1.1 	A bill for an act
1.2 	relating to human services; providing long-term care rate adjustments; providing 
1.3 	funding for long-term care employee health insurance costs; modifying 
1.4 	MinnesotaCare eligibility for long-term care employees; requiring development 
1.5 	of a new nursing facility rate rebasing methodology; requiring a study of 
1.6 	direct care staffing;amending Minnesota Statutes 2006, sections 256B.434, 
1.7 	by adding a subdivision; 256B.441, by adding a subdivision; 256B.5012, 
1.8 	by adding a subdivision; 256L.07, subdivision 2; Minnesota Statutes 2007 
1.9 	Supplement, sections 256B.434, subdivision 19; 256B.441, subdivisions 1, 50, 
1.10 	51a; 256B.5012, subdivision 7; Laws 2007, chapter 147, article 7, section 71; 
1.11 	repealing Minnesota Statutes 2007 Supplement, section 256B.441, subdivisions 
1.12 	55, 56.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2007 Supplement, section 256B.434, subdivision 19, 
1.15 	is amended to read:
1.16 		Subd. 19.Nursing facility rate increases beginning October 1, 2007, and 
1.17 	October 1, 2008.  (a) For the rate year beginning October 1, 2007, the commissioner 
1.18 	shall make available to each nursing facility reimbursed under this section operating 
1.19 	payment rate adjustments equal to 1.87 percent of the operating payment rates in effect 
1.20 	on September 30, 2007. For the rate year beginning October 1, 2008, the commissioner 
1.21 	shall make available to each nursing facility reimbursed under this section, operating 
1.22 	payment rate adjustments equal to 5.0 percent of the operating payment rates in effect 
1.23 	on September 30, 2008.
1.24 	(b) Seventy-five percent of the money resulting from the rate adjustment under 
1.25 	paragraph (a) must be used for increases in compensation-related costs for employees 
1.26 	directly employed by the nursing facility on or after the effective date of the rate 
1.27 	adjustment, except:
2.1 	(1) the administrator;
2.2 	(2) persons employed in the central office of a corporation that has an ownership 
2.3 	interest in the nursing facility or exercises control over the nursing facility; and 
2.4 	(3) persons paid by the nursing facility under a management contract.
2.5 	(c) Two-thirds of the money available under paragraph (b) must be used for wage 
2.6 	increases for all employees directly employed by the nursing facility on or after the 
2.7 	effective date of the rate adjustment, except those listed in paragraph (b), clauses (1) to 
2.8 	(3). The wage adjustment that employees receive under this paragraph must be paid as 
2.9 	an equal hourly percentage wage increase for all eligible employees. All wage increases 
2.10 	under this paragraph must be effective on the same date. Only costs associated with the 
2.11 	portion of the equal hourly percentage wage increase that goes to all employees shall 
2.12 	qualify under this paragraph. Costs associated with wage increases in excess of the 
2.13 	amount of the equal hourly percentage wage increase provided to all employees shall be 
2.14 	allowed only for meeting the requirements in paragraph (b). This paragraph shall not 
2.15 	apply to employees covered by a collective bargaining agreement.
2.16 	(d) The commissioner shall allow as compensation-related costs all costs for:
2.17 	(1) wages and salaries;
2.18 	(2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' 
2.19 	compensation;
2.20 	(3) the employer's share of health and dental insurance, life insurance, disability 
2.21 	insurance, long-term care insurance, uniform allowance, and pensions; and
2.22 	(4) other benefits provided, subject to the approval of the commissioner.
2.23 	(e) The portion of the rate adjustment under paragraph (a) that is not subject to the 
2.24 	requirements in paragraphs (b) and (c) shall be provided to nursing facilities effective 
2.25 	October 1, 2007, or October 1, 2008, as applicable.
2.26 	(f) Nursing facilities may apply for the portion of the rate adjustment under 
2.27 	paragraph (a) that is subject to the requirements in paragraphs (b) and (c). The application 
2.28 	must be submitted to the commissioner within six months of the effective date of the 
2.29 	rate adjustment, and the nursing facility must provide additional information required 
2.30 	by the commissioner within nine months of the effective date of the rate adjustment. 
2.31 	The commissioner must respond to all applications within three weeks of receipt. 
2.32 	The commissioner may waive the deadlines in this paragraph under extraordinary 
2.33 	circumstances, to be determined at the sole discretion of the commissioner. The 
2.34 	application must contain:
2.35 	(1) an estimate of the amounts of money that must be used as specified in paragraphs 
2.36 	(b) and (c);
3.1 	(2) a detailed distribution plan specifying the allowable compensation-related and 
3.2 	wage increases the nursing facility will implement to use the funds available in clause (1);
3.3 	(3) a description of how the nursing facility will notify eligible employees of 
3.4 	the contents of the approved application, which must provide for giving each eligible 
3.5 	employee a copy of the approved application, excluding the information required in clause 
3.6 	(1), or posting a copy of the approved application, excluding the information required in 
3.7 	clause (1), for a period of at least six weeks in an area of the nursing facility to which all 
3.8 	eligible employees have access; and
3.9 	(4) instructions for employees who believe they have not received the 
3.10 	compensation-related or wage increases specified in clause (2), as approved by the 
3.11 	commissioner, and which must include a mailing address, e-mail address, and the 
3.12 	telephone number that may be used by the employee to contact the commissioner or the 
3.13 	commissioner's representative.
3.14 	(g) The commissioner shall ensure that cost increases in distribution plans under 
3.15 	paragraph (f), clause (2), that may be included in approved applications, comply with the 
3.16 	following requirements:
3.17 	(1) costs to be incurred during the applicable rate year resulting from wage and 
3.18 	salary increases effective after October 1, 2006, and prior to the first day of the nursing 
3.19 	facility's payroll period that includes October 1~~, 2007~~ of each year, shall be allowed if they 
3.20 	were not used in the prior year's application;
3.21 	(2) a portion of the costs resulting from tenure-related wage or salary increases 
3.22 	may be considered to be allowable wage increases, according to formulas that the 
3.23 	commissioner shall provide, where employee retention is above the average statewide 
3.24 	rate of retention of direct care employees;
3.25 	(3) the annualized amount of increases in costs for the employer's share of health 
3.26 	and dental insurance, life insurance, disability insurance, and workers' compensation 
3.27 	shall be allowable compensation-related increases if they are effective on or after April 
3.28 	1~~, 2007,~~ of the year in which the rate adjustments are effective and prior to April 1~~, 2008~~
3.29 	of the following year; and 
3.30 	(4) for nursing facilities in which employees are represented by an exclusive 
3.31 	bargaining representative, the commissioner shall approve the application only upon 
3.32 	receipt of a letter of acceptance of the distribution plan, in regard to members of the 
3.33 	bargaining unit, signed by the exclusive bargaining agent and dated after May 25, 2007. 
3.34 	Upon receipt of the letter of acceptance, the commissioner shall deem all requirements of 
3.35 	this section as having been met in regard to the members of the bargaining unit.
4.1 	(h) The commissioner shall review applications received under paragraph (f) and 
4.2 	shall provide the portion of the rate adjustment under paragraphs (b) and (c) if the 
4.3 	requirements of this subdivision have been met. The rate adjustment shall be effective 
4.4 	October 1. Notwithstanding paragraph (a), if the approved application distributes less 
4.5 	money than is available, the amount of the rate adjustment shall be reduced so that the 
4.6 	amount of money made available is equal to the amount to be distributed.

4.7 	Sec. 2. Minnesota Statutes 2006, section 256B.434, is amended by adding a 
4.8 	subdivision to read:
4.9 		Subd. 21.Nursing facility employee health insurance costs. (a) For the period 
4.10 	between October 1, 2008, and September 30, 2010, the commissioner shall provide to 
4.11 	each nursing facility reimbursed under this section or any other section a health insurance 
4.12 	per diem of ..... cents to the total operating payment rate, to be used by the facility to 
4.13 	purchase private sector health insurance coverage for employees.
4.14 	(b) A facility receiving the health insurance per diem shall report to the 
4.15 	commissioner, in the form and manner specified by the commissioner, a calculation of the 
4.16 	health insurance per diem, including: the amount received from this rate adjustment, the 
4.17 	type and cost of health insurance coverage purchased, the number of persons for whom 
4.18 	health coverage was purchased, a calculation of the per diem amount of health coverage 
4.19 	costs based on actual resident days, and other information as required by the commissioner.
4.20 	(c) On October 1, 2010, the commissioner shall remove the health insurance per 
4.21 	diem from the total operating payment rate of each facility.
4.22 	(d) For rate periods and rate years beginning on or after October 1, 2010, the 
4.23 	commissioner shall provide to each facility the health insurance per diem as determined 
4.24 	by using the methods in paragraph (b) and the most recently reported information, subject 
4.25 	to an upper limit determined by the commissioner, based on the results of the study of 
4.26 	health coverage for long-term care workers required by section 13.

4.27 	Sec. 3. Minnesota Statutes 2007 Supplement, section 256B.441, subdivision 1, is 
4.28 	amended to read:
4.29 		Subdivision 1. Rebasing of nursing facility operating cost payment rates. (a) 
4.30 	The commissioner shall rebase nursing facility operating cost payment rates to align 
4.31 	payments to facilities with the cost of providing care, only upon authorization in law as 
4.32 	required by subdivision 1a. The rebased operating cost payment rates shall be calculated 
4.33 	using the statistical and cost report filed by each nursing facility for the report period 
4.34 	ending one year prior to the rate year.
5.1 	~~(b) The new operating cost payment rates based on this section shall take effect~~ 
5.2 	~~beginning with the rate year beginning October 1, 2008, and shall be phased in over~~ 
5.3 	~~eight rate years through October 1, 2015.~~
5.4 	~~(c) Operating cost payment rates shall be rebased on October 1, 2016, and every~~ 
5.5 	~~two years after that date.~~
5.6 	~~(d)~~ (b) Each cost reporting year shall begin on October 1 and end on the following 
5.7 	September 30. Beginning in 2006, a statistical and cost report shall be filed by each 
5.8 	nursing facility by January 15. Notice of rates shall be distributed by August 15 and the 
5.9 	rates shall go into effect on October 1 for one year.
5.10 	~~(e)~~ (c) Effective ~~October 1, 2014~~ upon full implementation of rebased operating cost 
5.11 	payment rates, property rates shall be rebased in accordance with section 256B.431 and 
5.12 	Minnesota Rules, chapter 9549. The commissioner shall determine what the property 
5.13 	payment rate for a nursing facility would be had the facility not had its property rate 
5.14 	determined under section 256B.434. The commissioner shall allow nursing facilities to 
5.15 	provide information affecting this rate determination that would have been filed annually 
5.16 	under Minnesota Rules, chapter 9549, and nursing facilities shall report information 
5.17 	necessary to determine allowable debt. The commissioner shall use this information 
5.18 	to determine the property payment rate.

5.19 	Sec. 4. Minnesota Statutes 2006, section 256B.441, is amended by adding a 
5.20 	subdivision to read:
5.21 		Subd. 1a.Prohibition on implementation. The commissioner is prohibited from 
5.22 	rebasing nursing facility payment rates, and from implementing any provision of this 
5.23 	section related to rebasing, without specific authorization in law.

5.24 	Sec. 5. Minnesota Statutes 2007 Supplement, section 256B.441, subdivision 50, 
5.25 	is amended to read:
5.26 		Subd. 50.Determination of total care-related limit. (a) The limit on the total 
5.27 	care-related per diem shall be determined for each peer group and facility type group 
5.28 	combination. A facility's total care-related per diems shall be limited to 120 percent of the 
5.29 	median for the facility's peer and facility type group. The facility-specific direct care costs 
5.30 	used in making this comparison and in the calculation of the median shall be based on a 
5.31 	RUG's weight of 1.00. A facility that is above that limit shall have its total care-related per 
5.32 	diem reduced to the limit. If a reduction of the total care-related per diem is necessary 
5.33 	because of this limit, the reduction shall be made proportionally to both the direct care per 
5.34 	diem and the other care-related per diem.
6.1 	(b) ~~Beginning with rates determined for October 1, 2016~~ Effective upon full 
6.2 	implementation of rebased operating cost payment rates, the total care-related limit shall 
6.3 	be a variable amount based on each facility's quality score, as determined under section 
6.4 	256B.441, subdivision 44, in accordance with clauses (1) to (4):
6.5 	(1) for each facility, the commissioner shall determine the quality score, subtract 40, 
6.6 	divide by 40, and convert to a percentage;
6.7 	(2) if the value determined in clause (1) is less than zero, the total care-related limit 
6.8 	shall be 105 percent of the median for the facility's peer and facility type group;
6.9 	(3) if the value determined in clause (1) is greater than 100 percent, the total 
6.10 	care-related limit shall be 125 percent of the median for the facility's peer and facility 
6.11 	type group; and 
6.12 	(4) if the value determined in clause (1) is greater than zero and less than 100 
6.13 	percent, the total care-related limit shall be 105 percent of the median for the facility's peer 
6.14 	and facility type group plus one-fifth of the percentage determined in clause (1).

6.15 	Sec. 6. Minnesota Statutes 2007 Supplement, section 256B.441, subdivision 51a, 
6.16 	is amended to read:
6.17 		Subd. 51a.Exception allowing contracting for specialized care. (a) ~~For rate years~~ 
6.18 	~~beginning on or after October 1, 2016~~ Effective upon full implementation of rebased 
6.19 	operating cost payment rates, the commissioner may negotiate increases to the care-related 
6.20 	limit for nursing facilities that provide specialized care, at a cost to the general fund not 
6.21 	to exceed $600,000 per year. The commissioner shall publish a request for proposals 
6.22 	annually, and may negotiate increases to the limits that shall apply for either one or 
6.23 	two years before the increase shall be subject to a new proposal and negotiation. The 
6.24 	care-related limit may be increased by up to 50 percent.
6.25 	(b) In selecting facilities with which to negotiate, the commissioner shall consider:
6.26 	(1) the diagnoses or other circumstances of residents in the specialized program that 
6.27 	require care that costs substantially more than the RUG's rates associated with those 
6.28 	residents;
6.29 	(2) the nature of the specialized program or programs offered to meet the needs 
6.30 	of these individuals; and 
6.31 	(3) outcomes achieved by the specialized program.

6.32 	Sec. 7. Minnesota Statutes 2007 Supplement, section 256B.5012, subdivision 7, 
6.33 	is amended to read:
7.1 		Subd. 7.ICF/MR rate increases effective October 1, 2007, and October 1, 2008.
 7.2 	(a) For the rate year beginning October 1, 2007, the commissioner shall make available 
7.3 	to each facility reimbursed under this section operating payment rate adjustments equal 
7.4 	to 2.0 percent of the operating payment rates in effect on September 30, 2007. For 
7.5 	the rate year beginning July 1, 2008, the commissioner shall make available to each 
7.6 	facility reimbursed under this section operating payment rate adjustments equal to ~~2.0~~ 5.0
7.7 	percent of the operating payment rates in effect on June 30, 2008. For each facility, the 
7.8 	commissioner shall make available an adjustment, based on occupied beds, using the 
7.9 	percentage specified in this paragraph multiplied by the total payment rate, including the 
7.10 	variable rate but excluding the property-related payment rate, in effect on the preceding 
7.11 	day. The total payment rate shall include the adjustment provided in section 256B.501, 
7.12 	subdivision 12. A facility whose payment rates are governed by closure agreements, 
7.13 	receivership agreements, or Minnesota Rules, part 9553.0075, is not eligible for an 
7.14 	adjustment otherwise granted under this subdivision.
7.15 	(b) Seventy-five percent of the money resulting from the rate adjustments under 
7.16 	paragraph (a) must be used for increases in compensation-related costs for employees 
7.17 	directly employed by the facility on or after the effective date of the rate adjustments, 
7.18 	except:
7.19 	(1) the administrator;
7.20 	(2) persons employed in the central office of a corporation that has an ownership 
7.21 	interest in the facility or exercises control over the facility; and 
7.22 	(3) persons paid by the facility under a management contract.
7.23 	(c) Two-thirds of the money available under paragraph (b) must be used for wage 
7.24 	increases for all employees directly employed by the facility on or after the effective 
7.25 	date of the rate adjustments, except those listed in paragraph (b), clauses (1) to (3). The 
7.26 	wage adjustment that employees receive under this paragraph must be paid as an equal 
7.27 	hourly percentage wage increase for all eligible employees. All wage increases under this 
7.28 	paragraph must be effective on the same date. Only costs associated with the portion of 
7.29 	the equal hourly percentage wage increase that goes to all employees shall qualify under 
7.30 	this paragraph. Costs associated with wage increases in excess of the amount of the equal 
7.31 	hourly percentage wage increase provided to all employees shall be allowed only for 
7.32 	meeting the requirements in paragraph (b). This paragraph shall not apply to employees 
7.33 	covered by a collective bargaining agreement.
7.34 	(d) The commissioner shall allow as compensation-related costs all costs for:
7.35 	(1) wages and salaries;
8.1 	(2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' 
8.2 	compensation;
8.3 	(3) the employer's share of health and dental insurance, life insurance, disability 
8.4 	insurance, long-term care insurance, uniform allowance, and pensions; and
8.5 	(4) other benefits provided, subject to the approval of the commissioner.
8.6 	(e) The portion of the rate adjustments under paragraph (a) that is not subject to the 
8.7 	requirements in paragraphs (b) and (c) shall be provided to facilities effective October 
8.8 	1 of each year.
8.9 	(f) Facilities may apply for the portion of the rate adjustments under paragraph 
8.10 	(a) that is subject to the requirements in paragraphs (b) and (c). The application 
8.11 	must be submitted to the commissioner within six months of the effective date of the 
8.12 	rate adjustments, and the facility must provide additional information required by 
8.13 	the commissioner within nine months of the effective date of the rate adjustments. 
8.14 	The commissioner must respond to all applications within three weeks of receipt. 
8.15 	The commissioner may waive the deadlines in this paragraph under extraordinary 
8.16 	circumstances, to be determined at the sole discretion of the commissioner. The 
8.17 	application must contain:
8.18 	(1) an estimate of the amounts of money that must be used as specified in paragraphs 
8.19 	(b) and (c);
8.20 	(2) a detailed distribution plan specifying the allowable compensation-related and 
8.21 	wage increases the facility will implement to use the funds available in clause (1);
8.22 	(3) a description of how the facility will notify eligible employees of the contents of 
8.23 	the approved application, which must provide for giving each eligible employee a copy of 
8.24 	the approved application, excluding the information required in clause (1), or posting a 
8.25 	copy of the approved application, excluding the information required in clause (1), for 
8.26 	a period of at least six weeks in an area of the facility to which all eligible employees 
8.27 	have access; and
8.28 	(4) instructions for employees who believe they have not received the 
8.29 	compensation-related or wage increases specified in clause (2), as approved by the 
8.30 	commissioner, and which must include a mailing address, e-mail address, and the 
8.31 	telephone number that may be used by the employee to contact the commissioner or the 
8.32 	commissioner's representative.
8.33 	(g) The commissioner shall ensure that cost increases in distribution plans under 
8.34 	paragraph (f), clause (2), that may be included in approved applications, comply with 
8.35 	requirements in clauses (1) to (4):
9.1 	(1) costs to be incurred during the applicable rate year resulting from wage and 
9.2 	salary increases effective after October 1, 2006, and prior to the first day of the facility's 
9.3 	payroll period that includes October 1 of each year shall be allowed if they were not used 
9.4 	in the prior year's application and they meet the requirements of paragraphs (b) and (c);
9.5 	(2) a portion of the costs resulting from tenure-related wage or salary increases 
9.6 	may be considered to be allowable wage increases, according to formulas that the 
9.7 	commissioner shall provide, where employee retention is above the average statewide 
9.8 	rate of retention of direct care employees;
9.9 	(3) the annualized amount of increases in costs for the employer's share of health 
9.10 	and dental insurance, life insurance, disability insurance, and workers' compensation shall 
9.11 	be allowable compensation-related increases if they are effective on or after April 1 of 
9.12 	the year in which the rate adjustments are effective and prior to April 1 of the following 
9.13 	year; and 
9.14 	(4) for facilities in which employees are represented by an exclusive bargaining 
9.15 	representative, the commissioner shall approve the application only upon receipt of a letter 
9.16 	of acceptance of the distribution plan, as regards members of the bargaining unit, signed 
9.17 	by the exclusive bargaining agent and dated after May 25, 2007. Upon receipt of the letter 
9.18 	of acceptance, the commissioner shall deem all requirements of this section as having 
9.19 	been met in regard to the members of the bargaining unit.
9.20 	(h) The commissioner shall review applications received under paragraph (f) and 
9.21 	shall provide the portion of the rate adjustments under paragraphs (b) and (c) if the 
9.22 	requirements of this subdivision have been met. The rate adjustments shall be effective 
9.23 	October 1 of each year. Notwithstanding paragraph (a), if the approved application 
9.24 	distributes less money than is available, the amount of the rate adjustment shall be reduced 
9.25 	so that the amount of money made available is equal to the amount to be distributed.

9.26 	Sec. 8. Minnesota Statutes 2006, section 256B.5012, is amended by adding a 
9.27 	subdivision to read:
9.28 		Subd. 8.ICF/MR employee health insurance costs. (a) For the period between 
9.29 	July 1, 2008, and June 30, 2009, the commissioner shall provide to each ICF/MR facility 
9.30 	reimbursed under this section, or any other section, a health insurance per diem of ... cents 
9.31 	to the total operating payment rate, to be used by the facility to purchase private sector 
9.32 	health insurance coverage for employees.
9.33 	(b) A facility receiving the health insurance per diem shall annually report to the 
9.34 	commissioner, in the form and manner specified by the commissioner, a calculation of the 
9.35 	health insurance per diem, including: the amount received from this rate adjustment, the 
10.1 	type and cost of health insurance coverage purchased, the number of persons for whom 
10.2 	health coverage was purchased, a calculation of the per diem amount of health coverage 
10.3 	costs based on actual resident days, and other information required by the commissioner.
10.4 	(c) On July 1, 2009, the commissioner shall remove the health insurance per diem 
10.5 	from the total operating payment rate of each facility.
10.6 	(d) For rate periods and rate years beginning on or after July 1, 2009, the 
10.7 	commissioner shall provide to each facility the health insurance per diem as determined 
10.8 	by using the methods in paragraph (b) and the most recently reported information, subject 
10.9 	to an upper limit determined by the commissioner, based on the results of the study of 
10.10 	health coverage for long-term care workers required by section 13.

10.11 	Sec. 9. Minnesota Statutes 2006, section 256L.07, subdivision 2, is amended to read:
10.12 		Subd. 2.Must not have access to employer-subsidized coverage. (a) To be 
10.13 	eligible, a family or individual must not have access to subsidized health coverage through 
10.14 	an employer and must not have had access to employer-subsidized coverage through 
10.15 	a current employer for 18 months prior to application or reapplication. A family or 
10.16 	individual whose employer-subsidized coverage is lost due to an employer terminating 
10.17 	health care coverage as an employee benefit during the previous 18 months is not eligible.
10.18 	(b) This subdivision does not apply to a family or individual who was enrolled 
10.19 	in MinnesotaCare within six months or less of reapplication and who no longer has 
10.20 	employer-subsidized coverage due to the employer terminating health care coverage 
10.21 	as an employee benefit.
10.22 	(c) For purposes of this requirement, subsidized health coverage means health 
10.23 	coverage for which the employer pays at least 50 percent of the cost of coverage for 
10.24 	the employee or dependent, or a higher percentage as specified by the commissioner. 
10.25 	Children are eligible for employer-subsidized coverage through either parent, including 
10.26 	the noncustodial parent. The commissioner must treat employer contributions to Internal 
10.27 	Revenue Code Section 125 plans and any other employer benefits intended to pay 
10.28 	health care costs as qualified employer subsidies toward the cost of health coverage for 
10.29 	employees for purposes of this subdivision.
10.30 	(d) The commissioner, for the period between July 1, 2008, and June 30, 2009, shall 
10.31 	exempt a family or individual from this subdivision if access to employer-subsidized 
10.32 	insurance is through employment at: (1) a nursing facility licensed under chapter 144A 
10.33 	that participates in the medical assistance program; (2) a service provider eligible for a 
10.34 	rate increase provided under Laws 2007, chapter 147, article 7, section 71; or (3) an 
10.35 	ICF/MR reimbursed under sections 256B.5011 to 256B.5015.

11.1 	EFFECTIVE DATE. This section is effective July 1, 2008, or upon federal 
11.2 	approval, whichever is later. The commissioner of human services shall inform the revisor 
11.3 	of statutes when federal approval is obtained.

11.4 	Sec. 10. Laws 2007, chapter 147, article 7, section 71, is amended to read:
11.5 	Sec. 71. PROVIDER RATE INCREASES.
 11.6 	(a) The commissioner of human services shall increase allocations, reimbursement 
11.7 	rates, or rate limits, as applicable, by 2.0 percent beginning October 1, 2007, and by ~~2.0~~
11.8 	5.0 percent beginning July 1, 2008, effective for services rendered on or after those dates. 
11.9 	County contracts for services specified in this section must be amended to pass through 
11.10 	these rate adjustments within 60 days of the effective date of the increase and must be 
11.11 	retroactive from the effective date of the rate adjustment. 
11.12 	(b) The annual rate increases described in this section must be provided to: 
11.13 	(1) home and community-based waivered services for persons with developmental 
11.14 	disabilities or related conditions, including consumer-directed community supports, under 
11.15 	Minnesota Statutes, section 256B.501; 
11.16 	(2) home and community-based waivered services for the elderly, including 
11.17 	consumer-directed community supports, under Minnesota Statutes, section 256B.0915; 
11.18 	(3) waivered services under community alternatives for disabled individuals, 
11.19 	including consumer-directed community supports, under Minnesota Statutes, section 
11.20 	256B.49; 
11.21 	(4) community alternative care waivered services, including consumer-directed 
11.22 	community supports, under Minnesota Statutes, section 256B.49; 
11.23 	(5) traumatic brain injury waivered services, including consumer-directed 
11.24 	community supports, under Minnesota Statutes, section 256B.49; 
11.25 	(6) nursing services and home health services under Minnesota Statutes, section 
11.26 	256B.0625, subdivision 6a; 
11.27 	(7) personal care services and qualified professional supervision of personal care 
11.28 	services under Minnesota Statutes, section 256B.0625, subdivision 19a; 
11.29 	(8) private duty nursing services under Minnesota Statutes, section 256B.0625, 
11.30 	subdivision 7; 
11.31 	(9) day training and habilitation services for adults with developmental disabilities 
11.32 	or related conditions under Minnesota Statutes, sections 252.40 to 252.46, including the 
11.33 	additional cost of rate adjustments on day training and habilitation services, provided as a 
11.34 	social service under Minnesota Statutes, section 256M.60; 
11.35 	(10) alternative care services under Minnesota Statutes, section 256B.0913; 
12.1 	(11) adult residential program grants under Minnesota Statutes, section 245.73; 
12.2 	(12) children's community-based mental health services grants and adult community 
12.3 	support and case management services grants under Minnesota Rules, parts 9535.1700 
12.4 	to 9535.1760; 
12.5 	(13) the group residential housing supplementary service rate under Minnesota 
12.6 	Statutes, section 256I.05, subdivision 1a; 
12.7 	(14) adult mental health integrated fund grants under Minnesota Statutes, section 
12.8 	245.4661; 
12.9 	(15) semi-independent living services (SILS) under Minnesota Statutes, section 
12.10 	252.275, including SILS funding under county social services grants formerly funded 
12.11 	under Minnesota Statutes, chapter 256I; 
12.12 	(16) community support services for deaf and hard-of-hearing adults with mental 
12.13 	illness who use or wish to use sign language as their primary means of communication 
12.14 	under Minnesota Statutes, section 256.01, subdivision 2; and deaf and hard-of-hearing 
12.15 	grants under Minnesota Statutes, sections 256C.233 and 256C.25; Laws 1985, chapter 9, 
12.16 	article 1; and Laws 1997, First Special Session chapter 5, section 20; 
12.17 	(17) living skills training programs for persons with intractable epilepsy who need 
12.18 	assistance in the transition to independent living under Laws 1988, chapter 689; 
12.19 	(18) physical therapy services under sections 256B.0625, subdivision 8, and 
12.20 	256D.03, subdivision 4; 
12.21 	(19) occupational therapy services under sections 256B.0625, subdivision 8a, and 
12.22 	256D.03, subdivision 4; 
12.23 	(20) speech-language therapy services under section 256D.03, subdivision 4, and 
12.24 	Minnesota Rules, part 9505.0390; 
12.25 	(21) respiratory therapy services under section 256D.03, subdivision 4, and 
12.26 	Minnesota Rules, part 9505.0295; 
12.27 	(22) adult rehabilitative mental health services under section 256B.0623; 
12.28 	(23) children's therapeutic services and support services under section 256B.0943; 
12.29 	(24) tier I chemical health services under Minnesota Statutes, chapter 254B; 
12.30 	(25) consumer support grants under Minnesota Statutes, section 256.476; 
12.31 	(26) family support grants under Minnesota Statutes, section 252.32; 
12.32 	(27) grants for case management services to persons with HIV or AIDS under 
12.33 	Minnesota Statutes, section 256.01, subdivision 19; and 
12.34 	(28) aging grants under Minnesota Statutes, sections 256.975 to 256.977, 256B.0917, 
12.35 	and 256B.0928. 
13.1 	(c) For services funded through Minnesota disability health options, the rate 
13.2 	increases under this section apply to all medical assistance payments, including former 
13.3 	group residential housing supplementary rates under Minnesota Statutes, chapter 256I. 
13.4 	(d) The commissioner may recoup payments made under this section from a provider 
13.5 	that does not comply with paragraphs (f) and (g). 
13.6 	(e) A managed care plan receiving state payments for the services in this section 
13.7 	must include these increases in their payments to providers on a prospective basis, 
13.8 	effective on January 1 following the effective date of the rate increase. 
13.9 	(f) Providers that receive a rate increase under ~~this section~~ paragraph (a) shall use 75 
13.10 	percent of the additional revenue to increase compensation-related costs for employees 
13.11 	directly employed by the program on or after the effective date of the rate adjustments, 
13.12 	except: 
13.13 	(1) the administrator; 
13.14 	(2) persons employed in the central office of a corporation or entity that has an 
13.15 	ownership interest in the provider or exercises control over the provider; and 
13.16 	(3) persons paid by the provider under a management contract. 
13.17 	Compensation-related costs include: wages and salaries; FICA taxes, Medicare taxes, 
13.18 	state and federal unemployment taxes, and workers' compensation; and the employer's 
13.19 	share of health and dental insurance, life insurance, disability insurance, long-term care 
13.20 	insurance, uniform allowance, and pensions. 
13.21 	(g) Two-thirds of the money available under paragraph (f) must be used for wage 
13.22 	increases for all employees directly employed by the provider on or after the effective 
13.23 	date of the rate adjustments, except those listed in paragraph (f), clauses (1) to (3). The 
13.24 	wage adjustment that employees receive under this paragraph must be paid as an equal 
13.25 	hourly percentage wage increase for all eligible employees. All wage increases under this 
13.26 	paragraph must be effective on the same date. This paragraph shall not apply to employees 
13.27 	covered by a collective bargaining agreement. 
13.28 	(h) For public employees, the increase for wages and benefits for certain staff is 
13.29 	available and pay rates must be increased only to the extent that they comply with laws 
13.30 	governing public employees collective bargaining. Money received by a provider for pay 
13.31 	increases under this section may be used only for increases implemented on or after the 
13.32 	first day of the rate period in which the increase is available and must not be used for 
13.33 	increases implemented prior to that date. 
13.34 	(i) The commissioner shall amend state grant contracts that include direct 
13.35 	personnel-related grant expenditures to include the allocation for the portion of the contract 
13.36 	that is employee compensation related. Grant contracts for compensation-related services 
14.1 	must be amended to pass through these adjustments within 60 days of the effective date of 
14.2 	the increase and must be retroactive to the effective date of the rate adjustment. 
14.3 	(j) The Board on Aging and its Area Agencies on Aging shall amend their 
14.4 	grants that include direct personnel-related grant expenditures to include the rate 
14.5 	adjustment for the portion of the grant that is employee compensation related. Grants 
14.6 	for compensation-related services must be amended to pass through these adjustments 
14.7 	within 60 days of the effective date of the increase and must be retroactive to the effective 
14.8 	date of the rate adjustment. 
14.9 	(k) The calendar year 2008 rate for vendors reimbursed under Minnesota Statutes, 
14.10 	chapter 254B, shall be at least 2.0 percent above the rate in effect on January 1, 2007. 
14.11 	The calendar year 2009 rate shall be at least ~~2.0~~ 5.0 percent above the rate in effect on 
14.12 	January 1, 2008. 
14.13 	(l) Providers that receive a rate adjustment under paragraph (a) that is subject to 
14.14 	paragraphs (f) and (g) shall provide to the commissioner, and those counties with whom 
14.15 	they have a contract, within six months after the effective date of each rate adjustment, a 
14.16 	letter, in a format specified by the commissioner, that provides assurances that the provider 
14.17 	has developed and implemented a compensation plan and complied with paragraphs (f) 
14.18 	and (g). The provider shall keep on file, and produce for the commissioner or county 
14.19 	upon request, its plan, which must specify: 
14.20 	(1) an estimate of the amounts of money that must be used as specified in paragraphs 
14.21 	(f) and (g); and 
14.22 	(2) a detailed distribution plan specifying the allowable compensation-related and 
14.23 	wage increases the provider will implement to use the funds available in clause (1). 
14.24 	(m) Within six months after the effective date of each rate adjustment, the provider 
14.25 	shall post this plan, excluding the information required in paragraph (l), clause (1), for 
14.26 	a period of at least six weeks in an area of the provider's operation to which all eligible 
14.27 	employees have access and provide instructions for employees who believe they have 
14.28 	not received the wage and other compensation-related increases specified in paragraph 
14.29 	(l), clause (2). Instructions must include a mailing address, e-mail address, and the 
14.30 	telephone number that may be used by the employee to contact the commissioner or the 
14.31 	commissioner's representative. Providers shall also make assurances to the commissioner 
14.32 	and counties with whom they have a contract that they have complied with the requirement 
14.33 	in this paragraph.
14.34 	(n) Beginning July 1, 2008, the commissioner shall provide a rate adjustment of ..... 
14.35 	percent for employee health insurance costs for the providers of the services listed in 
14.36 	paragraph (b). County contracts for services specified in this section must be amended to 
15.1 	pass through this rate adjustment within 60 days of the effective date of the increase and 
15.2 	must be retroactive from the date of the rate adjustment. This rate adjustment is in addition 
15.3 	to the increase provided in paragraph (a) and shall be calculated after determination of 
15.4 	the rate increase provided by that paragraph. In order to receive the increase, providers 
15.5 	must document use of the increase in the form and manner specified by the commissioner. 
15.6 	The commissioner may recoup from providers any portion of the increase not used to 
15.7 	provide employee health insurance coverage.

15.8 	Sec. 11. DEVELOPMENT OF NEW REBASING METHODOLOGY.
 15.9 		Subdivision 1.Task force. The commissioner of human services shall convene a 
15.10 	task force to advise and assist the commissioner in developing a new rebasing methodology 
15.11 	for nursing facility reimbursement, to be implemented beginning October 1, 2009.
15.12 		Subd. 2.Membership. The task force shall consist of:
15.13 	(1) two legislators from the house of representatives appointed by the speaker, one 
15.14 	from the majority party and one from the minority party;
15.15 	(2) two legislators from the senate appointed by the Subcommittee on Committees 
15.16 	of the Committee on Rules and Legislation, one from the majority party and one from 
15.17 	the minority party;
15.18 	(3) one representative of the commissioner of human services;
15.19 	(4) one representative of the commissioner of health;
15.20 	(5) two representatives of nursing facility providers;
15.21 	(6) two representatives of nursing facility consumers;
15.22 	(7) two representatives of nursing facility employees; and
15.23 	(8) two long-term care policy researchers, one with expertise in nursing facility 
15.24 	reimbursement and one with expertise in nursing facility quality of care.
15.25 		Subd. 3.Staffing. The commissioners of human services and health shall provide 
15.26 	staff support to the task force.  The task force may accept outside resources to support its 
15.27 	efforts and may contract for technical support.
15.28 		Subd. 4.Duties. By December 15, 2008, the task force shall develop and present 
15.29 	to the commissioner of human services and the legislature a methodology for rebasing 
15.30 	nursing facility reimbursement rates consistent with the principles specified in subdivision 
15.31 	5, and proposed legislation necessary to implement the methodology. In developing the 
15.32 	methodology, the task force shall consider the provisions in Minnesota Statutes, section 
15.33 	256B.441, but is not bound by those provisions.
15.34 		Subd. 5.Principles for rebasing. The new rebasing methodology must: (1) 
15.35 	establish a systematic approach to update nursing facility rates to meet the costs of care in 
16.1 	high quality and economically operated nursing facilities; (2) consider relevant factors 
16.2 	such as resident needs and the nursing hours necessary to provide the needed care; (3) 
16.3 	enable providers to offer a health insurance benefit; (4) create an incentive for providers 
16.4 	to increase direct care staffing levels and training while maintaining necessary growth 
16.5 	in wages and benefits for employees; (5) allow for evaluation of the adequacy of rates 
16.6 	over time; (6) provide for more frequent rebasing of direct care costs, relative to other 
16.7 	operating and property costs; (7) phase in the new rebasing methodology over a four-year 
16.8 	period; and (8) address whether rebasing of nursing facility rates should be accompanied 
16.9 	by rebasing of rates for home and community-based long-term care providers.

16.10 	Sec. 12. STAFFING CRITERIA.
 16.11 	The commissioners of human services and health shall convene a working group of 
16.12 	consumers, nursing facility providers, and nursing facility employees, to: (1) review the 
16.13 	definitions of nursing facility direct care staff in Minnesota Statutes, Minnesota Rules, 
16.14 	and agency bulletins; (2) determine how to standardize definitions to allow the public to 
16.15 	compare direct care staffing across facilities; and (3) examine how new and emerging 
16.16 	staff positions and titles, including but not limited to "resident assistant," should be 
16.17 	incorporated over time into direct care staffing. The commissioners shall present working 
16.18 	group recommendations to the legislature by December 15, 2008.

16.19 	Sec. 13. HEALTH COVERAGE FOR LONG-TERM CARE WORKERS.
 16.20 	The commissioner of human services, in consultation with long-term care providers 
16.21 	and their employees, and other stakeholders, shall determine the cost of a rate increase to 
16.22 	long-term care employers to be used to purchase employee health insurance in the private 
16.23 	insurance market, and shall present this cost estimate to the legislature by December 15, 
16.24 	2008. For purposes of this section, "long-term care providers" means nursing facilities, 
16.25 	intermediate care facilities for persons with developmental disabilities, and service 
16.26 	providers eligible for a rate increase provided under Laws 2007, chapter 147, article 
16.27 	7, section 71. The commissioner shall collect, from long-term care providers, the data 
16.28 	necessary to determine the cost of a future rate increase to long-term care employers for 
16.29 	the purchase of employee health insurance. The data to be collected must include, but is 
16.30 	not limited to, the number of full-time and part-time long-term care workers, their claims 
16.31 	patterns and histories, and the current levels of employer investment in health insurance. 
16.32 	Long-term care providers shall submit the data in the form and manner specified by the 
16.33 	commissioner.

17.1 	Sec. 14.  REPEALER.
 17.2 	Minnesota Statutes 2007 Supplement, section 256B.441, subdivisions 55 and 56, are 
17.3 	repealed.