1.1                          A bill for an act
  1.2             relating to health; establishing a framework for 
  1.3             restructuring the delivery of health care under the 
  1.4             state health care programs; changing the amount that 
  1.5             can be placed in an irrevocable funeral or burial 
  1.6             trust account; modifying county agency duties under 
  1.7             the MinnesotaCare program; requiring income and asset 
  1.8             verification for MinnesotaCare recipients; modifying 
  1.9             eligibility and asset transfer requirements under the 
  1.10            medical assistance program; requiring copayments for 
  1.11            medical assistance recipients; modifying covered 
  1.12            services under the medical assistance and general 
  1.13            assistance medical care programs; permitting an income 
  1.14            tax adjustment for long-term care insurance; modifying 
  1.15            requirements for nursing facilities; modifying the 
  1.16            nursing facility reimbursement system; establishing an 
  1.17            advisory committee on nursing facility reimbursement 
  1.18            and regulation; requiring various studies; amending 
  1.19            Minnesota Statutes 1994, sections 144A.10, subdivision 
  1.20            2; 149.11; 256.9352, by adding a subdivision; 
  1.21            256.9355, subdivisions 1 and 4; 256B.056, subdivisions 
  1.22            1, 1a, and 3; 256B.057, subdivisions 1, 2, and by 
  1.23            adding a subdivision; 256B.0625, subdivision 9; 
  1.24            518.145, subdivision 2; Minnesota Statutes 1995 
  1.25            Supplement, sections 144.057, subdivision 2, and by 
  1.26            adding a subdivision; 256.9355, subdivision 2; 
  1.27            256B.0595, subdivisions 1 and 2; 256B.431, subdivision 
  1.28            2j; 256B.434, subdivision 17, and by adding a 
  1.29            subdivision; 256D.03, subdivisions 3 and 4; and 
  1.30            290.01, subdivision 19b; proposing coding for new law 
  1.31            in Minnesota Statutes, chapters 256; and 256B; 
  1.32            repealing Minnesota Statutes 1994, sections 256B.057, 
  1.33            subdivisions 1a and 2a; 256B.41; 256B.411; 256B.421; 
  1.34            256B.431, subdivisions 1, 2, 2a, 2c, 2d, 2e, 2f, 2g, 
  1.35            2h, 2i, 2k, 2l, 2m, 2n, 2o, 2p, 2q, 2r, 3, 3a, 3b, 3c, 
  1.36            3d, 3e, 3f, 3g, 3h, 3i, 3j, 4, 5, 7, 8, 9, 9a, 10, 11, 
  1.37            12, 13, 14, 16, 18, 19, 20, 21, 22, and 24; 256B.432, 
  1.38            subdivisions 4, 7, and 8; 256B.433; 256B.47; and 
  1.39            256B.48; Minnesota Statutes 1995 Supplement, sections 
  1.40            256.9366; 256.9367; 256.9368; 256.9369; 256B.055, 
  1.41            subdivision 10a; 256B.057, subdivisions 1b and 2b; 
  1.42            256B.0625, subdivision 13b; 256B.0645; 256B.431, 
  1.43            subdivisions 2b, 2j, 15, 17, 23, and 25; and 256B.432, 
  1.44            subdivisions 1, 2, 3, 5, and 6. 
  1.45  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.1                              ARTICLE 1
  2.2              LEGISLATIVE INTENT AND GENERAL PRINCIPLES
  2.3      Section 1.  [PURPOSE.] 
  2.4      The legislature finds that rising health care costs, 
  2.5   burdensome government regulations, and limited state resources 
  2.6   require improvements in the effectiveness and efficiency of 
  2.7   Minnesota's public-assisted health care programs.  The 
  2.8   legislature also finds that the expected federal changes in the 
  2.9   Medicaid program will provide Minnesota greater flexibility in 
  2.10  the administration of the medical assistance program and allow 
  2.11  the state to provide health care services more efficiently.  
  2.12  This act is the first step in a longer process of restructuring 
  2.13  the delivery of health care.  In addition to maintaining 
  2.14  specific changes in health care delivery, the act also 
  2.15  establishes a framework for longer term changes. 
  2.16     Sec. 2.  [PRINCIPLES OF SYSTEM REFORM.] 
  2.17     The legislature finds that health care delivery is most 
  2.18  efficient when: 
  2.19     (1) individual consumers can select their own health care 
  2.20  services and providers, using funding sources that travel with 
  2.21  the consumer and that are not tied to specific programs, 
  2.22  services, or providers; 
  2.23     (2) the state purchases care through comprehensive contract 
  2.24  arrangements, rather than paying individual providers for each 
  2.25  specific service performed; 
  2.26     (3) the delivery of health care services is privatized 
  2.27  wherever appropriate; 
  2.28     (4) health care services provided by the state are 
  2.29  delivered through one integrated program, rather than through 
  2.30  multiple programs; and 
  2.31     (5) the delivery of long-term care and acute care is 
  2.32  integrated. 
  2.33     Sec. 3.  [COMPLIANCE WITH FEDERAL LAW.] 
  2.34     Subdivision 1.  [GENERAL PROVISION.] The provisions of this 
  2.35  act are effective only to the extent allowed under federal law 
  2.36  and regulations. 
  3.1      Subd. 2.  [FUTURE MODIFICATION.] It is the intent of the 
  3.2   legislature that the provisions of this bill will be modified to 
  3.3   the extent necessary to conform with federal Medicaid law 
  3.4   changes that are enacted. 
  3.5                              ARTICLE 2
  3.6          STATE HEALTH CARE PROGRAM ELIGIBILITY AND BENEFITS
  3.7      Section 1.  Minnesota Statutes 1994, section 149.11, is 
  3.8   amended to read: 
  3.9      149.11 [PREARRANGED FUNERAL PLANS; CONTRACTS; TRUST FUNDS.] 
  3.10     (a) When prior to the death of any person, that person or 
  3.11  another enters into any transaction, makes a contract, or any 
  3.12  series or combination of transactions or contracts with another 
  3.13  person, partnership, association, or corporation, other than an 
  3.14  insurance company licensed to do business in the state of 
  3.15  Minnesota, by the terms of which, certain personal property 
  3.16  related to the funeral services or the burial, cremation, or 
  3.17  other disposition of human remains will be used upon the death 
  3.18  of the person for whom the property is to be used, or when the 
  3.19  professional services of a funeral director or embalmer will 
  3.20  then be furnished, or both, then the total of all money paid by 
  3.21  the terms of the transaction, contract, or series or combination 
  3.22  of transactions or contracts shall be held in trust for the 
  3.23  purpose for which it has been paid until the death of the person 
  3.24  for whose benefit the money was paid, or refunded to the person 
  3.25  who made the payment or payments, upon demand.  A prearranged 
  3.26  funeral or burial contract buyer may, at the buyer's option, 
  3.27  declare the funeral or burial trust to be irrevocable up to an 
  3.28  amount equivalent to the current allowable supplemental security 
  3.29  income asset exclusion used for determining eligibility for 
  3.30  public assistance $5,000.  The contract buyer may, at the 
  3.31  buyer's option, also declare the interest to be irrevocable to 
  3.32  the extent permitted by federal laws and rules governing public 
  3.33  assistance.  The buyer of either a revocable or an irrevocable 
  3.34  prearranged funeral or burial contract retains the right to 
  3.35  designate as trustee a different funeral establishment at any 
  3.36  time before the death of the person for whose benefit the money 
  4.1   was paid.  Upon the death of that person, the next of kin or 
  4.2   other legal representative of that person's estate retains the 
  4.3   right to designate as trustee a different funeral 
  4.4   establishment.  Accruals of interest or dividends declared upon 
  4.5   the sum of money held in trust are subject to the same trust.  
  4.6   The person, partnership, association, or corporation holding the 
  4.7   money in trust shall inform the person on whose behalf the money 
  4.8   is held that all money paid plus all accrued earnings will be 
  4.9   held in trust until the death of that person or until a request 
  4.10  for a refund is made if made prior to death, except for a 
  4.11  prearranged funeral or burial trust declared irrevocable by the 
  4.12  buyer under this section.  The location of the trust account 
  4.13  including the name and address of the institution in which the 
  4.14  money is being held and any identifying account numbers, and any 
  4.15  subsequent changes in that information must be disclosed in 
  4.16  writing to the person on whose behalf the money is being held, 
  4.17  at the time the funds are deposited into the trust account and 
  4.18  at the time of any subsequent changes in the information.  The 
  4.19  personal property shall include but not be limited to a casket, 
  4.20  burial vault not interred in a grave, combination casket-vault, 
  4.21  or other receptacle not described in paragraph (b) for the 
  4.22  interment, entombment, cremation, or other disposition of human 
  4.23  remains.  
  4.24     (b) Nothing in this section shall prevent the sale and 
  4.25  delivery of cemetery lots, graves, burial vaults preinterred in 
  4.26  a grave, cremation urns, crypt spaces, niches, or grave or lot 
  4.27  markers or monuments before their use is required.  Nothing in 
  4.28  this section prevents the preconstruction sale of crypt spaces 
  4.29  to be permanently installed except that any seller of mausoleum 
  4.30  space or columbarium space, selling burial space in a mausoleum 
  4.31  or columbarium that is not completely constructed and usable, 
  4.32  must comply with section 306.90.  
  4.33     (c) It is the intent of the legislature that the provisions 
  4.34  of this section shall be construed as a limitation upon the 
  4.35  manner in which a person or legal entity is permitted to accept 
  4.36  funds in prepayment of funeral services to be performed in the 
  5.1   future or in prepayment of funeral or burial goods to be used in 
  5.2   connection with the funeral or final disposition of human 
  5.3   remains.  It is further intended to allow members of the public 
  5.4   to arrange and pay for funerals, final dispositions, funeral 
  5.5   services, and funeral and burial goods for themselves and their 
  5.6   families in advance of need while at the same time providing all 
  5.7   possible safeguards so that the prepaid funds cannot be 
  5.8   dissipated, whether intentionally or not, so as to be available 
  5.9   for the payment of the services and goods selected. 
  5.10     Sec. 2.  Minnesota Statutes 1994, section 256.9352, is 
  5.11  amended by adding a subdivision to read: 
  5.12     Subd. 5.  [COUNTY AGENCY DUTIES.] Beginning January 1, 
  5.13  1997, county agencies, as defined in section 256B.02, 
  5.14  subdivision 6, shall determine eligibility for applicants to the 
  5.15  MinnesotaCare program under the supervision of the commissioner. 
  5.16     Sec. 3.  Minnesota Statutes 1994, section 256.9355, 
  5.17  subdivision 1, is amended to read: 
  5.18     Subdivision 1.  [APPLICATION AND INFORMATION AVAILABILITY.] 
  5.19  Applications and other information must be made available to 
  5.20  provider offices, local human services agencies, school 
  5.21  districts, public and private elementary schools in which 25 
  5.22  percent or more of the students receive free or reduced price 
  5.23  lunches, community health offices, and Women, Infants and 
  5.24  Children (WIC) program sites.  These sites may accept 
  5.25  applications, collect the enrollment fee or initial premium fee, 
  5.26  and forward the forms and fees to the commissioner county agency.
  5.27  Otherwise, applicants may apply directly to the commissioner 
  5.28  county agency.  
  5.29     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
  5.30  256.9355, subdivision 2, is amended to read: 
  5.31     Subd. 2.  [COMMISSIONER'S COUNTY AGENCY DUTIES.] The 
  5.32  commissioner county agency shall use individuals' social 
  5.33  security numbers as identifiers for purposes of administering 
  5.34  the plan and conduct data matches to verify income.  Applicants 
  5.35  shall submit evidence of family income, earned and unearned, 
  5.36  including the most recent income tax return, wage slips, or 
  6.1   other documentation that is necessary to verify income 
  6.2   eligibility.  Applicants shall submit evidence of assets as 
  6.3   required under chapter 256B.  The commissioner county agency 
  6.4   shall perform random audits to verify reported income, assets, 
  6.5   and eligibility for all MinnesotaCare applicants.  The 
  6.6   commissioner, on behalf of county agencies, may execute data 
  6.7   sharing arrangements with the department of revenue and any 
  6.8   other governmental agency in order to perform income 
  6.9   verification related to eligibility and premium payment under 
  6.10  the MinnesotaCare program. 
  6.11     Sec. 5.  Minnesota Statutes 1994, section 256.9355, 
  6.12  subdivision 4, is amended to read: 
  6.13     Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
  6.14  human services county agency shall determine an applicant's 
  6.15  eligibility for MinnesotaCare no more than 30 days from the date 
  6.16  that the application is received by the department of human 
  6.17  services.  This requirement shall be suspended for four months 
  6.18  following the dates in which single adults and families without 
  6.19  children become eligible for the program. 
  6.20     Sec. 6.  [256.9364] [ASSET REQUIREMENTS FOR MINNESOTACARE.] 
  6.21     In order to be eligible for the MinnesotaCare program, 
  6.22  persons submitting applications on or after July 1, 1996, must 
  6.23  meet the asset limitation requirements in chapter 256B, except 
  6.24  that: 
  6.25     (1) a person must not individually own more than $6,000 in 
  6.26  assets, or if a member of a household with two family members 
  6.27  (husband and wife, or parent and child), the household must not 
  6.28  own more than $12,000 in assets, plus $400 for each additional 
  6.29  dependent; and 
  6.30     (2) motor vehicles are excluded up to a value of $10,000 
  6.31  per vehicle. 
  6.32     Sec. 7.  Minnesota Statutes 1994, section 256B.056, 
  6.33  subdivision 1, is amended to read: 
  6.34     Subdivision 1.  [RESIDENCY.] To be eligible for medical 
  6.35  assistance, a person must reside in be a permanent resident of 
  6.36  Minnesota, or, if absent from the state, be deemed to be a 
  7.1   resident of Minnesota in accordance with the rules of the state 
  7.2   agency.  For purposes of this section, a permanent Minnesota 
  7.3   resident is a person who has demonstrated, through persuasive 
  7.4   and objective evidence, that the person is domiciled in the 
  7.5   state and intends to live in the state permanently. 
  7.6      To be eligible, all applicants must demonstrate the 
  7.7   requisite intent to live in the state permanently by: 
  7.8      (1) showing that the applicant maintains a residence at a 
  7.9   verified address other than a place of public accommodation, 
  7.10  through the use of evidence of residence described in section 
  7.11  256D.02, subdivision 12a, clause (1); 
  7.12     (2) demonstrating that the applicant has been continuously 
  7.13  domiciled in the state for no less than 60 days immediately 
  7.14  before the application; and 
  7.15     (3) signing an affidavit declaring that: 
  7.16     (i) the applicant currently resides in the state and 
  7.17  intends to reside in the state permanently; and 
  7.18     (ii) the applicant did not come to the state for the 
  7.19  primary purpose of obtaining medical coverage or treatment. 
  7.20     Sec. 8.  Minnesota Statutes 1994, section 256B.056, 
  7.21  subdivision 1a, is amended to read: 
  7.22     Subd. 1a.  [INCOME AND ASSETS GENERALLY.] (a) Unless 
  7.23  specifically required by state law or rule or federal law or 
  7.24  regulation, the methodologies used in counting income and assets 
  7.25  to determine all income available to a family shall be counted 
  7.26  when determining eligibility for medical assistance for persons 
  7.27  whose eligibility category is based on blindness, disability, or 
  7.28  age of 65 or more years, the methodologies for the supplemental 
  7.29  security income program shall be used, except that payments made 
  7.30  pursuant to a court order for the support of children shall be 
  7.31  excluded from income in an amount not to exceed the difference 
  7.32  between the applicable income standard used in the state's 
  7.33  medical assistance program for aged, blind, and disabled persons 
  7.34  and the applicable income standard used in the state's medical 
  7.35  assistance program for families with children.  Exclusion of 
  7.36  court-ordered child support payments is subject to the condition 
  8.1   that if there has been a change in the financial circumstances 
  8.2   of the person with the legal obligation to pay support since the 
  8.3   support order was entered, the person with the legal obligation 
  8.4   to pay support has petitioned for modification of the support 
  8.5   order.  For families and children, which includes all other 
  8.6   eligibility categories, the methodologies for the aid to 
  8.7   families with dependent children program under section 256.73 
  8.8   shall be used.  For these purposes, a "methodology" does not 
  8.9   include an asset or income standard, or accounting method, or 
  8.10  method of determining effective dates. 
  8.11     (b) For purposes of this chapter, "income" means any form 
  8.12  of income, including remuneration for services performed as an 
  8.13  employee and net earnings from self-employment, reduced by the 
  8.14  amount attributable to employment expenses as defined by the 
  8.15  commissioner.  The amount attributable to employment expenses 
  8.16  shall include amounts paid or withheld for federal and state 
  8.17  personal income taxes and federal social security taxes.  Income 
  8.18  includes any payments received as an annuity, retirement, or 
  8.19  disability benefit, including veteran's or workers' 
  8.20  compensation; old age, survivors, and disability insurance; 
  8.21  railroad retirement benefits; unemployment benefits; and 
  8.22  benefits under any federal aid categorical assistance program, 
  8.23  supplementary security income, or other assistance program; 
  8.24  rents, dividends, interest, and royalties; and support and 
  8.25  maintenance payments.  Such payments may not be considered as 
  8.26  available to meet the needs of any person other than the person 
  8.27  for whose benefit they are received, unless that person is a 
  8.28  family member or a spouse.  Goods and services provided in lieu 
  8.29  of cash payment shall be excluded from the definition of income, 
  8.30  except that the following must be included as income:  payments 
  8.31  made for room, board, tuition, or fees by a parent, on behalf of 
  8.32  a child enrolled as a full-time student in a post-secondary 
  8.33  institution, and payments made on behalf of an applicant or 
  8.34  recipient which the applicant or recipient could legally demand 
  8.35  to receive personally in cash, must be included as income.  
  8.36  Benefits of an applicant or recipient, such as those 
  9.1   administered by the Social Security Administration, that are 
  9.2   paid to a representative payee, and are spent on behalf of the 
  9.3   applicant or recipient, are considered available income of the 
  9.4   applicant or recipient. 
  9.5      (c) For purposes of this section, "family" means the 
  9.6   applicant or recipient and the following persons who reside with 
  9.7   the applicant or recipient: 
  9.8      (1) the applicant's spouse; 
  9.9      (2) any minor child of whom the applicant is a parent, 
  9.10  stepparent, or legal custodian, and the child's minor siblings, 
  9.11  including half-siblings and stepsiblings; 
  9.12     (3) the other parent of the applicant's minor child or 
  9.13  children together with the parent's minor children, and, if the 
  9.14  parent is a minor, his or her parents, stepparents, legal 
  9.15  guardians, and minor siblings; and 
  9.16     (4) if the applicant or recipient is a minor, the minor's 
  9.17  parents, stepparents, or legal guardians, and any other minor 
  9.18  children for whom the parents, stepparents, or legal guardians 
  9.19  are financially responsible. 
  9.20     Sec. 9.  Minnesota Statutes 1994, section 256B.056, 
  9.21  subdivision 3, is amended to read: 
  9.22     Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
  9.23  assistance, a person must not individually own more than $3,000 
  9.24  in assets, or if a member of a household with two family 
  9.25  members (husband and wife, or parent and child), the household 
  9.26  must not own more than $6,000 in assets, plus $200 for each 
  9.27  additional legal dependent.  All assets available to a family 
  9.28  shall be considered.  In addition to these maximum amounts, an 
  9.29  eligible individual or family may accrue interest on these 
  9.30  amounts, but they must be reduced to the maximum at the time of 
  9.31  an eligibility redetermination.  The accumulation of the 
  9.32  clothing and personal needs allowance pursuant to section 
  9.33  256B.35 must also be reduced to the maximum at the time of the 
  9.34  eligibility redetermination.  The value of assets that are not 
  9.35  considered in determining eligibility for medical assistance is 
  9.36  the value of those assets that are excluded by the aid to 
 10.1   families with dependent children program for families and 
 10.2   children, and the supplemental security income program for aged, 
 10.3   blind, and disabled persons, with the following exceptions: 
 10.4      (a) Household goods and personal effects are not considered.
 10.5      (b) Capital and operating assets of a trade or business 
 10.6   that the local agency determines are necessary to the person's 
 10.7   ability to earn an income are not considered. 
 10.8      (c) Motor vehicles are excluded to the same extent excluded 
 10.9   by the supplemental security income program. 
 10.10     (d) Assets designated as burial expenses are excluded to 
 10.11  the same extent excluded by the supplemental security income 
 10.12  program An irrevocable funeral or burial trust agreement under 
 10.13  section 149.11 and up to $5,000 in burial space items are not 
 10.14  considered. 
 10.15     Sec. 10.  Minnesota Statutes 1994, section 256B.057, 
 10.16  subdivision 1, is amended to read: 
 10.17     Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] An infant 
 10.18  less than one year of age or a pregnant woman who has written 
 10.19  verification of a positive pregnancy test from a physician or 
 10.20  licensed registered nurse, is eligible for medical assistance if 
 10.21  countable family income is equal to or less than 275 133 percent 
 10.22  of the federal poverty guideline for the same family size.  For 
 10.23  purposes of this subdivision, "countable family income" means 
 10.24  the amount of income considered available using the methodology 
 10.25  of the AFDC program, except for the earned income disregard and 
 10.26  employment deductions.  An amount equal to the amount of earned 
 10.27  income exceeding 275 percent of the federal poverty guideline, 
 10.28  up to a maximum of the amount by which the combined total of 185 
 10.29  percent of the federal poverty guideline plus the earned income 
 10.30  disregards and deductions of the AFDC program exceeds 275 
 10.31  percent of the federal poverty guideline will be deducted for 
 10.32  pregnant women and infants less than one year of age.  
 10.33  Eligibility for a pregnant woman or infant less than one year of 
 10.34  age under this subdivision must be determined without regard to 
 10.35  asset standards established in section 256B.056, subdivision 3.  
 10.36     An infant born on or after January 1, 1991, to a woman who 
 11.1   was eligible for and receiving medical assistance on the date of 
 11.2   the child's birth shall continue to be eligible for medical 
 11.3   assistance without redetermination until the child's first 
 11.4   birthday, as long as the child remains in the woman's household. 
 11.5      Sec. 11.  Minnesota Statutes 1994, section 256B.057, 
 11.6   subdivision 2, is amended to read: 
 11.7      Subd. 2.  [CHILDREN.] A child one through five years of age 
 11.8   in a family whose countable income is less than 133 percent of 
 11.9   the federal poverty guidelines for the same family size, is 
 11.10  eligible for medical assistance.  A child six through 18 years 
 11.11  of age, who was born after September 30, 1983, in a family whose 
 11.12  countable income is less than 100 percent of the federal poverty 
 11.13  guidelines for the same family size is eligible for medical 
 11.14  assistance.  Eligibility for children under this subdivision 
 11.15  must be determined without regard to asset standards established 
 11.16  in section 256B.056, subdivision 3.  
 11.17     Sec. 12.  Minnesota Statutes 1994, section 256B.057, is 
 11.18  amended by adding a subdivision to read: 
 11.19     Subd. 7.  [ASSET PROTECTION FOR PERSONS WHO PURCHASE 
 11.20  LONG-TERM CARE INSURANCE.] (a) Notwithstanding any law to the 
 11.21  contrary, an applicant whose assets exceed the limitations under 
 11.22  this section and under section 256B.056, subdivision 3, is 
 11.23  eligible for medical assistance, without being required to spend 
 11.24  down the excess assets, if: 
 11.25     (1) the applicant meets all other eligibility requirements; 
 11.26     (2) the applicant was covered by a long-term care insurance 
 11.27  policy meeting coverage and benefit standards established by the 
 11.28  commissioner for the period of at least .... months within the 
 11.29  .... month period preceding the date of application for medical 
 11.30  assistance; and 
 11.31     (3) the total value of the applicant's assets does not 
 11.32  exceed .... percent of the asset limitations that otherwise 
 11.33  would apply to the applicant. 
 11.34     (b) The special exemption from asset limitations in 
 11.35  paragraph (a) continues for a period of one month for every .... 
 11.36  months the applicant was covered by long-term care insurance in 
 12.1   the .... months preceding the application for medical assistance.
 12.2      (c) The commissioner shall adopt rules to implement this 
 12.3   subdivision.  The rules must include criteria for determining 
 12.4   the level of long-term care coverage and benefits that must be 
 12.5   maintained to qualify an applicant for the asset exemption. 
 12.6      (d) This subdivision is effective on July 1, 1997, or 30 
 12.7   days after final rules have been adopted, whichever is later. 
 12.8      Sec. 13.  [256B.0591] [DISSOLUTION OF MARRIAGE OF 
 12.9   INSTITUTIONALIZED SPOUSE.] 
 12.10     Subdivision 1.  [DEFINITIONS.] For purposes of this 
 12.11  section, "institutionalized spouse" means a person who is: 
 12.12     (1) in a hospital, nursing facility, or intermediate care 
 12.13  facility for persons with mental retardation, or receiving home 
 12.14  and community-based services under section 256B.0915 or 256B.49, 
 12.15  and is expected to remain in the facility or institution or 
 12.16  receive the home and community-based services for at least 30 
 12.17  consecutive days; and 
 12.18     (2) married to a person who is not in a hospital, nursing 
 12.19  facility, or intermediate care facility for persons with mental 
 12.20  retardation, and is not receiving home and community-based 
 12.21  services under section 256B.0915 or 256B.49. 
 12.22     Subd. 2.  [DISSOLUTION OF MARRIAGE.] If a dissolution of 
 12.23  marriage is obtained within six months prior to or six months 
 12.24  after the date upon which one of the spouses becomes an 
 12.25  institutionalized spouse, the commissioner of human services may 
 12.26  petition the court to reopen the decree of dissolution of 
 12.27  marriage for purposes of determining whether the property 
 12.28  settlement was fair and equitable to the institutionalized 
 12.29  spouse.  A petition under this subdivision must be commenced 
 12.30  within one year after the date upon which the decree was entered.
 12.31     Sec. 14.  Minnesota Statutes 1995 Supplement, section 
 12.32  256B.0595, subdivision 1, is amended to read: 
 12.33     Subdivision 1.  [PROHIBITED TRANSFERS.] (a) For transfers 
 12.34  of assets made on or before August 10, 1993, if a person or the 
 12.35  person's spouse has given away, sold, or disposed of, for less 
 12.36  than fair market value, any asset or interest therein, except 
 13.1   assets other than the homestead that are excluded under the 
 13.2   supplemental security program, within 30 months before or any 
 13.3   time after the date of institutionalization if the person has 
 13.4   been determined eligible for medical assistance, or within 30 
 13.5   months before or any time after the date of the first approved 
 13.6   application for medical assistance if the person has not yet 
 13.7   been determined eligible for medical assistance, the person is 
 13.8   ineligible for long-term care services for the period of time 
 13.9   determined under subdivision 2.  
 13.10     (b) Effective for transfers made after August 10, 1993, a 
 13.11  person, a person's spouse, or any person, court, or 
 13.12  administrative body with legal authority to act in place of, on 
 13.13  behalf of, at the direction of, or upon the request of the 
 13.14  person or person's spouse, may not give away, sell, or dispose 
 13.15  of, for less than fair market value, any asset or interest 
 13.16  therein, except assets other than the homestead that are 
 13.17  excluded under the supplemental security income program, for the 
 13.18  purpose of establishing or maintaining medical assistance 
 13.19  eligibility.  For purposes of determining eligibility for 
 13.20  long-term care services, any transfer of such assets within 36 
 13.21  months before or any time after an institutionalized person 
 13.22  applies for medical assistance, or 36 months before or any time 
 13.23  after a medical assistance recipient becomes institutionalized, 
 13.24  for less than fair market value may be considered.  Any such 
 13.25  transfer is presumed to have been made for the purpose of 
 13.26  establishing or maintaining medical assistance eligibility and 
 13.27  the person is ineligible for long-term care services for the 
 13.28  period of time determined under subdivision 2, unless the person 
 13.29  furnishes convincing evidence to establish that the transaction 
 13.30  was exclusively for another purpose, or unless the transfer is 
 13.31  permitted under subdivision 3 or 4.  Notwithstanding the 
 13.32  provisions of this paragraph, in the case of payments from a 
 13.33  trust or portions of a trust that are considered transfers of 
 13.34  assets under federal law, any transfers made within 60 months 
 13.35  before or any time after an institutionalized person applies for 
 13.36  medical assistance and within 60 months before or any time after 
 14.1   a medical assistance recipient becomes institutionalized, may be 
 14.2   considered. 
 14.3      (c) This section applies to transfers, for less than fair 
 14.4   market value, of income or assets, including assets that are 
 14.5   considered income in the month received, such as inheritances, 
 14.6   court settlements, and retroactive benefit payments or income to 
 14.7   which the person or the person's spouse is entitled but does not 
 14.8   receive due to action by the person, the person's spouse, or any 
 14.9   person, court, or administrative body with legal authority to 
 14.10  act in place of, on behalf of, at the direction of, or upon the 
 14.11  request of the person or the person's spouse.  
 14.12     (d) This section applies to payments for care or personal 
 14.13  services provided by a relative, unless the compensation was 
 14.14  stipulated in a notarized, written agreement which was in 
 14.15  existence when the service was performed, the care or services 
 14.16  directly benefited the person, and the payments made represented 
 14.17  reasonable compensation for the care or services provided.  A 
 14.18  notarized written agreement is not required if payment for the 
 14.19  services was made within 60 days after the service was provided. 
 14.20     (e) This section applies to the portion of any asset or 
 14.21  interest that a person, a person's spouse, or any person, court, 
 14.22  or administrative body with legal authority to act in place of, 
 14.23  on behalf of, at the direction of, or upon the request of the 
 14.24  person or the person's spouse, to any trust, annuity, or other 
 14.25  instrument, that exceeds the value of the benefit likely to be 
 14.26  returned to the person or spouse while alive, based on estimated 
 14.27  life expectancy using the life expectancy tables employed by the 
 14.28  supplemental security income program to determine the value of 
 14.29  an agreement for services for life.  The commissioner may adopt 
 14.30  rules reducing life expectancies based on the need for long-term 
 14.31  care. 
 14.32     (f) For purposes of this section, long-term care services 
 14.33  include services in a nursing facility, services that are 
 14.34  eligible for payment according to section 256B.0625, subdivision 
 14.35  2, because they are provided in a swing bed, intermediate care 
 14.36  facility for persons with mental retardation, and home and 
 15.1   community-based services provided pursuant to sections 
 15.2   256B.0915, 256B.092, and 256B.49.  For purposes of this 
 15.3   subdivision and subdivisions 2, 3, and 4, "institutionalized 
 15.4   person" includes a person who is an inpatient in a nursing 
 15.5   facility or in a swing bed, or intermediate care facility for 
 15.6   persons with mental retardation or who is receiving home and 
 15.7   community-based services under sections 256B.0915, 256B.092, and 
 15.8   256B.49. 
 15.9      (g) Effective for transfers made on or after July 1, 1995, 
 15.10  or upon federal approval, whichever is later, a person, a 
 15.11  person's spouse, or any person, court, or administrative body 
 15.12  with legal authority to act in place of, on behalf of, at the 
 15.13  direction of, or upon the request of the person or person's 
 15.14  spouse, may not give away, sell, or dispose of, for less than 
 15.15  fair market value, any asset or interest therein, for the 
 15.16  purpose of establishing or maintaining medical assistance 
 15.17  eligibility.  For purposes of determining eligibility for 
 15.18  long-term care services, any transfer of such assets within 60 
 15.19  months before, or any time after, an institutionalized person 
 15.20  applies for medical assistance, or 60 months before, or any time 
 15.21  after, a medical assistance recipient becomes institutionalized, 
 15.22  for less than fair market value may be considered.  Any such 
 15.23  transfer is presumed to have been made for the purpose of 
 15.24  establishing or maintaining medical assistance eligibility and 
 15.25  the person is ineligible for long-term care services for the 
 15.26  period of time determined under subdivision 2, unless the person 
 15.27  furnishes convincing evidence to establish that the transaction 
 15.28  was exclusively for another purpose, or unless the transfer is 
 15.29  permitted under subdivision 3 or 4.  The commissioner shall seek 
 15.30  federal authorization to implement this paragraph.  If federal 
 15.31  law permits the use of a period longer than 36 months, the 
 15.32  period used shall be the longest period authorized under federal 
 15.33  law. 
 15.34     Sec. 15.  Minnesota Statutes 1995 Supplement, section 
 15.35  256B.0595, subdivision 2, is amended to read: 
 15.36     Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
 16.1   uncompensated transfer occurring on or before August 10, 1993, 
 16.2   the number of months of ineligibility for long-term care 
 16.3   services shall be the lesser of 30 months, or the uncompensated 
 16.4   transfer amount divided by the average medical assistance rate 
 16.5   for nursing facility services in the state in effect on the date 
 16.6   of application.  The amount used to calculate the average 
 16.7   medical assistance payment rate shall be adjusted each July 1 to 
 16.8   reflect payment rates for the previous calendar year.  The 
 16.9   period of ineligibility begins with the month in which the 
 16.10  assets were transferred.  If the transfer was not reported to 
 16.11  the local agency at the time of application, and the applicant 
 16.12  received long-term care services during what would have been the 
 16.13  period of ineligibility if the transfer had been reported, A 
 16.14  cause of action exists against the transferee for the cost of 
 16.15  long-term care services provided during the period of 
 16.16  ineligibility, or for the uncompensated amount of the transfer, 
 16.17  whichever is less.  The action may be brought by the state or 
 16.18  the local agency responsible for providing medical assistance 
 16.19  under chapter 256G.  The uncompensated transfer amount is the 
 16.20  fair market value of the asset at the time it was given away, 
 16.21  sold, or disposed of, less the amount of compensation received, 
 16.22  plus interest to be calculated from the date of the transfer 
 16.23  using the standard market interest rate.  
 16.24     (b) For uncompensated transfers made after August 10, 1993, 
 16.25  the number of months of ineligibility for long-term care 
 16.26  services shall be the total uncompensated value of the resources 
 16.27  transferred divided by the average medical assistance rate for 
 16.28  nursing facility services in the state in effect on the date of 
 16.29  application.  The amount used to calculate the average medical 
 16.30  assistance payment rate shall be adjusted each July 1 to reflect 
 16.31  payment rates for the previous calendar year.  The period of 
 16.32  ineligibility begins with the month in which the assets were 
 16.33  transferred except that if one or more uncompensated transfers 
 16.34  are made during a period of ineligibility, the total assets 
 16.35  transferred during the ineligibility period shall be combined 
 16.36  and a penalty period calculated to begin in the month the first 
 17.1   uncompensated transfer was made.  If the transfer was not 
 17.2   reported to the local agency at the time of application, and the 
 17.3   applicant received medical assistance services during what would 
 17.4   have been the period of ineligibility if the transfer had been 
 17.5   reported, A cause of action exists against the transferee for 
 17.6   the cost of medical assistance services provided during the 
 17.7   period of ineligibility, or for the uncompensated amount of the 
 17.8   transfer, whichever is less.  The action may be brought by the 
 17.9   state or the local agency responsible for providing medical 
 17.10  assistance under chapter 256G.  The uncompensated transfer 
 17.11  amount is the fair market value of the asset at the time it was 
 17.12  given away, sold, or disposed of, less the amount of 
 17.13  compensation received, plus interest to be calculated from the 
 17.14  date of the transfer using the standard market interest rate.  
 17.15     (c) If a calculation of a penalty period results in a 
 17.16  partial month, payments for long-term care services shall be 
 17.17  reduced in an amount equal to the fraction, except that in 
 17.18  calculating the value of uncompensated transfers, if the total 
 17.19  value of all uncompensated transfers made in a month does not 
 17.20  exceed $1,000 $......., then such transfers shall be disregarded 
 17.21  for each month prior to the month of application for or during 
 17.22  receipt of medical assistance. 
 17.23     Sec. 16.  [256B.0635] [COPAYMENT REQUIRED.] 
 17.24     (a) The commissioner shall adopt rules to require a nominal 
 17.25  copayment for all medical assistance services, except as 
 17.26  provided in paragraph (b).  The copayments shall apply to 
 17.27  recipients of medical assistance who have incomes above 100 
 17.28  percent of the federal poverty level and shall be effective July 
 17.29  1, 1997.  The copayment shall be collected by the provider and 
 17.30  shall be in addition to the reimbursement the provider receives 
 17.31  under the medical assistance program.  Except in cases of an 
 17.32  emergency, a provider may deny services to a recipient who 
 17.33  refuses to pay the copayment.  For purposes of this section, 
 17.34  "nominal" means the maximum amount permitted under applicable 
 17.35  federal law. 
 17.36     (b) No copayments shall be charged for the following 
 18.1   services: 
 18.2      (1) preventive services; 
 18.3      (2) allergy shots; 
 18.4      (3) medically necessary emergency services; and 
 18.5      (4) inpatient hospital services. 
 18.6      Sec. 17.  Minnesota Statutes 1994, section 256B.0625, 
 18.7   subdivision 9, is amended to read: 
 18.8      Subd. 9.  [DENTAL SERVICES.] Medical assistance covers 
 18.9   dental services for children through age 18.  Coverage of dental 
 18.10  services for all other recipients shall be limited to 
 18.11  preventative services.  Dental services include, with prior 
 18.12  authorization, fixed cast metal restorations that are 
 18.13  cost-effective for persons who cannot use removable dentures 
 18.14  because of their medical condition. 
 18.15     Sec. 18.  Minnesota Statutes 1995 Supplement, section 
 18.16  256D.03, subdivision 3, is amended to read: 
 18.17     Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 18.18  (a) General assistance medical care may be paid for any person 
 18.19  who is not eligible for medical assistance under chapter 256B, 
 18.20  including eligibility for medical assistance based on a 
 18.21  spenddown of excess income according to section 256B.056, 
 18.22  subdivision 5, who is a permanent resident of Minnesota as 
 18.23  provided in paragraph (g), and: 
 18.24     (1) who is receiving assistance under section 256D.05 or 
 18.25  256D.051, or who is having a payment made on the person's behalf 
 18.26  under sections 256I.01 to 256I.06; or 
 18.27     (2)(i) who is a resident of Minnesota; and whose equity in 
 18.28  assets is not in excess of $1,000 per assistance unit.  No asset 
 18.29  test shall be applied to children and their parents living in 
 18.30  the same household.  Exempt assets, the reduction of excess 
 18.31  assets, and the waiver of excess assets must conform to the 
 18.32  medical assistance program in chapter 256B, with the following 
 18.33  exception:  the maximum amount of undistributed funds in a trust 
 18.34  that could be distributed to or on behalf of the beneficiary by 
 18.35  the trustee, assuming the full exercise of the trustee's 
 18.36  discretion under the terms of the trust, must be applied toward 
 19.1   the asset maximum; and 
 19.2      (ii) who has countable income not in excess of the 
 19.3   assistance standards established in section 256B.056, 
 19.4   subdivision 4, or whose excess income is spent down pursuant to 
 19.5   section 256B.056, subdivision 5, using a six-month budget 
 19.6   period, except that a one-month budget period must be used for 
 19.7   recipients residing in a long-term care facility.  The method 
 19.8   for calculating earned income disregards and deductions for a 
 19.9   person who resides with a dependent child under age 21 shall be 
 19.10  as specified in section 256.74, subdivision 1.  However, if a 
 19.11  disregard of $30 and one-third of the remainder described in 
 19.12  section 256.74, subdivision 1, clause (4), has been applied to 
 19.13  the wage earner's income, the disregard shall not be applied 
 19.14  again until the wage earner's income has not been considered in 
 19.15  an eligibility determination for general assistance, general 
 19.16  assistance medical care, medical assistance, or aid to families 
 19.17  with dependent children for 12 consecutive months.  The earned 
 19.18  income and work expense deductions for a person who does not 
 19.19  reside with a dependent child under age 21 shall be the same as 
 19.20  the method used to determine eligibility for a person under 
 19.21  section 256D.06, subdivision 1, except the disregard of the 
 19.22  first $50 of earned income is not allowed; or 
 19.23     (3) who would be eligible for medical assistance except 
 19.24  that the person resides in a facility that is determined by the 
 19.25  commissioner or the federal health care financing administration 
 19.26  to be an institution for mental diseases. 
 19.27     (b) Eligibility is available for the month of application, 
 19.28  and for three months prior to application if the person was 
 19.29  eligible in those prior months.  A redetermination of 
 19.30  eligibility must occur every 12 months. 
 19.31     (c) General assistance medical care is not available for a 
 19.32  person in a correctional facility unless the person is detained 
 19.33  by law for less than one year in a county correctional or 
 19.34  detention facility as a person accused or convicted of a crime, 
 19.35  or admitted as an inpatient to a hospital on a criminal hold 
 19.36  order, and the person is a recipient of general assistance 
 20.1   medical care at the time the person is detained by law or 
 20.2   admitted on a criminal hold order and as long as the person 
 20.3   continues to meet other eligibility requirements of this 
 20.4   subdivision.  
 20.5      (d) General assistance medical care is not available for 
 20.6   applicants or recipients who do not cooperate with the county 
 20.7   agency to meet the requirements of medical assistance. 
 20.8      (e) In determining the amount of assets of an individual, 
 20.9   there shall be included any asset or interest in an asset, 
 20.10  including an asset excluded under paragraph (a), that was given 
 20.11  away, sold, or disposed of for less than fair market value 
 20.12  within the 60 months preceding application for general 
 20.13  assistance medical care or during the period of eligibility.  
 20.14  Any transfer described in this paragraph shall be presumed to 
 20.15  have been for the purpose of establishing eligibility for 
 20.16  general assistance medical care, unless the individual furnishes 
 20.17  convincing evidence to establish that the transaction was 
 20.18  exclusively for another purpose.  For purposes of this 
 20.19  paragraph, the value of the asset or interest shall be the fair 
 20.20  market value at the time it was given away, sold, or disposed 
 20.21  of, less the amount of compensation received.  For any 
 20.22  uncompensated transfer, the number of months of ineligibility, 
 20.23  including partial months, shall be calculated by dividing the 
 20.24  uncompensated transfer amount by the average monthly per person 
 20.25  payment made by the medical assistance program to skilled 
 20.26  nursing facilities for the previous calendar year.  The 
 20.27  individual shall remain ineligible until this fixed period has 
 20.28  expired.  The period of ineligibility may exceed 30 months, and 
 20.29  a reapplication for benefits after 30 months from the date of 
 20.30  the transfer shall not result in eligibility unless and until 
 20.31  the period of ineligibility has expired.  The period of 
 20.32  ineligibility begins in the month the transfer was reported to 
 20.33  the county agency, or if the transfer was not reported, the 
 20.34  month in which the county agency discovered the transfer, 
 20.35  whichever comes first.  For applicants, the period of 
 20.36  ineligibility begins on the date of the first approved 
 21.1   application. 
 21.2      (f)(1) Beginning October 1, 1993, an undocumented alien or 
 21.3   a nonimmigrant is ineligible for general assistance medical care 
 21.4   other than emergency services.  For purposes of this 
 21.5   subdivision, a nonimmigrant is an individual in one or more of 
 21.6   the classes listed in United States Code, title 8, section 
 21.7   1101(a)(15), and an undocumented alien is an individual who 
 21.8   resides in the United States without the approval or 
 21.9   acquiescence of the Immigration and Naturalization Service. 
 21.10     (2) This subdivision does not apply to a child under age 
 21.11  18, to a Cuban or Haitian entrant as defined in Public Law 
 21.12  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 21.13  is aged, blind, or disabled as defined in United States Code, 
 21.14  title 42, section 1382c(a)(1). 
 21.15     (3) For purposes of paragraph (f), "emergency services" has 
 21.16  the meaning given in Code of Federal Regulations, title 42, 
 21.17  section 440.255(b)(1), except that it also means services 
 21.18  rendered because of suspected or actual pesticide poisoning. 
 21.19     (g) For purposes of this subdivision, a permanent Minnesota 
 21.20  resident is a person who has demonstrated, through persuasive 
 21.21  and objective evidence, that the person is domiciled in the 
 21.22  state and intends to live in the state permanently. 
 21.23     To be eligible, all applicants must demonstrate the 
 21.24  requisite intent to live in the state permanently by: 
 21.25     (1) showing that the applicant maintains a residence at a 
 21.26  verified address other than a place of public accommodation, 
 21.27  through the use of evidence of residence described in section 
 21.28  256D.02, subdivision 12a, clause (1); 
 21.29     (2) demonstrating that the applicant has been continuously 
 21.30  domiciled in the state for no less than 60 days immediately 
 21.31  before the application; and 
 21.32     (3) signing an affidavit declaring that:  
 21.33     (i) the applicant currently resides in the state and 
 21.34  intends to reside in the state permanently; and 
 21.35     (ii) the applicant did not come to the state for the 
 21.36  primary purpose of obtaining medical coverage or treatment. 
 22.1      Sec. 19.  Minnesota Statutes 1995 Supplement, section 
 22.2   256D.03, subdivision 4, is amended to read: 
 22.3      Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
 22.4   For a person who is eligible under subdivision 3, paragraph (a), 
 22.5   clause (3), general assistance medical care covers, except as 
 22.6   provided in paragraph (c): 
 22.7      (1) inpatient hospital services; 
 22.8      (2) outpatient hospital services; 
 22.9      (3) services provided by Medicare certified rehabilitation 
 22.10  agencies; 
 22.11     (4) prescription drugs and other products recommended 
 22.12  through the process established in section 256B.0625, 
 22.13  subdivision 13; 
 22.14     (5) equipment necessary to administer insulin and 
 22.15  diagnostic supplies and equipment for diabetics to monitor blood 
 22.16  sugar level; 
 22.17     (6) eyeglasses and eye examinations provided by a physician 
 22.18  or optometrist; 
 22.19     (7) hearing aids; 
 22.20     (8) prosthetic devices; 
 22.21     (9) laboratory and X-ray services; 
 22.22     (10) physician's services; 
 22.23     (11) medical transportation; 
 22.24     (12) chiropractic services as covered under the medical 
 22.25  assistance program; 
 22.26     (13) podiatric services; 
 22.27     (14) preventative dental services; 
 22.28     (15) outpatient services provided by a mental health center 
 22.29  or clinic that is under contract with the county board and is 
 22.30  established under section 245.62; 
 22.31     (16) day treatment services for mental illness provided 
 22.32  under contract with the county board; 
 22.33     (17) prescribed medications for persons who have been 
 22.34  diagnosed as mentally ill as necessary to prevent more 
 22.35  restrictive institutionalization; 
 22.36     (18) case management services for a person with serious and 
 23.1   persistent mental illness who would be eligible for medical 
 23.2   assistance except that the person resides in an institution for 
 23.3   mental diseases; 
 23.4      (19) psychological services, medical supplies and 
 23.5   equipment, and Medicare premiums, coinsurance and deductible 
 23.6   payments; 
 23.7      (20) medical equipment not specifically listed in this 
 23.8   paragraph when the use of the equipment will prevent the need 
 23.9   for costlier services that are reimbursable under this 
 23.10  subdivision; 
 23.11     (21) services performed by a certified pediatric nurse 
 23.12  practitioner, a certified family nurse practitioner, a certified 
 23.13  adult nurse practitioner, a certified obstetric/gynecological 
 23.14  nurse practitioner, or a certified geriatric nurse practitioner 
 23.15  in independent practice, if the services are otherwise covered 
 23.16  under this chapter as a physician service, and if the service is 
 23.17  within the scope of practice of the nurse practitioner's license 
 23.18  as a registered nurse, as defined in section 148.171; and 
 23.19     (22) services of a certified public health nurse or a 
 23.20  registered nurse practicing in a public health nursing clinic 
 23.21  that is a department of, or that operates under the direct 
 23.22  authority of, a unit of government, if the service is within the 
 23.23  scope of practice of the public health nurse's license as a 
 23.24  registered nurse, as defined in section 148.171.  
 23.25     (b) Except as provided in paragraph (c), for a recipient 
 23.26  who is eligible under subdivision 3, paragraph (a), clause (1) 
 23.27  or (2), general assistance medical care covers the services 
 23.28  listed in paragraph (a) with the exception of special 
 23.29  transportation services. 
 23.30     (c) Gender reassignment surgery and related services are 
 23.31  not covered services under this subdivision unless the 
 23.32  individual began receiving gender reassignment services prior to 
 23.33  July 1, 1995.  
 23.34     (d) In order to contain costs, the commissioner of human 
 23.35  services shall select vendors of medical care who can provide 
 23.36  the most economical care consistent with high medical standards 
 24.1   and shall where possible contract with organizations on a 
 24.2   prepaid capitation basis to provide these services.  The 
 24.3   commissioner shall consider proposals by counties and vendors 
 24.4   for prepaid health plans, competitive bidding programs, block 
 24.5   grants, or other vendor payment mechanisms designed to provide 
 24.6   services in an economical manner or to control utilization, with 
 24.7   safeguards to ensure that necessary services are provided.  
 24.8   Before implementing prepaid programs in counties with a county 
 24.9   operated or affiliated public teaching hospital or a hospital or 
 24.10  clinic operated by the University of Minnesota, the commissioner 
 24.11  shall consider the risks the prepaid program creates for the 
 24.12  hospital and allow the county or hospital the opportunity to 
 24.13  participate in the program in a manner that reflects the risk of 
 24.14  adverse selection and the nature of the patients served by the 
 24.15  hospital, provided the terms of participation in the program are 
 24.16  competitive with the terms of other participants considering the 
 24.17  nature of the population served.  Payment for services provided 
 24.18  pursuant to this subdivision shall be as provided to medical 
 24.19  assistance vendors of these services under sections 256B.02, 
 24.20  subdivision 8, and 256B.0625, and for contracts beginning on or 
 24.21  after July 1, 1995, shall be discounted ten percent from 
 24.22  comparable fee for service payments.  For payments made during 
 24.23  fiscal year 1990 and later years, the commissioner shall consult 
 24.24  with an independent actuary in establishing prepayment rates, 
 24.25  but shall retain final control over the rate methodology.  
 24.26  Notwithstanding the provisions of subdivision 3, an individual 
 24.27  who becomes ineligible for general assistance medical care 
 24.28  because of failure to submit income reports or recertification 
 24.29  forms in a timely manner, shall remain enrolled in the prepaid 
 24.30  health plan and shall remain eligible for general assistance 
 24.31  medical care coverage through the last day of the month in which 
 24.32  the enrollee became ineligible for general assistance medical 
 24.33  care. 
 24.34     (e) The commissioner of human services may reduce payments 
 24.35  provided under sections 256D.01 to 256D.21 and 261.23 in order 
 24.36  to remain within the amount appropriated for general assistance 
 25.1   medical care, within the following restrictions. 
 25.2      For the period July 1, 1985 to December 31, 1985, 
 25.3   reductions below the cost per service unit allowable under 
 25.4   section 256.966, are permitted only as follows:  payments for 
 25.5   inpatient and outpatient hospital care provided in response to a 
 25.6   primary diagnosis of chemical dependency or mental illness may 
 25.7   be reduced no more than 30 percent; payments for all other 
 25.8   inpatient hospital care may be reduced no more than 20 percent.  
 25.9   Reductions below the payments allowable under general assistance 
 25.10  medical care for the remaining general assistance medical care 
 25.11  services allowable under this subdivision may be reduced no more 
 25.12  than ten percent. 
 25.13     For the period January 1, 1986 to December 31, 1986, 
 25.14  reductions below the cost per service unit allowable under 
 25.15  section 256.966 are permitted only as follows:  payments for 
 25.16  inpatient and outpatient hospital care provided in response to a 
 25.17  primary diagnosis of chemical dependency or mental illness may 
 25.18  be reduced no more than 20 percent; payments for all other 
 25.19  inpatient hospital care may be reduced no more than 15 percent.  
 25.20  Reductions below the payments allowable under general assistance 
 25.21  medical care for the remaining general assistance medical care 
 25.22  services allowable under this subdivision may be reduced no more 
 25.23  than five percent. 
 25.24     For the period January 1, 1987 to June 30, 1987, reductions 
 25.25  below the cost per service unit allowable under section 256.966 
 25.26  are permitted only as follows:  payments for inpatient and 
 25.27  outpatient hospital care provided in response to a primary 
 25.28  diagnosis of chemical dependency or mental illness may be 
 25.29  reduced no more than 15 percent; payments for all other 
 25.30  inpatient hospital care may be reduced no more than ten 
 25.31  percent.  Reductions below the payments allowable under medical 
 25.32  assistance for the remaining general assistance medical care 
 25.33  services allowable under this subdivision may be reduced no more 
 25.34  than five percent.  
 25.35     For the period July 1, 1987 to June 30, 1988, reductions 
 25.36  below the cost per service unit allowable under section 256.966 
 26.1   are permitted only as follows:  payments for inpatient and 
 26.2   outpatient hospital care provided in response to a primary 
 26.3   diagnosis of chemical dependency or mental illness may be 
 26.4   reduced no more than 15 percent; payments for all other 
 26.5   inpatient hospital care may be reduced no more than five percent.
 26.6   Reductions below the payments allowable under medical assistance 
 26.7   for the remaining general assistance medical care services 
 26.8   allowable under this subdivision may be reduced no more than 
 26.9   five percent. 
 26.10     For the period July 1, 1988 to June 30, 1989, reductions 
 26.11  below the cost per service unit allowable under section 256.966 
 26.12  are permitted only as follows:  payments for inpatient and 
 26.13  outpatient hospital care provided in response to a primary 
 26.14  diagnosis of chemical dependency or mental illness may be 
 26.15  reduced no more than 15 percent; payments for all other 
 26.16  inpatient hospital care may not be reduced.  Reductions below 
 26.17  the payments allowable under medical assistance for the 
 26.18  remaining general assistance medical care services allowable 
 26.19  under this subdivision may be reduced no more than five percent. 
 26.20     There shall be no copayment required of any recipient of 
 26.21  benefits for any services provided under this subdivision.  A 
 26.22  hospital receiving a reduced payment as a result of this section 
 26.23  may apply the unpaid balance toward satisfaction of the 
 26.24  hospital's bad debts. 
 26.25     (f) Any county may, from its own resources, provide medical 
 26.26  payments for which state payments are not made. 
 26.27     (g) Chemical dependency services that are reimbursed under 
 26.28  chapter 254B must not be reimbursed under general assistance 
 26.29  medical care. 
 26.30     (h) The maximum payment for new vendors enrolled in the 
 26.31  general assistance medical care program after the base year 
 26.32  shall be determined from the average usual and customary charge 
 26.33  of the same vendor type enrolled in the base year. 
 26.34     (i) The conditions of payment for services under this 
 26.35  subdivision are the same as the conditions specified in rules 
 26.36  adopted under chapter 256B governing the medical assistance 
 27.1   program, unless otherwise provided by statute or rule. 
 27.2      Sec. 20.  Minnesota Statutes 1995 Supplement, section 
 27.3   290.01, subdivision 19b, is amended to read: 
 27.4      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 27.5   individuals, estates, and trusts, there shall be subtracted from 
 27.6   federal taxable income: 
 27.7      (1) interest income on obligations of any authority, 
 27.8   commission, or instrumentality of the United States to the 
 27.9   extent includable in taxable income for federal income tax 
 27.10  purposes but exempt from state income tax under the laws of the 
 27.11  United States; 
 27.12     (2) if included in federal taxable income, the amount of 
 27.13  any overpayment of income tax to Minnesota or to any other 
 27.14  state, for any previous taxable year, whether the amount is 
 27.15  received as a refund or as a credit to another taxable year's 
 27.16  income tax liability; 
 27.17     (3) the amount paid to others not to exceed $650 for each 
 27.18  dependent in grades kindergarten to 6 and $1,000 for each 
 27.19  dependent in grades 7 to 12, for tuition, textbooks, and 
 27.20  transportation of each dependent in attending an elementary or 
 27.21  secondary school situated in Minnesota, North Dakota, South 
 27.22  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
 27.23  legally fulfill the state's compulsory attendance laws, which is 
 27.24  not operated for profit, and which adheres to the provisions of 
 27.25  the Civil Rights Act of 1964 and chapter 363.  As used in this 
 27.26  clause, "textbooks" includes books and other instructional 
 27.27  materials and equipment used in elementary and secondary schools 
 27.28  in teaching only those subjects legally and commonly taught in 
 27.29  public elementary and secondary schools in this state.  
 27.30  "Textbooks" does not include instructional books and materials 
 27.31  used in the teaching of religious tenets, doctrines, or worship, 
 27.32  the purpose of which is to instill such tenets, doctrines, or 
 27.33  worship, nor does it include books or materials for, or 
 27.34  transportation to, extracurricular activities including sporting 
 27.35  events, musical or dramatic events, speech activities, driver's 
 27.36  education, or similar programs.  In order to qualify for the 
 28.1   subtraction under this clause the taxpayer must elect to itemize 
 28.2   deductions under section 63(e) of the Internal Revenue Code; 
 28.3      (4) to the extent included in federal taxable income, 
 28.4   distributions from a qualified governmental pension plan, an 
 28.5   individual retirement account, simplified employee pension, or 
 28.6   qualified plan covering a self-employed person that represent a 
 28.7   return of contributions that were included in Minnesota gross 
 28.8   income in the taxable year for which the contributions were made 
 28.9   but were deducted or were not included in the computation of 
 28.10  federal adjusted gross income.  The distribution shall be 
 28.11  allocated first to return of contributions until the 
 28.12  contributions included in Minnesota gross income have been 
 28.13  exhausted.  This subtraction applies only to contributions made 
 28.14  in a taxable year prior to 1985; 
 28.15     (5) income as provided under section 290.0802; 
 28.16     (6) the amount of unrecovered accelerated cost recovery 
 28.17  system deductions allowed under subdivision 19g; 
 28.18     (7) to the extent included in federal adjusted gross 
 28.19  income, income realized on disposition of property exempt from 
 28.20  tax under section 290.491; 
 28.21     (8) to the extent not deducted in determining federal 
 28.22  taxable income, the amount paid for health insurance of 
 28.23  self-employed individuals as determined under section 162(l) of 
 28.24  the Internal Revenue Code, except that the 25 percent limit does 
 28.25  not apply.  If the taxpayer deducted insurance payments under 
 28.26  section 213 of the Internal Revenue Code of 1986, the 
 28.27  subtraction under this clause must be reduced by the lesser of: 
 28.28     (i) the total itemized deductions allowed under section 
 28.29  63(d) of the Internal Revenue Code, less state, local, and 
 28.30  foreign income taxes deductible under section 164 of the 
 28.31  Internal Revenue Code and the standard deduction under section 
 28.32  63(c) of the Internal Revenue Code; or 
 28.33     (ii) the lesser of (A) the amount of insurance qualifying 
 28.34  as "medical care" under section 213(d) of the Internal Revenue 
 28.35  Code to the extent not deducted under section 162(1) of the 
 28.36  Internal Revenue Code or excluded from income or (B) the total 
 29.1   amount deductible for medical care under section 213(a); and 
 29.2      (9) the exemption amount allowed under Laws 1995, chapter 
 29.3   255, article 3, section 2, subdivision 3; and 
 29.4      (10) the lesser of (i) the amount paid for long-term care 
 29.5   insurance, as defined in section 62A.46; or (ii) $1,000. 
 29.6      Sec. 21.  Minnesota Statutes 1994, section 518.145, 
 29.7   subdivision 2, is amended to read: 
 29.8      Subd. 2.  [REOPENING.] (a) On motion and upon terms as are 
 29.9   just, the court may relieve a party from a judgment and decree, 
 29.10  order, or proceeding under this chapter, except for provisions 
 29.11  dissolving the bonds of marriage, annulling the marriage, or 
 29.12  directing that the parties are legally separated, and may order 
 29.13  a new trial or grant other relief as may be just for the 
 29.14  following reasons: 
 29.15     (1) mistake, inadvertence, surprise, or excusable neglect; 
 29.16     (2) newly discovered evidence which by due diligence could 
 29.17  not have been discovered in time to move for a new trial under 
 29.18  the rules of civil procedure, rule 59.03; 
 29.19     (3) fraud, whether denominated intrinsic or extrinsic, 
 29.20  misrepresentation, or other misconduct of an adverse party; 
 29.21     (4) the judgment and decree or order is void; or 
 29.22     (5) the judgment has been satisfied, released, or 
 29.23  discharged, or a prior judgment and decree or order upon which 
 29.24  it is based has been reversed or otherwise vacated, or it is no 
 29.25  longer equitable that the judgment and decree or order should 
 29.26  have prospective application.  
 29.27     The motion must be made within a reasonable time, and for a 
 29.28  reason under clause (1), (2), or (3), not more than one year 
 29.29  after the judgment and decree, order, or proceeding was entered 
 29.30  or taken.  A motion under this subdivision does not affect the 
 29.31  finality of a judgment and decree or order or suspend its 
 29.32  operation.  This subdivision does not limit the power of a court 
 29.33  to entertain an independent action to relieve a party from a 
 29.34  judgment and decree, order, or proceeding or to grant relief to 
 29.35  a party not actually personally notified as provided in the 
 29.36  rules of civil procedure, or to set aside a judgment for fraud 
 30.1   upon the court.  
 30.2      (b) A decree of dissolution may be reopened by filing a 
 30.3   petition under section 256B.0591. 
 30.4      Sec. 22.  [REPEALER.] 
 30.5      Minnesota Statutes 1994, section 256B.057, subdivisions 1a 
 30.6   and 2a, are repealed.  Minnesota Statutes 1995 Supplement, 
 30.7   sections 256.9366; 256.9367; 256.9368; 256.9369; 256B.055, 
 30.8   subdivision 10a; 256B.057, subdivisions 1b and 2b; 256B.0625, 
 30.9   subdivision 13b; and 256B.0645, are repealed. 
 30.10     Sec. 23.  [EFFECTIVE DATES.] 
 30.11     Section 20 is effective for tax years beginning after 
 30.12  1995.  Sections 7, 8, 9, 10, 11, 12, and 16 are effective July 
 30.13  1, 1996, to the extent allowed under federal law and regulations.
 30.14                             ARTICLE 3
 30.15          NURSING FACILITY REGULATIONS AND QUALITY OF CARE
 30.16     Section 1.  Minnesota Statutes 1995 Supplement, section 
 30.17  144.057, subdivision 2, is amended to read: 
 30.18     Subd. 2.  [RESPONSIBILITIES OF THE DEPARTMENT OF HUMAN 
 30.19  SERVICES.] The department of human services shall conduct the 
 30.20  background studies required by subdivision 1 in compliance with 
 30.21  the provisions of chapter 245A and Minnesota Rules, parts 
 30.22  9543.3000 to 9543.3090, except as provided in subdivision 2a.  
 30.23  For the purpose of this section, the term "residential program" 
 30.24  shall include all facilities described in subdivision 1.  The 
 30.25  department of human services shall provide necessary forms and 
 30.26  instructions, shall conduct the necessary background studies of 
 30.27  individuals, and shall provide notification of the results of 
 30.28  the studies to the facilities, individuals, and the commissioner 
 30.29  of health.  Individuals shall be disqualified under the 
 30.30  provisions of chapter 245A and Minnesota Rules, parts 9543.3000 
 30.31  to 9543.3090.  If an individual is disqualified, the department 
 30.32  of human services shall notify the facility and the individual 
 30.33  and shall inform the individual of the right to request a 
 30.34  reconsideration of the disqualification by submitting the 
 30.35  request to the department of health. 
 30.36     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 31.1   144.057, is amended by adding a subdivision to read: 
 31.2      Subd. 2a.  [EXEMPTION FROM MULTIPLE BACKGROUND 
 31.3   STUDIES.] The commissioner of human services, in conducting the 
 31.4   background studies required by subdivision 1, shall not conduct 
 31.5   multiple background studies for individuals providing services 
 31.6   which have direct contact with patients in more than one nursing 
 31.7   facility.  The commissioner shall consider a background study 
 31.8   conducted for the provision of services at one nursing facility 
 31.9   as satisfying the requirement for background studies for the 
 31.10  provision of services at other nursing facilities, and as 
 31.11  sufficient for complying with the provisions of chapter 245A and 
 31.12  Minnesota Rules, parts 9543.3000 to 9543.3090. 
 31.13     Sec. 3.  Minnesota Statutes 1994, section 144A.10, 
 31.14  subdivision 2, is amended to read: 
 31.15     Subd. 2.  [INSPECTIONS.] The commissioner of health shall 
 31.16  inspect each nursing home facility to ensure compliance with 
 31.17  sections 144A.01 to 144A.16 and the rules promulgated to 
 31.18  implement them.  The inspection shall be a full inspection of 
 31.19  the nursing home facility.  If upon a reinspection provided for 
 31.20  in subdivision 5 the representative of the commissioner of 
 31.21  health finds one or more uncorrected violations, a second 
 31.22  inspection of the facility shall be conducted.  The second 
 31.23  inspection need not be a full inspection.  No prior notice shall 
 31.24  be given of an inspection conducted pursuant to this 
 31.25  subdivision.  Any employee of the commissioner of health who 
 31.26  willfully gives or causes to be given any advance notice of an 
 31.27  inspection required or authorized by this subdivision shall be 
 31.28  subject to suspension or dismissal in accordance with chapter 
 31.29  43A.  An inspection required by a federal rule or statute may be 
 31.30  conducted in conjunction with or subsequent to any other 
 31.31  inspection.  Any inspection required by this subdivision may be 
 31.32  in addition to or in conjunction with the reinspections required 
 31.33  by subdivision 5.  Nothing in this subdivision shall be 
 31.34  construed to prohibit the commissioner of health from making 
 31.35  more than one unannounced inspection of any nursing home 
 31.36  facility during its license year.  The commissioner of health 
 32.1   shall coordinate inspections of nursing homes facilities with 
 32.2   inspections by other state and local agencies consistent with 
 32.3   the requirements of this section and the Medicare and Medicaid 
 32.4   certification programs.  This coordination must include 
 32.5   providing each nursing facility with the option of scheduling 
 32.6   all inspections by state and local agencies, for which advance 
 32.7   notice can be provided, within the same time period. 
 32.8      The commissioner shall conduct inspections and 
 32.9   reinspections of health facilities with a frequency and in a 
 32.10  manner calculated to produce the greatest benefit to residents 
 32.11  within the limits of the resources available to the 
 32.12  commissioner.  In performing this function, the commissioner may 
 32.13  devote proportionately more resources to the inspection of those 
 32.14  facilities in which conditions present the most serious concerns 
 32.15  with respect to resident health, treatment, comfort, safety, and 
 32.16  well-being.  
 32.17     These conditions include but are not limited to:  change in 
 32.18  ownership; frequent change in administration in excess of normal 
 32.19  turnover rates; complaints about care, safety, or rights; where 
 32.20  previous inspections or reinspections have resulted in 
 32.21  correction orders related to care, safety, or rights; and, where 
 32.22  persons involved in ownership or administration of the facility 
 32.23  have been indicted for alleged criminal activity.  Any facility 
 32.24  that has none of the above conditions or any other condition 
 32.25  established by the commissioner that poses a risk to resident 
 32.26  care, safety, or rights shall be inspected once every two years. 
 32.27     Sec. 4.  [COMPLAINT RESOLUTION.] 
 32.28     The commissioner of health shall prepare a brochure 
 32.29  describing local resources for addressing and resolving 
 32.30  complaints against nursing facilities, including but not limited 
 32.31  to, resident advisory councils, local ombudspersons, and 
 32.32  complaint resolution processes operated by the nursing 
 32.33  facility.  The commissioner shall make this brochure available 
 32.34  to nursing facility residents, nursing facilities, and other 
 32.35  interested parties. 
 32.36     Sec. 5.  [RULE AMENDMENTS.] 
 33.1      The commissioner of health shall amend Minnesota Rules, 
 33.2   part 4658.0530, to eliminate training and documentation 
 33.3   requirements for nursing facilities that choose to allow 
 33.4   volunteers to assist residents with eating.  The commissioner 
 33.5   shall amend these rules only after determining that the 
 33.6   amendments are allowed under federal law and regulations.  This 
 33.7   amendment is not subject to the rulemaking provisions of chapter 
 33.8   14.  The amended rule shall have the force and effect of law if 
 33.9   the requirements of Minnesota Statutes, section 14.386, 
 33.10  paragraph (a), are met, and section 14.386, paragraph (b), shall 
 33.11  not apply. 
 33.12                             ARTICLE 4
 33.13                   NURSING FACILITY REIMBURSEMENT
 33.14     Section 1.  Minnesota Statutes 1995 Supplement, section 
 33.15  256B.431, subdivision 2j, is amended to read: 
 33.16     Subd. 2j.  [HOSPITAL-ATTACHED NURSING FACILITY STATUS.] (a) 
 33.17  For the purpose of setting rates under Minnesota Rules, parts 
 33.18  9549.0010 to 9549.0080, for rate years beginning after June 30, 
 33.19  1989, a hospital-attached nursing facility means a nursing 
 33.20  facility which meets the requirements of clauses (1) to (3): 
 33.21     (1) the nursing facility is recognized by the federal 
 33.22  Medicare program to be a hospital-based nursing facility for 
 33.23  purposes of being subject to higher cost limits accorded 
 33.24  hospital-based nursing facilities under the Medicare program, 
 33.25  or, prior to June 30, 1983, was classified as a 
 33.26  hospital-attached nursing facility under Minnesota Rules, parts 
 33.27  9510.0010 to 9510.0480; 
 33.28     (2) the nursing facility's cost report filed under 
 33.29  Minnesota Rules, parts 9549.0010 to 9549.0080, shall use the 
 33.30  same cost allocation principles and methods used in the reports 
 33.31  filed for the Medicare program except as provided in clause (3); 
 33.32  and 
 33.33     (3) direct identification of costs to the nursing facility 
 33.34  cost center will be permitted only when the comparable hospital 
 33.35  costs have also been directly identified to a cost center which 
 33.36  is not allocated to the nursing facility.  
 34.1      (b) For rate years beginning after June 30, 1989, a nursing 
 34.2   facility and hospital, which have applied for hospital-based 
 34.3   nursing facility status under the federal Medicare program 
 34.4   during the reporting year or the nine-month period following the 
 34.5   nursing facility's reporting year, shall be considered a 
 34.6   hospital-attached nursing facility for purposes of setting 
 34.7   payment rates under Minnesota Rules, parts 9549.0010 to 
 34.8   9549.0080, for the rate year following the reporting year or the 
 34.9   nine-month period in which the facility made its Medicare 
 34.10  application.  The nursing facility must file its cost report or 
 34.11  an amended cost report for that reporting year before the 
 34.12  following rate year using Medicare principles and Medicare's 
 34.13  recommended cost allocation methods had the Medicare program's 
 34.14  hospital-based nursing facility status been granted to the 
 34.15  nursing facility.  For each subsequent rate year, the nursing 
 34.16  facility must meet the definition requirements in paragraph 
 34.17  (a).  If the nursing facility is denied hospital-based nursing 
 34.18  facility status under the Medicare program, the nursing 
 34.19  facility's payment rates for the rate years the nursing facility 
 34.20  was considered to be a hospital-attached nursing facility 
 34.21  pursuant to this paragraph shall be recalculated treating the 
 34.22  nursing facility as a non-hospital-attached nursing facility. 
 34.23     (c) For rate years beginning on or after July 1, 1995, and 
 34.24  July 1, 1996, a nursing facility shall be considered a hospital 
 34.25  attached nursing facility for purposes of setting payment rates 
 34.26  under Minnesota Rules, parts 9549.0010 to 9549.0080 and this 
 34.27  section if it meets the requirements of paragraphs (a) and (b), 
 34.28  and 
 34.29     (1) the hospital and nursing facility are physically 
 34.30  attached or connected by a tunnel or skyway; or 
 34.31     (2) the nursing facility was recognized by the Medicare 
 34.32  program as hospital attached as of January 1, 1995, and this 
 34.33  status has been maintained continuously. 
 34.34     (d) For rate years beginning on or after July 1, 1997, the 
 34.35  commissioner shall not consider hospital attached nursing 
 34.36  facilities as a special rate category for purposes of setting 
 35.1   payment rates under Minnesota Rules, parts 9549.0010 to 
 35.2   9549.0080. 
 35.3      Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 35.4   256B.434, subdivision 17, is amended to read: 
 35.5      Subd. 17.  [REPORT.] The commissioner shall report to the 
 35.6   legislature by January 15, 1997, regarding the impact of the 
 35.7   alternative payment demonstration project, and shall present 
 35.8   recommendations and draft legislation for a new nursing facility 
 35.9   reimbursement system to be implemented July 1, 1998, in 
 35.10  geographic areas of the state in which nursing facility services 
 35.11  are not reimbursed on a capitated basis under the long-term care 
 35.12  options project established under section 256B.69, subdivision 
 35.13  23.  In developing recommendations and draft legislation for the 
 35.14  new nursing facility reimbursement system, the commissioner 
 35.15  shall consult with the advisory committee on nursing facility 
 35.16  reimbursement and regulation.  In assessing the impact of the 
 35.17  alternative payment demonstration project, the commissioner may 
 35.18  examine elements of the project including consumer satisfaction, 
 35.19  quality of care, adequacy of services, timeliness in the 
 35.20  delivery of services, and other elements determined appropriate 
 35.21  by the commissioner.  In developing this report, the 
 35.22  commissioner may involve appropriate consumer advocate groups as 
 35.23  needed to assist in monitoring and evaluating changes in a 
 35.24  nursing facility's behavior, including the monitoring and 
 35.25  evaluation of issues involving resident protection.  The report 
 35.26  must include recommendations and draft legislation for 
 35.27  reimbursement of nursing homes facilities after June 30, 1997, 
 35.28  based on experience with the demonstration project and the 
 35.29  requirements of subdivision 18. 
 35.30     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 35.31  256B.434, is amended by adding a subdivision to read: 
 35.32     Subd. 18.  [REQUIREMENTS FOR NEW NURSING FACILITY 
 35.33  REIMBURSEMENT SYSTEM.] The recommendations and draft legislation 
 35.34  in the report required under subdivision 17 must: 
 35.35     (1) address whether reimbursement rates under the new 
 35.36  reimbursement system should differ based upon the geographic 
 36.1   location of the facility; 
 36.2      (2) allow private pay rates to exceed medical assistance 
 36.3   rates without limit, or by a percentage specified by the 
 36.4   commissioner; 
 36.5      (3) provide adequate reimbursement for nursing facilities 
 36.6   choosing to provide subacute care services, as defined in 
 36.7   section 144.6505, subdivision 2; 
 36.8      (4) provide incentives for facilities to provide 
 36.9   nonemergency medical transportation services, if this is more 
 36.10  cost-effective than obtaining these services through an 
 36.11  independent medical transportation provider; 
 36.12     (5) allow facilities to employ staff in multiple job 
 36.13  functions, without satisfying complex data reporting 
 36.14  requirements; and 
 36.15     (6) allow facilities to coordinate mental health care 
 36.16  provided to residents, in order to reduce visits that are not 
 36.17  medically necessary. 
 36.18     Sec. 4.  [REPEALER; PER-BED MAINTENANCE CAP.] 
 36.19     Minnesota Statutes 1994, section 256B.431, subdivision 3c, 
 36.20  is repealed effective July 1, 1997. 
 36.21     Sec. 5.  [REPEALER; NURSING FACILITY PROSPECTIVE 
 36.22  REIMBURSEMENT SYSTEM.] 
 36.23     Minnesota Statutes 1994, sections 256B.41; 256B.411; 
 36.24  256B.421; 256B.431, subdivisions 1, 2, 2a, 2c, 2d, 2e, 2f, 2g, 
 36.25  2h, 2i, 2k, 2l, 2m, 2n, 2o, 2p, 2q, 2r, 3, 3a, 3b, 3d, 3e, 3f, 
 36.26  3g, 3h, 3i, 3j, 4, 5, 7, 8, 9, 9a, 10, 11, 12, 13, 14, 16, 18, 
 36.27  19, 20, 21, 22, and 24; 256B.432, subdivisions 4, 7, and 8; 
 36.28  256B.433; 256B.47; and 256B.48; Minnesota Statutes 1995 
 36.29  Supplement, sections 256B.431, subdivisions 2b, 2j, 15, 17, 23, 
 36.30  and 25; and 256B.432, subdivisions 1, 2, 3, 5, and 6, are 
 36.31  repealed effective July 1, 1998. 
 36.32                             ARTICLE 5
 36.33                  FRAMEWORK FOR LONG-TERM CHANGES
 36.34     Section 1.  [ADVISORY COMMITTEE ON NURSING FACILITY 
 36.35  REIMBURSEMENT AND REGULATION.] 
 36.36     The commissioners of health and human services shall 
 37.1   establish an advisory committee on nursing facility 
 37.2   reimbursement and regulation.  The advisory committee must 
 37.3   include nursing facility residents, health care professionals 
 37.4   providing care to nursing facility residents, representatives of 
 37.5   advocate groups, the nursing facility industry, and the 
 37.6   commissioners of health and human services.  The committee shall:
 37.7      (1) review the rules, procedures, and financing systems for 
 37.8   nursing facilities, and recommend any revisions that allow 
 37.9   greater efficiency and do not adversely affect quality of care; 
 37.10     (2) provide recommendations to the commissioner of human 
 37.11  services regarding the recommendations and draft legislation for 
 37.12  the new nursing facility reimbursement system as required by 
 37.13  Minnesota Statutes, section 256B.434, subdivision 17; 
 37.14     (3) assist the commissioner of health in identifying 
 37.15  federal waivers and approvals to be obtained under section 4; 
 37.16  and 
 37.17     (4) assist the commissioner in evaluating new approaches to 
 37.18  assessing and ensuring quality of care in nursing facilities, 
 37.19  including, but not limited to, the use of peer review by staff 
 37.20  from other nursing facilities, placing greater emphasis on 
 37.21  health care outcomes when surveying nursing facilities, and 
 37.22  providing recognition for facilities providing high quality care.
 37.23     The committee shall be jointly staffed by the departments 
 37.24  of health and human services.  The advisory committee is 
 37.25  governed by Minnesota Statutes, section 15.059, except that it 
 37.26  expires on July 1, 1999. 
 37.27     Sec. 2.  [SYSTEM REFORM AND THE INTEGRATION OF STATE HEALTH 
 37.28  CARE PROGRAMS.] 
 37.29     Subdivision 1.  [REPORT BY THE COMMISSIONER.] The 
 37.30  commissioner of human services shall present to the legislature, 
 37.31  by January 15, 1997, a report containing recommendations and 
 37.32  draft legislation to combine the medical assistance, general 
 37.33  assistance medical care, and MinnesotaCare programs into one 
 37.34  integrated program.  This integrated program must: 
 37.35     (1) use simplified eligibility criteria; 
 37.36     (2) provide a basic benefit set, with supplementary 
 38.1   benefits for persons with high medical needs; 
 38.2      (3) include cost sharing and require premium payments based 
 38.3   on a sliding scale; 
 38.4      (4) be administered at the county level; and 
 38.5      (5) coordinate the provision of health care services 
 38.6   through managed care and other methods. 
 38.7      Subd. 2.  [COMPLIANCE WITH PRINCIPLES OF SYSTEM 
 38.8   REFORM.] The commissioner, in preparing the report required by 
 38.9   subdivision 1, shall evaluate policy options in light of the 
 38.10  extent to which they satisfy the principles of system reform 
 38.11  established under article 1, section 2.  The commissioner shall 
 38.12  include with the report information documenting the extent to 
 38.13  which each recommendation and each initiative contained in the 
 38.14  draft legislation conforms to those principles of system reform. 
 38.15     Subd. 3.  [OPTIONS FOR PRIVATIZATION.] In developing the 
 38.16  report required by subdivision 1, the commissioner shall 
 38.17  consider the feasibility of: 
 38.18     (1) allowing public program enrollees to establish medical 
 38.19  savings accounts; and 
 38.20     (2) providing sliding-scale vouchers to program enrollees 
 38.21  for purchase of private-sector health insurance coverage. 
 38.22     Sec. 3.  [MEDICAID MANAGEMENT INFORMATION SYSTEM.] 
 38.23     Subdivision 1.  [PERFORMANCE TARGET.] The commissioner of 
 38.24  human services shall manage the operation of the Medicaid 
 38.25  management information system in a manner that achieves the 
 38.26  following performance targets: 
 38.27     (1) for the period of July 1, 1996, to December 31, 1996, 
 38.28  65 percent of all properly filed claims are paid within 30 days; 
 38.29  and 
 38.30     (2) for the period January 1, 1997, to June 30, 1997, 80 
 38.31  percent of all properly filed claims are paid within 30 days. 
 38.32     Subd. 2.  [CONTINGENT REQUEST FOR PROPOSALS.] The 
 38.33  commissioner of administration shall evaluate the performance of 
 38.34  the Medicaid management information system.  If the performance 
 38.35  targets established under subdivision 1 are not met, the 
 38.36  commissioner of administration shall issue a request for 
 39.1   proposals for privatization of administration and operation of 
 39.2   the Medicaid management information system beginning January 1, 
 39.3   1998.  This request for proposals must be issued by August 1, 
 39.4   1997. 
 39.5      Sec. 4.  [FEDERAL LAW CHANGES.] 
 39.6      The commissioner of health, in coordination with the 
 39.7   Minnesota congressional delegation and with the assistance of 
 39.8   the advisory committee on nursing facility reimbursement and 
 39.9   regulation, shall seek federal law changes and obtain any 
 39.10  federal waivers and approvals necessary to: 
 39.11     (1) allow the commissioner to simplify nursing facility 
 39.12  data requirements by reducing the number of forms that 
 39.13  facilities are required to submit and eliminating duplicative 
 39.14  reporting requirements; 
 39.15     (2) allow the commissioner to designate one set of nursing 
 39.16  facility quality standards that satisfies requirements for 
 39.17  participation in all federal and state health care programs; 
 39.18     (3) provide the commissioner with flexibility to waive the 
 39.19  annual survey requirement for nursing facilities that can in 
 39.20  other ways demonstrate that they provide high quality care; 
 39.21     (4) increase the percentage of working time registered 
 39.22  nurses and other health care professionals are able to spend on 
 39.23  direct patient care and other patient services, rather than 
 39.24  completing forms and other paperwork; 
 39.25     (5) increase the opportunities for on-the-job training of 
 39.26  certified nursing assistants and allow nursing facilities to 
 39.27  reimburse certified nursing assistants for training and 
 39.28  educational costs only after completion of a specified number of 
 39.29  work hours at the facility; 
 39.30     (6) reduce the frequency of required physician and nurse 
 39.31  practitioner visits to nursing facility residents in stable 
 39.32  condition; and 
 39.33     (7) implement other initiatives which in the judgment of 
 39.34  the commissioner will improve the efficiency of nursing 
 39.35  facilities and are consistent with high quality care.