1.1                          A bill for an act 
  1.2             relating to human services; changing nursing facility 
  1.3             salary adjustment per diem; amending Minnesota 
  1.4             Statutes 1996, section 256B.431, by adding a 
  1.5             subdivision. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 256B.431, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 27.  [SALARY ADJUSTMENT PER DIEM.] (a) For the 
  1.10  purposes of this subdivision, salary shall include wages, 
  1.11  payroll taxes, and fringe benefits.  For the rate years 
  1.12  beginning July 1, 1998, and July 1, 1999, the commissioner shall 
  1.13  add the appropriate salary adjustment per diem calculated in 
  1.14  paragraph (b) or (c), to the total operating cost payment rate 
  1.15  of each nursing facility calculated under subdivision 26, or 
  1.16  section 256B.434.  The salary adjustment per diem for each 
  1.17  nursing facility shall be determined according to paragraphs (b) 
  1.18  and (c).  
  1.19     (b) For each nursing facility that reports salaries 
  1.20  separately as required by this section, the commissioner shall 
  1.21  determine the salary adjustment per diem by multiplying the 
  1.22  total of compensated hours for all job classifications reported 
  1.23  on the most recent cost report by $1 and then dividing the 
  1.24  resulting amount by the nursing facility's reported resident 
  1.25  days.  
  2.1      (c) Each facility reimbursed under section 256B.434 shall 
  2.2   submit to the commissioner the resident days and total 
  2.3   compensated hours for all job classifications included on the 
  2.4   reports filed by facilities under this section.  The report 
  2.5   shall cover the same time period as the most recent reports 
  2.6   filed under this section.  The commissioner shall calculate the 
  2.7   per diem increase by multiplying the total reported compensated 
  2.8   hours by $1 and dividing the resulting number by the nursing 
  2.9   facility's reported resident days.  
  2.10     (d) Each nursing facility that receives a salary adjustment 
  2.11  per diem according to paragraph (d), clauses (1) and (2), shall 
  2.12  adjust nursing facility employee salaries by $1 per hour.  For 
  2.13  facilities reimbursed according to this section, the 
  2.14  commissioner shall review allowable salary costs for the 
  2.15  reporting year ending September 30, 1999, to determine whether 
  2.16  facilities complied with the requirements of this subdivision. 
  2.17  The commissioner shall determine whether facilities have spent 
  2.18  the salary adjustment per diem to increase salaries according to 
  2.19  paragraphs (e) and (f).  
  2.20     (e) Using the reports filed according to this section, the 
  2.21  commissioner shall calculate the ratio of all spending on 
  2.22  salaries to the total of all compensated hours for the requested 
  2.23  job classifications.  Facilities which show an increase of at 
  2.24  least 75 cents in this ratio from the report year ending 
  2.25  September 30, 1998, to the report year ending September 30, 
  2.26  1999, shall be considered to have used the salary adjustment per 
  2.27  diem to increase salaries and will not be subject to a penalty.  
  2.28  The commissioner shall notify facilities of whether they meet 
  2.29  the test described in this paragraph within 60 days of the 
  2.30  deadline for submitting the information for the report year 
  2.31  ending September 30, 1999. 
  2.32     (f) Those facilities which do not meet the test described 
  2.33  in paragraph (e) may submit information to the commissioner 
  2.34  indicating that extenuating circumstances caused them to fail to 
  2.35  achieve the required increase in the ratio even though they did 
  2.36  raise salaries by $1 per compensated hour.  Any such information 
  3.1   must be submitted to the commissioner within 60 days of 
  3.2   receiving notification of failure to meet the requirements 
  3.3   described in paragraph (e).  In reviewing information submitted 
  3.4   by these facilities, the commissioner shall consider such 
  3.5   factors as the replacement of veteran staff with less 
  3.6   experienced people, changes in the facility's case mix score, 
  3.7   and changes in the ratio of professional to nonprofessional 
  3.8   staff.  If the commissioner determines that a facility did use 
  3.9   its salary adjustment per diem to provide $1 per hour salary 
  3.10  increases without meeting the ratio requirement in paragraph 
  3.11  (e), no penalty will be imposed on that facility.  The 
  3.12  commissioner shall notify facilities of any action taken under 
  3.13  this paragraph within 60 days of receiving information from the 
  3.14  facility. 
  3.15     (g) Facilities which do not meet the requirements described 
  3.16  in paragraphs (e) and (f) are subject to a penalty on their 
  3.17  rates effective July 1, 2000.  The penalty shall be determined 
  3.18  by computing 75 cents minus the difference between the ratio in 
  3.19  paragraph (e), for the year ending September 30, 1999, and the 
  3.20  year ending September 30, 1998.  This amount shall then be 
  3.21  multiplied by the total compensated hours for the year ending 
  3.22  September 30, 1999, and divided by the resident days from the 
  3.23  same year to determine the per diem reduction to be applied to 
  3.24  the facility's total operating cost payment rate for the rate 
  3.25  year beginning July 1, 2000.  The commissioner may apply a 
  3.26  smaller penalty for those facilities which submit information 
  3.27  according to paragraph (e), which indicates they spent more of 
  3.28  the salary adjustment per diem for compensation increases than 
  3.29  the ratio calculated in paragraph (e) would indicate. 
  3.30     (h) Where a collective bargaining agreement exists covering 
  3.31  nursing home salaries, the collective bargaining agreement shall 
  3.32  prevail until the employer and employee representative modify 
  3.33  the agreement.  Failure to modify the collective bargaining 
  3.34  agreement will result in a reduction of the nursing home per 
  3.35  diem payment according to this subdivision. 
  3.36     (i) Facilities reimbursed according to this section shall 
  4.1   receive an addition to the limit described in subdivision 26, 
  4.2   paragraph (a), for the rate years beginning July 1, 1999, and 
  4.3   July 1, 2000.  For the rate year beginning July 1, 1999, the 
  4.4   addition to the limit shall be computed by subtracting the ratio 
  4.5   of total salary costs to total resident days from the September 
  4.6   30, 1997, cost report from the ratio of total salary costs to 
  4.7   total resident days from the September 30, 1998, cost report.  
  4.8   This amount shall then be divided into three components by 
  4.9   multiplying it by the percentage of compensated hours for all 
  4.10  classifications on the September 30, 1998, cost report that are 
  4.11  included in the cost categories of direct care, other 
  4.12  care-related, and other operating costs, respectively.  The 
  4.13  addition to the other operating cost limit shall be the other 
  4.14  operating cost portion calculated in this paragraph.  The 
  4.15  addition to the care-related limit for each of the 11 case mix 
  4.16  classes shall equal the nursing portion calculated in this 
  4.17  paragraph multiplied by the appropriate case mix weight plus the 
  4.18  other care-related portion calculated in this paragraph.  The 
  4.19  addition to the limits for determining rates effective July 1, 
  4.20  2000, shall be calculated in the same manner, except that the 
  4.21  difference in ratios shall be determined using the September 30, 
  4.22  1998, and September 30, 1999, cost reports, and the difference 
  4.23  in the ratios shall be divided into the three cost category 
  4.24  components using the distribution of hours on the September 30, 
  4.25  1999, cost report.