7.  [MINIMUM NURSING STAFF REQUIREMENT.] 
  1.13  Notwithstanding the provisions of Minnesota Rules, part 
  1.14  4655.5600, the minimum staffing standard for nursing personnel 
  1.15  in certified nursing homes is as follows: 
  1.16     (a) The minimum number of hours of nursing personnel to be 
  1.17  provided in a nursing home is the greater of two hours per 
  1.18  resident per 24 hours or, until the state implements a minimum 
  1.19  data set resource utilization grouping based case mix system, 
  1.20  0.95 hours per standardized resident day. 
  1.21     (b) For purposes of this subdivision, "hours of nursing 
  1.22  personnel" means the paid, on-duty, productive nursing hours of 
  1.23  all nurses and nursing assistants, calculated on the basis of 
  1.24  any given 24-hour period.  "Productive nursing hours" means all 
  1.25  on-duty hours during which nurses and nursing assistants are 
  1.26  engaged in nursing duties.  Examples of nursing duties may be 
  1.27  found in Minnesota Rules, parts 4655.5900, 4655.6100, and 
  2.1   4655.6400.  Not included are vacations, holidays, sick leave, 
  2.2   in-service classroom training, or lunches.  Also not included 
  2.3   are the nonproductive nursing hours of the in-service training 
  2.4   director.  In homes with more than 60 licensed beds, the hours 
  2.5   of the director of nursing are excluded.  "Standardized resident 
  2.6   day" means the sum of the number of residents in each case mix 
  2.7   class multiplied by the case mix weight for that resident class, 
  2.8   as found in Minnesota Rules, part 9549.0059, subpart 2, 
  2.9   calculated on the basis of a facility's census for any given 
  2.10  day.  For the purpose of determining a facility's census, the 
  2.11  commissioner of health shall exclude the resident days claimed 
  2.12  by the facility for resident therapeutic leave or bed hold days. 
  2.13     (c) Calculation of nursing hours per standardized resident 
  2.14  day is performed by dividing total hours of nursing personnel 
  2.15  for a given period by the total of standardized resident days 
  2.16  for that same period. 
  2.17     (d) A nursing home that is issued a notice of noncompliance 
  2.18  under section 144A.10, subdivision 5, for a violation of this 
  2.19  subdivision, shall be assessed a civil fine of $300 for each day 
  2.20  of noncompliance, subject to section 144A.10, subdivisions 7 and 
  2.21  8. 
  2.22     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
  2.23  144A.071, subdivision 1a, is amended to read: 
  2.24     Subd. 1a.  [DEFINITIONS.] For purposes of sections 144A.071 
  2.25  to 144A.073, the following terms have the meanings given them: 
  2.26     (a) "Attached fixtures" has the meaning given in Minnesota 
  2.27  Rules, part 9549.0020, subpart 6. 
  2.28     (b) "Buildings" has the meaning given in Minnesota Rules, 
  2.29  part 9549.0020, subpart 7. 
  2.30     (c) "Capital assets" has the meaning given in section 
  2.31  256B.421, subdivision 16. 
  2.32     (d) "Commenced construction" means that all of the 
  2.33  following conditions were met:  the final working drawings and 
  2.34  specifications were approved by the commissioner of health; the 
  2.35  construction contracts were let; a timely construction schedule 
  2.36  was developed, stipulating dates for beginning, achieving 
  3.1   various stages, and completing construction; and all zoning and 
  3.2   building permits were applied for. 
  3.3      (e) "Completion date" means the date on which a certificate 
  3.4   of occupancy is issued for a construction project, or if a 
  3.5   certificate of occupancy is not required, the date on which the 
  3.6   construction project is available for facility use. 
  3.7      (f) "Construction" means any erection, building, 
  3.8   alteration, reconstruction, modernization, or improvement 
  3.9   necessary to comply with the nursing home licensure rules. 
  3.10     (g) "Construction project" means: 
  3.11     (1) a capital asset addition to, or replacement of a 
  3.12  nursing home or certified boarding care home that results in new 
  3.13  space or the remodeling of or renovations to existing facility 
  3.14  space; 
  3.15     (2) the remodeling or renovation of existing facility space 
  3.16  the use of which is modified as a result of the project 
  3.17  described in clause (1).  This existing space and the project 
  3.18  described in clause (1) must be used for the functions as 
  3.19  designated on the construction plans on completion of the 
  3.20  project described in clause (1) for a period of not less than 24 
  3.21  months; or 
  3.22     (3) capital asset additions or replacements that are 
  3.23  completed within 12 months before or after the completion date 
  3.24  of the project described in clause (1). 
  3.25     (h) "New licensed" or "new certified beds" means: 
  3.26     (1) newly constructed beds in a facility or the 
  3.27  construction of a new facility that would increase the total 
  3.28  number of licensed nursing home beds or certified boarding care 
  3.29  or nursing home beds in the state; or 
  3.30     (2) newly licensed nursing home beds or newly certified 
  3.31  boarding care or nursing home beds that result from remodeling 
  3.32  of the facility that involves relocation of beds but does not 
  3.33  result in an increase in the total number of beds, except when 
  3.34  the project involves the upgrade of boarding care beds to 
  3.35  nursing home beds, as defined in section 144A.073, subdivision 
  3.36  1.  "Remodeling" includes any of the type of conversion, 
  4.1   renovation, replacement, or upgrading projects as defined in 
  4.2   section 144A.073, subdivision 1. 
  4.3      (i) "Project construction costs" means the cost of the 
  4.4   facility capital asset additions, replacements, renovations, or 
  4.5   remodeling projects, construction site preparation costs, and 
  4.6   related soft costs.  Project construction costs include the cost 
  4.7   of any remodeling or renovation of existing facility space which 
  4.8   is modified as a result of the construction project.  Project 
  4.9   construction costs also includes the cost of new technology 
  4.10  implemented as part of the construction project.  Project 
  4.11  construction costs also include the cost of new technology 
  4.12  implemented as part of the construction project and depreciable 
  4.13  equipment directly identified to the project.  Any new 
  4.14  technology and depreciable equipment included in the project 
  4.15  construction costs shall, at the written election of the 
  4.16  facility, be included in the facility's appraised value for 
  4.17  purposes of Minnesota Rules, part 9549.0020, subpart 5, and debt 
  4.18  incurred for its purchase shall be included as allowable debt 
  4.19  for purposes of Minnesota Rules, part 9549.0060, subpart 5, item 
  4.20  A.  Any new technology and depreciable equipment included in the 
  4.21  project construction costs that the facility elects not to 
  4.22  include in its appraised value and allowable debts shall be 
  4.23  treated as provided in section 256B.431, subdivision 17, 
  4.24  paragraph (b). 
  4.25     (j) "Technology" means information systems or devices that 
  4.26  make documentation, charting, and staff time more efficient or 
  4.27  encourage and allow for care through alternative settings 
  4.28  including, but not limited to, touch screens, monitors, 
  4.29  hand-helds, swipe cards, motion detectors, pagers, telemedicine, 
  4.30  medication dispensers, and equipment to monitor vital signs and 
  4.31  self-injections, and to observe skin and other conditions. 
  4.32     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
  4.33  144A.36, subdivision 1, is amended to read: 
  4.34     Subdivision 1.  [DEFINITIONS.] "Eligible nursing home" 
  4.35  means any nursing home licensed under sections 144A.01 to 
  4.36  144A.155 and or a boarding care facility, certified by the 
  5.1   appropriate authority under United States Code, title 42, 
  5.2   sections 1396-1396p, to participate as a vendor in the medical 
  5.3   assistance program established under chapter 256B. 
  5.4      Sec. 4.  Minnesota Statutes 2001 Supplement, section 
  5.5   144A.74, is amended to read: 
  5.6      144A.74 [MAXIMUM CHARGES.] 
  5.7      A supplemental nursing services agency must not bill or 
  5.8   receive payments from a nursing home licensed under this chapter 
  5.9   at a rate higher than 150 percent of the weighted average wage 
  5.10  rate for the applicable employee classification for the 
  5.11  geographic group to which the nursing home is assigned under 
  5.12  Minnesota Rules, part 9549.0052.  The weighted average wage 
  5.13  rates must be determined by the commissioner of human services 
  5.14  and reported to the commissioner of health on an annual basis.  
  5.15  Wages are defined as hourly rate of pay and shift differentials 
  5.16  including weekend shift differentials.  Wages do not include 
  5.17  payroll taxes, benefits, or overtime.  Facilities shall provide 
  5.18  information necessary to determine weighted average wage rates 
  5.19  to the commissioner of human services in a format requested by 
  5.20  the commissioner.  The maximum rate must include all charges for 
  5.21  administrative fees, contract fees, or other special charges in 
  5.22  addition to the hourly rates for the temporary nursing pool 
  5.23  personnel supplied to a nursing home. 
  5.24     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
  5.25  256B.431, subdivision 34, is amended to read: 
  5.26     Subd. 34.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
  5.27  1, 2001, AND JULY 1, 2002.] (a) For the rate years beginning 
  5.28  July 1, 2001, and July 1, 2002, two-thirds of the money 
  5.29  resulting from the rate adjustment under subdivision 31 and 
  5.30  one-half of the money resulting from the rate adjustment under 
  5.31  subdivisions 32 and 33 must be used to increase the wages and 
  5.32  benefits and pay associated costs of all employees except 
  5.33  management fees, the administrator, and central office staff. 
  5.34     (b) Money received by a facility as a result of the rate 
  5.35  adjustments provided in subdivisions 31 to 33, which must be 
  5.36  used as provided in paragraph (a), must be used only for wage 
  6.1   and benefit increases implemented on or after July 1, 2001, or 
  6.2   July 1, 2002, respectively, and must not be used for wage 
  6.3   increases implemented prior to those dates. 
  6.4      (c) Nursing facilities may apply for the portions of the 
  6.5   rate adjustments under subdivisions 31 to 33, which must be used 
  6.6   as provided in paragraph (a).  The application must be made to 
  6.7   the commissioner and contain a plan by which the nursing 
  6.8   facility will distribute to employees of the nursing facility 
  6.9   the funds, which must be used as provided in paragraph (a).  For 
  6.10  nursing facilities in which the employees are represented by an 
  6.11  exclusive bargaining representative, an agreement negotiated and 
  6.12  agreed to by the employer and the exclusive bargaining 
  6.13  representative constitutes the plan.  A negotiated agreement may 
  6.14  constitute the plan only if the agreement is finalized after the 
  6.15  date of enactment of all increases for the rate year.  The 
  6.16  commissioner shall review the plan to ensure that the rate 
  6.17  adjustments are used as provided in paragraph (a).  To be 
  6.18  eligible, a facility must submit its plan for the wage and 
  6.19  benefit distribution by December 31 each year.  If a facility's 
  6.20  plan for wage and benefit distribution is effective for its 
  6.21  employees after July 1 of the year that the funds are available, 
  6.22  the portion of the rate adjustments, which must be used as 
  6.23  provided in paragraph (a), are effective the same date as its 
  6.24  plan. 
  6.25     (d) A hospital-attached nursing facility may include costs 
  6.26  in their distribution plan for wages and benefits and associated 
  6.27  costs of employees in the organization's shared services 
  6.28  departments, provided that: 
  6.29     (1) the nursing facility and the hospital share common 
  6.30  ownership; and 
  6.31     (2) adjustments for hospital services using the 
  6.32  diagnostic-related grouping payment rates per admission under 
  6.33  Medicare are less than three percent during the 12 months prior 
  6.34  to the effective date of these rate adjustments. 
  6.35     If a hospital-attached facility meets the qualifications in 
  6.36  this paragraph, the difference between the rate adjustments 
  7.1   approved for nursing facility services and the rate increase 
  7.2   approved for hospital services may be permitted as a 
  7.3   distribution in the hospital-attached facility's plan regardless 
  7.4   of whether the use of those funds is shown as being attributable 
  7.5   to employee hours worked in the nursing facility or employee 
  7.6   hours worked in the hospital. 
  7.7      For the purposes of this paragraph, a hospital-attached 
  7.8   nursing facility is one that meets the definition under 
  7.9   subdivision 2j, or, in the case of a facility reimbursed under 
  7.10  section 256B.434, met this definition at the time their last 
  7.11  payment rate was established under Minnesota Rules, parts 
  7.12  9549.0010 to 9549.0080, and this section. 
  7.13     (e) A copy of the approved distribution plan must be made 
  7.14  available to all employees by giving each employee a copy or by 
  7.15  posting it in an area of the nursing facility to which all 
  7.16  employees have access.  If an employee does not receive the wage 
  7.17  and benefit adjustment described in the facility's approved plan 
  7.18  and is unable to resolve the problem with the facility's 
  7.19  management or through the employee's union representative, the 
  7.20  employee may contact the commissioner at an address or telephone 
  7.21  number provided by the commissioner and included in the approved 
  7.22  plan.  
  7.23     (f) Notwithstanding section 256B.48, subdivision 1, clause 
  7.24  (a), upon the request of a nursing facility, the commissioner 
  7.25  may authorize the facility to raise per diem rates for 
  7.26  private-pay residents on July 1 by the amount anticipated to be 
  7.27  required upon implementation of the rate adjustments allowable 
  7.28  under subdivisions 31 to 33.  The commissioner shall require any 
  7.29  amounts collected under this paragraph, which must be used as 
  7.30  provided in paragraph (a), to be placed in an escrow account 
  7.31  established for this purpose with a financial institution that 
  7.32  provides deposit insurance until the medical assistance rate is 
  7.33  finalized.  The initial rate notice, with compensation plan 
  7.34  approval pending, shall be deemed as the finalized rate notice 
  7.35  for purposes of this section.  The commissioner shall conduct 
  7.36  audits as necessary to ensure that: 
  8.1      (1) the amounts collected are retained in escrow until 
  8.2   medical assistance rates are increased to reflect the 
  8.3   wage-related adjustment; and 
  8.4      (2) any amounts collected from private-pay residents in 
  8.5   excess of the final medical assistance rate are repaid to the 
  8.6   private-pay residents with interest at the rate used by the 
  8.7   commissioner of revenue for the late payment of taxes and in 
  8.8   effect on the date the distribution plan is approved by the 
  8.9   commissioner of human services. 
  8.10     Sec. 6.  Minnesota Statutes 2001 Supplement, section 
  8.11  256B.437, subdivision 3, is amended to read: 
  8.12     Subd. 3.  [APPLICATIONS FOR PLANNED CLOSURE OF NURSING 
  8.13  FACILITIES.] (a) By August 15, 2001, the commissioner of human 
  8.14  services shall implement and announce a program for closure or 
  8.15  partial closure of nursing facilities.  Names and identifying 
  8.16  information provided in response to the announcement shall 
  8.17  remain private unless approved, according to the timelines 
  8.18  established in the plan.  The announcement must specify: 
  8.19     (1) the criteria in subdivision 4 that will be used by the 
  8.20  commissioner to approve or reject applications; 
  8.21     (2) a requirement for the submission of a letter of intent 
  8.22  before the submission of an application; 
  8.23     (3) the information that must accompany an application; and 
  8.24     (4) that applications may combine planned closure rate 
  8.25  adjustments with moratorium exception funding, in which case a 
  8.26  single application may serve both purposes. 
  8.27  Between August 1, 2001, and June 30, 2003, the commissioner may 
  8.28  approve planned closures of up to 5,140 nursing facility beds, 
  8.29  less the number of licensed beds in facilities that close during 
  8.30  the same time period without approved closure plans or that have 
  8.31  notified the commissioner of health of their intent to close 
  8.32  without an approved closure plan. 
  8.33     (b) A facility or facilities reimbursed under section 
  8.34  256B.431 or 256B.434 with a closure plan approved by the 
  8.35  commissioner under subdivision 5 may assign a planned closure 
  8.36  rate adjustment to another facility or facilities that are not 
  9.1   closing or in the case of a partial closure, to the facility 
  9.2   undertaking the partial closure.  A facility may also elect to 
  9.3   have a planned closure rate adjustment shared equally by the 
  9.4   five nursing facilities with the lowest total operating payment 
  9.5   rates in the state development region designated under section 
  9.6   462.385, in which the facility that is closing is located.  The 
  9.7   planned closure rate adjustment must be calculated under 
  9.8   subdivision 6.  Facilities that close without a closure plan, or 
  9.9   whose closure plan is not approved by the commissioner, are not 
  9.10  eligible to assign a planned closure rate adjustment under 
  9.11  subdivision 6, unless they are closing five or fewer beds, or 
  9.12  less than ten percent of their total licensed bed capacity, 
  9.13  whichever is greater.  Facilities closing five or fewer beds or 
  9.14  less than ten percent of their total licensed bed capacity 
  9.15  without an approved closure plan are eligible to assign the 
  9.16  amount calculated under subdivision 6 to themselves.  When 
  9.17  facilities are closing more than five beds, or more than ten 
  9.18  percent of their total licensed bed capacity, and if they do not 
  9.19  have an approved closure plan or are not eligible for the 
  9.20  adjustment under subdivision 6, the commissioner shall calculate 
  9.21  the amount the facility would have been eligible to assign under 
  9.22  subdivision 6, and shall use this amount to provide equal rate 
  9.23  adjustments to the five nursing facilities with the lowest total 
  9.24  operating payment rates in the state development region 
  9.25  designated under section 462.385, in which the facility that 
  9.26  closed is located. 
  9.27     (c) To be considered for approval, an application must 
  9.28  include: 
  9.29     (1) a description of the proposed closure plan, which must 
  9.30  include identification of the facility or facilities to receive 
  9.31  a planned closure rate adjustment and the amount and timing of a 
  9.32  planned closure rate adjustment proposed for each facility; 
  9.33     (2) the proposed timetable for any proposed closure, 
  9.34  including the proposed dates for announcement to residents, 
  9.35  commencement of closure, and completion of closure; 
  9.36     (3) the proposed relocation plan for current residents of 
 10.1   any facility designated for closure.  The proposed relocation 
 10.2   plan must be designed to comply with all applicable state and 
 10.3   federal statutes and regulations, including, but not limited to, 
 10.4   section 144A.161; 
 10.5      (4) a description of the relationship between the nursing 
 10.6   facility that is proposed for closure and the nursing facility 
 10.7   or facilities proposed to receive the planned closure rate 
 10.8   adjustment.  If these facilities are not under common ownership, 
 10.9   copies of any contracts, purchase agreements, or other documents 
 10.10  establishing a relationship or proposed relationship must be 
 10.11  provided; 
 10.12     (5) documentation, in a format approved by the 
 10.13  commissioner, that all the nursing facilities receiving a 
 10.14  planned closure rate adjustment under the plan have accepted 
 10.15  joint and several liability for recovery of overpayments under 
 10.16  section 256B.0641, subdivision 2, for the facilities designated 
 10.17  for closure under the plan; and 
 10.18     (6) an explanation of how the application coordinates with 
 10.19  planning efforts under subdivision 2.  If the planning group 
 10.20  does not support a level of nursing facility closures that the 
 10.21  commissioner considers to be reasonable, the commissioner may 
 10.22  approve a planned closure proposal without its support. 
 10.23     (d) The application must address the criteria listed in 
 10.24  subdivision 4. 
 10.25     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
 10.26  256B.438, subdivision 1, is amended to read: 
 10.27     Subdivision 1.  [SCOPE.] This section establishes the 
 10.28  method and criteria used to determine resident reimbursement 
 10.29  classifications based upon the assessments of residents of 
 10.30  nursing homes and boarding care homes whose payment rates are 
 10.31  established under section 256B.431, 256B.434, or 256B.435.  
 10.32  Resident reimbursement classifications shall be established 
 10.33  according to the 34 group, resource utilization groups, version 
 10.34  III or RUG-III model as described in section 144.0724.  
 10.35  Reimbursement classifications established under this section 
 10.36  shall be implemented after June 30, 2002, but no later than 
 11.1   January 1, 2003.  Reimbursement classifications established 
 11.2   under this section shall be implemented no earlier than six 
 11.3   weeks after nursing facilities receive notices of payment rates 
 11.4   from the commissioner. 
 11.5      Sec. 8.  Minnesota Statutes 2000, section 256B.47, 
 11.6   subdivision 2, is amended to read: 
 11.7      Subd. 2.  [NOTICE TO RESIDENTS.] No increase in nursing 
 11.8   facility rates for private paying residents shall be effective 
 11.9   unless the nursing facility notifies the resident or person 
 11.10  responsible for payment of the increase in writing 30 days 
 11.11  before the increase takes effect.  
 11.12     A nursing facility may adjust its rates without giving the 
 11.13  notice required by this subdivision when the purpose of the rate 
 11.14  adjustment is to reflect a necessary change in the level of care 
 11.15  provided to a resident.  If the state fails to set rates as 
 11.16  required by section 256B.431, the time required for giving 
 11.17  notice is decreased by the number of days by which the state was 
 11.18  late in setting the rates.  The initial rate notice sent to a 
 11.19  nursing facility by the commissioner may be used to meet this 
 11.20  requirement.  If the final rate notice after the approval of the 
 11.21  facility's compensation plan differs from the initial rate 
 11.22  notice, the facility must settle up the difference with the 
 11.23  private paying residents.