1.1    .................... moves to amend H. F. No. 1836 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 256B.434, subdivision 4, is amended to
1.4read:
1.5    Subd. 4. Alternate rates for nursing facilities. (a) For nursing facilities which
1.6have their payment rates determined under this section rather than section 256B.431, the
1.7commissioner shall establish a rate under this subdivision. The nursing facility must enter
1.8into a written contract with the commissioner.
1.9    (b) A nursing facility's case mix payment rate for the first rate year of a facility's
1.10contract under this section is the payment rate the facility would have received under
1.11section 256B.431.
1.12    (c) A nursing facility's case mix payment rates for the second and subsequent years
1.13of a facility's contract under this section are the previous rate year's contract payment
1.14rates plus an inflation adjustment and, for facilities reimbursed under this section or
1.15section 256B.431, an adjustment to include the cost of any increase in Health Department
1.16licensing fees for the facility taking effect on or after July 1, 2001. The index for the
1.17inflation adjustment must be based on the change in the Consumer Price Index-All Items
1.18(United States City average) (CPI-U) forecasted by the commissioner of finance's national
1.19economic consultant, as forecasted in the fourth quarter of the calendar year preceding
1.20the rate year. The inflation adjustment must be based on the 12-month period from the
1.21midpoint of the previous rate year to the midpoint of the rate year for which the rate is
1.22being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1, 2001,
1.23July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July
1.241, 2008, this paragraph shall apply only to the property-related payment rate, except
1.25that adjustments to include the cost of any increase in Health Department licensing fees
1.26taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to
1.27the property payment rate under this section and section 256B.431 shall be effective on
2.1October 1. In determining the amount of the property-related payment rate adjustment
2.2under this paragraph, the commissioner shall determine the proportion of the facility's
2.3rates that are property-related based on the facility's most recent cost report.
2.4    (d) The commissioner shall develop additional incentive-based payments of up to
2.5five percent above a facility's operating payment rate for achieving outcomes specified
2.6in a contract. The commissioner may solicit contract amendments and implement those
2.7which, on a competitive basis, best meet the state's policy objectives. The commissioner
2.8shall limit the amount of any incentive payment and the number of contract amendments
2.9under this paragraph to operate the incentive payments within funds appropriated for this
2.10purpose. The contract amendments may specify various levels of payment for various
2.11levels of performance. Incentive payments to facilities under this paragraph may be in the
2.12form of time-limited rate adjustments or onetime supplemental payments. In establishing
2.13the specified outcomes and related criteria, the commissioner shall consider the following
2.14state policy objectives:
2.15    (1) successful diversion or discharge of residents to the residents' prior home or other
2.16community-based alternatives;
2.17    (2) adoption of new technology to improve quality or efficiency;
2.18    (3) improved quality as measured in the Nursing Home Report Card;
2.19    (4) reduced acute care costs; and
2.20    (5) any additional outcomes proposed by a nursing facility that the commissioner
2.21finds desirable.
2.22    (e) Notwithstanding the threshold in section 256B.431, subdivision 16, facilities that
2.23take action to come into compliance with existing or pending requirements of the life
2.24safety code provisions governing sprinkler systems shall receive reimbursement for the
2.25costs associated with compliance if all of the following conditions are met:
2.26    (1) the expenses associated with compliance occurred on or after January 1, 2005,
2.27and before December 31, 2008;
2.28    (2) the costs were not otherwise reimbursed under section 144A.071, 144A.073,
2.29or 256B.434, subdivision 4f; and
2.30    (3) the total allowable costs reported under this paragraph are less than the minimum
2.31threshold established under section 256B.431, subdivision 15, paragraph (e), and
2.32subdivision 16.
2.33The commissioner shall use funds appropriated for this purpose to provide to qualifying
2.34nursing facilities a rate adjustment beginning October 1, 2007, and ending September
2.3530, 2008. Nursing facilities that have expended funds or anticipate the need to expend
2.36funds to satisfy the most recent life safety code requirements by (1) installing a sprinkler
3.1system or (2) replacing all or portions of an existing sprinkler system may submit to the
3.2commissioner by June 30, 2007, on a form provided by the commissioner the actual
3.3costs of a completed project or the estimated costs, based on a project bid, of a planned
3.4project. The commissioner shall calculate a rate adjustment equal to the allowable costs
3.5of the project divided by the resident days reported for the report year ending September
3.630, 2006. If the costs from all projects exceed the appropriation for this purpose, the
3.7commissioner shall allocate the funds appropriated on a pro rata basis to the qualifying
3.8facilities by reducing the rate adjustment determined for each facility by an equal
3.9percentage. If the commissioner determines that there are any unexpended funds for the
3.10purposes of this paragraph, the commissioner may allocate the remainder of the funds to
3.11the qualifying facilities on a pro rata basis for other physical plant changes required by the
3.12nursing facility in order to meet the most recent life safety code compliance standards.
3.13Facilities that used estimated costs when requesting the rate adjustment shall report to
3.14the commissioner by January 31, 2009, on the use of these funds on a form provided by
3.15the commissioner. If the nursing facility fails to provide the report, the commissioner
3.16shall recoup the funds appropriated to the facility for this purpose. If the facility reports
3.17expenditures allowable under this subdivision that are less than the amount received in the
3.18facility's annualized rate adjustment, the commissioner shall recoup the difference.

3.19    Sec. 2. APPROPRIATION.
3.20    $6,000,000 is appropriated from the general fund to the commissioner of human
3.21services for the biennium beginning July 1, 2007, for the purposes of section 1."
3.22Amend the title accordingly