1.1 	A bill for an act
1.2 	relating to human services; changing hospital payment
1.3 	adjustment provision for diagnostic-related group
1.4 	payments; amending Minnesota Statutes 2004, sections
1.5 	256.969, subdivision 26; 256B.195, subdivision 3.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 256.969,
1.8 	subdivision 26, is amended to read:
1.9 		Subd. 26.Greater minnesota payment adjustment after june
1.10 	30, 2001.  (a) For admissions occurring after June 30, 2001, the
1.11 	commissioner shall pay fee-for-service inpatient admissions for
1.12 	the diagnosis-related groups specified in paragraph (b) at
1.13 	hospitals located outside of the seven-county metropolitan area
1.14 	at the higher of:
1.15 	(1) the hospital's current payment rate for the diagnostic
1.16 	category to which the diagnosis-related group belongs, exclusive
1.17 	of disproportionate population adjustments received under
1.18 	subdivision 9 and hospital payment adjustments received under
1.19 	subdivision 23; or
1.20 	(2) 90 percent of the average payment rate for that
1.21 	diagnostic category for hospitals located within the
1.22 	seven-county metropolitan area, exclusive of disproportionate
1.23 	population adjustments received under subdivision 9 and hospital
1.24 	payment adjustments received under subdivisions 20 and 23. The
1.25 	commissioner may adjust this percentage each year so that the
2.1 	estimated payment increases under this paragraph are equal to
2.2 	the funding provided under section 256B.195 for this purpose.
2.3 	(b) The payment increases provided in paragraph (a) apply
2.4 	to the following diagnosis-related groups, as they fall within
2.5 	the diagnostic categories:
2.6 	(1) 370 cesarean section with complicating diagnosis;
2.7 	(2) 371 cesarean section without complicating diagnosis;
2.8 	(3) 372 vaginal delivery with complicating diagnosis;
2.9 	(4) 373 vaginal delivery without complicating diagnosis;
2.10 	(5) 386 extreme immaturity and respiratory distress
2.11 	syndrome, neonate;
2.12 	(6) 388 full-term neonates with other problems;
2.13 	(7) 390 prematurity without major problems;
2.14 	(8) 391 normal newborn;
2.15 	(9) 385 neonate, died or transferred to another acute care
2.16 	facility;
2.17 	(10) 425 acute adjustment reaction and psychosocial
2.18 	dysfunction;
2.19 	(11) 430 psychoses;
2.20 	(12) 431 childhood mental disorders; and
2.21 	(13) 164-167 appendectomy.

2.22 	Sec. 2. Minnesota Statutes 2004, section 256B.195,
2.23 	subdivision 3, is amended to read:
2.24 		Subd. 3.Payments to certain safety net providers.  (a)
2.25 	Effective July 15, 2001, the commissioner shall make the
2.26 	following payments to the hospitals indicated after noon on the
2.27 	15th of each month:
2.28 	(1) to Hennepin County Medical Center, any federal matching
2.29 	funds available to match the payments received by the medical
2.30 	center under subdivision 2, to increase payments for medical
2.31 	assistance admissions and to recognize higher medical assistance
2.32 	costs in institutions that provide high levels of charity care;
2.33 	and
2.34 	(2) to Regions Hospital, any federal matching funds
2.35 	available to match the payments received by the hospital under
2.36 	subdivision 2, to increase payments for medical assistance
3.1 	admissions and to recognize higher medical assistance costs in
3.2 	institutions that provide high levels of charity care.
3.3 	(b) Effective July 15, 2001, the following percentages of
3.4 	the transfers under subdivision 2 shall be retained by the
3.5 	commissioner for deposit each month into the general fund:
3.6 	(1) 18 percent, plus any federal matching funds, shall be
3.7 	allocated for the following purposes:
3.8 	(i) during the fiscal year beginning July 1, 2001, of the
3.9 	amount available under this clause, 39.7 percent shall be
3.10 	allocated to make increased hospital payments under section
3.11 	256.969, subdivision 26; 34.2 percent shall be allocated to fund
3.12 	the amounts due from small rural hospitals, as defined in
3.13 	section 144.148, for overpayments under section 256.969,
3.14 	subdivision 5a, resulting from a determination that medical
3.15 	assistance and general assistance payments exceeded the charge
3.16 	limit during the period from 1994 to 1997; and 26.1 percent
3.17 	shall be allocated to the commissioner of health for rural
3.18 	hospital capital improvement grants under section 144.148; and
3.19 	(ii) during fiscal years beginning on or after July 1,
3.20 	2002, of the amount available under this clause, 55 percent
3.21 	shall be allocated to make increased hospital payments under
3.22 	section 256.969, subdivision 26, and 45 percent shall be
3.23 	allocated to the commissioner of health for rural hospital
3.24 	capital improvement grants under section 144.148; and
3.25 	(2) 11 percent shall be allocated to the commissioner of
3.26 	health to fund community clinic grants under section 145.9268.
3.27 	(c) This subdivision shall apply to fee-for-service
3.28 	payments only and shall not increase capitation payments or
3.29 	payments made based on average rates. The allocation in
3.30 	paragraph (b), clause (1), item (ii), to increase hospital
3.31 	payments under section 256.969, subdivision 26, shall not limit
3.32 	payments under that section.
3.33 	(d) Medical assistance rate or payment changes, including
3.34 	those required to obtain federal financial participation under
3.35 	section 62J.692, subdivision 8, shall precede the determination
3.36 	of intergovernmental transfer amounts determined in this
4.1 	subdivision.  Participation in the intergovernmental transfer
4.2 	program shall not result in the offset of any health care
4.3 	provider's receipt of medical assistance payment increases other
4.4 	than limits resulting from hospital-specific charge limits and
4.5 	limits on disproportionate share hospital payments.
4.6 	(e) Effective July 1, 2003, if the amount available for
4.7 	allocation under paragraph (b) is greater than the amounts
4.8 	available during March 2003, after any increase in
4.9 	intergovernmental transfers and payments that result from
4.10 	section 256.969, subdivision 3a, paragraph (c), are paid to the
4.11 	general fund, any additional amounts available under this
4.12 	subdivision after reimbursement of the transfers under
4.13 	subdivision 2 shall be allocated to increase medical assistance
4.14 	payments, subject to hospital-specific charge limits and limits
4.15 	on disproportionate share hospital payments, as follows:
4.16 	(1) if the payments under subdivision 5 are approved, the
4.17 	amount shall be paid to the largest ten percent of hospitals as
4.18 	measured by 2001 payments for medical assistance, general
4.19 	assistance medical care, and MinnesotaCare in the nonstate
4.20 	government hospital category.  Payments shall be allocated
4.21 	according to each hospital's proportionate share of the 2001
4.22 	payments; or
4.23 	(2) if the payments under subdivision 5 are not approved,
4.24 	the amount shall be paid to the largest ten percent of hospitals
4.25 	as measured by 2001 payments for medical assistance, general
4.26 	assistance medical care, and MinnesotaCare in the nonstate
4.27 	government category and to the largest ten percent of hospitals
4.28 	as measured by payments for medical assistance, general
4.29 	assistance medical care, and MinnesotaCare in the nongovernment
4.30 	hospital category.  Payments shall be allocated according to
4.31 	each hospital's proportionate share of the 2001 payments in
4.32 	their respective category of nonstate government and
4.33 	nongovernment.  The commissioner shall determine which hospitals
4.34 	are in the nonstate government and nongovernment hospital
4.35 	categories.