1.1 	A bill for an act
1.2 	relating to health; modifying certain critical access
1.3 	hospital provisions; amending Minnesota Statutes 2004,
1.4 	sections 144.147, subdivision 1; 144.148, subdivision
1.5 	1; 144.551, subdivision 1; 144.562, subdivision 2.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 144.147,
1.8 	subdivision 1, is amended to read:
1.9 		Subdivision 1.Definition.  "Eligible rural hospital"
1.10 	means any nonfederal, general acute care hospital that:
1.11 	(1) is either located in a rural area, as defined in the
1.12 	federal Medicare regulations, Code of Federal Regulations, title
1.13 	42, section 405.1041, or located in a community with a
1.14 	population of less than ~~10,000~~ 15,000, according to United
1.15 	States Census Bureau statistics, outside the seven-county
1.16 	metropolitan area;
1.17 	(2) has 50 or fewer beds; and
1.18 	(3) is not for profit.

1.19 	Sec. 2. Minnesota Statutes 2004, section 144.148,
1.20 	subdivision 1, is amended to read:
1.21 		Subdivision 1.Definition.  (a) For purposes of this
1.22 	section, the following definitions apply.
1.23 	(b) "Eligible rural hospital" means any nonfederal, general
1.24 	acute care hospital that:
1.25 	(1) is either located in a rural area, as defined in the
2.1 	federal Medicare regulations, Code of Federal Regulations, title
2.2 	42, section 405.1041, or located in a community with a
2.3 	population of less than ~~10,000~~ 15,000, according to United
2.4 	States Census Bureau statistics, outside the seven-county
2.5 	metropolitan area;
2.6 	(2) has 50 or fewer beds; and
2.7 	(3) is not for profit.
2.8 	(c) "Eligible project" means a modernization project to
2.9 	update, remodel, or replace aging hospital facilities and
2.10 	equipment necessary to maintain the operations of a hospital.

2.11 	Sec. 3. Minnesota Statutes 2004, section 144.551,
2.12 	subdivision 1, is amended to read:
2.13 		Subdivision 1.Restricted construction or modification.
 2.14 	(a) The following construction or modification may not be
2.15 	commenced:
2.16 	(1) any erection, building, alteration, reconstruction,
2.17 	modernization, improvement, extension, lease, or other
2.18 	acquisition by or on behalf of a hospital that increases the bed
2.19 	capacity of a hospital, relocates hospital beds from one
2.20 	physical facility, complex, or site to another, or otherwise
2.21 	results in an increase or redistribution of hospital beds within
2.22 	the state; and
2.23 	(2) the establishment of a new hospital.
2.24 	(b) This section does not apply to:
2.25 	(1) construction or relocation within a county by a
2.26 	hospital, clinic, or other health care facility that is a
2.27 	national referral center engaged in substantial programs of
2.28 	patient care, medical research, and medical education meeting
2.29 	state and national needs that receives more than 40 percent of
2.30 	its patients from outside the state of Minnesota;
2.31 	(2) a project for construction or modification for which a
2.32 	health care facility held an approved certificate of need on May
2.33 	1, 1984, regardless of the date of expiration of the
2.34 	certificate;
2.35 	(3) a project for which a certificate of need was denied
2.36 	before July 1, 1990, if a timely appeal results in an order
3.1 	reversing the denial;
3.2 	(4) a project exempted from certificate of need
3.3 	requirements by Laws 1981, chapter 200, section 2;
3.4 	(5) a project involving consolidation of pediatric
3.5 	specialty hospital services within the Minneapolis-St. Paul
3.6 	metropolitan area that would not result in a net increase in the
3.7 	number of pediatric specialty hospital beds among the hospitals
3.8 	being consolidated;
3.9 	(6) a project involving the temporary relocation of
3.10 	pediatric-orthopedic hospital beds to an existing licensed
3.11 	hospital that will allow for the reconstruction of a new
3.12 	philanthropic, pediatric-orthopedic hospital on an existing site
3.13 	and that will not result in a net increase in the number of
3.14 	hospital beds.  Upon completion of the reconstruction, the
3.15 	licenses of both hospitals must be reinstated at the capacity
3.16 	that existed on each site before the relocation;
3.17 	(7) the relocation or redistribution of hospital beds
3.18 	within a hospital building or identifiable complex of buildings
3.19 	provided the relocation or redistribution does not result in:
3.20 	(i) an increase in the overall bed capacity at that site; (ii)
3.21 	relocation of hospital beds from one physical site or complex to
3.22 	another; or (iii) redistribution of hospital beds within the
3.23 	state or a region of the state;
3.24 	(8) relocation or redistribution of hospital beds within a
3.25 	hospital corporate system that involves the transfer of beds
3.26 	from a closed facility site or complex to an existing site or
3.27 	complex provided that:  (i) no more than 50 percent of the
3.28 	capacity of the closed facility is transferred; (ii) the
3.29 	capacity of the site or complex to which the beds are
3.30 	transferred does not increase by more than 50 percent; (iii) the
3.31 	beds are not transferred outside of a federal health systems
3.32 	agency boundary in place on July 1, 1983; and (iv) the
3.33 	relocation or redistribution does not involve the construction
3.34 	of a new hospital building;
3.35 	(9) a construction project involving up to 35 new beds in a
3.36 	psychiatric hospital in Rice County that primarily serves
4.1 	adolescents and that receives more than 70 percent of its
4.2 	patients from outside the state of Minnesota;
4.3 	(10) a project to replace a hospital or hospitals with a
4.4 	combined licensed capacity of 130 beds or less if:  (i) the new
4.5 	hospital site is located within five miles of the current site;
4.6 	and (ii) the total licensed capacity of the replacement
4.7 	hospital, either at the time of construction of the initial
4.8 	building or as the result of future expansion, will not exceed
4.9 	70 licensed hospital beds, or the combined licensed capacity of
4.10 	the hospitals, whichever is less;
4.11 	(11) the relocation of licensed hospital beds from an
4.12 	existing state facility operated by the commissioner of human
4.13 	services to a new or existing facility, building, or complex
4.14 	operated by the commissioner of human services; from one
4.15 	regional treatment center site to another; or from one building
4.16 	or site to a new or existing building or site on the same
4.17 	campus;
4.18 	(12) the construction or relocation of hospital beds
4.19 	operated by a hospital having a statutory obligation to provide
4.20 	hospital and medical services for the indigent that does not
4.21 	result in a net increase in the number of hospital beds;
4.22 	(13) a construction project involving the addition of up to
4.23 	31 new beds in an existing nonfederal hospital in Beltrami
4.24 	County;
4.25 	(14) a construction project involving the addition of up to
4.26 	eight new beds in an existing nonfederal hospital in Otter Tail
4.27 	County with 100 licensed acute care beds;
4.28 	(15) a construction project involving the addition of 20
4.29 	new hospital beds used for rehabilitation services in an
4.30 	existing hospital in Carver County serving the southwest
4.31 	suburban metropolitan area.  Beds constructed under this clause
4.32 	shall not be eligible for reimbursement under medical
4.33 	assistance, general assistance medical care, or MinnesotaCare;
4.34 	(16) a project for the construction or relocation of up to
4.35 	20 hospital beds for the operation of up to two psychiatric
4.36 	facilities or units for children provided that the operation of
5.1 	the facilities or units have received the approval of the
5.2 	commissioner of human services;
5.3 	(17) a project involving the addition of 14 new hospital
5.4 	beds to be used for rehabilitation services in an existing
5.5 	hospital in Itasca County; ~~or~~ 
5.6 	(18) a project to add 20 licensed beds in existing space at
5.7 	a hospital in Hennepin County that closed 20 rehabilitation beds
5.8 	in 2002, provided that the beds are used only for rehabilitation
5.9 	in the hospital's current rehabilitation building.  If the beds
5.10 	are used for another purpose or moved to another location, the
5.11 	hospital's licensed capacity is reduced by 20 beds; or 
5.12 	(19) a critical access hospital established under section
5.13 	144.1483, clause (10), and section 1820 of the federal Social
5.14 	Security Act, United States Code, title 42, section 1395i-4,
5.15 	that delicensed beds since enactment of the Balanced Budget Act
5.16 	of 1997, Public Law 105-33, to the extent that the critical
5.17 	access hospital does not seek to exceed the maximum number of
5.18 	beds permitted such hospital under federal law.

5.19 	Sec. 4. Minnesota Statutes 2004, section 144.562,
5.20 	subdivision 2, is amended to read:
5.21 		Subd. 2.Eligibility for license condition.  A hospital
5.22 	is not eligible to receive a license condition for swing beds
5.23 	unless (1) it either has a licensed bed capacity of less than 50
5.24 	beds defined in the federal Medicare regulations, Code of
5.25 	Federal Regulations, title 42, section 482.66, or it has a
5.26 	licensed bed capacity of 50 beds or more and has swing beds that
5.27 	were approved for Medicare reimbursement before May 1, 1985, or
5.28 	it has a licensed bed capacity of less than 65 beds and the
5.29 	available nursing homes within 50 miles have had, in the
5.30 	aggregate, an average occupancy rate of 96 percent or higher in
5.31 	the most recent two years as documented on the statistical
5.32 	reports to the Department of Health; and (2) it is located in a
5.33 	rural area as defined in the federal Medicare regulations, Code
5.34 	of Federal Regulations, title 42, section 482.66. Except for
5.35 	critical access hospitals established under section 144.1483,
5.36 	clause (10), and section 1820 of the federal Social Security
6.1 	Act, United States Code, title 42, section 1395i-4,eligible
6.2 	hospitals are allowed a total of 1,460 days of swing bed use per
6.3 	year, provided that no more than ten hospital beds are used as
6.4 	swing beds at any one time. Except for critical access
6.5 	hospitals,the commissioner of health must approve swing bed use
6.6 	beyond 1,460 days as long as there are no Medicare certified
6.7 	skilled nursing facility beds available within 25 miles of that
6.8 	hospital. Critical access hospitals are allowed swing bed use
6.9 	as provided in federal law.