1.1 	A bill for an act
1.2 	relating to human services; providing children's mental health grants; establishing 
1.3 	mental health service delivery and finance reform; modifying mental health case 
1.4 	management and rates; modifying general assistance medical care coverages; 
1.5 	amending Minnesota Statutes 2004, sections 245.465, by adding a subdivision; 
1.6 	246.54, subdivision 1, by adding a subdivision; 256B.0625, subdivision 
1.7 	20; 256B.0945, subdivisions 1, 4; 256B.69, subdivisions 5g, 5h; 256L.12, 
1.8 	subdivision 9a; Minnesota Statutes 2005 Supplement, sections 245.4874; 
1.9 	256D.03, subdivision 4; 256L.03, subdivision 1; 256L.035; proposing coding 
1.10 	for new law in Minnesota Statutes, chapters 245; 256B; repealing Minnesota 
1.11 	Statutes 2004, sections 245.465, subdivision 2; 256B.0945, subdivisions 5, 6, 
1.12 	7, 8, 9; 256B.83.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 245.465, is amended by adding a 
1.15 	subdivision to read:
1.16 		Subd. 3.Mental health services already provided. For individuals who have 
1.17 	health care coverage, the county board is not responsible for providing mental health 
1.18 	services which are covered by the entity that administers the health care coverage.

1.19 	Sec. 2. [245.4682] MENTAL HEALTH SERVICE DELIVERY AND FINANCE 
1.20 	REFORM.
1.21 		Subdivision 1.Policy. The commissioner of human services shall undertake a series 
1.22 	of reforms to improve the underlying structural, financing, and organizational problems 
1.23 	in Minnesota's mental health system with the goal of improving the availability, quality, 
1.24 	and accountability of mental health care within the state.
1.25 		Subd. 2.General provisions. In the design and implementation of reforms to the 
1.26 	mental health system, the commissioner shall:
2.1 	(1) consult with consumers, families, counties, tribes, advocates, providers, and 
2.2 	other stakeholders;
2.3 	(2) report to the legislature and the state Mental Health Advisory Council by January 
2.4 	15, 2007, with any recommendations for amending statutes, including to update the role of 
2.5 	counties;
2.6 	(3) ensure continuity of care for persons affected by these reforms including:
2.7 	(i) ensuring client choice of provider by requiring broad provider networks;
2.8 	(ii) allowing clients options to maintain previously established therapeutic 
2.9 	relationships; and
2.10 	(iii) developing mechanisms to facilitate a smooth transition of service 
2.11 	responsibilities;
2.12 	(4) provide accountability for the efficient and effective use of public and private 
2.13 	resources in achieving positive outcomes for consumers;
2.14 	(5) ensure client access to applicable protections and appeals; and
2.15 	(6) make budget transfers that do not increase the state share of costs to effectively 
2.16 	implement improvements to the mental health system and efficiently allocate state funds. 
2.17 	When making transfers necessary to implement movement of responsibility for clients 
2.18 	and services between counties and health care programs, the commissioner shall ensure 
2.19 	that any transfer of state grants to health care programs does not exceed the value of the 
2.20 	services being transferred for the latest 12-month period for which data is available. The 
2.21 	commissioner may make quarterly adjustments based on the availability of additional data 
2.22 	during the first four quarters after the transfers first occur.
2.23 		Subd. 3.Regional projects for coordination of care. (a) Consistent with section 
2.24 	256B.69 and chapters 256D and 256L, the commissioner is authorized to solicit, approve, 
2.25 	and implement regional projects to demonstrate the integration of physical and mental 
2.26 	health services within prepaid health plans and their coordination with social services. The 
2.27 	commissioner, in consultation with consumers, families, and their representatives, shall:
2.28 	(1) determine criteria for approving the regional projects and use those criteria to 
2.29 	solicit regional proposals for integrated service networks;
2.30 	(2) require that each project be based on locally defined partnerships that include 
2.31 	at least one health maintenance organization, community integrated service network, or 
2.32 	accountable provider network authorized and operating under chapter 62D, 62N, or 62T, 
2.33 	or county-based purchasing entity under section 256B.692 that is eligible to contract with 
2.34 	the commissioner as a prepaid health plan, and the county or counties within the region;
2.35 	(3) waive any administrative rule not consistent with the implementation of the 
2.36 	regional projects; and
3.1 	(4) begin implementation of the regional projects no earlier than January 1, 2008.
3.2 	(b) Notwithstanding any statute or administrative rule to the contrary, the 
3.3 	commissioner shall enroll all medical assistance eligible persons with serious and 
3.4 	persistent mental illness or severe emotional disturbance in the prepaid plan of their choice 
3.5 	within the project region unless:
3.6 	 (1) they have no other basis for exclusion from the prepaid plan under section 
3.7 	256B.69, subdivision 4; or
3.8 	 (2) the individual has a previously established therapeutic relationship with a 
3.9 	provider who is not included in the available prepaid plans.
3.10 	 (c) If the person with serious and persistent mental illness or severe emotional 
3.11 	disturbance declines to choose a plan, the commissioner may preferentially assign 
3.12 	that person to the prepaid plan participating in the integrated service network. The 
3.13 	commissioner shall implement the enrollment changes within a regional project on the 
3.14 	timeline specified in that region's approved application.
3.15 	(d) The commissioner, in consultation with consumers, families, and their 
3.16 	representatives, shall refine the design of the regional service integration projects and 
3.17 	expand the number of regions engaged in the demonstration projects as additional 
3.18 	qualified applicant partnerships present themselves.
3.19 	(e) The commissioner shall apply for any federal waivers necessary to implement 
3.20 	these changes.

3.21 	Sec. 3. [245.4835] COUNTY MAINTENANCE OF EFFORT.
3.22 		Subdivision 1.Required expenditures. Counties must maintain a level of 
3.23 	expenditures for mental health services under sections 245.461 to 245.484 and 245.487 to 
3.24 	245.4887 so that each year's county expenditures are at least equal to that county's average 
3.25 	expenditures for those services for calendar years 2004 and 2005. The commissioner will 
3.26 	adjust each county's base level for minimum expenditures in each year by the amount of 
3.27 	any increase or decrease in that county's state grants or other noncounty revenues for 
3.28 	mental health services under sections 245.461 to 245.484 and 245.487 to 245.4887.
3.29 		Subd. 2.Failure to maintain expenditures. If a county does not comply with 
3.30 	subdivision 1, the commissioner shall require the county to develop a corrective action plan 
3.31 	according to a format and timeline established by the commissioner. If the commissioner 
3.32 	determines that a county has not developed an acceptable corrective action plan within 
3.33 	the required timeline, or that the county is not in compliance with an approved corrective 
3.34 	action plan, the protections provided to that county under section 245.485 do not apply.

4.1 	Sec. 4. Minnesota Statutes 2005 Supplement, section 245.4874, is amended to read:
4.2 	245.4874 DUTIES OF COUNTY BOARD.
4.3 		Subdivision 1.Duties of the county board. (a) The county board must:
4.4 	(1) develop a system of affordable and locally available children's mental health 
4.5 	services according to sections 245.487 to 245.4887;
4.6 	(2) establish a mechanism providing for interagency coordination as specified in 
4.7 	section 245.4875, subdivision 6;
4.8 	(3) consider the assessment of unmet needs in the county as reported by the local 
4.9 	children's mental health advisory council under section 245.4875, subdivision 5, paragraph 
4.10 	(b), clause (3). The county shall provide, upon request of the local children's mental health 
4.11 	advisory council, readily available data to assist in the determination of unmet needs;
4.12 	(4) assure that parents and providers in the county receive information about how to 
4.13 	gain access to services provided according to sections 245.487 to 245.4887;
4.14 	(5) coordinate the delivery of children's mental health services with services 
4.15 	provided by social services, education, corrections, health, and vocational agencies to 
4.16 	improve the availability of mental health services to children and the cost-effectiveness of 
4.17 	their delivery;
4.18 	(6) assure that mental health services delivered according to sections 245.487
4.19 	to 245.4887 are delivered expeditiously and are appropriate to the child's diagnostic 
4.20 	assessment and individual treatment plan;
4.21 	(7) provide the community with information about predictors and symptoms of 
4.22 	emotional disturbances and how to access children's mental health services according to 
4.23 	sections 245.4877 and 245.4878;
4.24 	(8) provide for case management services to each child with severe emotional 
4.25 	disturbance according to sections 245.486; 245.4871, subdivisions 3 and 4; and 245.4881, 
4.26 	subdivisions 1, 3, and 5;
4.27 	(9) provide for screening of each child under section 245.4885 upon admission 
4.28 	to a residential treatment facility, acute care hospital inpatient treatment, or informal 
4.29 	admission to a regional treatment center;
4.30 	(10) prudently administer grants and purchase-of-service contracts that the county 
4.31 	board determines are necessary to fulfill its responsibilities under sections 245.487 to 
4.32 	245.4887;
4.33 	(11) assure that mental health professionals, mental health practitioners, and case 
4.34 	managers employed by or under contract to the county to provide mental health services 
4.35 	are qualified under section 245.4871;
5.1 	(12) assure that children's mental health services are coordinated with adult mental 
5.2 	health services specified in sections 245.461 to 245.486 so that a continuum of mental 
5.3 	health services is available to serve persons with mental illness, regardless of the person's 
5.4 	age;
5.5 	(13) assure that culturally informed mental health consultants are used as necessary 
5.6 	to assist the county board in assessing and providing appropriate treatment for children of 
5.7 	cultural or racial minority heritage; and
5.8 	(14) consistent with section 245.486, arrange for or provide a children's mental 
5.9 	health screening to a child receiving child protective services or a child in out-of-home 
5.10 	placement, a child for whom parental rights have been terminated, a child found to be 
5.11 	delinquent, and a child found to have committed a juvenile petty offense for the third or 
5.12 	subsequent time, unless a screening has been performed within the previous 180 days, or 
5.13 	the child is currently under the care of a mental health professional. The court or county 
5.14 	agency must notify a parent or guardian whose parental rights have not been terminated of 
5.15 	the potential mental health screening and the option to prevent the screening by notifying 
5.16 	the court or county agency in writing. The screening shall be conducted with a screening 
5.17 	instrument approved by the commissioner of human services according to criteria that 
5.18 	are updated and issued annually to ensure that approved screening instruments are valid 
5.19 	and useful for child welfare and juvenile justice populations, and shall be conducted 
5.20 	by a mental health practitioner as defined in section 245.4871, subdivision 26, or a 
5.21 	probation officer or local social services agency staff person who is trained in the use of 
5.22 	the screening instrument. Training in the use of the instrument shall include training in the 
5.23 	administration of the instrument, the interpretation of its validity given the child's current 
5.24 	circumstances, the state and federal data practices laws and confidentiality standards, the 
5.25 	parental consent requirement, and providing respect for families and cultural values. 
5.26 	If the screen indicates a need for assessment, the child's family, or if the family lacks 
5.27 	mental health insurance, the local social services agency, in consultation with the child's 
5.28 	family, shall have conducted a diagnostic assessment, including a functional assessment, 
5.29 	as defined in section 245.4871. The administration of the screening shall safeguard the 
5.30 	privacy of children receiving the screening and their families and shall comply with the 
5.31 	Minnesota Government Data Practices Act, chapter 13, and the federal Health Insurance 
5.32 	Portability and Accountability Act of 1996, Public Law 104-191. Screening results shall be 
5.33 	considered private data and the commissioner shall not collect individual screening results.
5.34 	(b) When the county board refers clients to providers of children's therapeutic 
5.35 	services and supports under section 256B.0943, the county board must clearly identify 
5.36 	the desired services components not covered under section 256B.0943 and identify the 
6.1 	reimbursement source for those requested services, the method of payment, and the 
6.2 	payment rate to the provider.
6.3 		Subd. 2.Mental health services already provided. For individuals that have 
6.4 	health care coverage, the county board is not responsible for providing mental health 
6.5 	services which are covered by the entity which administers the health care coverage. 

6.6 	Sec. 5. [245.4889] CHILDREN'S MENTAL HEALTH GRANTS.
6.7 		Subdivision 1.Establishment and authority. The commissioner is authorized to 
6.8 	make grants from available appropriations to assist counties, Indian tribes, children's 
6.9 	collaboratives under section 124D.23 or 245.493, or mental health service providers in 
6.10 	providing services to children with emotional disturbances as defined in section 245.4871, 
6.11 	subdivision 15, and their families; and to young adults meeting the criteria for transition 
6.12 	services in section 245.4875, subdivision 8, and their families. Services must be designed 
6.13 	to help each child to function and remain with the child's family in the community and 
6.14 	delivered consistent with the child's treatment plan. Transition services to eligible young 
6.15 	adults must be designed to foster independent living in the community.
6.16 		Subd. 2.Grant application and reporting requirements. To apply for a grant an 
6.17 	applicant organization shall submit an application and budget for the use of the money 
6.18 	in the form specified by the commissioner. The commissioner shall make grants only to 
6.19 	entities whose applications and budgets are approved by the commissioner. In awarding 
6.20 	grants, the commissioner shall give priority to those counties whose applications indicate 
6.21 	plans to collaborate in the development, funding, and delivery of services with other 
6.22 	agencies in the local system of care. The commissioner shall specify requirements for 
6.23 	reports, including quarterly fiscal reports, according to section 256.01, subdivision 2, 
6.24 	paragraph (q). The commissioner shall require collection of data and periodic reports that 
6.25 	the commissioner deems necessary to demonstrate the effectiveness of each service.

6.26 	Sec. 6. Minnesota Statutes 2004, section 246.54, subdivision 1, is amended to read:
6.27 		Subdivision 1.County portion for cost of care. Except for chemical dependency 
6.28 	services provided under sections  254B.01 to  254B.09, the client's county shall pay to the 
6.29 	state of Minnesota a portion of the cost of care provided in a regional treatment center 
6.30 	or a state nursing facility to a client legally settled in that county. A county's payment 
6.31 	shall be made from the county's own sources of revenue and payments shall be paid as 
6.32 	follows: payments to the state from the county shall equal 20 percent of the cost of care, as 
6.33 	determined by the commissioner, for each day of the first 60 days, or the portion thereof, 
6.34 	that the client spends at a regional treatment center or a state nursing facility. After the 
7.1 	first 60 days, the county share is 50 percent. If payments received by the state under 
7.2 	sections  246.50 to  246.53 exceed 80 percent of the cost of care for the first 60 days or 50 
7.3 	percent for any additional days, the county shall be responsible for paying the state only 
7.4 	the remaining amount. The county shall not be entitled to reimbursement from the client, 
7.5 	the client's estate, or from the client's relatives, except as provided in section  246.53. No 
7.6 	such payments shall be made for any client who was last committed prior to July 1, 1947.

7.7 	EFFECTIVE DATE. This section is effective January 1, 2007.

7.8 	Sec. 7. Minnesota Statutes 2004, section 246.54, is amended by adding a subdivision 
7.9 	to read:
7.10 		Subd. 3.Additional exception for community behavioral health hospitals.
 7.11 	Subdivision 1 does not apply to services provided at state-operated community behavioral 
7.12 	health hospitals. For services at these facilities, a county's payment shall be made from 
7.13 	the county's own sources of revenue and payments shall be paid as follows: payments to 
7.14 	the state from the county shall equal 50 percent of the cost of care, as determined by the 
7.15 	commissioner, for each day, or the portion thereof, that the client spends at the facility. 
7.16 	If payments received by the state under sections 246.50 to 246.53 exceed 50 percent of 
7.17 	the cost of care, the county shall be responsible for paying the state only the remaining 
7.18 	amount. The county shall not be entitled to reimbursement from the client, the client's 
7.19 	estate, or from the client's relatives, except as provided in section 246.53.

7.20 	EFFECTIVE DATE. This section is effective January 1, 2007.

7.21 	Sec. 8. Minnesota Statutes 2004, section 256B.0625, subdivision 20, is amended to 
7.22 	read:
7.23 		Subd. 20.Mental health case management. (a) To the extent authorized by rule 
7.24 	of the state agency, medical assistance covers case management services to persons with 
7.25 	serious and persistent mental illness and children with severe emotional disturbance. 
7.26 	Services provided under this section must meet the relevant standards in sections  245.461
7.27 	to  245.4887, the Comprehensive Adult and Children's Mental Health Acts, Minnesota 
7.28 	Rules, parts 9520.0900 to 9520.0926, and 9505.0322, excluding subpart 10. 
7.29 	(b) Entities meeting program standards set out in rules governing family community 
7.30 	support services as defined in section  245.4871, subdivision 17, are eligible for medical 
7.31 	assistance reimbursement for case management services for children with severe 
7.32 	emotional disturbance when these services meet the program standards in Minnesota 
7.33 	Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subparts 6 and 10. 
8.1 	(c) Medical assistance and MinnesotaCare payment for mental health case 
8.2 	management shall be made on a monthly basis. In order to receive payment for an eligible 
8.3 	child, the provider must document at least a face-to-face contact with the child, the child's 
8.4 	parents, or the child's legal representative. To receive payment for an eligible adult, the 
8.5 	provider must document:
8.6 	(1) at least a face-to-face contact with the adult or the adult's legal representative; or
8.7 	(2) at least a telephone contact with the adult or the adult's legal representative and 
8.8 	document a face-to-face contact with the adult or the adult's legal representative within 
8.9 	the preceding two months.
8.10 	(d) Payment for mental health case management provided by county or state staff 
8.11 	shall be based on the monthly rate methodology under section  256B.094, subdivision 6, 
8.12 	paragraph (b), with separate rates calculated for child welfare and mental health, and 
8.13 	within mental health, separate rates for children and adults. 
8.14 	(e) Payment for mental health case management provided by Indian health services 
8.15 	or by agencies operated by Indian tribes may be made according to this section or other 
8.16 	relevant federally approved rate setting methodology.
8.17 	(f) Payment for mental health case management provided by vendors who contract 
8.18 	with a county or Indian tribe shall be based on a monthly rate negotiated by the host county 
8.19 	or tribe. The negotiated rate must not exceed the rate charged by the vendor for the same 
8.20 	service to other payers. If the service is provided by a team of contracted vendors, the 
8.21 	county or tribe may negotiate a team rate with a vendor who is a member of the team. The 
8.22 	team shall determine how to distribute the rate among its members. No reimbursement 
8.23 	received by contracted vendors shall be returned to the county or tribe, except to reimburse 
8.24 	the county or tribe for advance funding provided by the county or tribe to the vendor.
8.25 	(g) If the service is provided by a team which includes contracted vendors, tribal 
8.26 	staff, and county or state staff, the costs for county or state staff participation in the team 
8.27 	shall be included in the rate for county-provided services. In this case, the contracted 
8.28 	vendor, the tribal agency, and the county may each receive separate payment for services 
8.29 	provided by each entity in the same month. In order to prevent duplication of services, 
8.30 	each entity must document, in the recipient's file, the need for team case management and 
8.31 	a description of the roles of the team members.
8.32 	(h) The commissioner shall calculate the nonfederal share of actual medical 
8.33 	assistance and general assistance medical care payments for each county, based on the 
8.34 	higher of calendar year 1995 or 1996, by service date, project that amount forward to 1999, 
8.35 	and transfer one-half of the result from medical assistance and general assistance medical 
8.36 	care to each county's mental health grants under section  256E.12 for calendar year 1999. 
9.1 	The annualized minimum amount added to each county's mental health grant shall be 
9.2 	$3,000 per year for children and $5,000 per year for adults. The commissioner may reduce 
9.3 	the statewide growth factor in order to fund these minimums. The annualized total amount 
9.4 	transferred shall become part of the base for future mental health grants for each county. 
9.5 	(i) Any net increase in revenue to the county or tribe as a result of the change in this 
9.6 	section must be used to provide expanded mental health services as defined in sections 
9.7 	245.461 to  245.4887, the Comprehensive Adult and Children's Mental Health Acts, 
9.8 	excluding inpatient and residential treatment. For adults, increased revenue may also be 
9.9 	used for services and consumer supports which are part of adult mental health projects 
9.10 	approved under Laws 1997, chapter 203, article 7, section 25. For children, increased 
9.11 	revenue may also be used for respite care and nonresidential individualized rehabilitation 
9.12 	services as defined in section  245.492, subdivisions 17 and 23. "Increased revenue" has 
9.13 	the meaning given in Minnesota Rules, part 9520.0903, subpart 3. 
9.14 	(j)(h) Notwithstanding section  256B.19, subdivision 1, the nonfederal share of 
9.15 	costs for mental health case management shall be provided by the recipient's county of 
9.16 	responsibility, as defined in sections  256G.01 to  256G.12, from sources other than federal 
9.17 	funds or funds used to match other federal funds. If the service is provided by a tribal 
9.18 	agency, the nonfederal share, if any, shall be provided by the recipient's tribe. When this 
9.19 	service is paid by the state without a federal share through fee-for-service, 50 percent of 
9.20 	the cost shall be provided by the recipient's county of responsibility.
9.21 	(i) Notwithstanding Minnesota Rules to the contrary, prepaid medical assistance, 
9.22 	general assistance medical care, and MinnesotaCare include mental health case 
9.23 	management. When the service is provided through prepaid capitation, the nonfederal 
9.24 	share is paid by the state and there is no county share.
9.25 	(k) (j) The commissioner may suspend, reduce, or terminate the reimbursement to a 
9.26 	provider that does not meet the reporting or other requirements of this section. The county 
9.27 	of responsibility, as defined in sections  256G.01 to  256G.12, or, if applicable, the tribal 
9.28 	agency, is responsible for any federal disallowances. The county or tribe may share this 
9.29 	responsibility with its contracted vendors. 
9.30 	(l) (k) The commissioner shall set aside a portion of the federal funds earned for 
9.31 	county expenditures under this section to repay the special revenue maximization account 
9.32 	under section  256.01, subdivision 2, clause (15). The repayment is limited to: 
9.33 	(1) the costs of developing and implementing this section; and
9.34 	(2) programming the information systems.
9.35 	(m) (l) Payments to counties and tribal agencies for case management expenditures 
9.36 	under this section shall only be made from federal earnings from services provided 
10.1 	under this section. When this service is paid by the state without a federal share through 
10.2 	fee-for-service, 50 percent of the cost shall be provided by the state. Payments to 
10.3 	county-contracted vendors shall include both the federal earnings, the state share, and the 
10.4 	county share.
10.5 	(n) Notwithstanding section  256B.041, county payments for the cost of mental 
10.6 	health case management services provided by county or state staff shall not be made 
10.7 	to the commissioner of finance. For the purposes of mental health case management 
10.8 	services provided by county or state staff under this section, the centralized disbursement 
10.9 	of payments to counties under section  256B.041 consists only of federal earnings from 
10.10 	services provided under this section.
10.11 	(o) (m) Case management services under this subdivision do not include therapy, 
10.12 	treatment, legal, or outreach services.
10.13 	(p) (n) If the recipient is a resident of a nursing facility, intermediate care facility, 
10.14 	or hospital, and the recipient's institutional care is paid by medical assistance, payment 
10.15 	for case management services under this subdivision is limited to the last 180 days of 
10.16 	the recipient's residency in that facility and may not exceed more than six months in a 
10.17 	calendar year.
10.18 	(q) (o) Payment for case management services under this subdivision shall not 
10.19 	duplicate payments made under other program authorities for the same purpose.
10.20 	(r) By July 1, 2000, the commissioner shall evaluate the effectiveness of the changes 
10.21 	required by this section, including changes in number of persons receiving mental health 
10.22 	case management, changes in hours of service per person, and changes in caseload size.
10.23 	(s) For each calendar year beginning with the calendar year 2001, the annualized 
10.24 	amount of state funds for each county determined under paragraph (h) shall be adjusted by 
10.25 	the county's percentage change in the average number of clients per month who received 
10.26 	case management under this section during the fiscal year that ended six months prior to 
10.27 	the calendar year in question, in comparison to the prior fiscal year.
10.28 	(t) For counties receiving the minimum allocation of $3,000 or $5,000 described 
10.29 	in paragraph (h), the adjustment in paragraph (s) shall be determined so that the county 
10.30 	receives the higher of the following amounts:
10.31 	(1) a continuation of the minimum allocation in paragraph (h); or
10.32 	(2) an amount based on that county's average number of clients per month who 
10.33 	received case management under this section during the fiscal year that ended six months 
10.34 	prior to the calendar year in question, times the average statewide grant per person per 
10.35 	month for counties not receiving the minimum allocation.
11.1 	(u) The adjustments in paragraphs (s) and (t) shall be calculated separately for 
11.2 	children and adults.

11.3 	EFFECTIVE DATE. This section is effective January 1, 2008.

11.4 	Sec. 9. Minnesota Statutes 2004, section 256B.0945, subdivision 1, is amended to read:
11.5 		Subdivision 1.Provider qualifications. Counties must arrange to provide 
11.6 	residential services for children with severe emotional disturbance according to sections  
11.7 	245.4882,  245.4885, and this section. Services must be provided by a facility that is 
11.8 	licensed according to section  245.4882 and administrative rules promulgated thereunder, 
11.9 	and under contract with the county. Facilities providing services under subdivision 2, 
11.10 	paragraph (a), must be accredited as a psychiatric facility by the Joint Commission 
11.11 	on Accreditation of Healthcare Organizations, the Commission on Accreditation of 
11.12 	Rehabilitation Facilities, or the Council on Accreditation. Accreditation is not required for 
11.13 	facilities providing services under subdivision 2, paragraph (b).

11.14 	Sec. 10. Minnesota Statutes 2004, section 256B.0945, subdivision 4, is amended to 
11.15 	read:
11.16 		Subd. 4.Payment rates. (a) Notwithstanding sections  256B.19 and  256B.041, 
11.17 	payments to counties for residential services provided by a residential facility shall only 
11.18 	be made of federal earnings for services provided under this section, and the nonfederal 
11.19 	share of costs for services provided under this section shall be paid by the county from 
11.20 	sources other than federal funds or funds used to match other federal funds. Payment to 
11.21 	counties for services provided according to this section shall be a proportion of the per 
11.22 	day contract rate that relates to rehabilitative mental health services and shall not include 
11.23 	payment for costs or services that are billed to the IV-E program as room and board. 
11.24 	(b) Per diem rates paid to providers under this section by prepaid plans shall be the 
11.25 	proportion of the per day contract rate that relates to rehabilitative mental health services 
11.26 	and shall not include payment for costs or services that are billed to the IV-E program 
11.27 	as room and board.
11.28 	(c) The commissioner shall set aside a portion not to exceed five percent of the 
11.29 	federal funds earned for county expenditures under this section to cover the state costs of 
11.30 	administering this section. Any unexpended funds from the set-aside shall be distributed 
11.31 	to the counties in proportion to their earnings under this section.

11.32 	EFFECTIVE DATE. This section is effective January 1, 2008.

12.1 	Sec. 11. Minnesota Statutes 2004, section 256B.69, subdivision 5g, is amended to read:
12.2 		Subd. 5g.Payment for covered services. For services rendered on or after January 
12.3 	1, 2003, the total payment made to managed care plans for providing covered services 
12.4 	under the medical assistance and general assistance medical care programs is reduced by 
12.5 	.5 percent from their current statutory rates. This provision excludes payments for nursing 
12.6 	home services, home and community-based waivers, and payments to demonstration 
12.7 	projects for persons with disabilities, and mental health services added as covered benefits 
12.8 	after December 31, 2006.

12.9 	Sec. 12. Minnesota Statutes 2004, section 256B.69, subdivision 5h, is amended to read:
12.10 		Subd. 5h.Payment reduction. In addition to the reduction in subdivision 5g, 
12.11 	the total payment made to managed care plans under the medical assistance program is 
12.12 	reduced 1.0 percent for services provided on or after October 1, 2003, and an additional 
12.13 	1.0 percent for services provided on or after January 1, 2004. This provision excludes 
12.14 	payments for nursing home services, home and community-based waivers, and payments 
12.15 	to demonstration projects for persons with disabilities, and mental health services added as 
12.16 	covered benefits after December 31, 2006.

12.17 	Sec. 13. [256B.763] CRITICAL ACCESS MENTAL HEALTH RATE INCREASE.
12.18 	(a) For services defined in paragraph (b) and rendered on or after July 1, 2007, 
12.19 	payment rates shall be increased by 23.7 percent over the rates in effect on January 1, 
12.20 	2006, for:
12.21 	(1) psychiatrists and advanced practice registered nurses with a psychiatric specialty;
12.22 	(2) community mental health centers under section 256B.0625, subdivision 5; and
12.23 	(3) mental health clinics and centers certified under Minnesota Rules, parts 
12.24 	9520.0750 to 9520.0870, or hospital outpatient psychiatric departments that are designated 
12.25 	as essential community providers under section 62Q.19.
12.26 	(b) This increase applies to group skills training when provided as a component of 
12.27 	children's therapeutic services and support, psychotherapy, medication management, 
12.28 	evaluation and management, diagnostic assessment, explanation of findings, psychological 
12.29 	testing, neuropsychological services, direction of behavioral aides, and inpatient 
12.30 	consultation.
12.31 	(c) This increase does not apply to rates that are governed by sections 256B.0625, 
12.32 	subdivision 30, and 256B.761, paragraph (b), other cost-based rates, rates that are 
12.33 	negotiated with the county, rates that are established by the federal government, or rates 
12.34 	that increased between January 1, 2004, and January 1, 2005.
13.1 	(d) The commissioner shall adjust rates paid to prepaid health plans under contract 
13.2 	with the commissioner to reflect the rate increases provided in paragraph (a). The prepaid 
13.3 	health plan must pass this rate increase to the providers identified in paragraph (a).

13.4 	Sec. 14. Minnesota Statutes 2005 Supplement, section 256D.03, subdivision 4, is 
13.5 	amended to read:
13.6 		Subd. 4.General assistance medical care; services. (a)(i) For a person who is 
13.7 	eligible under subdivision 3, paragraph (a), clause (2), item (i), general assistance medical 
13.8 	care covers, except as provided in paragraph (c):
13.9 	(1) inpatient hospital services;
13.10 	(2) outpatient hospital services;
13.11 	(3) services provided by Medicare certified rehabilitation agencies;
13.12 	(4) prescription drugs and other products recommended through the process 
13.13 	established in section 256B.0625, subdivision 13;
13.14 	(5) equipment necessary to administer insulin and diagnostic supplies and equipment 
13.15 	for diabetics to monitor blood sugar level;
13.16 	(6) eyeglasses and eye examinations provided by a physician or optometrist;
13.17 	(7) hearing aids;
13.18 	(8) prosthetic devices;
13.19 	(9) laboratory and X-ray services;
13.20 	(10) physician's services;
13.21 	(11) medical transportation except special transportation;
13.22 	(12) chiropractic services as covered under the medical assistance program;
13.23 	(13) podiatric services;
13.24 	(14) dental services as covered under the medical assistance program;
13.25 	(15) outpatient services provided by a mental health center or clinic that is under 
13.26 	contract with the county board and is established under section 245.62 mental health 
13.27 	services covered under chapter 256B;
13.28 	(16) day treatment services for mental illness provided under contract with the 
13.29 	county board;
13.30 	(17)(16) prescribed medications for persons who have been diagnosed as mentally 
13.31 	ill as necessary to prevent more restrictive institutionalization;
13.32 	(18) psychological services,(17) medical supplies and equipment, and Medicare 
13.33 	premiums, coinsurance and deductible payments;
14.1 	(19) (18) medical equipment not specifically listed in this paragraph when the use 
14.2 	of the equipment will prevent the need for costlier services that are reimbursable under 
14.3 	this subdivision;
14.4 	(20) (19) services performed by a certified pediatric nurse practitioner, a 
14.5 	certified family nurse practitioner, a certified adult nurse practitioner, a certified 
14.6 	obstetric/gynecological nurse practitioner, a certified neonatal nurse practitioner, or a 
14.7 	certified geriatric nurse practitioner in independent practice, if (1) the service is otherwise 
14.8 	covered under this chapter as a physician service, (2) the service provided on an inpatient 
14.9 	basis is not included as part of the cost for inpatient services included in the operating 
14.10 	payment rate, and (3) the service is within the scope of practice of the nurse practitioner's 
14.11 	license as a registered nurse, as defined in section 148.171;
14.12 	(21) (20) services of a certified public health nurse or a registered nurse practicing 
14.13 	in a public health nursing clinic that is a department of, or that operates under the direct 
14.14 	authority of, a unit of government, if the service is within the scope of practice of the 
14.15 	public health nurse's license as a registered nurse, as defined in section 148.171; and
14.16 	(22) (21) telemedicine consultations, to the extent they are covered under section 
14.17 	256B.0625, subdivision 3b; and.
14.18 	(23) mental health telemedicine and psychiatric consultation as covered under 
14.19 	section 256B.0625, subdivisions 46 and 48.
14.20 	(ii) Effective October 1, 2003, for a person who is eligible under subdivision 3, 
14.21 	paragraph (a), clause (2), item (ii), general assistance medical care coverage is limited 
14.22 	to inpatient hospital services, including physician services provided during the inpatient 
14.23 	hospital stay. A $1,000 deductible is required for each inpatient hospitalization.
14.24 	(b) Effective August 1, 2005, sex reassignment surgery is not covered under this 
14.25 	subdivision.
14.26 	(c) In order to contain costs, the commissioner of human services shall select 
14.27 	vendors of medical care who can provide the most economical care consistent with high 
14.28 	medical standards and shall where possible contract with organizations on a prepaid 
14.29 	capitation basis to provide these services. The commissioner shall consider proposals by 
14.30 	counties and vendors for prepaid health plans, competitive bidding programs, block grants, 
14.31 	or other vendor payment mechanisms designed to provide services in an economical 
14.32 	manner or to control utilization, with safeguards to ensure that necessary services are 
14.33 	provided. Before implementing prepaid programs in counties with a county operated or 
14.34 	affiliated public teaching hospital or a hospital or clinic operated by the University of 
14.35 	Minnesota, the commissioner shall consider the risks the prepaid program creates for the 
14.36 	hospital and allow the county or hospital the opportunity to participate in the program in a 
15.1 	manner that reflects the risk of adverse selection and the nature of the patients served by 
15.2 	the hospital, provided the terms of participation in the program are competitive with the 
15.3 	terms of other participants considering the nature of the population served. Payment for 
15.4 	services provided pursuant to this subdivision shall be as provided to medical assistance 
15.5 	vendors of these services under sections 256B.02, subdivision 8, and 256B.0625. For 
15.6 	payments made during fiscal year 1990 and later years, the commissioner shall consult 
15.7 	with an independent actuary in establishing prepayment rates, but shall retain final control 
15.8 	over the rate methodology.
15.9 	(d) Recipients eligible under subdivision 3, paragraph (a), shall pay the following 
15.10 	co-payments for services provided on or after October 1, 2003:
15.11 	(1) $25 for eyeglasses;
15.12 	(2) $25 for nonemergency visits to a hospital-based emergency room;
15.13 	(3) $3 per brand-name drug prescription and $1 per generic drug prescription, 
15.14 	subject to a $12 per month maximum for prescription drug co-payments. No co-payments 
15.15 	shall apply to antipsychotic drugs when used for the treatment of mental illness; and
15.16 	(4) 50 percent coinsurance on restorative dental services.
15.17 	(e) Co-payments shall be limited to one per day per provider for nonpreventive visits, 
15.18 	eyeglasses, and nonemergency visits to a hospital-based emergency room. Recipients of 
15.19 	general assistance medical care are responsible for all co-payments in this subdivision. 
15.20 	The general assistance medical care reimbursement to the provider shall be reduced by 
15.21 	the amount of the co-payment, except that reimbursement for prescription drugs shall not 
15.22 	be reduced once a recipient has reached the $12 per month maximum for prescription 
15.23 	drug co-payments. The provider collects the co-payment from the recipient. Providers 
15.24 	may not deny services to recipients who are unable to pay the co-payment, except as 
15.25 	provided in paragraph (f).
15.26 	(f) If it is the routine business practice of a provider to refuse service to an individual 
15.27 	with uncollected debt, the provider may include uncollected co-payments under this 
15.28 	section. A provider must give advance notice to a recipient with uncollected debt before 
15.29 	services can be denied.
15.30 	(g) Any county may, from its own resources, provide medical payments for which 
15.31 	state payments are not made.
15.32 	(h) Chemical dependency services that are reimbursed under chapter 254B must not 
15.33 	be reimbursed under general assistance medical care.
15.34 	(i) The maximum payment for new vendors enrolled in the general assistance 
15.35 	medical care program after the base year shall be determined from the average usual and 
15.36 	customary charge of the same vendor type enrolled in the base year.
16.1 	(j) The conditions of payment for services under this subdivision are the same as the 
16.2 	conditions specified in rules adopted under chapter 256B governing the medical assistance 
16.3 	program, unless otherwise provided by statute or rule.
16.4 	(k) Inpatient and outpatient payments shall be reduced by five percent, effective July 
16.5 	1, 2003. This reduction is in addition to the five percent reduction effective July 1, 2003, 
16.6 	and incorporated by reference in paragraph (i).
16.7 	(l) Payments for all other health services except inpatient, outpatient, and pharmacy 
16.8 	services shall be reduced by five percent, effective July 1, 2003.
16.9 	(m) Payments to managed care plans shall be reduced by five percent for services 
16.10 	provided on or after October 1, 2003.
16.11 	(n) A hospital receiving a reduced payment as a result of this section may apply the 
16.12 	unpaid balance toward satisfaction of the hospital's bad debts.
16.13 	(o) Fee-for-service payments for nonpreventive visits shall be reduced by $3 
16.14 	for services provided on or after January 1, 2006. For purposes of this subdivision, a 
16.15 	visit means an episode of service which is required because of a recipient's symptoms, 
16.16 	diagnosis, or established illness, and which is delivered in an ambulatory setting by 
16.17 	a physician or physician ancillary, chiropractor, podiatrist, advance practice nurse, 
16.18 	audiologist, optician, or optometrist.
16.19 	(p) Payments to managed care plans shall not be increased as a result of the removal 
16.20 	of the $3 nonpreventive visit co-payment effective January 1, 2006.
16.21 	(q) Payments for mental health services added as covered benefits after December 
16.22 	31, 2006, are not subject to the reductions in paragraphs (i), (k), (l), and (m).

16.23 	EFFECTIVE DATE. This section is effective January 1, 2007, except mental 
16.24 	health case management under paragraph (a)(i)(15) is effective January 1, 2008.

16.25 	Sec. 15. Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 1, is 
16.26 	amended to read:
16.27 		Subdivision 1.Covered health services. For individuals under section 256L.04, 
16.28 	subdivision 7, with income no greater than 75 percent of the federal poverty guidelines 
16.29 	or for families with children under section 256L.04, subdivision 1, all subdivisions of 
16.30 	this section apply. "Covered health services" means the health services reimbursed 
16.31 	under chapter 256B, with the exception of inpatient hospital services, special education 
16.32 	services, private duty nursing services, adult dental care services other than services 
16.33 	covered under section 256B.0625, subdivision 9, orthodontic services, nonemergency 
16.34 	medical transportation services, personal care assistant and case management services, 
16.35 	nursing home or intermediate care facilities services, inpatient mental health services, 
17.1 	and chemical dependency services. Outpatient mental health services covered under the 
17.2 	MinnesotaCare program are limited to diagnostic assessments, psychological testing, 
17.3 	explanation of findings, mental health telemedicine, psychiatric consultation, medication 
17.4 	management by a physician, day treatment, partial hospitalization, and individual, family, 
17.5 	and group psychotherapy.
17.6 	No public funds shall be used for coverage of abortion under MinnesotaCare 
17.7 	except where the life of the female would be endangered or substantial and irreversible 
17.8 	impairment of a major bodily function would result if the fetus were carried to term; or 
17.9 	where the pregnancy is the result of rape or incest.
17.10 	Covered health services shall be expanded as provided in this section.

17.11 	EFFECTIVE DATE. This section is effective January 1, 2007, except mental 
17.12 	health case management under subdivision 1 is effective January 1, 2008.

17.13 	Sec. 16. Minnesota Statutes 2005 Supplement, section 256L.035, is amended to read:
17.14 	256L.035 LIMITED BENEFITS COVERAGE FOR CERTAIN SINGLE 
17.15 	ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.
17.16 	(a) "Covered health services" for individuals under section 256L.04, subdivision 
17.17 	7, with income above 75 percent, but not exceeding 175 percent, of the federal poverty 
17.18 	guideline means:
17.19 	(1) inpatient hospitalization benefits with a ten percent co-payment up to $1,000 and 
17.20 	subject to an annual limitation of $10,000;
17.21 	(2) physician services provided during an inpatient stay; and
17.22 	(3) physician services not provided during an inpatient stay; outpatient hospital 
17.23 	services; freestanding ambulatory surgical center services; chiropractic services; lab and 
17.24 	diagnostic services; diabetic supplies and equipment; mental health services as covered 
17.25 	under chapter 256B; and prescription drugs; subject to the following co-payments:
17.26 	(i) $50 co-pay per emergency room visit;
17.27 	(ii) $3 co-pay per prescription drug; and
17.28 	(iii) $5 co-pay per nonpreventive visit.
17.29 	The services covered under this section may be provided by a physician, physician 
17.30 	ancillary, chiropractor, psychologist, or licensed independent clinical social worker, or 
17.31 	other mental health providers covered under chapter 256B if the services are within the 
17.32 	scope of practice of that health care professional.
18.1 	For purposes of this section, "a visit" means an episode of service which is required 
18.2 	because of a recipient's symptoms, diagnosis, or established illness, and which is delivered 
18.3 	in an ambulatory setting by any health care provider identified in this paragraph.
18.4 	Enrollees are responsible for all co-payments in this section.
18.5 	(b) Reimbursement to the providers shall be reduced by the amount of the 
18.6 	co-payment, except that reimbursement for prescription drugs shall not be reduced once a 
18.7 	recipient has reached the $20 per month maximum for prescription drug co-payments. 
18.8 	The provider collects the co-payment from the recipient. Providers may not deny services 
18.9 	to recipients who are unable to pay the co-payment, except as provided in paragraph (c).
18.10 	(c) If it is the routine business practice of a provider to refuse service to an individual 
18.11 	with uncollected debt, the provider may include uncollected co-payments under this 
18.12 	section. A provider must give advance notice to a recipient with uncollected debt before 
18.13 	services can be denied.

18.14 	EFFECTIVE DATE. This section is effective January 1, 2007, except mental 
18.15 	health case management under paragraph (a), clause (3), is effective January 1, 2008.

18.16 	Sec. 17. Minnesota Statutes 2004, section 256L.12, subdivision 9a, is amended to read:
18.17 		Subd. 9a.Rate setting; ratable reduction. For services rendered on or after 
18.18 	October 1, 2003, the total payment made to managed care plans under the MinnesotaCare 
18.19 	program is reduced 1.0 percent. This provision excludes payments for mental health 
18.20 	services added as covered benefits after December 31, 2006.

18.21 	Sec. 18. REVISOR'S INSTRUCTION.
 18.22 	In the next edition of Minnesota Statutes, the revisor of statutes shall change the 
18.23 	reference to sections 245.487 to 245.4887, the Children's Mental Health Act, wherever it 
18.24 	appears in statutes or rules to sections 245.487 to 245.4889.

18.25 	Sec. 19.  REPEALER.
 18.26 	Minnesota Statutes 2004, sections 245.465, subdivision 2; 256B.0945, subdivisions 
18.27 	5, 6, 7, 8, and 9; and 256B.83, are repealed.