1.1                          A bill for an act 
  1.2             relating to human services; providing for a special 
  1.3             nursing facility rate adjustment process for 
  1.4             facilities that downsize or close; requiring budget 
  1.5             neutrality; proposing coding for new law in Minnesota 
  1.6             Statutes, chapter 256B. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [256B.436] [SPECIAL RATE ADJUSTMENT.] 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) "Closure" means the 
  1.10  voluntary cessation of operations of a nursing facility and 
  1.11  voluntary delicensure and decertification of all nursing 
  1.12  facility beds of the nursing facility. 
  1.13     (b) "Commencement of closure" means the date on which the 
  1.14  commissioner of health is notified of a planned closure in 
  1.15  accordance with section 144A.16, as part of an approved plan for 
  1.16  a special rate adjustment. 
  1.17     (c) "Completion of closure" means the date on which the 
  1.18  final resident of the nursing facility or nursing facilities 
  1.19  designated for closure in an approved plan for a special rate 
  1.20  adjustment is discharged from the facility or facilities. 
  1.21     (d) "Downsizing" means the delicensure and decertification 
  1.22  of a number of a nursing facility's licensed and certified beds 
  1.23  without closure. 
  1.24     (e) "Interim closure payments" means the medical assistance 
  1.25  payments that may be made to a nursing facility designated for 
  1.26  closure in an approved plan under this section. 
  2.1      (f) "Phased plan" means a special rate adjustment plan 
  2.2   affecting more than one nursing facility undergoing closure or 
  2.3   downsizing that is commenced and completed in phases. 
  2.4      (g) "Special rate adjustment" means an increase in a 
  2.5   nursing facility's operating rates under this section. 
  2.6      (h) "Standardized resident days" means the standardized 
  2.7   resident days as calculated under Minnesota Rules, part 
  2.8   9549.0054, subpart 2, based on the resident days in each 
  2.9   resident class for the most recent reporting period required to 
  2.10  be reported to the commissioner. 
  2.11     Subd. 2.  [PROPOSAL FOR SPECIAL RATE ADJUSTMENT PLAN.] One 
  2.12  or more nursing facilities that are owned or operated by a 
  2.13  nonprofit corporation owning or operating more than 22 nursing 
  2.14  facilities licensed in the state of Minnesota may submit to the 
  2.15  commissioner a proposal for a special rate adjustment under this 
  2.16  section.  To be eligible for a special rate adjustment, a 
  2.17  facility's operating rate for case mix level "A" must be below 
  2.18  the statewide weighted average operating rate for case mix level 
  2.19  "A," or, for facilities in geographic group III, the operating 
  2.20  rate for case mix level "A" must be below the weighted average 
  2.21  operating rate for case mix level "A" for nursing facilities in 
  2.22  geographic group III.  Facilities are eligible regardless of 
  2.23  whether they are reimbursed under section 256B.431 or 256B.434.  
  2.24  To be considered for approval, a proposal must include the 
  2.25  following: 
  2.26     (1) a description of the proposed special rate adjustment 
  2.27  plan, which shall include identification of the facility or 
  2.28  facilities to receive the special rate adjustment, the amount 
  2.29  and timing of special rate adjustment proposed for each facility 
  2.30  for the case mix level "A" operating rate, the standardized 
  2.31  resident days for each facility for which a special rate 
  2.32  adjustment is proposed, and the effective date for each special 
  2.33  rate adjustment.  The actual special rate adjustment for a 
  2.34  facility shall be allocated proportionately to the various rate 
  2.35  per diems included in that facility's operating rate; 
  2.36     (2) an analysis of the projected state medical assistance 
  3.1   costs of the special rate adjustment plan as proposed, including 
  3.2   the estimated costs of the special rate adjustments and any 
  3.3   phases included in the plan; 
  3.4      (3) an analysis of the projected state medical assistance 
  3.5   savings of the special rate adjustment plan as proposed, 
  3.6   including any savings projected to result from closure of one or 
  3.7   more nursing facilities; 
  3.8      (4) the proposed timetable for any proposed closure or 
  3.9   downsizing, including the proposed dates for commencement and 
  3.10  completion of closure and the effective date for downsizing; 
  3.11     (5) the proposed relocation plan for current residents of 
  3.12  any facility designated for closure or downsizing that reduces a 
  3.13  nursing facility's beds below its occupancy level at the time 
  3.14  the proposal is submitted.  The proposed relocation plan must be 
  3.15  designed to comply with all applicable state and federal 
  3.16  statutes and regulations, including, but not limited to, section 
  3.17  144A.16; and Minnesota Rules, parts 4655.6810 to 4655.6830; 
  3.18  parts 4658.1600 to 4658.1690; and parts 9546.0010 to 9546.0060; 
  3.19  and 
  3.20     (6) documentation, in a format approved by the 
  3.21  commissioner, that all the nursing facilities receiving a 
  3.22  special rate adjustment under the plan have accepted joint and 
  3.23  several liability for recovery of overpayments under section 
  3.24  256B.0641, subdivision 2, for the facilities designated for 
  3.25  closure under the plan. 
  3.26     Subd. 3.  [PHASED PLANS.] A proposal for a phased plan may 
  3.27  include more than one special rate adjustment plan, each of 
  3.28  which must meet the requirements of this section and each of 
  3.29  which may be implemented in phases at different times.  As part 
  3.30  of a phased plan, a nursing facility may receive a special rate 
  3.31  adjustment under more than one phase of the plan, and the cost 
  3.32  savings from the closure of a nursing facility designated for 
  3.33  closure under the plan may be applied as an offset to the 
  3.34  subsequent costs of more than one phase of the plan.  If a 
  3.35  facility is proposed to receive a special rate adjustment or 
  3.36  provide cost savings under more than one phase of a plan, the 
  4.1   proposal must describe the special rate adjustments or cost 
  4.2   savings in each of the affected phases of the plan.  Review and 
  4.3   approval of a phased plan under subdivision 4 shall apply to all 
  4.4   phases of the plan as proposed. 
  4.5      Subd. 4.  [REVIEW AND APPROVAL OF PROPOSALS.] (a) The 
  4.6   commissioner may grant a special rate adjustment for a nursing 
  4.7   facility or facilities according to an approved plan that 
  4.8   satisfies the requirements of this section.  The commissioner 
  4.9   shall not approve a proposal unless the commissioner determines 
  4.10  that projected state savings of the plan equal or exceed 
  4.11  projected state costs, including state agency administrative 
  4.12  costs directly related to the accomplishment of duties specified 
  4.13  in this subdivision relative to that proposal.  For purposes of 
  4.14  a phased plan, the requirement that costs must not exceed 
  4.15  savings applies to both the aggregate costs and savings of the 
  4.16  plan and to each phase of the plan.  A special rate adjustment 
  4.17  under this section shall be effective no earlier than the first 
  4.18  day of the month following completion of closure of all 
  4.19  facilities designated for closure under the plan.  For purposes 
  4.20  of a phased plan, the special rate adjustment for each phase 
  4.21  shall be effective no earlier than the first day of the month 
  4.22  following completion of closure of all facilities designated for 
  4.23  closure in that phase of the plan. 
  4.24     (b) Upon receipt of a proposal for a special rate 
  4.25  adjustment, the commissioner shall provide a copy of the 
  4.26  proposal to the commissioner of health.  The commissioner of 
  4.27  health shall certify to the commissioner within 30 days whether 
  4.28  the proposal, if implemented, will satisfy the requirements of 
  4.29  section 144A.16; and Minnesota Rules, parts 4655.6810 to 
  4.30  4655.6830, and parts 4658.1600 to 4658.1690.  The commissioner 
  4.31  shall not approve a plan under this section unless the 
  4.32  commissioner of health has made the certification required under 
  4.33  this paragraph. 
  4.34     (c) The commissioner shall review a proposal for a special 
  4.35  rate adjustment to determine whether it satisfies the 
  4.36  requirements of this section.  A determination shall be made 
  5.1   within 60 days of the date the proposal is submitted.  If the 
  5.2   commissioner determines that the proposal does not satisfy the 
  5.3   requirements of this section, or if the commissioner of health 
  5.4   does not certify the proposal under paragraph (b), the applicant 
  5.5   shall be provided written notice as soon as practicable, 
  5.6   specifying the deficiencies of the proposal.  The proposal may 
  5.7   be modified and resubmitted for further review by each 
  5.8   commissioner.  The commissioner of health shall review a 
  5.9   modified proposal within 30 days from the date it is submitted, 
  5.10  and the commissioner shall make a final determination on whether 
  5.11  the proposal satisfies the requirements of this section within 
  5.12  60 days of the date the modified proposal is submitted. 
  5.13     (d) Approval of a special rate adjustment plan expires 18 
  5.14  months after approval by the commissioner, unless commencement 
  5.15  of closure has occurred at all facilities designated for closure 
  5.16  under the plan for special rate adjustment. 
  5.17     Subd. 5.  [INTERIM CLOSURE PAYMENTS.] Instead of receiving 
  5.18  payments under section 256B.431 or 256B.434, a facility or 
  5.19  facilities designated for closure under an approved plan for a 
  5.20  special rate adjustment may elect in its proposal to have the 
  5.21  commissioner: 
  5.22     (1) extend the interim and settle-up rate provisions under 
  5.23  Minnesota Rules, part 9549.0057, to include facilities covered 
  5.24  by this section, effective from commencement of closure to 
  5.25  completion of closure; 
  5.26     (2) extend the length of the interim period but not to 
  5.27  exceed 12 months; 
  5.28     (3) limit the amount of reimbursable expenses related to 
  5.29  the acquisition of new capital assets; 
  5.30     (4) prohibit the acquisition of additional capital debt or 
  5.31  refinancing of existing capital debt unless prior approval is 
  5.32  obtained from the commissioner; 
  5.33     (5) establish as the aggregate administrative operating 
  5.34  cost limitation for the interim period the actual aggregate 
  5.35  administrative operating costs for the period immediately prior 
  5.36  to commencement of closure that is of the same duration as the 
  6.1   interim period; 
  6.2      (6) require the retention of financial and statistical 
  6.3   records until the commissioner has audited the interim period 
  6.4   and the settle-up rate; 
  6.5      (7) make aggregate payments under this subdivision for the 
  6.6   interim period up to the level of the aggregate payments for the 
  6.7   period immediately prior to commencement of closure that is of 
  6.8   the same duration as the interim period; or 
  6.9      (8) change any other provision to which all parties to the 
  6.10  plan agree. 
  6.11     Subd. 6.  [COST SAVINGS OF CLOSURE.] For purposes of this 
  6.12  section, the calculation of medical assistance cost savings from 
  6.13  the closure of a nursing facility designated for closure under a 
  6.14  plan for special rate adjustment shall be according to the 
  6.15  following criteria: 
  6.16     (a) The projected medical assistance savings of the closure 
  6.17  of a facility shall be the aggregate medical assistance payments 
  6.18  to the facility for the most recently completed state fiscal 
  6.19  year prior to submission of the proposal, as reflected in the 
  6.20  number of resident days of care for each resident class provided 
  6.21  by the facility in that fiscal year, multiplied by the payment 
  6.22  rate for each resident class. 
  6.23     (b) If an approved plan for a special rate adjustment 
  6.24  includes proposed closure of one or more facilities and one or 
  6.25  more facilities designated for closure in the plan are not able 
  6.26  to be closed for any reason, or projection of savings for that 
  6.27  closure are otherwise prohibited under this section, the 
  6.28  projected medical assistance savings from that closure may not 
  6.29  be offset against the medical assistance costs of the special 
  6.30  rate adjustment plan.  In that event, the applicant must notify 
  6.31  the commissioner in writing and the applicant must either amend 
  6.32  its proposal by reducing the special rate adjustment to reduce 
  6.33  the medical assistance cost of the plan by at least the amount 
  6.34  of the medical assistance savings that were projected from the 
  6.35  closure of that facility, or withdraw the plan. 
  6.36     (c) No medical assistance savings shall be projected from 
  7.1   closure of a nursing facility that is designated for closure 
  7.2   under a plan for a special rate adjustment, if the facility is 
  7.3   subject to adverse licensure action under section 144A.ll at the 
  7.4   time the proposal is submitted or at the commencement of closure.
  7.5      (d) Medical assistance savings under paragraph (a) shall be 
  7.6   recognized for purposes of this section beginning the first day 
  7.7   of the month following the month of completion of closure for 
  7.8   all facilities designated for closure under the plan for a 
  7.9   special rate adjustment, or all facilities designated for 
  7.10  closure under that phase for a phased plan. 
  7.11     Subd. 7.  [PROPERTY RATE INCENTIVE FOR DOWNSIZING.] A 
  7.12  nursing facility reimbursed under section 256B.431 or 256B.434, 
  7.13  designated for downsizing under a plan for special rate 
  7.14  adjustment shall have its property-related rate adjusted under 
  7.15  section 256B.431, subdivision 3a, paragraph (d), effective the 
  7.16  first date of the month following the month in which the 
  7.17  downsizing of that nursing facility takes effect as part of the 
  7.18  implementation of the plan for a special rate adjustment.  
  7.19  Notice deadlines set forth in section 256B.431, subdivision 3a, 
  7.20  paragraph (d), do not apply to downsizing of facilities under 
  7.21  this subdivision. 
  7.22     Subd. 8.  [OTHER RATE ADJUSTMENTS.] Except as otherwise 
  7.23  provided in subdivision 5, facilities subject to special rate 
  7.24  adjustments under this section remain eligible for any 
  7.25  applicable rate adjustments provided under section 256B.431, 
  7.26  256B.434, or any other section. 
  7.27     Sec. 2.  [REPORT.] 
  7.28     By January 15, 2001, the commissioner of health and the 
  7.29  commissioner of human services shall each report to the senate 
  7.30  health and family security committee, and the house health and 
  7.31  human services committee, any recommendations for revision and 
  7.32  general application of the special rate adjustment process 
  7.33  established in section 1, including a recommendation on the 
  7.34  advisability of providing an appropriation to facilitate 
  7.35  downsizing and closure projects that are not budget neutral.