1.1 	A bill for an act
1.2 	relating to human services; modifying mental health services eligibility and rates;
1.3 	amending Minnesota Statutes 2022, sections 254B.04, subdivision 1; 256B.0622, 
1.4 	subdivision 8; 256B.0757, subdivision 5; 256B.0941, subdivision 3; 256B.0947, 
1.5 	subdivision 7.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2022, section 254B.04, subdivision 1, is amended to read:
1.8 		Subdivision 1.Eligibility. (a) Persons eligible for benefits under Code of Federal 
1.9 	Regulations, title 25, part 20, who meet the income standards of section 256B.056, 
1.10 	subdivision 4, and are not enrolled in medical assistance, are entitled to behavioral health 
1.11 	fund services. State money appropriated for this paragraph must be placed in a separate 
1.12 	account established for this purpose.
1.13 	(b) Persons with dependent children who are determined to be in need of chemical 
1.14 	dependency treatment pursuant to an assessment under section 260E.20, subdivision 1, or 
1.15 	a case plan under section 260C.201, subdivision 6, or 260C.212, shall be assisted by the 
1.16 	local agency to access needed treatment services. Treatment services must be appropriate 
1.17 	for the individual or family, which may include long-term care treatment or treatment in a 
1.18 	facility that allows the dependent children to stay in the treatment facility. The county shall 
1.19 	pay for out-of-home placement costs, if applicable.
1.20 	(c) Notwithstanding paragraph (a), persons enrolled in medical assistance and 
1.21 	MinnesotaCare are eligible for room and board services under section 254B.05, subdivision 
1.22 	5, paragraph (b), clause (12).
2.1 	(d) Persons enrolled in MinnesotaCare are eligible for room and board services when 
2.2 	provided through intensive residential treatment services and residential crisis services under 
2.3 	section 256B.0622.

2.4 	Sec. 2. Minnesota Statutes 2022, section 256B.0622, subdivision 8, is amended to read:
2.5 		Subd. 8.Medical assistance payment for assertive community treatment and 
2.6 	intensive residential treatment services. (a) Payment for intensive residential treatment 
2.7 	services and assertive community treatment in this section shall be based on one daily rate 
2.8 	per provider inclusive of the following services received by an eligible client in a given 
2.9 	calendar day: all rehabilitative services under this section, staff travel time to provide 
2.10 	rehabilitative services under this section, and nonresidential crisis stabilization services 
2.11 	under section 256B.0624.
2.12 	(b) Except as indicated in paragraph (c), payment will not be made to more than one 
2.13 	entity for each client for services provided under this section on a given day. If services 
2.14 	under this section are provided by a team that includes staff from more than one entity, the 
2.15 	team must determine how to distribute the payment among the members.
2.16 	(c) The commissioner shall determine one rate for each provider that will bill medical 
2.17 	assistance for residential services under this section and one rate for each assertive community 
2.18 	treatment provider. If a single entity provides both services, one rate is established for the 
2.19 	entity's residential services and another rate for the entity's nonresidential services under 
2.20 	this section. A provider is not eligible for payment under this section without authorization 
2.21 	from the commissioner. The commissioner shall develop rates using the following criteria:
2.22 	(1) the provider's cost for services shall include direct services costs, other program 
2.23 	costs, and other costs determined as follows:
2.24 	(i) the direct services costs must be determined using actual costs of salaries, benefits, 
2.25 	payroll taxes, and training of direct service staff and service-related transportation;
2.26 	(ii) other program costs not included in item (i) must be determined as a specified 
2.27 	percentage of the direct services costs as determined by item (i). The percentage used shall 
2.28 	be determined by the commissioner based upon the average of percentages that represent 
2.29 	the relationship of other program costs to direct services costs among the entities that provide 
2.30 	similar services;
2.31 	(iii) physical plant costs calculated based on the percentage of space within the program 
2.32 	that is entirely devoted to treatment and programming. This does not include administrative 
2.33 	or residential space;
3.1 	(iv) assertive community treatment physical plant costs must be reimbursed as part of 
3.2 	the costs described in item (ii); and
3.3 	(v) subject to federal approval, up to an additional five percent of the total rate may be 
3.4 	added to the program rate as a quality incentive based upon the entity meeting performance 
3.5 	criteria specified by the commissioner;
3.6 	(vi) for assertive community treatment, intensive residential treatment services, and 
3.7 	residential crisis services, providers may include in their prospective cost-based rate-setting 
3.8 	methodology a line item reflecting estimated additional staffing compensation costs. 
3.9 	Estimated additional staffing compensation costs are subject to review by the commissioner; 
3.10 	and
3.11 	(vii) for intensive residential treatment services and residential crisis services, providers 
3.12 	may include in their prospective cost-based rate-setting methodology a line item reflecting 
3.13 	estimated new capital costs. Estimated new capital costs are subject to review by the 
3.14 	commissioner;
3.15 	(2) actual cost is defined as costs which are allowable, allocable, and reasonable, and 
3.16 	consistent with federal reimbursement requirements under Code of Federal Regulations, 
3.17 	title 48, chapter 1, part 31, relating to for-profit entities, and Office of Management and 
3.18 	Budget Circular Number A-122, relating to nonprofit entities;
3.19 	(3) the number of service units;
3.20 	(4) the degree to which clients will receive services other than services under this section; 
3.21 	and
3.22 	(5) the costs of other services that will be separately reimbursed.
3.23 	(d) The rate for intensive residential treatment services and assertive community treatment 
3.24 	must exclude room and board, as defined in section 256I.03, subdivision 6, and services 
3.25 	not covered under this section, such as partial hospitalization, home care, and inpatient 
3.26 	services.
3.27 	(e) Physician services that are not separately billed may be included in the rate to the 
3.28 	extent that a psychiatrist, or other health care professional providing physician services 
3.29 	within their scope of practice, is a member of the intensive residential treatment services 
3.30 	treatment team. Physician services, whether billed separately or included in the rate, may 
3.31 	be delivered by telehealth. For purposes of this paragraph, "telehealth" has the meaning 
3.32 	given to "mental health telehealth" in section 256B.0625, subdivision 46, when telehealth 
3.33 	is used to provide intensive residential treatment services.
4.1 	(f) When services under this section are provided by an assertive community treatment 
4.2 	provider, case management functions must be an integral part of the team.
4.3 	(g) The rate for a provider must not exceed the rate charged by that provider for the 
4.4 	same service to other payors.
4.5 	(h) The rates for existing programs must be established prospectively based upon the 
4.6 	expenditures and utilization over a prior 12-month period using the criteria established in 
4.7 	paragraph (c). The rates for new programs must be established based upon estimated 
4.8 	expenditures and estimated utilization using the criteria established in paragraph (c).
4.9 	(i) Entities who discontinue providing services must be subject to a settle-up process 
4.10 	whereby actual costs and reimbursement for the previous 12 months are compared. In the 
4.11 	event that the entity was paid more than the entity's actual costs plus any applicable 
4.12 	performance-related funding due the provider, the excess payment must be reimbursed to 
4.13 	the department. If a provider's revenue is less than actual allowed costs due to lower 
4.14 	utilization than projected, the commissioner may reimburse the provider to recover its actual 
4.15 	allowable costs. The resulting adjustments by the commissioner must be proportional to the 
4.16 	percent of total units of service reimbursed by the commissioner and must reflect a difference 
4.17 	of greater than five percent.
4.18 	(j) A provider may request of the commissioner a review of any rate-setting decision 
4.19 	made under this subdivision.

4.20 	Sec. 3. Minnesota Statutes 2022, section 256B.0757, subdivision 5, is amended to read:
4.21 		Subd. 5.Payments. The commissioner shall make payments to each designated provider 
4.22 	for the provision ofimplement a single statewide reimbursement rate for behavioral health 
4.23 	home services described in subdivision 3 to each eligible individual under subdivision 2 
4.24 	that selects the health home as a provider under this section. In implementing this rate, the 
4.25 	commissioner must include input from stakeholders, including providers of the services. 
4.26 	The commissioner shall adjust the statewide reimbursement rate annually by the Consumer 
4.27 	Price Index for medical care services. The statewide reimbursement rate must include 
4.28 	estimated staff expenses for salary and benefits reflecting the required behavioral health 
4.29 	home staffing compliment.

4.30 	Sec. 4. Minnesota Statutes 2022, section 256B.0941, subdivision 3, is amended to read:
4.31 		Subd. 3.Per diem rate. (a) The commissioner must establish one per diem rate per 
4.32 	provider for psychiatric residential treatment facility services for individuals 21 years of 
5.1 	age or younger. The rate for a provider must not exceed the rate charged by that provider 
5.2 	for the same service to other payers. Payment must not be made to more than one entity for 
5.3 	each individual for services provided under this section on a given day. The commissioner 
5.4 	must set rates prospectively for the annual rate period. The commissioner must require 
5.5 	providers to submit annual cost reports on a uniform cost reporting form and must use 
5.6 	submitted cost reports to inform the rate-setting process. The cost reporting must be done 
5.7 	according to federal requirements for Medicare cost reports. The commissioner shall establish 
5.8 	a cost-settlement process to coincide with the annual rate-setting process. The cost-settlement 
5.9 	process must review annualized psychiatric residential treatment facility services costs, as 
5.10 	identified by allowable costs outlined in the cost report, and must provide for settlement 
5.11 	where costs exceeded reimbursements from the prior year rate.
5.12 	(b) The following are included in the rate:
5.13 	(1) costs necessary for licensure and accreditation, meeting all staffing standards for 
5.14 	participation, meeting all service standards for participation, meeting all requirements for 
5.15 	active treatment, maintaining medical records, conducting utilization review, meeting 
5.16 	inspection of care, and discharge planning. The direct services costs must be determined 
5.17 	using the actual cost of salaries, benefits, payroll taxes, and training of direct services staff 
5.18 	and service-related transportation; and
5.19 	(2) payment for room and board provided by facilities meeting all accreditation and 
5.20 	licensing requirements for participation.
5.21 	(c) A facility may submit a claim for payment outside of the per diem for professional 
5.22 	services arranged by and provided at the facility by an appropriately licensed professional 
5.23 	who is enrolled as a provider with Minnesota health care programs. Arranged services may 
5.24 	be billed by either the facility or the licensed professional. These services must be included 
5.25 	in the individual plan of care and are subject to prior authorization.
5.26 	(d) Medicaid must reimburse for concurrent services as approved by the commissioner 
5.27 	to support continuity of care and successful discharge from the facility. "Concurrent services" 
5.28 	means services provided by another entity or provider while the individual is admitted to a 
5.29 	psychiatric residential treatment facility. Payment for concurrent services may be limited 
5.30 	and these services are subject to prior authorization by the state's medical review agent. 
5.31 	Concurrent services may include targeted case management, assertive community treatment, 
5.32 	clinical care consultation, team consultation, and treatment planning.
5.33 	(e) Payment rates under this subdivision must not include the costs of providing the 
5.34 	following services:
6.1 	(1) educational services;
6.2 	(2) acute medical care or specialty services for other medical conditions;
6.3 	(3) dental services; and
6.4 	(4) pharmacy drug costs.
6.5 	(f) For purposes of this section, "actual cost" means costs that are allowable, allocable, 
6.6 	reasonable, and consistent with federal reimbursement requirements in Code of Federal 
6.7 	Regulations, title 48, chapter 1, part 31, relating to for-profit entities, and the Office of 
6.8 	Management and Budget Circular Number A-122, relating to nonprofit entities.
6.9 	(g) The commissioner shall annually adjust psychiatric residential treatment facility 
6.10 	services per diem rates to reflect the change in the federal Centers for Medicare and Medicaid 
6.11 	Services Inpatient Psychiatric Facility Market Basket. The commissioner shall use the 
6.12 	indices as forecasted for the midpoint of the prior rate year to the midpoint of the current 
6.13 	rate year.

6.14 	Sec. 5. Minnesota Statutes 2022, section 256B.0947, subdivision 7, is amended to read:
6.15 		Subd. 7.Medical assistance payment and rate setting. (a) Payment for services in this 
6.16 	section must be based on one daily encounter rate per provider inclusive of the following 
6.17 	services received by an eligible client in a given calendar day: all rehabilitative services, 
6.18 	supports, and ancillary activities under this section, staff travel time to provide rehabilitative 
6.19 	services under this section, and crisis response services under section 256B.0624.
6.20 	(b) Payment must not be made to more than one entity for each client for services 
6.21 	provided under this section on a given day. If services under this section are provided by a 
6.22 	team that includes staff from more than one entity, the team shall determine how to distribute 
6.23 	the payment among the members.
6.24 	(c) The commissioner shall establish regional cost-based rates for entities that will bill 
6.25 	medical assistance for nonresidential intensive rehabilitative mental health services. In 
6.26 	developing these rates, the commissioner shall consider:
6.27 	(1) the cost for similar services in the health care trade area;
6.28 	(2) actual costs incurred by entities providing the services;
6.29 	(3) the intensity and frequency of services to be provided to each client;
6.30 	(4) the degree to which clients will receive services other than services under this section; 
6.31 	and
7.1 	(5) the costs of other services that will be separately reimbursed.; and
7.2 	(6) the estimated additional staffing compensation costs for the next rate year as reported 
7.3 	by entities providing the service.
7.4 	(d) The rate for a provider must not exceed the rate charged by that provider for the 
7.5 	same service to other payers.